Schildgen's Intelligence Review - A.K.A.: HERMES AND THE GNOMES OF LaSALLE STREET

The above chart, courtesy of the book "Irrational Exuberance" is as meaningful to the average citizen/consumer as most

housing charts are meaningless and useless. The massive Housing Bubble started in 1997-98 and not in 2001-02 as put

out by the controlled financial media. To adjust for a bullish 10-year Real Estate Bubble, the downside has to be

I love the headlines for two reasons. First, they confirm exactly what any first year business srtudent knows in the real estate sector, there are always 'Cycles' present in business. Secondly, I've known so many arrogent traders who loved to flaunt their multi-million dollar homes at me, to show off how 'easy' it is to make wealth off of owning property. Two-, three- and even five million dollar homes are common on the North Shore of Chicago. The trick is, keeping them! Why then, if it's such a cool thing to get totally into debt, live week to week while trading at the exchanges, letting $ 100,000-weeks come and go through your hands, do you have to go to K-Mart for your household goods - in your Mercedes, do you sweat each and every week avoiding paying off your credit cards? Living in debt to such a degree is utterly futile, just to impress the neighbors. All you're doing is racking up obscene amounts of interest/debt to your Money Masters. You're a slave! And you won't acknowledge it! Worst still, one fellow I know is literally living week-to-week in meeting his huge debt, putting three kids through college. He survived the last five-six years or so by refinancing his house every two years come springtime. Now the game has ended for him! Coming from a family where your father was a working class person, may let you believe you are 'ahead' or 'better' than your father was, but I doubt it. It might be an emotional accomplishment, but in reality, it's all lies. Falsehoods with no degree awards. If your net worth (market valued) is $ 6 million or so, and you owe $ 8 million, you haven't learned a darn thing your entire lifetime. This is the finality of a "Financial Bubble." Learning what you DON'T have! Your fathers learned the hard way, from their fathers, what NOT to do, like get into debt as a crutch too heavily. And own your home outright as soon as you can.

Unfortunately, the 'bigger' the manufactured- (artificial) growth Bubble, the bigger the fall. I won't report the following article, BUT.... these words would NEVER APPEAR in anything to do with real estate 18 months ago, when I said a Real Estate Bubble collapse was IMMINENT. It hasn't really hit the used housing sectors yet, except for a sharp drop in prices, both for fringe area properties as well as upper middle class, deep in debt non-thinkers. "Panic has begun to sweep the sub-prime mortgage sector in the United States after the bankruptcy of 22 lenders over the past two months, setting off mass liquidation of housing loans packaged as securities." And, "The rapid deterioration could not come at a worse time for British bank HSBC, which has set aside $ 10.5 bn, (5.4 bil.) to cover bad loans in the U.S." "Low-grade BBB-rated securities - measured by the ABX index - have CRASHED from near par of 100 in early November to 72.5 this week." (I've been telling my readers how much the Debt market has been supported and manipulated the last 2.-2.5 years, especially by Japan.) A 30 % drop in Bonds is DEFINITELY in the category of a 'Panic' and 'Fiscal Crisis' category. The ONLY recommendations I've made in my Debt section, are the SELL signals I've gotten, mainly via the cycles elements I know. Please go to http://www.telegraph.co.uk/core/Content/displayPrintable.jhtml;jsessionid=5J11UOYBF...

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According to www.realtytrac.com, "Foreclosures on the Rise Nationwide." As of February 13, 2006, a total of 846,982 properties nationwide entered some stage of foreclosure in 2005. New foreclosures increased 25 percent from the first quarter to the fourth quarter. In other words, it's a "growth industry." Florida was the 'winner' with 121,843 properties in that category, accounting for 14 percent of the total. You won't find much of this in major news stories, articles or TV reporting as most advertising for the printed news media is from real estate brokers and sales companies. All three phases of foreclosure are: Pre-foreclosures - Notice of Default (NOD) and Lis Pendens (LIS); Foreclosures - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned , or REO Properties (that have been re-purchased by a bank).

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In the last two months, the world has seen three more unusual typhoon-class storms ravage the underbelly of America. In 2004, four typhoons or hurricanes attacked Florida in unusual movements with one doing a reversal loop in the Atlantic Ocean (Ivan), and coming back in again. Another storm last year went below the equator to hit South America, which is almost unheard of in recorded history. This is because of the Coriolis effect on rotational vortexes on planet earth�s rotation. (They shouldn�t cross the equator because of the E.M. energy on their initial push or movement, no less than five degrees from the equator. Rotation should be counter-clockwise in the N. hemisphere, clockwise in the S. hemisphere.) Plus, at least two of the four that hit Florida in 2004 had five-spokes in the �eye� as seen by satellite imagery on live satellite TV. This year, hurricane Wilma had a perfectly stylized �2� in its center by cloud/radar imagery � a near impossibility. I made hard copies of all these to save in my files to verify their existence.

