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Italy Warns that Stopping QE will Lead to Collapse of Eurozone

Italy has called on the ECB to guarantee the bond yields warning that if they END quantitative easing the Eurozone will break apart. On this score, they are not wrong. The economic spokesman for the Italian governing party Lega has warned of a collapse of the Eurozone. The ECB should ensure that the yield spreads of government bonds of the euro countries are contained and not allowed to soar. This is what Claudio Borghi told Reuters. “Either the ECB offers a guarantee or the euro will break apart.” Interest on Italian, Spanish and Portuguese bonds rose in response to the currency crisis in Turkey. Borghi warned that this situation cannot be solved and will explode in everyone’s face. This is the Sovereign Debt Crisis coming into play. We are no looking at the risk premium for ten-year Italian government bonds has risen to 2.7% above Germany. The promise that a single currency would produce a single interest rate has been a complete failure.

This is what I have been warning about. Ten years of QE has FAILED to stimulate the economy of Europe, it has only made governments addicted to the ECB buying their debt at absurd low levels in rate. The Eurozone will indeed break apart once QE stops for rates will soar and tensions will then rise among the 28 member states for the promise of a single currency would produce a single interest rate pointing to the USA as their proof was a lie. The USA federal debt had a single rate because it was a single authority issuing the debt, not 28 separate states. The better comparison was looking to the 50 states who all experienced different interest rates based on a single currency and their individual CREDIT RATING! The lies of selling the Euro are coming back to haunt them.

China to Support Syria Along with Russia Against USA

COMMENT: Mr. Armstrong; You said that China would eventually send troops to the Middle East and join with Russia in Syria. China just openly told that to the newspapers. Your contacts behind the curtail are quite amazing.

BH

 REPLY: Qi Qianjin was appointed the ambassador to Syria back in 2016. You are correct, on August 1st, 2018, the Chinese ambassador to Damascus, Qi Qianjin, told pro-government Syrian newspaper Al Watan that the Chinese military was ready to join Idlib in the upcoming military operation. This has been widely reportedin the Middle East. China has NEVER been engaged in war sending its troops outside of its claimed territory. It is important to understand that China has always been invaded and hence that was the very reason behind constructing the Chinese Wall – to keep other out.

Qianjin confirmed that China was entering a positive military cooperation with Syria in the region under counter-terrorism. It is Syria who is fighting against the ISIS terrorists. The witch-hunt against Russia by those in Congress has been setting the stage for world war led by the Democrats. This really has to stop and the mid-term elections will see the Democrats out to take the Congress at all costs and they have become the part of anti-Russia. Socialists always want to conquer the world and force others to comply with their demands. 

It may have been Khrushchev who boasted that Communism would defeat Capitalism when he said “We will bury you“, but today this is rapidly becoming the slogan of the Democrats for the upcoming Mid-Term Elections.

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The Healthcare Crisis Behind the Curtain – Are We Importing New Plagues?

Charles Dickens wrote about how corrupt the courts were out of control in Bleak House published back in 1859. He began in his first chapter on Chancery:

“This is the Court of Chancery, which has its decaying houses and its blighted lands in every shire, which has its worn-out lunatic in every madhouse and its dead in every churchyard, which has its ruined suitor with his slipshod heels and threadbare dress borrowing and begging through the round of every man’s acquaintance, which gives to monied might the means abundantly of wearying out the right, which so exhausts finances, patience, courage, hope, so overthrows the brain and breaks the heart, that there is not an honourable man among its practitioners who would not give—who does not often give—the warning, ‘Suffer any wrong that can be done you rather than come here!’”

The rule of law is so dangerous when it lies in the hands of government for inevitably it has historically ALWAYS been abused for political purposes with perhaps one of the most famous cases being that of the trial of Socrates for effectively knowing too much. I paid my respect at the cell where Socrates died in Athens. Torture was legal in England as in the American Colonies. If a charged person refused to plead to the crime the government demanded, he was subjected to peine forte et dure, which meant that he would be subjected to having heavier and heavier stones placed upon his or her chest until a plea was entered, or he/she died.

Many defendants who were charged with a felony, which was a capital offense, refused to plead in order to avoid forfeiture of property for their family.

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Is the Climate Change Preparation for the Pole Shift?

