"Gold is in a Bear Leg..with an $1800 Target"

originally posted by the Soren K. Group on marketslant.com

Moor Report Summary:

If the title confuses you, do not be fooled. There is a short term outlook, that can change from day to day, an intermediate outlook that can change week to week, and a long term one. This changes month to month And they are not contradictory.

• Short Term -  refers to daily outlooks here. It is choppy with repeated failures to pierce $1300. This calls for trading counter trend with a downward bias intraday Sell rallies, buy dips.... in that order.


• Intermediate Term- We do not like trading week to week and have no feel for this time frame. To us, if the short term makes money, then take it home and see if it continues intermediate term.


• Long Term- Buy it, buy it again, and keep buying it unleveraged with money you do not need for current cash flow or expenses; and hold it for 12 to 18 months with a target of $1700 plus. The only thing to  consider is if you buy more on any dip above $1245 (Fund  Finder level) then $1229 (Moor Level) and $1192, (from VBS). Then decide if you add on a break  above $1338. The macro is lined up. We seek the micro to start the ball rolling to add or pare positions.

Slow Rally Kills Shorts

We are in a limbo area right now, where a short term bull leg is triggered with a decisive penetration above $1294.50. And any settlement below $1292.20 is a short term bear leg. Accumulators buy while shorters seek weakness to push lower. Physical  accumulators  do not chase. It is the shorts who will ignite this if it is to accelerate  to the upside. We"d  prefer a slow melt up to $1338 so no hot money buys, and shorts can delude themselves

Michael"s analysis echoes what we see longer  term. Specifically, in 9-12 months he sees an upward  move bringing us to $1400 minimum,  and over $1800 maximum. This all happens as long as the market withstands any pressure down to $1229.

Our own  analysis remains unviolated adn fully intact. Funds are buying dips above the  12 month moving average, Volatility in the short term is starting to percolate, and long term volatility is flatlining. The low long term volatility implies the next move in Gold is not to be faded if  accompanied by  newly expanding long term volatility.

Simply put:

1. SKG Fund Finder: Patient Long above the 12 month MA with a sell stop on a  monthly settlement below $1245


2. Moor Analytics: Traditional Analysis says a long bias is in order with the ability to swing trade in either direction as described in the levels below


3. Echobay"s VBS Macro: Explosive volatility on a move above $1338 or below $1192 in either direction. implying a $200 move in either direction if triggered

SKG Fund Finder - the 12 month MA said to buy in July/August on a settlement above the yellow line. Our refinement says now is when to buy based on line slope and risk /reward

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Moor Analytics Weekly

GC (G)

On a short-term basis:

I cautioned that an area of possible exhaustion for the move up from 12628 came in at 13077-81.
We rejected $43.9 from this, but this is now on hold. The trade above 12896 (-1 tic (10 cents) per/hour) put us above a small
formation that projects this upward $5.5 minimum, $14.5 (+) maximum. We have seen $9.4 of this so far. This will come in at
12881 (-1 tic (10 cents) per/hour starting at 6:00pm). If we break back below, look for profit taking to come in. The trade
above 12925 brought in $6.5 of the strength warned about above before rolling over. Decent trade below 12792 (+.3 of a tic
(3 cents) per/hour starting at 6:00pm) will project this downward $20 minimum, $24 (+) maximum; but if we break below here
decently and back above decently, look for decent short covering to come in. A maintained gap lower tomorrow will leave a
short term bearish reversal intact above that will warn of decent pressure, likely for days. Trade above 12990 is a sign of
renewed strength.

On a macro basis:

We broke above a well-formed macro line in the week of 8/7 that came in at 12629. The break above here
projects this upward $174 minimum, $493 (+) maximum—the maximum to be attained likely within 9-12 months. This line
comes in at 12294 this week, and rolls into (G). This is off hold, or you could wait for a decent break above the 12947-54 area
mentioned below for added confirmation. Within that we rallied up to a macro resistance line on 9/11 at 13522 that I said we
are looking for a multi-week smackdown from-- we were seeing some of this as we have come off $89.4, but this is on hold.
We left a medium term bearish reversal intact above on 9/18 that also warned of continued pressure in the days/weeks ahead.
We have seen $48 so far. This too is on hold. Within the bearishness I noted that a possible area of exhaustion for this move
down from 13624 comes in at 12732-644. We basically held this, but with a $1.6 violation, and rallied to 13084 before rolling
over and rejecting from it again. Decent trade below 12682 will project this downward $31 minimum, $97 (+) maximum based
off a well-formed formation. Decent trade above 12950 will project this upward $23 minimum, $47 (+) maximum based off an
‘ok formed’ formation; but if we break above here decently and back below decently, look for decent profit taking to come in.

Email Michael for subscription info : Michael Moor

VBS MACRO

Volatility Cycles more cleanly than price. it could stay low for months, but is far less likely to give false  signals. 

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In Gold and Silver, we use 1.5 STD on BBands and relationships not shown here between historical and implied that corroborate or negate a signal- SK

Good Luck

Dear Readers:

"Day job" obligations are making it difficult to expend resources toward writing original pieces consistently. We do not have a Soren K. site but wish to continue writing. To do so we will need to incur expenses. Marketslant is kind to post our work and the work of others here. We hope to be setting up a Soren K. Group Patreon page in the next weeks to continue giving our original work, as well as proprietary research for Precious Metals traders. Anytng offered will be greatly appreciated. 

We  also hope to do the following for readers

1. weekly settlement price competition for token prizes - Silver Eagles etc.


2. opportunity to guest post under SKG and on zerohedge where we write and  post under Vince Lanci"s Blog


3. Ability to  place  your own editorials on Kitco if they accept as relevant to the market. 

Finally we are in the process of raising capital for a fund and are speaking to seeders in that pursuit. Between our SKG members we have  65 years trading experience in PM, Energy, and Equities. Among our group are algo writers, analysts, $BB Fund partners, lawyers, Wall Street bank executives, and other complementary minds. Trade ideas we execute when up and running will be shared with site Patrons as investors permit. 