Back in May 2005, I wrote a long piece showing the extremes for real estate overvaluation pricing for the six Bubble Cities of this decade � Miami, Phoenix, San Diego, Los Angeles, Las Vegas and San Francisco. The major demographic force behind all this easy money flowing into bricks and mortar, or pine and plastic (depending on the type of house you bought), is retirees seeking to avoid snow, �6-month snowbirds,� as well as domestic drug laundering or stolen foreign money coming onshore (i.e. Russian Oligarch Mafia in Florida, etc.) rushing into these warm city, coastal enclaves and hi-tech dynamic cities like San Francisco or Palo Alto.

The closest thing to monitoring this Real Estate Bubble is by checking on total amounts of assessed fees for turnover of titles, which I can�t seem to find, in these warm city localities. The next closest chart of housing prices, with inflation adjusted prices I could find is about five months old, from the National Realtors Assn. But the magnitude of the dollar volume of real estate title turnover is intensive. The sharp increase of compounded values the last two years, especially in Florida, up 20-25 % yr. is indicative of a �buying price spike.� But Phoenix is definitely in the running with an estimated plus 45 % yr.-on-yr. gain. A parallel movement of prices for this pattern has just occurred in the crude oil, gasoline and heating oil. So now you �market price experts� know what to look for, as well as expect on the downside.

A year ago in Phoenix, there were 145 homes selling for $ 500,000 or higher. Today, that number is 1,341 as of January 2006. In Boston, Ma., the housing inventory is up 54 % from a year go. Existing home sales fell in December for the third month in a row nationwide.

In talking to my main contacts and friends in the swampland of America, for those who had been hit both last year as well as this year by extreme weather, to a man, they all want to move back north mostly to the hill country of Virginia or North Carolina. That way, they�ll avoid the extreme snow conditions and cold (in Chicago � never), but also the fun �June-November hurricane season.� No longer will those travelogues from the 1950s showing a dozen blonde water skiers on skis, in pyramid form, being pulled by powerful motorboats, entice everyone down to the crystal clear, blue water lakes, perfectly turquoise skies and smiling faces and bodies. In Texas, California OR in Florida!

Completely related to my analysis and judgment in the overextended real estate sector, an article I caught recently espoused the announcement that Tom Barrack, Colony Capital, was getting out of U.S. real estate. Creating returns of 21 %/yr. Since 1990 before fees, an admirable record for any investing area, he stated that, �I feel totally safe playing polo on a field of pros. But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don�t know when to hold back. There�s too much money chasing too few good (real estate) deals, with too much debt and too few brains.� His total real estate holdings include the Raffles hotel chain in Asia, the Aga Khan�s former resort in Sardinia and Resorts International in the U.S., the largest gaming company here. Check out the full article: http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Why+the+world%27s�

In my opinion, Florida represents the tip of the �iceberg� (make that �swampland�) for real estate speculation and just plain Buying Mania. It has most definitely been pricked by the last hurricane Wilma that crossed over the southern portion of the peninsula hitting the Palm Beach-Ft./'Liquor-dale' region the hardest. Comments from contacts and friends I have down there indicate that, they will be migrating back up north to find a nicer place to live, once they finish repairing this year�s damage. Most have just gotten around to finishing or repairing last year�s damage. Two years back-to-back is about the maximum memory most people have in thinking nowadays. Just ask any farmer about his next year�s plantings.

Most people state that prices have �stabilized� (which means �mania prices pausing between hurricanes�) by going flat, compared to 3-months and to a year ago. In a �Buying Price Spike� pattern, going flat is a sign of a turnaround to the selling panic state. For a chart explaining these psychological/emotional- and financial attitudes I use, I provide a chart elsewhere on my esite on the NASDAQ Index topping out, with all the attendant financial- and emotional attitudes and prices then collapsing, never to return to la-la land. Also, my initial chart called �Crowd Psychological Profile� on the giant gold market price spike and collapse of 1975-86 is in my book, �Analytical Methods for Successful Speculation.� 1987

Real estate prices have to keep on compounding faster if the Bubble were intact. Once the climax is reached, the market is saturated with short-term owners or �long-holders,� and the only place the market can go therefore, is sharply down. Expect the reported selling climax observation to be early next year. Floridians who want to escape will be selling into a dried-up market demand function of retirees, second-home buyers and migrant illegal aliens all wanting sharply lower prices. How much repair work can be done by early next year remains to be seen because of the extensiveness of damage. Volume of sales of condos and regular housing has shrunk, but is still technically going on. The rental 'market' is tight because of all the damage. Mortgage rates are climbing however, courtesy of the Fed jumping S.T. Fed funds rates by another 0.25 % to 4.00 % for member bank borrowings. Once S.T. rates supersede the L.T. rates, the developers will be on the hook and building will grind to a screeching halt. This creates what is called an inverted yield curve, which redirects everyone to begin liquidating assets to raise cash. It happened in 1974, 1980, 1988 and 1990. (And 1997 in all of S.E. Asia, Malaysia, Indonesia, Thailand, Vietnam, Myanmar, Brunei, Philippines; as well as in all Latin America.)

