MMA COMMENTS FOR WEEK BEGINNING JULY 20, 2009

Raymond A. Merriman ©

Review and Preview

That was interesting. Jupiter ended its second conjunction to Neptune last Friday, and then investors became euphoric and optimistic. Of course the reason was due to the positive earnings reports of various companies (like Goldman Sachs and IBM) that took place before last Friday. But nevertheless it shows yet another truism of Financial Astrology, that certain powerful signatures – like Jupiter and Neptune – coincide with reversals of trends, and not necessarily from a high as would be expected under certain “harmonious” aspects like Jupiter conjunct Neptune. For the record, most world stock indices completed a primary cycle trough July 8-13, and then soared right through the end of last week. This also points out a truism of cycles’ analysis, and that is that the first stage of any new cycle is always bullish. That was certainly the case last week as several equity markets are already testing their highs recorded just one month ago. According to cycles’ theory (“Merriman on Market Cycles: The Basics”), the highs of this new cycle are not likely in yet either. Equity indices should go higher before re-visiting those lows of the past week.

The stock indices weren’t the only markets that benefited in the aftermath of the Jupiter- Neptune conjunction last week. Gold rose from 904 the previous week to a high of 942 on Wednesday, and Silver was even more spectacular, rising from a low of 1243 on Monday to a high of 1347 on Friday. Crude Oil also did well, nearly reaching 64.00/barrel on Friday after bottoming at 58.32 on Monday. This is most noteworthy because Crude Oil is ruled by Jupiter and Neptune. But slightly more disturbing is the fact that all of these commodities rose in concert with the inflationary numbers represented by the PPI and CPI that were up sharply last week. This too is part of the Jupiter-Neptune story (see Longer-Term Thoughts).

Short-Term Geocosmics

Here we go again. We are about to enter an unusual two-week period that will contain two translations of Venus to longer-term planetary signatures in effect. As stated last week, “From July 18 through August 1 there are six important geocosmic signatures taking place. Many involve Venus, which will make a translation to both the Saturn-Uranus opposition (July 21-28) and the Jupiter-Neptune conjunction (July 26-28). Since Venus rules assets, it would appear to be an important time for both equity and currency markets.” On top of that, there is a powerful solar eclipse on July 21-22 (depending where you are in the world), that falls over India and Pakistan (hence, they will likely be in the news shortly). Traders may expect to see sharp price movements around then, especially in weather-related markets like grains.

Longer-Term Thoughts

There are two long-term subjects we could discuss that relate to last week’s events and current long-term geocosmic signatures. The first could be the sudden and dramatic spike inflation numbers, per Jupiter conjunct Neptune. The second could be the congressional and White House proposals regarding an increase of taxes and the just-increased projections (again) of the federal deficit and debt, per the forthcoming waning square of Saturn to Pluto. In our webcast of May 2, and various columns since then, it was pointed out that under the first two passes of Jupiter-Neptune conjunction (May 27-July 10), the U.S. economy could experience suddenly rising inflation numbers. At first this would be greeted with great relief, for it would suggest the economic stimulus (spending) packages were finally working. Stock and commodity prices would soar, as would currencies against the Dollar (the U.S. Dollar would plummet). But the amplitude and speed of this inflationary change of trend could soon become a source of great concern by the end of the year, forcing the FED to become just as suddenly very restrictive, i.e. raise its interest rates. This is turn would upset lawmakers, who would be even more critical of the Federal Reserve Board and its Chairman, Ben Bernanke.

So what happened last week? The Producer Price Index (PPI) for June came out last Tuesday, up a whopping 1.8% (annualized at 21%), its biggest gain in quite some time. The change of trend had actually begun in April, as the numbers reverted to positive from a negative (deflationary) number before then. The next day the CPI (Consumer Price Index) for June came out, and it was up .9% (annualized, that would be 10+%), according to the Bureau of Labor statistics. This too is huge jump from just the previous month(s). Thus the trend appears to turning up, just as Jupiter conjunct Neptune suggested it would. If this trend continues into the Saturn waning square to Pluto (November 2009-August 2010), the FED may be forced to raise rates. That Saturn-Pluto square falls right on the Sun-Pluto opposition in the Federal Reserve Board chart, which means this could become yet another point of contention for lawmakers who are disturbed with the Federal Reserve Board monetary policies (and other things too).

And now let’s review the Saturn-Pluto cycle in light of last week’s announcement that “The U.S. federal budget deficit broke through the $1 trillion mark in June… a once unthinkable level that could threaten any nascent economic recovery by undermining the dollar and driving up interest rates,” according to a Wall Street Journal article July 14 by John D. McKinnon. Additionally, the estimated annual deficit has now been increased (again) to about 1.84 trillion by the end of this fiscal year, about 5% higher than the last estimate given in February, which was higher than the previous estimate, etc. (you get the picture). The administration also revised upward its deficit estimates for 2010 and 2011. What is going on here? And more importantly, why aren’t we learning from our mistakes of the past under similar geocosmic cycles?