A reader sent this is where ice storms are happening daily this summer in Calgary, Canada. In Bavaria, where I am currently, it is the hottest in 200 years. The temperature is in the 90s (32c) and hotels, restaurants do not have air conditioning because it never gets hot here. Then in Ukraine, which it is typically in the 90s for the summer, they are experiencing the coldest summer with temperatures in the 70s.

In Greenland, birds migrate there for the summer to create offspring. This year, summer never came. Indeed, crops are failing around the world from either too much heat or too much cold. It appears that where it is normally hot, the climate is becoming cold. Where it is cold, it is becoming hot.

Many scientists are starting to wonder what is going on. It certainly is not Global Warming since that theory implies consistency. Some are wondering if this is a prelude to the climate is shifting thanks to a possible pole shift. The problem, nobody knows what this means. The last time the poles flipped was 720,000 years ago. We have no model to clearly define the end result. Will we suddenly be frozen with a spoon in our mouth at breakfast? Perhaps we are entering more than just a major Sixth Wave in the ECM. Maybe the weather is also conspiring to shift the financial capital from the West to the East.

Still, the other school of thought is pointing to volcanos. It’s abundantly clear that there is also such a thing as volcanic weather, which historically can be highly dangerous. These astonishing changes historically also remind us that volcanic events have long affected weather systems and have even transformed the Earth’s climate dramatically.

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Italy – the Coming Revolution & Euro Crisis for 2021?

QUESTION: Mr. Armstrong, you obviously have a database on Italy that is without comparison. Nobody else even had a chart on the Italian lira you recently published on the blog. I know you are well aware of the revolutions in Italy and the history. I was wondering do you have any forecast for the next revolution? It seems that the five-star movement may perhaps be the beginning. Any hint about the future?

VDM

ANSWER: Well to give you a target year where it can begin will be 2021. The Five-Star Movement is indeed the prelude. However, the attempt to stay in the Eurozone will be the undoing of Italy. The most threatening issue in Italy that will lead to revolution is most likely an attempt to raise inheritance taxes as being suggested by Brussels.

Culturally, Italy has the lowest inheritance tax in all of Europe. The German inheritance tax rates range from 17% to 50%, depending on your relationship to the decedent. In Italy, the Italian Inheritance Tax (Imposta sulle Successioni) is applied to all the assets worldwide belonging to the deceased if the person is a resident of Italy ONLY. If the person lives outside of Italy, then the tax is applied ONLY to assets in Italy. Where everyone else has generally inheritance taxes of 15% or higher for the immediate family, Italy that rate is just 4%. Here is the breakdown:

  • 4% to be paid for transfers to the surviving spouse and children, with an exemption of Euro 1,000,000 for each beneficiary
  • 6% to be paid for transfers to brother and sisters of the deceased, with an exemption of Euro 100,000 for each beneficiary
  • 6% to be paid for transfers to relatives within the fourth degree of relationship to the Deceased, and other relatives on the spouse side up to the third degree (no exempt amount is available)
  • 8% to be paid for transfers to any other (unrelated) parties.

…click on the above link to read the rest of the article…

Canada Global Warming Tax up to $1,000 per Household?

 

I have been warning that Global Warming is profitable for governments. They paid these academics $1 billion to come up with dire forecasts that ignore nature, cycles, and history, all to justify taxing people that will never actually impact anything nor balance their budgets. Canadian households in Alberta, Saskatchewan and Nova Scotia will be hit with more than $1,000 of carbon tax per year, while those in British Columbia, Quebec and Manitoba will pay around $650. In Canada, where it is often very cold, up to 10% of someone’s income is already going to cover energy costs. Politicians have discovered a new source of revenue and they are NOT about to listen to any evidence to the contrary. At the bug environmental conference in Paris, they outright DENIED any right of any speaker to put on a contrary view. This is all despite the fact that over 30,000 people have signed a petition against Global Warming, which has been ignored as usual. Any opposition is simply ignored or silenced. Why not, there is too much money on the table for governments to just ignore. Guess it will definitely now be cheaper to retire to the Caribbean. You won’t have to pay $1,000 a year to heat your home.

New Jersey To Now Tax Water Supply as Well – Creative Greed of Taxes

Politicians are truly amazing. When they need money, they are never short of ideas of things to tax. New Jersey is proposing to now tax water from the tap. The proposal is being submitted by State Senator Bob Smith D-Middlesex. Of course, Smith is trying to say it’s not actually a tax and calling it a“user fee” even though you already get a water bill. A “user fee” would be a flat rate. He wants 10 cents per 1,000 gallons so it functions more like a tax than a one-time fee like getting a driver’s license. Smith obtained his J.D. in 1981 from the Seton Hall University School of Law. The only thing law teaches you is how to call a pig a cow and get away with it. It is probably inevitable that they will figure out a way to tax the air for making it clean.