If you have an opinion, interest or wish to write please contact us at

Sorenk@marketslant.com

700 Years Of Data Suggests The Reversal In Rates Will Be Rapid

Have we been lulled into a false sense of security about the future path of rates by ZIRP/NIRP policies? Central banks’ misguided efforts to engineer inflation have undoubtedly been woefully feeble, so far. As the Federal Reserve “valiantly” raises short rates, markets ignore its dot plot and yield curves continue to flatten. And thanks to Larry Summers, the term “secular stagnation” has entered the lexicon.  While it sure doesn"t feel like it, could rates suddenly take off to the upside?

A guest post on the Bank of England’s staff blog, “Bank Underground”, answers the question with an unequivocal yes. Harvard University’s visiting scholar at the Bank, Paul Schmelzing, normally focuses on 20th century financial history. In his guest post (see here), he analyses real interest rates stretching back a further 600 years to 1311. Schmelzing describes his methodology as follows.

We trace the use of the dominant risk-free asset over time, starting with sovereign rates in the Italian city states in the 14th and 15th centuries, later switching to long-term rates in Spain, followed by the Province of Holland, since 1703 the UK, subsequently Germany, and finally the US.

Schmelzing calculates the 700-year average real rate at 4.78% and the average for the last two hundred years at 2.6%. As he notes “the current environment remains severely depressed”, no kidding. Looking back over seven centuries certainly provides plenty of context for our current situation, where rates have been trending downwards since the early 1980s. According to Schmelzing, we are in the ninth “real rate depression” since 1311 as shown in his chart below. We count more than nine, but let’s not be picky.

Furthermore, he believes that we are still locked into a 500-year downward trend.

Upon closer inspection, it can be shown that trend real rates have been following a downward path for close to five hundred years, on a variety of measures. The development since the 1980s does not constitute a fundamental break with these tendencies.

Now to the useful bit, Schmelzing looks at how these "real rates depressions" ended. The chart below shows the path of real interest rates in each reversal period following the trough.

He calculates that the average reversal has been 315 basis points within 24 months.

Most reversals to “real rate stagnation” periods have been rapid, non-linear, and took place on average after 26 years. Within 24-months after hitting their troughs in the rate depression cycle, rates gained on average 315 basis points, with two reversals showing real rate appreciations of more than 600 basis points within 2 years.

While we’d rather he ignored tainted “maestro”, Schmelzing states that there is “solid historical evidence” to support Greenspan’s view that real rates will rise “reasonably fast” once they turn. In Schmelzing’s opinion, and we would broadly agree, the best analogy in “recent” times for today’s situation is the Long Depression that followed the Panic of 1873.

Most of the eight previous cyclical “real rate depressions” were eventually disrupted by geopolitical events or catastrophes, with several – such as the Black Death, the Thirty Years War, or World War Two – combining both demographic, and geopolitical inflections. Most cyclical real rate depressions equally coincided with inflation outperformances. But for a minority of cycles, economic fundamentals were decisive, and exhibited both excess savings and subdued inflation. The prime example – and likely the closest historical analogy to today’s “secular stagnation” – is represented by the global “Long Depression” of the 1880s and 1890s. Following years of a global railroad investment frenzy, and global overcapacity indicators inflecting in the mid-1860s, the infamous “Panic of 1873” heralded the advent of two decades of low productivity growth, deflationary price dynamics, and a rise in global populism and protectionism.

Low rates in the wake of a financial crisis, lack of productivity growth, rising populism, etc, all strike a chord with our current circumstances, obviously. Going into more detail about the exit from the real rates depression of the 1880s-1890s, Schmelzing emphasises a rebound in productivity, stronger wage inflation and monetary expansion.

What ended the Long Depression? Labor productivity bottomed out in 1892-3, prior to the discovery of gold at the Klondike, and the associated monetary expansion. Wage inflation started outstripping productivity increases as early as 1885, leading the recovery in general inflation. And US equities finally bounced back from their 15-year lows with the Presidential election of William McKinley – a Republican pro-business protectionist – in November 1896. In other words, there is strong evidence suggesting that the last “secular stagnation cycle” started fading relatively autonomously after just over two decades following the key financial shock, not requiring the aid of decisive fiscal or monetary stimulus.

We find his conclusion, that a rapid, non-linear recovery in real rates can occur without any “decisive” events or policy, almost counter-intuitive. It doesn"t feel like it"s about to happen, but maybe it didn"t in the 1890s either. Indeed, maybe the best analogy for rates today is the proverbial beach ball held under water.

Personal Recollections From The Crash Of 1987: "There Was No 'Smart Money' That Day!"

Via LyonsSharePro.com,

The following guest post is a first-hand account of the events surrounding the Crash of 1987 by JLFMI President, John S. Lyons.

Personal Recollections of the Crash of 1987 on its 30th Anniversary

“There was no ‘smart money’ that day.”

What do the assassination of President John F Kennedy, the beginning of Desert Storm and 9/11 have in common? Provided you are old enough to recall JFK’s assassination, the answer probably is that you remember exactly where you were on the day of those events. If not that old, there is most likely another event that is so memorable that you recall where you were and what you were doing at that moment.

Being in the securities business for many, many years, the Crash of ’87 on October 19th of that year is right up there with JFK’s assassination and 9/11 as one of the mind-numbing catastrophes I’ve witnessed.

In retrospect only, it was fortunate that I had entered the brokerage business in 1969 and immediately weathered a 36% market decline into 1970. On the heels of that decline, I then endured one of the worst bear markets in modern history in 1973-74 when the Dow Jones Industrial Average lost almost 50% of its value. As a result, I was weaned on risk in my new profession. And I learned early on that if a career that centered around the stock market were to be endurable, I had to find a way to practice risk management.