Upscale housing, where price is not a problem and mortgages are optional, has slowed appreciably. One contact on Marcos Island, a little dot on your Rand McNally Interstate Atlas at Southwest Florida near Naples, has sales volume down 70 % from 2004, year-on-year.

Just like the (potential-) monster earthquake coming up in 2007, +/- 6 mo. in Tokyo, Japan, similar to 1923�s destruction, I have tried to relate the effects of the 1926�s hurricane to this real estate mania. It was also a timing event due to complete its cycle. The reason I say this is that California also had a bubble mania going on in 1926, which topped the same year. So was it really the hurricane? Amazing!

Financial markets are not the only things being manipulated in plain view. There

is an extensive amount of information on the last fifty years being the time that Nikola Tesla�s advanced knowledge of electricity and energy (especially scalar wave technology and free energy) has been put into use by several governments. The U.S., Russia, France, England, Japan and possibly China are into weather modification for both agricultural- as well as military uses. I could write a book on our (America�s) military�s extensive involvement in this, which is a byproduct of our government�s profligate spending. Everyone from NASA, the U.S.D.A., H.A.A.R.P., G.W.E.N., P.O.L.E.X., A.I.D.J.E.X., the Air Force, Marines, Army and Navy have their own weather programs. The Office of Naval Intelligence (most involved with the E.T. craft, agendas, etc.) is the dominant force behind the current chemtrails or constant chemical spraying over the continental areas. Private research is also there but on a much more restricted level.

1940s-50s - Hurricane seeding with dry ice, by military planes. In the late 1940s, in an attempt to disrupt or dissolve a storm in the Atlantic, the lopsided spraying and resultant disgorging of moisture caused one to slam into Savannah, Georgia. About 45 dead and millions of dollars of damage occurred. From this time forward, all experiments along these lines are kept quiet and denial becomes the order of the day. This policy of denial (lying) becomes the standard procedure of all military agencies as well as the O.S.S./C.I.A. covert agendas. That way, they can do whatever they want without being held responsible. Also, the National Oceanic Atmospheric Administration (N.O.A.A.) was created to attract the top physicists and meteorologists in the world to study and reduce hurricane damage. In August 1969, Hurricane Debbie was seeded five times one day, reducing the wind speed from 115 m.p.h. to 80 m.p.h. Two days later, another seeding decreased wind speed to less than 100 m.p.h. again.

1960s/&70s -The Vietnam Police Action (was never declared a �War� by Congress) saw extensive experimentation of using chemicals and U.L.F. to make typhoons drop their rain over enemy territory to disrupt their movements. In effect, the government was trying to increase windspeed and quantity of rainfall to do extreme damage.

1971 � The United States and Soviet Union began secret cooperation on world weather engineering. In 1972, both countries� scientific teams conducted the Polar Experiment of the Global Atmospheric Research Program � P.O.L.E.X. By 1973, both nations secretly cooperated on A.I.D.J.EX. � the Artic Ice Dynamics Joint Experiment. They�ve been in close activity ever since. From 1968 through 1973, the weather in Chicago, Illinois, always had arctic fronts (0 degrees to �20 d. F.) go through the last week of December, just like clockwork.

1962-83s � Project Storm Fury, the U.S. government�s project set up to discover how to control hurricanes began in earnest. More recently, the pouring of tens of gallons of vegetable oil onto the sea to disrupt high evaporation of very warm waters has been attempted. (If ever implemented on a full time basis, just go long soybean oil and roll positions into the future. We had/still have over 24 hurricanes this year alone I believe. That�s a lot of soy sauce!) (No relation to the 1963 �Salad Oil Scandal� perpetrated by Tony DeAngelis, New Jersey.)

1968-72 - Russia experimented with two extremely powerful 20 million watt transmitters, one near Riga in Latvia, the other close to Moscow. In an attempt to disrupt the weather�s jet stream flow over the U.S., they pushed it away from their virgin lands area, a marginally productive area that they were trying to make stable for future food production. Total crop failure there forced them to go to the world market and purchase some 25 million metric tons of animal protein feed. The U.S. became the recipient of this weather/offensive manipulation by filling this demand, the largest export order ever seen in the world (October 1972).

1976 - The Soviet �Woodpecker Grid� becomes active; at the 10 Hz. E.L.F. level. This was so described because of its sound effects. Using three 40-million watt radio transmitters, this was intended to really disrupt weather patterns, create drought or flooding by interfering with the normal front locations in the different seasons. There is a global circuit called the �Wilson circuit,� in which the ionosphere is maintained at a positive potential in the range of 200-300 kilovolts, relative to the earth. The circuit is completed between the conducting earth and the bases of thunderclouds. This massive free energy was discovered by Nicola Tesla in the 1890s, and tapped into via his experiments. To understand the power behind these transmitters, check the radio stations in your area. The strongest have their rating at around 50,000 watts. Compare that to a 40-million watt transmitter.