They have in a way managed to tax sex as well over the centuries. In Nevada, they have proposed a $5 tax every time a prostitute performs a service. This is nothing new. The Roman Emperor Caligula (37-41AD) inaugurated a tax upon prostitutes per client (the vectigal ex capturis). There was the bachelor tax which was a punitive tax imposed on unmarried men. The Lex Papia Poppaea was introduced in 9 AD by emperor Augustus (27BC-14AD) to encourage marriage. Penalties were therefore imposed on those who were celibate, with an exception granted to Vestal Virgins. (Ulp. Frag. xvii.1). The law also imposed penalties on married persons who had no children from the age of twenty-five to sixty in a man. Women were taxed who had no children from the age of twenty to fifty (Gaius, ii.111)  (Tacit. Ann. xv.19). As strange as that may sound, New Jersey and Michigan proposed a tax on bachelor men to change their behavior.

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Were the Crusades just for Plunder & Money?

QUESTION: Were the Crusades inspired by economics? You mentioned how Venice looted Constantinople.

Thank you for making history interesting

KR

ANSWER: To understand the Crusades, we have to first look at what was the original justification. The Catholic Church encouraged pilgrimages from the 4th century, but they began really during the 1st-2nd century and built in intensity. Pilgrimages became very popular once Constantine the Great became emperor. Contemporary historians reported that Roman Emperor Hadrian (117-138 AD) built a temple dedicated to the goddess Venus in order to hide the cave in which Jesus had been buried in hopes of ending early Christian pilgrimages. Constantine ordered during 325/326 AD that the temple of Venus be replaced by a church which has become known as the Church of the Holy Sepulchre. It was during the construction of this church that Constantine’s mother, Saint Helena, is believed to have rediscovered the tomb.  Socrates Scholasticus gives a full description of the discovery in his Ecclesiastical History. In her final years, Helena made a religious tour of Syria, Palestine, and Jerusalem, during which she allegedly discovered the True Cross.

 

The pilgrimages to the Holy Land really began to rise in mass going into the year 1000. As the year 1000 approached, the doom and gloom were pervasive. Everyone assumed that the world would end and this would be the last judgment. It became so common that the King of England removed his own portrait from the coinage and placed the Christian symbol of the lamb on one side and the Holy Ghost on the reverse. When the world did not end, he promptly restored his portrait to the coinage the following year.

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ABC News Anchor Leaves Because of Fake News

 

One of the prominent faces of ABC news has been Brian Ross, one of their star investigative correspondents. He has been forced to resign because he embarrassed the network late last year when he did an on-air report suggesting former National Security Adviser Michael Flynn had been toldby President Donald Trump to make contact with Russian officials during the 2016 campaign for president. Ross and Rhonda Schwartz, who was the chief investigative producer for Ross’ team, has had to step down when that report proved to be false.

FAKE NEWS has been building because there have been no checks and balance. I have had my encounters over the years that will make your head spin. I was flying to Australia to give a public conference there and a journalist, who was obviously a socialist and President Reagan-hater calling it “trickle-down” economics,  ran a full-page story on me and said I was the author of just about everything and Reagan did everything I instructed so I was an evil capitalist and nobody should go listen to me. When I landed, the staff informed me about the article. I called the journalist who never bothered to interview me that I was only called in for that dog & pony show to launch G5 and that I disagreed with that policy. As for “trickle-down” supply-side economics, I told him that was Arthur Laffer – not me. Of course, there was never a retraction. I went to a cocktail party and someone called me a liar. His interpretation of that article was that I had worked in the White House as the Chief Economic Advisor. When I denied that, I was a liar because I was “embarrassed” to admit I worked for Reagan. That was just one of many encounters I had with FAKE NEWS.

Uganda Taxes the Internet Deny Access Unless you Pay Your Taxes

I have been warning that there are no rules when it comes to the greed of government. Throughout history, the ideas behind taxes keep popping up is slightly different ways. For example, your freedom to travel can be suspended and your passport revoked if you owe the IRS more than $50,000. In Ancient Rome, it was not uncommon for slaves to be freed after a number of years of service. To freee a slave, however, they also put a tax of the value of the slave freed. No tax = no freedom not unlike the IRS rule.