As a result, I developed a risk model during the 1970’s as a means of guarding against such disastrous losses in the future. Fortunately, the model has been of very valuable assistance, protecting clients from every major decline since its inception in 1978. Its Sell Signals have occurred prior to insignificant declines as well, but its risk avoidance guidance supersedes those times. On September 25th of 1987, for example, our model issued a Sell Signal and I sold over half of my clients’ holdings. I was reminded just recently by an associate of mine at that time about how he passed by my office that day and was amazed at the pile of sell orders on my desk.

The Friday prior to the October 19th crash ended with the first triple digit decline in the history of the Dow Jones Industrial Average. In total, the market lost just over 10% that week. The apprehension of professionals in the business was palpable to say the least as we entered the weekend and yet there was no seemingly immediate cause for a significant decline. I have learned that such unexplained declines are the most insidious. On Saturday night, at dinner with friends at a restaurant in Chicago, I could not eat my food!

On Monday morning, the market opened and headed south immediately. There were no buyers – just panic. Program trading, a technique supposedly providing insurance for portfolios in which computers entered sell orders at certain predetermined levels below the market, simply propelled the decline. Markets were in complete disarray. There were no bids. No one to fill the mountain of orders that were coming from all over the world. Traders left the pits crying as the carnage grew. It seemed like the end of the world – their world at least. And there was nothing stock brokers could do except watch in horror. Paradoxically, on the way home that night, the outside world was acting like nothing happened. That was no comfort.

The DJIA closed down 508 points or 22.6% that Monday, October 19th. To provide some perspective, that decline today would be the equivalent of a 5,176 point loss. The Nasdaq would have fared worse were it not for the fact that it completely failed and effectively shut down. Bid prices were often higher than asked prices. When asked what smart money was doing that day, one leading money manager admitted that “there was no smart money”.

Though most of the eventual decline was over by the close on Tuesday, the gut wrenching market action continued for the rest of the week. And its wreckage would last for weeks and months. First Options, the company charged with settling trades on the Chicago Board Options Exchange couldn’t function for weeks and had to be bailed out by its parent, the Continental Bank. Significant corporate mergers that were almost completed were canceled or at least became questionable. My only major problem during the crash – and it was a big one – was that I was selling puts on some merger candidates that were all but assured prior to the crash.

For example, I had sold hundreds of puts at a quarter of a point with a strike price of 40 on a company that was trading at the 52-53 level. All the company’s stock had to do was to close over 40/share and the puts would be worthless and the trade profitable. Instead, the stock dropped to about 37 which made the intrinsic value of the put 3. Unbelievably, they were bid at 18 for more than a week despite having negligible trading in them. Unbelievably as well, I was issued no margin calls on the positions for over two weeks due to First Options being in chaos. Unfortunately I eventually had to take sizable losses in them. In some other cases that I knew about, no margin calls were ever issued for some substantial unsecured debits. I recall one investor who had a deficit in his account of almost $250,000 and was never called to cover that amount!

When I say chaos, I mean chaos. Will it happen again? Although it is always claimed that we learn by our previous mistakes and take the appropriate steps to avoid the same problems in the future, history doesn’t bear that out. So called “reforms”, as well as proclamations such as that by Yale’s first Ph. D in economics, Irving Fisher, nine days before the stock market crash of 1929 that stock prices “reached what looks like a permanently high plateau”, are made with ultimately untimely confidence throughout history. Portfolio insurance during the ’87 crash was anything but insurance. Although it was embraced as risk management, it turned out to be risk fertilizer. Society in general always thinks that we have hit that new plateau in managing ourselves but unfortunately that is often quite the opposite. To me, the message is that we never should abandon employing some measure of risk management in investing and probably in most of our activities. So how is that accomplished?

Human Nature, The Stick in the Spokes of Risk Management

One of the phenomena that increasingly seems axiomatic is that human nature is the enemy of such risk management. The longer that one has gone without the need for caution, the more it is thought not to be needed when, in actuality, the more it is needed. This is due to a condition called perceptual recency, which simply stated means that one’s expectations of the future are the result of what one has experienced and is in their active memory. We are not good at anticipating junctures of change. That is understandable.

The following two charts show that we humans indeed clearly react to what has occurred in our memorable past. The higher we go and the longer we go higher, the more confidence we have that we will continue to go higher — and the less we feel the need for risk management. That eventually, and I repeat eventually, is injurious to one’s investing health. Note how the level of both household stock investment and consumer confidence continue to grow the higher the market goes.

So, as asked, how do we guard against the human natural tendency to dismiss the need for risk protection the higher the market goes — and to become more bearish, the lower it goes? Frankly the answer probably is that most investors, i.e., humans, cannot. I have spent a career practicing human nature avoidance in my job. Now I will admit that there will be times when the market does not need risk protection and there will be other times when there appears to be substantial risk afoot as quantified by our 40-year-old risk model but the market chooses to ignore it and continue to move higher. However, like wearing a seat belt, you cannot possibly choose to employ caution only shortly before an accident.

As stated above, declines that are the most hurtful typically begin with no seeming warning or at least before any provocation is identified. For example, on July 30, 1990, our model issued a Sell Signal and we sold 100% of our clients’ holdings. On August 2, Saddam Hussein marched into Kuwait and Operation Desert Shield began — as well as a substantial decline in the stock market. Similarly, the completion of selling 100% of our clients’ holdings on account of a Sell Signal on September 4, 2001 was obviously done without any known external provocation. The lesson regarding employment of risk management is that, no, you will not know when to sell by just “having that feeling” or even more remotely, by getting tipped off by the news in the morning paper. That said, many investors do believe that they will know when to protect their holdings.