1980s - The federal government�s Ground Wave Emergency Network (G.W.E.N.) was created supposedly to give the government communications in the case of an atomic war. But some researchers say it also has weather modification as its intended purpose. Because of the Star wars special budget considerations, Reagan politics, etc., no exacting source of credible intel on this construction can be found. It has also been suggested that we aided Hussein in his war on Iran with weather manipulation, from 1980-88. Because of the regime change in Tehran in 1978-79, the taking of U.S. hostages, etc., we sold arms, fighters, poison gas, etc. to Iraq as well as used weather disruption for our new �friend.�

1993 - The �Great Midwestern Flood� of the U.S. essentially has been shown to be a

byproduct of both U.S.- and Russian weather targeting. For 49 days straight, from June 11^th on, rain fell in exceptional amounts in all areas in about 8-9 states, outside of the Army Corp of Engineers� planned floodplain areas. The saturated ground created a standing water problem that some hydrologists called the �Sixth Great Lake.� A blocking pattern or stalled front over the upper Midwest forced this excessive rainfall to saturate normal farmland (20,000,000 acres) as to be unplantable (bullish for crop prices) and destroyed much as the walls of water filled the Mississippi Rivers floodplains to the point of breaking 1,000+ levies.

begins in earnest, in Gakona, Alaska, to broadcast U.L.F. frequencies into the ionosphere for various experiments. This was planned as originally part of Pres. Reagan�s Star Wars Initiative defense system. It was formulated by Dr. Bernard Eastlund, who actually owns the patents on the wave plasma physics he created, to modify weather and use the ionosphere as a communications device. It is managed by the U.S. Air Force Research Laboratory and the Office of Naval Research, on a D.O.D. location. Eastlund�s research is also tuned to artificial generation of acoustic- and gravitational waves in the atmosphere. This enables one to move hurricanes and mesocyclones at will, theoretically.

1998 -Operation Cloverleaf starts. Massive aerial spraying by planes controlled by

the Office of Naval Intelligence has saturated our skies with various chemicals of a life-impacting nature, mainly on our immune systems. Barium particulates, aluminum particulates, red blood cells, plastic polymers, etc. all have been detected by private air quality scientists. There is a total denial on this weather modifying activity on the part of every level of federal government and military agency to date. Even top lawmakers have been stonewalled as to their existence, the planes creating these poisonous sprayings in plain view and the obvious chemtrail patterns criss-crossing in the sky.

1998 - A renegade criminal organization called the AUM Shinrikyo (�the Supreme

Truth�), made famous for their massive Sarin poison gas attack on a Tokyo subway killing thousands, have been fingered as using Tesla scalar wave technology to disrupt several countries economies. Blackmailing of the Tokyo government has netted them $ 1 billion in gold annually. This splinter group from the Japanese Yakusa merged with an offshoot of the old K.G.B. of Soviet cold war agents, to perform some of these actions. Check out Lt. Col. Tom Beardon�s esite �Cheniere.�

1998 - Solar Power Satellite based systems have been designed for a power output of

1,000 megawatts. Dr. Bernard Eastlund, the astrophysicist who has the patent under which H.A.A.R.P. operates, stated back then, acknowledges that the project on the ground are to go to 980 KW then, with plans to ultimately go to 3.6 MW. The H.A.A.R.P. antenna as it is now configured modulates the auroral electrojet to induce E.L.F. waves and thus, could have an effect on the Zonal winds.

�attack� Florida with severe results. One, called Ivan � a Russian name uniquely enough, did a mysterious U-turn and re-charged the Florida land mass. A certain meteorologist, who is quite familiar with normal behavior of storms, began calling them �HAARPICANES.� This was a clear inference to the military complex in Alaska as having some responsibility for the storms� paths. The unique path of one hurricane took a right turn, when it had been heading for the Tampa-St. Petersburg area, going up the Naples/Ft. Myers Caloosahatchee River, and then up the center of Florida. This is not normal as storms �feed� off of the hot water evaporation for their life�s energy. Another clear sign they are being �directed� as used to do deliberate damage.

this, it was obvious that nothing was normal about her path. It went exactly over the National Hurricane Center in Florida, moved generally into the Gulf of Mexico, paused and then, sent on its way northwards. It veered slightly right going into the oilrigs and refineries owned by British Petroleum, that is, by the British monarchy.

Does anyone here know that your Congress created and funded with $ 10 million, another bureaucratic federal agency from enacted legislation entitled �Weather Modification Research & Technology Transfer Act of 2005?� I read the details of it, and it follows the same path of being an appointee-structured political top of a far larger bureaucracy in the future. It gives legal standing to what the government has been doing for over fifty years, with varying results. It was passed October 1^st, 2005!