Once again, here is the correlation of these developments within the purview of Financial Astrology. From the conjunction to the opposition of the Saturn-Pluto cycle, a period that lasts 16-20 years, the trend is for federal deficits (debts) to decrease, interest rates to decrease, taxes decrease, economies to prosper, and equity markets to be bullish. Most recently this was the case from 1947-1966, and then 1982-2001. Then the 16-20 years of the waning phase (from opposition to conjunction), sees the opposite fundamentals occur. That is when federal deficits (debt) increases, interest rates increase, taxes increase, economies suffer from longer and more numerous recessions, and stock markets undergo longer and more numerous bear markets. Recent and current examples would be 1966-1982 and 2001-2020. Starting this autumn, we will be right in the middle of the down phase as the waning square takes place between Saturn and Pluto. In other words, the very policies that have correlated with a long economic downturn in the waning phase of the Saturn-Pluto cycle are underway again. Why is it that these policies have these consequences? It is not by accident, and it will not be different this time.

It is not my intention to sound like a Republican or Democrat (I am neither). But it doesn’t take a rocket scientist to understand that the source of economic recovery is not through raising taxes or increasing government spending (and the consequent increase in federal debt). This is the history – the “trap” - of the waning phase of Saturn and Pluto, and it takes money out of the private sector that is needed to grow businesses and payrolls. Economic growth for a nation happens with the 1) raising of revenues and/or 2) the decrease of spending, which occurs when there is increase of employment (or, decrease of unemployment). The “secret” is getting people back to work and back on the federal tax rolls, who also then become producers AND consumers of goods. This production occurs in the private sector, not the government sector.

The congressional proposals of last week call for another tax increase of 8% on small businesses whose payrolls exceed $400,000. Small businesses in the USA already pay one of the highest tax rates of any country in the world. Yes, that may raise monies in the very short-term for the government. But it will also cause companies to either lay more people off, or go outside of the United States to produce goods and conduct business. Why is it that the most successful US businesses are those that do business in other countries? One reason is because the tax rate is lower outside the USA. But instead of lowering the tax rate on US businesses doing business in this country, Congress and the White House are instead considering raising the tax rates for those who do business outside of the country. In other words, they want to adjust the inequity by taking the policy that represents the worst performance instead of the best. As reported in the Moscow Times recently, this policy will not only be detrimental to USA companies, but could easily lead to another more serious global collapse, for those countries need USA businesses to maintain their economies. And if other countries fall again, that in turns hurts the USA too.

Let me suggest that you don’t grow an economy by rising taxes on small businesses (who already pay a high tax by world standards). And you don’t do it by offering new and special loans to small businesses, as is being considered by this Congress (that just increases small business debt). Increased debt and taxes. These are “old school” policies that have been shown to fail over and over again in the waning phase of the Saturn and Pluto cycle. With these policies, fewer and fewer people end up working and thus pay less – not more – taxes to the government. Unemployment grows as more and more businesses cut back, leave the country, or simply go out of business. It is a fallacy conceived of by people in government or academia who have no successful real world business experience, who believe that increasing taxes brings in more tax receipts for the government. It doesn’t, because fewer people will be on the tax roll, and that in turn means fewer people will buy the products of businesses, which means less revenues for the companies by which to pay taxes too. It is a recipe for a prolonged period of economic stagnation and non-growth. But then again, that is exactly what the Saturn-Pluto cycle suggests will be the future of the United States through the end of the next decade – unless these policies consistent with the history of the waning phase of the Saturn-Pluto cycle are changed. And on top of that, we are now facing the prospect of inflation. This is not the best of all worlds - unless you own a lot of Gold.

Announcements

The monthly MMA Cycles and MMA Japanese Cycles Reports will be issued this week, Monday and Tuesday. The “MMA Cycles Report” is our market advisory report for traders of the U.S. stock indices, T-Notes, Gold, Silver, Euro, Swiss Franc, Grains, and Crude Oil. The “MMA Japan Cycles Report” covers the Nikkei, Dollar/Yen, and JGB Bonds. For more information and subscription, go to http://www.mmacycles.com/services/.

I will be hosting another special update gathering for subscribers to our MMA daily, weekly, and/or monthly reports at the end of the year and in early 2010 on the East Coast. I will be celebrating my birthday (solar return) in New York City this year, which is on Christmas Day. So I will come in early to meet with subscribers on December 22. If there are any readers who would like to host this meeting, please feel free to contact me. And the last week in February I will be giving the “Forecasts 2010” talk in Boston at the NCGR conference. I will take the opportunity again to meet privately with subscribers just after that talk – either that evening or the next, depending on location chosen to meet. If there are any readers who would wish to host that meeting in their home, kindly let me know. I can say this without any hesitation: the most exciting meetings for me are those with my subscribers. They understand the language I use, and they add great value to these discussions. And they come from all walks of life: leaders from government, banking, finances, intelligence, astrology, and private businesses. It is an electric atmosphere.

This is a good time to sign up for the ISAR 2009 conference, as a window for a wonderful discount closes July 25. For those interested in learning or improving your understanding of astrology, this fantastic conference in Astrology is going to take place August 19-24, 2009, at the luxurious Oakbrook Hills Marriot Resort, just outside of Chicago (not far from O’Hare Airport). This will be the ISAR (International Society for Astrological Research) 2009 conference, featuring over 80 professional astrologers from all over the world, including Jeff Jawer, Rick Levine, Michael Lutin, Claude Weiss, Nick Campion, Verena Bachmann, and several Financial Astrologers like Christeen Skinner, Grace Morris, Roy Gillett, and myself. There will be a whole track on Financial Astrology, and I will be giving a one-day workshop on Financial Astrology, specializing in the Stock and Gold markets, on Monday, August 24. For more information, and registration, please go to www.isar2009.com.

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Disclaimer and statement of purpose: The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language. This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world. It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

 

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.