Now of course, there will be legions of market experts, many with an investment product to sell, who will say it is foolishness to even try to “time the market” as they put it. I will admit it is difficult to find a good practitioner of avoiding risk. However, one must try. Failing to avoid a substantial market decline is a double whammy. It is well quantified that losing money has twice the negative emotional impact vs. the pleasing emotional impact derived from making money. That emotional jolt on the downside is what contributes to selling at the bottom (one whammy) and makes you divorce Wall Street until it is well into its next bull phase (a 2nd whammy).

So what was learned from the Crash of ’87? Not much in my opinion. For starters, the laws of human nature have yet to be repealed. Additionally, high frequency trading is today’s version of program trading. Only now, instead of transmitting an order through a stock broker, who sends it to a floor broker, who give it to a trader, who takes it to a specialist at the post where the stock in question is trading, high frequency computer generated orders are automatically entered at the behest of complex algorithms and are executed and reported back in milliseconds. Witness the May of 2010 “flash crash” where the market lost about 1000 points and then mostly recovered all within 15 minutes.

In summary, risk cannot be removed from the stock market. The Crash of ’87 affected everyone. Crashes will occur again. Wear a seat belt!

– John S. Lyons is President and Founder of J. Lyons Fund Management, Inc.

If you’re interested in the “all-access” version of our charts and research, we invite you to check out our new site, The Lyons Share. TLS is currently running a 30th anniversary 1987 Crash Commemoration SALE, offering a discount of 22.6%, or the equivalent of the Dow’s 1-day drop 30 years ago. The SALE ends October 22 so considering the discounted cost and a potentially treacherous market climate, there has never been a better time to reap the benefits of our risk-managed approach. Thanks for reading!

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Could never happen again...

Chicago Population Shrinks Most Of Any City In US

Authored by Mike Shedlock via MishTalk.com,

Illinoisans continue their exodus, with Chicago having the dubious distinction of the highest population loss in the nation.

High taxes are the number one reason people and businesses leave the state.

What follows is a guest post by Michael Lucci, Vice President of Policy, Illinois Policy Institute.

CHICAGO ONLY MAJOR U.S. CITY TO LOSE POPULATION FROM 2015 TO 2016

The majority of major cities in Illinois are shrinking as the Land of Lincoln depopulates due to massive out-migration to other states.

But while most of Illinois’ cities and towns are continuing to shrink, the majority of cities and towns in Illinois’ bordering states are growing, according to data from the U.S. Census Bureau.
When Illinoisans are polled on why they are leaving, taxes are the No. 1 reason they cite. Yet Illinois politicians continue to raise taxes, showing that political leaders have not yet heard the message of the state’s residents.

Chicago shrank more than any other U.S. city, but Berwyn, Cicero and Peoria are shrinking faster on a per capita basis

Chicago’s population declined by 8,638 people from July 2015 to July 2016, a larger loss than any other major American city. Illinois has 29 cities with 50,000 people or more, and 21 of those cities also shrank in total size.

However, on a per capita basis, Decatur is shrinking more than any other city in Illinois. Decatur’s population shrank by 8.5 people per 1,000 residents from July 2015 to July 2016. That means that for every 1,000 people in Decatur in 2015, there were 8.5 fewer people in Decatur in 2016.

On a per capita basis, Decatur’s loss was followed by Berwyn, Cicero, Peoria and Oak Park, all of which shrank by more than seven people per 1,000 residents.

Eight of these larger Illinois cities had population growth year over year. Champaign is the only Illinois city that had more than 1 percent population growth, fueled almost entirely by the arrival of international students at the University of Illinois.

Most of these cities are shrinking because there are so many people leaving for other parts of the country. Those losses to other parts of the country outweigh the normal population gains experienced across the state from having more births than deaths, and having a small inflow of international immigrants.

Illinois’ Neighbors are Watching Most of their Biggest Cities Grow

The story is different in neighboring states, where most cities with more than 50,000 people are growing. Illinois’ border states have 58 cities with more than 50,000 people, and 38 of them are growing. That means that 65 percent of such cities in neighboring states are growing.

In Illinois, only eight of 29 cities with populations of 50,000 or more are growing, which is only 28 percent of Illinois cities with more than 50,000 people.

A large part of the reason Illinois’ border states have growing cities and Illinois has shrinking cities is because Illinois is losing the border wars with all of its neighbors. Illinoisans are flooding into bordering states faster than ever before. Over the last 10 years, Illinois has experienced large net migration losses to nearly all of its bordering states, and those losses have accelerated in recent years. (The exception to this 10-year trend is Michigan, which shares a lake border with Illinois and to which Illinois had net losses of residents over only the two most recent years of data.)

Higher Taxes Will Push More Residents Out of State

The Census Bureau released its out-migration data the same week the Illinois Senate passed a massive tax hike bill.

This is a significant development in a state where residents are fed up with the high tax burden, and this frustration is pushing more and more people to leave. According to a Paul Simon Public Policy Institute poll released in October 2016, 47 percent of Illinoisans surveyed said they want to leave the state. And taxes were the most commonly cited reason people gave for their desire to move.

And according to a recent poll commissioned by the Illinois Policy Institute, fewer than 1 in 3 likely Illinois voters support raising taxes to balance the state’s books. Yet the General Assembly continues to insist on tax hikes as the way to close the budget deficit.

Illinoisans are taxed enough already, and the state will continue to lose residents until it reins in taxes and adopts policies to support more jobs growth.

The General Assembly has run a losing strategy for years: raising taxes and failing to reform spending drivers. This has not brought prosperity or opportunity to the state, and will not do so over the longer term, either.
Illinois will not become sustainable again until the state implements reforms so that the government, its bureaucracies and special interests serve the people rather than the other way around.

Until Illinois is fixed, Illinoisans will continue to vote with their feet against staying in the Land of Lincoln.

Michael Lucci
Vice President of Policy

* *  *

Those who leave are generally better educated and have higher wages than those who stay. Those who cannot find another job elsewhere have no choice but to stay.