The constant idiot claims by TV�s �talking heads� is a heads-up sign that you (the masses out in idiot-tubeland) should believe that the passage of these storms over the oil platform areas in the Gulf, then the refineries in the Louisiana-Texas area including the Beaumont oilfield in E. Texas, and Houston, etc., gives a valid �excuse� for higher crude, gasoline and heating oil prices. In common language, this is a form of propaganda and brainwashing � repeating a statement that just isn�t true over and over and over again. Natural gas prices, the tightest or most bullish by their chart action, are in this group as well! Does this make you think, that this was an Intel operation, ordered by some powerful interests, in an attempt via their Monopoly (the M-word!) to raise gross revenue and profits before the U.S. dollar shrinks to sharply lower levels? A lower dollar drops their gross revenue as world oil prices are quoted in dollars, and the purchase of U.S. treasury debt keeps the debt market intact, the money bankers in power and the federal government in absolute control. The actions by the federal government, against Venezuela, Iraq and Indonesia, all speak volumes.

This was the climax! Stupidity unbridled! How many speculators will be wiped out � Unknown! How many lives will be ruined by misjudgment and ignorance? Somehow, Miami sales turnover by some sources has been estimated at around 85 %. So all those filthy rich, cash heavy title-flippin� professionals are going to get caught, gutted, filleted, garnished and served piping hot from this real estate bubble popping. �.and, learn market timing the hard way. As the Chinese say �Most people are very smart; some before, some after.�

This was my cyclical high as projected from the earlier 1988 high in U.S. real estate back then, based on the coastal cities quick money washing from the narco-trade. The massive infusion of cash from cocaine, went offshore, was washed and came back to the cities where the owners were based. The Midwestern cities had almost no bullishness at this time, mainly because they were not �international� economically. But this cycle was still there in effect. Tokyo�s 1999 bubble burst for which they are still feeling the liquidation effects 17 years afterwards.

The actual 18.33-yr. cyclical highs of Edward R. Dewey�s Cycle Foundation were: 1997, 1979, 1961, 1943, 1925, 1908, 1889, 1870, 1852, 1834, 1816, 1798, 1780. (Years after 1958 are estimates.) You may note that some of these years are off one year from major �Panics� or �Financial Crises� as the business press of the day called them. The 1908 real estate high came about two years early, as the January 1907 high in equities, masterminded by J.P. Morgan to wipe out a few banks, Hetty Green�s bank, the Copper Trust, etc., took effect as cash and loans were called inby banks he controlled. The 1870 real estate high came one year early, in sync with the 1869 Gold Squeeze that failed, putting the N.Y.S.E. into a Panic where its doors closed for ten day�s time. (Jay Gould and Jim Fisk were the masterminds of that ploy.) The 1979 real estate high was obvious as interest rates kind of wiped out every living developer in America (S.T. rates � 23 %; L.T. rates 16.9 %).

2006 happens to be the year the 3.97-yr. equity bear market cycle hits, as well as

the 7.998-yr. equity bear cycle combination applies, simultaneously with the 18.33-yr. real estate liquidation cycle to 1988. It will be glorious to see these negative cyclical patterns align to create a massive fear-oriented wave of dumping, dumping, dumping of paper assets. Real estate properties are not just going to stop turning over, massive amounts of normal holders of homes and businesses are going to unload or rather, try to unload in a panic state. That�s why they are called �Panics� and described as all-pervasive or across the board by the masses behavior. The fear spreads that they may not be able to get out at current prices, whatever they may be, which induces �selling at any price� logic/behavior. After �buying price spikes,� or what I affectionately call the buying panic stage, a selling panic stage is always the next phase. The top of the price activity is actually a �release mechanism� or �energy factor� that triggers the masses to change attitudes in a moment. Until you�ve been on the floor of an exchange, and witnessed a pit or ring turn from buying to selling, in which the �paper� (orders) flow changes accordingly, you will never appreciate a crowd behavior mentality in effect. The need to �get liquid� is an irrational behavior function, always a fear-emotion, irrational to the extreme. It is a byproduct of the reciprocal or greed-emotion, also irrational for the masses to throw their money � their most cherished possession, into owning something at a dubious price level. The need to have that thing overwhelms all logic no matter how much rational discourse takes place. It started as hope, and turned to greed.

bonds will be joining the foray. Prices should sell off sharply, like what I experienced in the remnants of the post-�90s stock bubble euphoria where P.E.s went to obscene levels in the hundreds. Investors, who were of the �buy-and-hold� mentality, were effectively destroyed. All the prior 20-25 years �learning curve� reality in the markets became �wrong.� If they have learned to be more flexible (note: haven�t lost ALL of their discretionary money yet), they will lose most of the balance of their holdings. Seeing the equity markets (worldwide) appreciate the last 31+ months MAY have lulled them back into a state of semi-greed or �shallow want levels.� They will give back much if they haven�t adopted a trader�s viewpoint to their trading campaigns. You might remember the stock market values (the 1990s Bubble) of pure euphoric P.E. values of hi-tech equities in the hundreds/P.E.s. The main computer software/hardware indexes got up close to the 100+ P.E. ratio levels by March 2000 if my memory serves me correctly. Taking out the big-four issues, with more established businesses and huge issues of stock, increased the P.E.s of Indexes to still sharply higher levels. �Irrational Exuberance� was uttered by Greenspan back in December 1996, four years before this mania ended.

