Anyone who thinks that Ukraine was just a CIA plot is honestly in serious denial and are blind to the real trend afoot. All governments are declining into corruption on a massive scale and this is reflected in their rising demands for taxation. The American Revolution was – No Taxation without Representation. That is the global trend that is re-emerging after 300 years and that is the length of our revolutionary cycle. The last time this cycle hit was the late 1700s. The only Leader from Maidan in Ukraine to stand up is anti-West and East. He stands for Ukrainian independence – not CIA or Russia manipulation.

Thailand is a classic example of people getting fed up with corruption. The removal of Yingluck Shinawatra as prime minister on Wednesday on the grounds that she had illegally transferred a civil servant to another post was followed Thursday by separate proceedings to impeach her in connection with a farm subsidy program, a process that could result in Ms. Yingluck being banned from politics. The National Anti-Corruption Commission, which brought the latest proceedings, did not clarify how Ms. Yingluck could be impeached from an office that she no longer holds.

The separatist movements are part of this same trend. This is global. Here are the rising separatist movement shown above. We are looking at the break-up of civilization driven by centralized corrupt governments everywhere. Politicians cannot get through their thick skulls that 70% of the national debts are accumulative interest payments. Perpetually borrowing year-after-year and never paying anyone back is totally insane. When I have sat in meetings with various high-ranking officials, they excuse that away saying just bluntly, they are the exception to economics arguing simply because they are government. Those days are coming to an end.

This issue of political corruption that is driving the break-up and uprising within Western and Eastern culture is fundamental to Capital Flows and to the outlook for markets. We need to understand the trend for what we face is the potential for a major CYCLE INVERSION. We must ask ourselves, what will capital do if the full faith in government declines? Capital begins to act like a cannon on the deck of a ship in a hurricane, as Hoover explained.

When the Economic Confidence Model turns down next year, governments are going to attack the people much more aggressively. The socialists can only see that if they grab more money somehow they will survive another day. They do not contemplate what happens if that dream is fulfilled. This is how empires die – not by hyperinflation, but by massive deflation. As they hunt money, the velocity collapses and people stopping investing and therein unemployment rises further and we get the eruption of civil unrest and revolution. Some politicians will start international war to shift the blame to someone else. It is popular in Russia now to claim the collapse of the Soviet Union was a CIA plot as well. If the CIA could really do everything people attribute to it, we should have no problem for they will prevent the collapse of Western society. Sorry – they have no such skills. The USSR and China saw communism collapse because it represses economic growth just as we are seeing right now.

This is the REAL trend. After 2015.75, we will see capital still confused. The flight to quality will initially be to short-term paper of the USA, but that will give way as well. However, we have more than $25 trillion globally in bonds (short/long) and that is a huge reservoir of capital to shift. This idea that government debt is “quality” will give way to reality. That means we will see tangible assets rise precisely as we see during a hyperinflation within a peripheral economy.

The daunting question is formulating when the cycle will flip from Public to Private. The major low intraday is 2009. However, the lowest annual closing is 2002. Under most conditions, a 7 year rally would have produced a high in 2009, but that was overpowered by the ECM and the business cycle inverting that into a LOW. This is suggesting that we are in the inversion process.

A 26 year target from 2002 brings us to 2028. That is the next low on the 8.6 year wave. The Pi target will be 31.4 years from 2002.85 giving us 2034.25 after the 2032 peak. As you can see, we are starting to line up with the lows in the ECM. This is part of the inversion process. Gold rallied AFTER 2007.15 and peaked with the low in the ECM 2011. Its rallies are lining up with the lows.

It is sad to say, but this process was unfolding going into the Fall of Rome. Here we have a picture of 1929. This was the culmination of a Private Wave in which we are in right now. The 1929 target was the equivalent of 2032. Note that at the end, equity did better than bonds.

We are entering this phase. The bulk of analysts keep saying the stock market will crash and burn. The goldbugs say buy gold. The conspiracy people see some new currency emerging like bitcoin that is even less familiar to people than gold. Yet none seem to grasp that if we are headed into the worse part of this economic storm, how is some new currency going to emerge? Sorry, it is back to old-school. Getting off the grid with a diversification between movable and tangible assets.

That means capital will flow to the dollar since the USA cannot be easily invaded as can even Japan and Europe when politicians seek to find external enemies. This will most likely be the last and final 3rd rally due to war that sends the dollar to record highs. This implies tangible fixed assets have a chance of surviving in the USA requiring less of a mix for movable compared to Asia and Europe.

Nonetheless, the US government is as corrupt as any. The trend against the Fed will gather steam. What we saw in Nevada is just the beginning.