Five Desperately Needed Reforms

1. Municipal bankruptcy legislation


2. Pension reform


3. Right-to-Work legislation


4. End of prevailing wage laws


5. Workers’ compensation reform

Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities whose hands are also tied by union-sponsored prevailing wage laws.

For further discussion, including pension analysis,  please see Puerto Rico Placed in Bankruptcy Protection: Illinois Needs Similar Deal.

Cook County Illinois Suffers Largest Population Drop In Entire US

Authored by Mike Shedlock via MishTalk.com,

Illinois voters are voting with their feet. Not only are people scrambling to get out of Cook County, but the entire state is suffering.

Illinois Policy Institute writer Michael Lucci explains in this guest post on Cook County Migration.

Cook County has Largest Population Loss of Any County in U.S.

Cook County lost more population than any other county in the United States from July 2015 to July 2016, according to a new data release from the U.S. Census Bureau.

Cook County shrank by 21,324 people. The county had more births than deaths and gained 18,434 people from international immigration. However, Cook County had a net loss of 66,244 people to other parts of the United States, which more than offset the components of population growth.

However, the people leaving Cook County aren’t showing up in other parts of Illinois when the net movements of people are considered.

In fact, most of Illinois is depopulating – 93 of Illinois’ 102 counties are experiencing net out-migration, and 89 of Illinois’ 102 counties have shrinking populations. Illinois’ dysfunctional government, weak job creation, and ever-increasing tax burden help explain why. A Paul Simon Public Policy Institute poll released in October 2016 found that taxes were the No. 1 reason people want to leave Illinois.

Cook, DuPage, Lake, Kane, McHenry, Will counties see net out-migration to other parts of the U.S.

The major driver of Cook County’s shrinking population is that the county’s domestic migration losses have doubled over the last five years, while international gains have remained flat and gains from more births than deaths have declined.

The flow of people out of Cook County did not result in net in-migration for the collar counties. Cook County’s net out-migration of 66,244 people was followed by net out-migration of 9,171 people from DuPage; 5,179 from Lake; 1,824 from Kane; 1,589 from McHenry; and 1,253 from Will. Kendall County is the nearest to Cook to have net inflows, with Kendall gaining 553 more people than it lost to other parts of the country.

The out-migration from Cook, DuPage, Lake and McHenry counties was large enough to make all those counties shrink in total population. Kane County and Will County managed to have population gains despite their out-migration problems.

It should worry policymakers in Chicago and Cook County that out-migration and population loss were already so strong in the July 2015 – July 2016 timeframe. That’s because Chicago and Cook County’s major property and sales tax hikes had not yet taken effect at the time of this out-migration. When those tax hikes are in place, the Chicago area will likely lose more population due to taxation. And the economic effects of increased taxation will be felt a few years later, with fewer jobs and economic growth than would have occurred without the tax hikes. Population loss in the Chicago area is likely to get worse.

Not just the collar counties: All of Illinois is seeing population losses

The problem is not just with Cook and the collar counties: The majority of Illinois counties are shrinking. Eighty-nine of Illinois’ 102 counties are shrinking in total population. Northeast Illinois is shrinking most in terms of total population, but many downstate counties are shrinking and seeing more out-migration as a percentage of population. For example, Rock Island and Peoria counties both have more out-migration as a percentage of population than Cook County.

Most of Illinois’ metropolitan statistical areas are also shrinking due to large migration losses to other parts of the country, with only Elgin and Champaign showing slow population growth. The Chicago metro division saw a net migration loss of nearly 78,000 people, driving a population decline of more than 19,000 people for the Chicago metro division.

Elgin had net migration losses to other parts of the country. However, Elgin’s population growth is attributable to an unusually high birth rate and a solid gain of international immigrants. Champaign similarly relies on international immigration to avoid a shrinking population size. Champaign showed a large gain from international immigration, likely a flow of international students to the University of Illinois.

The U.S. Census Bureau’s report does not come as a surprise, but it should serve as a warning to state and local governments. Illinois is depopulating, and no area is immune from its effects. Downstate communities are especially stressed due to the loss of manufacturing jobs and other blue-collar industries. And the Chicago area is likely to face additional stress as nearly $2 billion dollars in tax hikes are phased in over the next few years.

Lawmakers can take on two key measures to give taxpayers hope. The first is to freeze property taxes statewide so Illinoisans can feel secure in their homes. The second is to pass a balanced budget without any tax increases to give residents confidence that lawmakers can rein in out-of-control spending and not repeatedly hit up taxpayers for more of their hard-earned dollars.

Before considering any more tax increases, policymakers statewide should consider the sobering reality of how quickly people are leaving the state.

Michael Lucci

Mish Getaway

People keep asking “When are you leaving?” Rest assured plans are in progress and have been for some time.

But some people are stuck here. Others want to be here for personal reasons even though they are fed up with the state of affairs.

IPI Push

1. Give Illinoisans much-needed property tax relief


2. Consolidate Illinois’ many layers of duplicative government


3. Cut burdensome regulations to attract businesses and jobs to Illinois

The Illinois Policy Institute is fighting on your behalf every day in Springfield. Please consider Making a Contribution to Illinois Policy Institute.

I am an unpaid senior fellow at the IPI and receive no part of donations. My benefit is the same as yours. The IPI is fighting on our behalf.

The Illinois Policy Institute is a 501(c)(3) charitable organization, and contributions are tax-deductible to the fullest extent allowed by law.

Few organizations work as hard as the IPI to support Illinois taxpayers.

Guest Post - Americans Play Their Trump Card (And Why the System Always Deals Us a Bad Hand)

Guest Post - Americans Play Their Trump Card

(And Why the System Always Deals Us a Bad Hand)

By

Joe Withrow

(We are so inured to the present day socioeconomic system of exploitation and control that it has become seamless and mostly invisible to "We the Walking Wounded". Passed off as just the way things work, nothing to see here so move on, we sooth our crushed soul with the ego saving lament you just can"t fight city hall.