When I tell experienced traders that the P.E.s in the final quarter of 2006 will be somewhere near 6-8 P.E. and hi-techs, 15-20, all I get is derision and negative comments as to my judgment. But my views are based on reality and history. The lows prices of stocks in the 1974 bear market were at 6-8 P.E.s. The same thing existed in the mid-1949 bear market low price year, with average yields at 8 %. Their sarcasm of my projections is based on a short history and limited understanding of the Crowd�s psychology dominance of value by �dividends� (yields) and �earnings� (honest 10K figures, not the salesmen puffery of the �90s decade). I also have a composite U.S. stock index back to 1792 from the Foundation for the Study of Cycles, thoroughly analyzed for 213 years in my methodology. �Computer Camelot� will not return, no matter what the electronic industry specialists believe. The high growth phase of that industry is over, just like the PEs of old. In the upcoming bear stock markets of 2010 and 2014 (-especially), this country will be on its knees, with a nearly destroyed banking system and paper currency debacle.

As Congress tries to inflate its way out of its profligate recessions they themselves create, an inversion of effect shall accrue to collapse the Dollar�s worth and compound the debt repudiation. Our English-style paper money is �debt fiat,� highly interest-based indebtedness on worthless paper money. Massive selling pressure in all financial assets will compound the flight to liquidity. We have become a �slave economy� to the international banking interests already. Soon, the cycle will be complete. The so-called �U.S. Dollar� may have disappeared if the selling wave and needs of the middle class are too great. I called for not one, but TWO Civil Wars in the immediate future in this country. Wars, real wars not the lying, Narco-Oil political machinations of our corrupt regime, are due cyclically in 2007 and 2028 (the Main Internal War), plus or minus one year, with a high level of confidence. This war cycle is an absolute or reliable one I discovered from my energy cycles research back to the 1500s. It ties into the 1776-80 Revolutionary War along with the 1860-65 Civil War as well as with the WW II period.

Half of the 54.90-yr. Schildgen Mania and Panic Cycle is 27.45- years. From 2002.35 to 2030, interest rates and commodities are moving higher in certain patterns or waves that will formulate our existence and corporate profits for the next two decades. Because commodities are the raw material cost of every product, their higher levels means lower profits and, on a residual basis, lower stock prices and P.E. values. On the other side, the reduction in commodity prices the prior 27 years (1974.9-2002.35+) created excessive profits across the board, thus expanding P.E.s in the process into a giant bull market. From 1974 and 1980-81, commodity prices and interest rates collapsed. Management took credit for something that they did not have any control over. Now, they have to pay and watch their world shrink. A secondary cycle of stocks, the 16.803-yr. energy cycle, effectively topped the 3-4^th quarter of 1999, which I put out to the public on TV on Chicago�s WCIU/Ch. 26/23 in 1997. I also put out that some severe financial events were going to happen that year (correct) which hit everybody in the world except us.

Going back to my favorite source of proven financial activities, the Foundation for the Study of Cycles, one of their most statistically proven periods of repetition is the Real Estate Activity Cycle of 18.33 yrs. In Edward R. Dewey�s most popular book, �Cycles: the Mysterious Forces that Trigger Events,� real estate data from 1795 forward is shown on an index basis (average = 100) with an idealized VVVV-pattern throughout to 1958. Taken from the Roy Wenzlick & Cos. publication �The Real Estate Trends,� it has the best degree of regularity than almost all the other 4,200 proven cycles known at that time. Highs were taken off the diagram as: 1780, 1798, 1816, 1834, 1852, 1870, 1889, 1908, 1925, 1943, 1961, 1979, 1997 and 2015. (All dates from 1961 on are estimated.) Most interesting is the fact that, in almost all instances following these high dates, ranging between +60 %-to-40 % of normal, there was a severe Panic and Real Estate Crash of some intensity. 1980-82 was really bad, mainly due to extremely high interest rates destroying real estate developers en masse. 1966/69-70 created some oversupply of rental space in sync to the stockmarkets bear periods. 1946-49 was severe in equities as well as the economy due to post-war adjusting, excess workers returning from the war and final elimination of excess debt from the 1920s period. 1929-33 you may have heard of. 1907 was a famous stock market Panic of sharp effect and a credit crunch, in sync to a squeeze on the copper producer syndicate and certain banks J.P. Morgan wanted eliminated.