It rarely occurs to us there is no need to actually fight at all, that what we dimly perceive as the enemy, the thorn in our paw, is doomed by its own dominance of an industrial age soon to be left behind.

Please welcome back Joe Withrow (aka joegalt here on ZH) a long time Two Ice Floes guest author, with another insightful and timely article outlining what is happening and how to navigate the fall of the industrial age and the Rise of the Individual.) 

Cognitive Dissonance

www.TwoIceFloes.com

We wait anxiously in our seats as the orchestra finishes tuning, the lights dim and the curtain draws signaling the commencement of Act Two - The Trump Triumphant.

Act One - The Campaign offered an amazing display of political strategy and showmanship! The tried and true hero vs. villain narrative was perfectly established and relentlessly repeated, drawing all of us in. Evidence of Hillary"s dirty dealings were constantly paraded for all to see - the Podesta emails, the Clinton Foundation, Benghazi, the paid speeches to Goldman Sachs – much of it delivered directly to the people via Twitter leaving us all to wonder: will a Hillary indictment come? 

Our hero stood tall and fearless on television, staring corruption directly in the face. "Remember, the election is rigged...” he warned us, implying the villain would do anything, including cheating, to win.

America was listening.

Middle class citizens all over the country had their pitch forks and torches arrayed and at the ready; enough was enough! Even a portion of working class people on the "left", most of whom enthusiastically supported Obama in the previous two elections, threw their support over to the Trump camp.

The mainstream media made it clear a Trump victory was nigh impossible. But that only succeeded in invigorating supporters and enlisting new recruits. After all, the narrative of America is the ultimate underdog story. If George Washington and the colonists could do it, so can Team Trump!

Yet poll after poll came back with the villain comfortably in the lead. Enthusiasm remained, but hope began to ebb and teeter...then BOOM!

The crescendo was queued and Trump stood victorious against all apparent odds on election night.

Initially stocks sold off and gold skyrocketed on uncertainty as the vote tally came in, but then something very curious happened. As if a testament to the sheer power of our hero"s will, the markets completely reversed course in after-hours trading. By the time the financial markets geared up in the U.S. the next day, stocks were in the green and gold was in the red.

It was morning in America.

The opposition paid rabble-rousers to foment unrest in a handful of cities on the coasts, as well as on many college campuses. But by and large Middle America rejoiced. Away went the pitchforks. Away went the torches. Out came the baseball caps - a true symbol of American greatness. Their hero would be the next president of the United States; they had won and all was right in the world! The swamp would be drained, jobs would be returned, and prosperity would be restored. America would be great once again!

Just a masterful display!

We watch enthusiastically as the curtain draws to reveal our hero as he addresses supporters and the nation. First he speaks of the villain: "We owe her a major debt of gratitude for her service to our country.” he informs us. A few timid voices can be heard from the back of the auditorium: Wait a minute... didn"t you just say she should be in jail?

Those voices are immediately hushed. Quiet down! It"s just political talk, don"t you know anything?

Next our hero expresses his gratitude to a number of his high profile advisors: Rudy Giuliani, Chris Christie, Jeff Sessions, Mike Huckabee, Gen. Mike Flynn, Gen. Kellogg, Reince Priebus, the RNC...

To the ire of many, several apprehensive voices can be heard from the back of the room once again. Hold on now. Those are the same old political hacks who have been living high on the hog from the status-quo for decades! I thought you were supposed to drain the swamp... not embrace it!

Once again their voices are immediately hushed. Can it! It"s just political maneuvering. He has to play nice to get anything done.

Next our hero proclaims his vision: "We will embark upon a project of national growth and renewal..." This project, we learn, is to be a $1 trillion spending plan for infrastructure. The crowd cheers:  It"s about time we take care of our country! And think of the jobs!

Those tentative voices just can"t help themselves: Wait a minute... that sounds an awful lot like FDR"s New Deal. I thought we opposed the New Deal. Not to mention, that"s a lot of government spending...which is how the swamp got to be so darn big in the first place. I thought we opposed government spending? I thought we opposed deficits and public debt?

The crowd is getting pretty fed up at this point. Stop being a sissy... just wait until you see how he is going to pay for it! You don"t know anything about economics or geo-politics!

As Act Two plays out, our hero continues to announce the people who will serve on his cabinet and staff... more Beltway insiders... more Wall Street insiders... more swamp creatures.

The crowd doesn"t care very much... the only thing that really matters is they got "their guy" elected.  They can finally "get their licks in" at the annual Christmas party for the first time in eight years. The crowd claims to want the swamp drained, but observation suggests they simply want to be part of the winning team.

Such is the nature of politics; it is a zero-sum game. The crowd understands this perfectly well, but they think the game is "our side" vs. "their side". Left vs. Right... Liberal vs. Conservative... Working Class vs. the Rich... Main Street vs. Wall Street... Our Nation vs. Their Nation.

Those are all false paradigms. The zero-sum game is always Politics vs. Humanity.

It"s always Politics vs. Humanity. 

Always!

Politics proclaims hope and change, yet foments anger and hatred. Politics poisons the mind and pits otherwise good people against one another. Politics is the venom that encourages neighbors to actively hate one another, despite the fact they mostly share the same values, culture, and interests. Politics is the greatest engine of theft, coercion, violence, misinformation, lies, death, and destruction the world has ever seen.

Yet the crowd remains glued to political news programming and faithfully shows up at the ballot box every four years ready to enact political change. They are always trying to get the "right" people into office. They never seem to understand the things they wish to change have very little to do with the people in office, and everything to do with the structure of coercive government. Without the structure of institutionalized force, coercion, theft, and violence, it would not matter much who claimed to be the ruler.

This has been going on for hundreds of years now, ever since "representative democracy" convinced people they themselves own their government and that politics is all about civil service. Prior to this, people understood that they were "subjects" to their government, not "citizens", and they did their very best to avoid it whenever possible. That"s why the tax collector was once the most reviled of professions.