For those who read extensive private NL analysis, that�s news without the censorship, the year 1988 was bad for real estate on the coasts of America. An already strong real estate market had formed on all the coastal cities, only to turn very soft that year giving evidence of an additional 18.3-yr. cycle. Prices for high, upper scale housing halved in no time. Adding 18.3 years to this date, I get 2006 as a target year for a bursting of the bubble. But it has been known (the original cycle) to shift a year either way mainly due to strong money Panics or financial crises of some type pulling the turn point. Also, as mentioned earlier, Japan�s paper market bubble in real estate and stocks popped in 1988 and 1990 respectively.

In my original esite that another friend set up for me, I wrote heavily in one of my Commentaries on the �Skyscraper Index� of Edward R. Dewey. The original book of his (�Cycles, the Science of Prediction,� 1947) alluded to the bunching up of dates of completed skyscrapers ending periods of excessive economic growth and over-expansion in America. It also applies to activity word wide. Examples given were of all the famous buildings in New York and Chicago, which many people read about and see in old movies, from the early 1900s on. This was the glory days when commercial buildings broke through the 5^th floor-�barrier� to height. Have you walked up any good 10-story buildings lately? You know, to stay in shape? I used to at the Lewis Towers downtown business campus, Loyola University, Chicago.

All the big commercial buildings, retail stores with huge displays � Marshall Field�s in Chicago, the Palmer House Hotel, etc., wished they could add more floor space, relative to their actual space coverage in the city they were in, mainly because of taxes on ground space.

In the late 1800s, a few buildings created �lifts� or �elevators, with counterweights, run with long cables and on tracks, carrying large numbers of people up stories at a time. There now became no limit to height. Architects began experimenting with new buildings having support in the center columns and steel girder frames, and designing them around wind shear factors and not just on weight loads on the walls, etc., down to bedrock. (Chicago�s top buildings ALL have caissons down to bedrock � 400 feet below surface level. New York is almost all granite, needing only 7 story support frames to anchor 100-story buildings.) In any event, these were the buildings that foreigners saw in pictures of America, that showed the progress in that new nation of freedom. It was the epitome of architecture and commerce all rolled up into one.

The frenzied Real Estate Bubble of the 1920s, fueled by easy credit of the newly formed Federal Reserve, had overbuilt throughout our land in sync with the massive outpouring of automobiles. It was in this bubble that the first �suburb� was born, a sub-urban city, to a large city, where most of its workers commuted. Numerous giant buildings were built for the vanity of the presidents of the dominant corporations � the Chrysler building (1930), the Wrigley building (1924), Pure Oil building (1926), Irving Trust Co. (1929), 40 Wall Street (1929), Merchandise Mart (1930), Chicago Board of Trade (1930), Empire State Building (1930), etc. Many were flush with cash and, like all games, tried to outdo one another by building the �tallest building in the world.� Such claims to unique status created tremendous free advertising in a multitude of periodicals, books and even movies.

Which is clearer in your mind, King Kong wrestling a T-Rex to death� or, King Kong on top of the Empire State building, fighting off a squad of Army Air Force biplanes, while holding a half-naked blonde in one hand? Naturally, the Empire State building scene!!!! This 1933 talkie film started a new type of adventure stories called �science fiction.� Ok, so you prefer reptiles!

More importantly, once the Fed began pulling in the money and credit in December 1928, the Bubble Economy began falling apart and commissioning of new buildings stopped. It took about 1-2 years more to finish those projects in process, at a much higher cost of borrowed money. But the number of new skyscrapers in the 1920s far overshadowed the 1910s, and was followed by almost no new growth in the 1930s and �40s.

Then, with a 16.8-yr. stock market bubble from 1949 thru 1966, the easy wealth now concentrated in the hands of banks and insurance companies (due mainly to special tax-favored treatment), saw several 90-110 story skyscrapers evolve in Chicago and New York. In Chicago, my hometown, the John Hancock Center (1969), Standard Oil (now AON Center, 1973) and Sears Tower (1974) were the giants finished in that period.

cash/excess profits � the Petrodollar Paradise and the Southeastern Asia Boom. Out of a

popular list of these �skyscrapers�, a name first applied to the last generation of tall

Once complete in 2009, the Burj Dubai, Dubai, U.A.E. at 2,313� and 160 stories will

be king. Just completed, the Taipai 101, Taipai, Taiwan at 1,671� and 101 floors is

current king. The World Financial Tower � 2006 in Shanghia, China, at 1,507�. (2003

saw Laura Croft�s second movie �The Cradle of Life� with the two spies jumping off of

this monster building in batwing outfits, and parachuting onto a ship in Shanghai

Harbor.) In 1998, the Petronas Towers # 1 & 2 with antennae, Kuala Lumpur, Malaysia

came in at 1,483� and 88 floors. (The famous movie �Entrapment�, 1999, with Sean

Connery and Catherine Zeta Jones pulled off their Malaysian central bank heist at the

stroke of Y2K � 23:59:59 December 31^st, 1999 when the computers shut down for eight

seconds to reboot for the Millennium.) The semi-famous Sears Tower - 1974 in Chicago,

Illinois, USA at 1,450� and 108 stories. Asia Plaza Kaoshiung � in 2008, Taipei, Taipan,

at 1,417�. Next, the Jin Mao Tower - 1998, Shanghai, China, at 1,380� and 88 stories.

The International Finance Centre � 2003, Hong Kong, China, 1.368� and 88 floors. �2

stories. (If you haven�t guessed it by now, the number �8� is very auspicious in Chinese

numerology � very lucky! And they are very number sensitive! Unless you are Nick

Leeson of Barings Bank fame, wiping out said bank by incorrect trading and overtrading � lost 1.2 billion

Sterling, in an account # 88888. {Inside joke to those in the know.}) CITIC Plaza � 1997

in Guangzhou, China, at 1,283� and 80 stories. The Shun Hing Square � 1996 in

Shenzhen, China, at 1,260 and 69 stories. (Hmmmmmmm!) The Empire State Building �

1931, in New York, New York, USA, at 1,250� and 102 stories. (This building alone has

been the center of many plots in movie lore, due to its uniqueness and highest building in

the world status some 75 years ago.) The Central Plaza - 1992, Hong Kong, China, at

1,227�. The Emirates Office Tower - 2000, Dubai, U.A.E., at 1,163�, 54 stories. The John

Hancock Center � 1969, Chicago, Illinois, USA, at 1,127� and 100 stories. The Burj Al

Arab � 1999, Dubai, U.A.E. at 1.053 at 60 stories. Southeast Asia and the Middle East

upwards, much like the Tower of Babble, in ancient Babylon, of 6,000 years ago. But

rumor holds that they had no building permits, went over their property line, had too

many Priests of Ba�al officiating there and their mast was not to code! So they aren�t

I believe that the future of the world economy is going into a massive paper wealth

meltdown, with the three main assets becoming prime candidates for liquidation for much

needed cash. Real estate, stocks and bonds will become the poster children for the

excesses of the past twenty years. Best liquid market to take advantage for your situation

is continue t roll forward your Shorts on all L.T. debt instruments. This will become a

multi-year trade, as waves of liquidation of poor class junk bonds as well as un-

mortgaged debt will be thrown onto the altar fires of Moloch as a sacrifice to the vanity

and stupidity of a whole generation of debt-builders. It also emphasizes a reduction of

Closes below the 110.16-.111.00 level for the nearby contract, continuation price of 30 Yr. bonds,

should be added onto with more short positions. Highs were at 119.16 & 118.16 in June and Sept. respectfully. The same relative level for 10-yr. U.S. notes 114.00 & 113.10, also in June and Sept. gives us five full point gains from the highs. The 10-yr. Part of the yield curve is buckling, implying a tendency towards inversion or tightness of money is occurring.

"Thank you for sending your well written article James! You have a lot of good information." "I think E. Harriman said "Panics do not occur on a gradual basis." 'P.S. Most people will not believe anything you tell them regarding the above transparency." Marcus S., Palmerton, PA

Please feel free to comment on my observations re the coming real estate collapse. I believe that it is the last Bubble or Financial Panic that will happen until 2009 or 2010. Then, some surprising events will begin unfolding that�ll change the expectations and perception of what the future will be for all of us, on a personal as well as a financial level.

If the Civil Wars start sooner than expected, a government currently out of control will become more onerous and dictatorial in every aspect of our life. The long-term efforts to eliminate our U.S. Constitution and Bill of Rights is complete. Any attempts by freedom-loving Americans to return our government to a Constitutional Republic under Law will be met by attacks, both above board and by dirty tricks, until every individual is squashed. The Internet is next!

For those of you who�ve inquired via email, I am a trader by profession and training, and a financial analyst by hobby. My degrees are an M.B.A. (finance) and a B.B.A. (finance, economics, accounting, management, mathematics). I handled hundreds of accounts including several substantial clients, mostly in the dynamic trending markets of the 1970s, '80s and '90s, via the technical analyst�s approach. Accounts handled included International Precious Metals, Wheatheart Feeders, and full time private investor/traders in the area of hard assets, metals, stock indexes and grains. Have known many full time traders on all five exchanges in Chicago (now four), for better or for worse. And have met and talked to some of the sharpest traders in the industry there. I could expand my advice and trading ideas by the use of institutional approaches such as condors, packs, butterflies, calendar spreads, etc., as well as directional trend trading moving average trending systems which is my forte, but it would lose too many readers. I also have also developed advanced group indexes, which no one else has, to better monitor money flows by group movement over my entire lifetime. Articles in Japanese institutional publications and trade magazines have given me exposure in this area.