Here"s the thing: even if the crowd understood they were "subjects" to the structure claiming dominion over them, there is very little they could do to change it. You don"t get to vote for the structure or even for the fundamental components comprising the structure; you only get to vote for a public overseer. That is the great democratic deceit - the illusion of governmental ownership and control by “We the People”.

The crowd will continue to be preyed upon for as long as they fail to recognize this. But that doesn"t mean you have to be a victim.

The world has undergone a massive change over the past several decades – the type of change from which there is no return. This change has been the transition from the Industrial Age to the Information Age; a transition still in its infancy.

The Industrial Revolution, which began in the mid-to-late 18th century, has lifted more than a billion people from the shackles of poverty, raised standards of living exponentially and created the world in which we live today. In the developed world, even people of the most modest means enjoy far more comforts and luxuries than the wealthiest kings and nobles of the pre-industrial era.

Commerce was the driving force behind industrialism and the market system was spawned from enterprise and trade. But for all of its revolutionary and wealth-creating qualities, the Industrial Age carried one major limitation; it required highly rigid centralization.

Centralized institutions require a certain degree of administrative bureaucracy in order to function. This applies to corporations just as it applies to governments, and it is why corporate organizational structures fundamentally resemble government hierarchies.

All of these institutions employ pyramidal hierarchical structures: there are a few people at the top who send orders down to the people comprising the chain below them who pass those orders on down the hierarchy. Each successive chain is progressively larger as you work your way down the organizational chart.

Old or new, all legacy institutions employ failing pyramidal hierarchical structures.

The problem with bureaucracies is that they are slow, inefficient, and carry conflicting incentives and disincentives across the various chains of authority. These problems become magnified as the bureaucracy grows, and the one consistent incentive present in all bureaucracies is the desire to expand. As an institution grows, its focus becomes less on innovation or wealth-creation, and more on suppressing competition.

This is why the very institutions responsible for empowering individuals and enriching civilization on a mass scale always seem to stagnate and become parasitic over time.

So many institutional systems of the Industrial Age began (and I paint with a broad brush here) as liberators and innovators. These systems grew to encompass most of the globe, and they came to be thought of as permanent. For many, perhaps they still are.

Francis Fukuyama penned an essay back in 1989 titled The End of History? which suggested that humanity may have reached the end of its socio-cultural evolution with the collapse of the Soviet Union. Francis made a number of good points in his essay, and overall it made perfect sense at the height of the Industrial Age.

But God has a sense of humor and the Universe is unequivocally characterized by change and paradox. The Information Age was beginning its ascent precisely as Mr. Fukuyama was proclaiming the supreme permanency of western regulatory democracy and its established institutional systems. Little did the Establishment know that a new disrupting force was rising from the ether.

In fact, Timothy C. May had already penned and presented his powerful manifesto a year earlier at the Crypto 88 conference. History may very well point to Mr. May’s manifesto as the definitive beginning to the Information Age. Here’s May:

A specter is haunting the modern world… Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other…

Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation…

Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions…

That day has arrived; we are living in the early stages of the Information Age. Most people may not know this yet, but they can feel it.

The institutional foundation of the industrial world is crumbling around us. Governments are bankrupt. Social welfare program costs are growing exponentially. Unions are broke. Pension plans are severely underfunded. National currencies have been trashed. Blue-collar jobs in the developed world have been lost to low-wage countries. Low-wage jobs have been lost to robotics and automation. Many of the jobs just disappeared entirely. Everyone"s retirement account is propped up by the constant creation of money out of thin air required to keep the financial markets afloat.

Welcome to the Information Age!

The Information Age is still in its infancy.

In truth, these are all great things. The seeds of a second Renaissance for human civilization have already been sown. These seeds will blossom as civilization continues to move away from the Industrial Age model and its centralized dominant/submissive paradigm.

Think about it this way: technology is conquering scarcity and reducing the need for centralization.

It required 40% of the U.S. population to work in agriculture in order to produce enough food to meet demand in the year 1900. Today that number is around 2%, and food is more available than ever before. You can find milk, eggs, meat, fresh fruits, vegetables, and all kinds of other items at your local grocery store year-round. This has enabled people to focus their time, energy, and labor on more advanced endeavors which in turn has led to an explosion of technological innovation.

As a result of this drastic reduction in scarcity, the average person today is far wealthier in standard of living terms than the wealthiest people alive one hundred years ago. Take a few minutes to walk around your house and catalogue your furniture, appliances, electronics, gadgets, widgets, and stuff. Most of what you take for granted every single day was not available to your forefathers a mere one hundred years ago.

Here"s the point: the world is not going to hell in a hand basket; the institutionalized industrial model is.

I don"t know whether or not the centralized structure of coercive government was a necessary evil on the way to building an advanced civilization, but I do know this: politics is 100% obsolete in this digital age we now find ourselves in. We are living with space-age technology, yet we still employ the structure of bronze-age rulership by means of force, coercion, theft, misinformation, and violence on a mass scale.

We have been conditioned by this model to view ourselves as a victim always in need of a savior. Yet we humans are engines of creation. We can imagine and envision, then turn our imaginations and visions into reality. I mean that quite literally. It is just a choice. We are astonishingly capable beings, but we have been conditioned to focus on manifesting conflict and negativity.

This is why I am so saddened when I see politics, and the dark forces behind it, trick wonderful people into spending all of their time, energy, and thoughts on political abstractions. I see this every day in my own life. I see people whom I love and respect get sucked into the political game; I see them elevate politics to religious levels and willfully ignore those things that are most important in their own life. I watch as the twinkle vanishes from their eye, the pep disappears from their step, and the anger slowly poisons their psyche.

And I understand. I was there myself not too long ago.

As best I can tell, western civilization is a tale of two cities at the current point in time.

The people in one city are confused and angry because they do not understand why their industrial institutions are failing them. The 2016 U.S. election cycle made it obvious the people living in this city reside on both the "left" and the "right" side of the modern political spectrum. They know it’s broke and they want it fixed no matter what it takes, and no matter whose rights are trampled to do so. They are looking for a hero, and they see politics as the solution.

The people in the other city are much less concerned about the devolving industrial model because they are leveraging the budding trends of the Information Age in their favor. These are the people learning how to operate in the digital economy that bypasses industrial borders. They are learning there"s a whole lot more to the money story than what they were led to believe.

They are learning how to build collaborative networks utilizing digital technology and secure communications. They are actively creating superior alternatives to literally every civil service function currently provided by industrial institutions. They see politics as the problem, and they see decentralized networks as the solution.

I lived in that first city several years ago. I was angry and depressed all the time. I thought the answer was to fight the trends; fight the world. I was stressed to the max, and terribly unpleasant to be around...just ask my wife.

When I eventually got tired of being angry and depressed my mind switched gears, and I moved to the second city. It"s much more pleasant here, and the people are friendlier. The people in this city aren"t trying to change the world - that"s a win-lose proposition. Instead, they are building an alternative world based upon participatory networks and voluntary association utilizing modern technology.

Never before has this been possible in recorded human history.

While the crowd is focused on fighting the existing status-quo on the macro scale, a growing number of individuals are focused on building a better model on the micro scale. The new model is not fixated upon enacting "social change", it is geared towards empowering individuals. In fact, it"s not much of a model at all in the traditional sense. It is not about replacing the old structure with a new one. Instead, the new model is a perspective paired with an understanding of the economic trends, digital technologies, and financial tools necessary to build a life of freedom, wealth, and fulfillment to the fullest extent possible.

This is the theme of the third edition of my book titled The Individual is Rising: Transcending the Industrial Order and Prospering in the Digital Age.

Pick up a digital copy absolutely free at http://theindividualisrising.com/.

The book is available in both paperback and Kindle format on Amazon. But at the moment I’m not terribly interested in selling copies as much as I am in distributing copies. Anyone interested can pick up a digital copy absolutely free at http://theindividualisrising.com/.

If you are tired of politics and its associated corruption, this book is for you. You see, in every developed industrial country there is a glass ceiling of-sorts over the middle class. When you add up all of the taxes across all levels of government, the middle class pays at least half of their income to their governments each year.

In addition to taxes, the middle class is also subjected to the whims of their rulers almost entirely. They just don"t have any other options - they are stuck. And truthfully very few in the middle class even think about it. After all, the rat-race consumes the bulk of their time and energy.

But what if you don"t want to participate in any of their political programs? What do you do when you just want to be left alone to experience this life in a meaningful way, but politics and its supporters are hell-bent on forcing you to play their games and participate in their schemes? What do you do when the moral busybodies are determined to keep you corralled within their systems of taxation and surveillance? What do you do when your logic is met with anger and condemnation?

Historically, the answer has been to fight; to use force - politically or even physically - as a means of instituting change. This is a losing proposition, and it is completely unnecessary in the digital age.

In the old days, the dreamers, visionaries, philosophers, and wayfaring souls were forced to meet secretly in the back rooms of taverns, inns, and speak-easies to discuss their radical ideas. Today, they can all connect with one another to share information and ideas instantaneously on the Internet, in total privacy thanks to encryption technology, from the comforts of their own home.

What this means is individuals can create their own future independently; they no longer need to fight to reform society in accordance with their own ideals and preferences. As systems theorist Buckminster Fuller pointed out, fighting the System only strengthens it. Here"s Bucky:

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

For perhaps the first time in history, the Information Age and its digital economy are enabling individuals to build and experiment with new models on a global scale in relative peace and freedom. I don"t think the significance of this is well-understood or appreciated as of yet.

This dynamic is unprecedented and absolutely revolutionary. And it is irreversible. The rulers can certainly build censorship and misinformation into popular social media sites, search engines, and top-level domains, and I suspect they will. But they cannot censor or shut down distributed networks designed to decentralize the Internet and all of its applications by bypassing third parties entirely.

The rabbit is out of the hat, and it won"t be going back in. It is the Gutenberg Press all over again, except on a much greater scale. Fundamentally, the encryption technology driving decentralization is just a branch of mathematics. No matter how much legislation is passed, and no matter how many guns are drawn, the rulers cannot alter mathematics. 2 + 2 will always equal 4.

This presents the disenfranchised individual with a unique opportunity.

Most aspects of our society are digital today. Information is digital. Communication is digital. Vital records are digital. Money is digital. Wealth is digital. Transactions are digital.

I don"t think this dynamic is well understood, nor do I think it is particularly welcomed by those of us who came up according to the rules of the Industrial Age. But those who understand the trends and the available technology can organize their affairs to bypass the abusive structure to the fullest extent possible to enhance their quality of life. Further, they can build alternative networks geared towards any desired purpose; they can construct better alternatives to the existing model which is based on centralization, hierarchy, monopoly, coercion, and political power.

Now this doesn"t reduce the need for basic resiliency - food, water, shelter, and gold... but those are chaos hedges. My experience is that a fixation upon chaos hedges tends to foster an unpleasant and rather defeatist perspective. I am not sure that fulfillment can ever come to those with a defeatist mindset. Simply, a focus on negativity necessarily crowds out the inner genius capable of building a custom-tailored life.

Einstein once mused: "I think the most important question facing humanity is, "Is the universe a friendly place?"."

If we come to the conclusion that the answer to Einstein"s question is no, then we are doomed to a Hobbesian life of scarcity, struggle, and subservience. But if we decide the answer is yes, then a whole new world of opportunity opens up to us. As to what, specifically, that opportunity is - that is up to you.

It"s all just a choice...

Joe Withrow

aka joegalt here on ZH

There are always Jokers in their deck. The only way to win is not to play their game.