I have warned that cryptocurrencies would be subject to the whims of government and they can simply declare them illegal. Well, if you didn’t believe me, you have the crazy EU laws imposed on emails in Europe which can wipe out your company on a whim. Now, the Uganda government began on July 1st shutting down the internet blocking social media which included services like WhatsApp, Twitter, Facebook and Skype just to mention a few. These social media apps were all made inaccessible overnight. Governments can shut down cryptocurrencies in the blink of an eye if there is money to be had. The reason for taking these actions are really bogus. The President Museveni claimed that idle talk on social media was costing the country vast amounts of money because the young are communicating instead of working when they wopuld be producing more tax revenue.

Civil Unrest = Hoarding of Assets

QUESTION: Mr. Armstrong; You pick themes that are not really just political on the surface, but beneath you are connecting the dots economically. This is what I read between the lines for you do not always emphasize it in every post why you will address issues like migration and civil unrest. Are these serious issues to the economic backdrop?

HW

ANSWER: Oh yes. Perhaps I just understand that is the backdrop so I do not openly restate it because it is obvious to me. Not a very good communication tactic on my part. To explicitly state this, when the economy turns downward, people will then blame migrants. Today, they label this as racist. That is simply not true. It really has nothing to do with race or religion. We saw civil unrest turn to violence during the 1840s when there was a wholesale State level Sovereign Debt Crisis in the United States. That was against the Irish who were the same race, but were at least Catholics that the Protestants did not like back in Europe.

During such period of civil unrest, capital contracts and begins to hoard. This is what caused the German Hyperinflation for that was a 1918 Communist Revolution which overthrew the German Emperor. We also find hoards of ancient coins from periods of economic stress. The 3rd century AD is when we have the most hoards, but they tend to cluster also around civil unrest and civil wars. If people are fearful or uncertain about the future, they do NOT spend and they contract. So the global trend I am highlighting with respect to rising civil unrest is important economically. The fact that this trend is WORLDWIDE, is particularly alarming for it further supports the fact that we are in the Sixth Wave and 2032 will be the generational change of monumental proportions.

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The Next American Civil War – Thank You Mueller

The Mueller investigation is all about removing Trump from office, which has been cheered by CNN, New York Times, and The Washington Post among many others. They are intent on overturning the results of a Democratic election to ensure this is no longer a government of the people for the people. They see this as intolerable and those who voted for Trump are too stupid to vote anyway. I have actually heard that argument. So we all know what the objective here really is – Mueller is to overthrow the presidency. Yet, history may one day write that this is the very man who created the Second American Civil War.

Mueller is hell-bent on charging Trump to get him out of office. The bureaucracy then will take back the government and suppresses the people, grinding us into the dirt. What they overlook is that the resentment from both sides is turning into sheer unbridled hatred and this is the foundation needed for a Civil War. This is by no means the first time a president was elected this century and many said he didn’t really win. Of course, the election of Abraham Lincoln led to the secession of several states who also rejected the election because they lost. The South rose up against the North and the Civil War began. The Supreme Court gave George Bush the election and that began to stir the discontent among the people.

The Presidential election of 1824 was really the start of the Civil War. This followed the Missouri Compromise which was legislation passed on May 9th, 1820, and provided for the admission of Maine as a free state along with Missouri as a slave state. This maintained the balance of power between North and South in the United States Senate. It was showing that the tension was rising when the presidential election followed four years later.

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2032 – How Hard Do We Fall?

2032 – How Hard Do We Fall?

 

QUESTION: Hi Martin,

First, I’d like to offer my condolences on your mother’s passing. It feels to me that you must take great satisfaction in the fact that she must have been very proud of your accomplishments, and what you are trying to do for the average person. To me, that is the ultimate goal of a child; in thanking their parents for everything they have done.

Concerning the blog entry of “Crash & Burn & The Sixth Wave”, you write that it all depends upon if we begin the process in 2021. My interpretation – having followed you for years now – is that the people must rise up and push back against higher taxation, and demand reform and/or it could hinge on the Euro breaking apart, which provides the path to follow for the rest of us.

I believe you meant that if the people just acquiesce and do nothing – like in 2008, then those in power continue to run the economy for their benefit, causing the social fabric to continue to be torn apart between 2021-2032, (which means continued record low birth rates, low productivity, record low levels of capex, record suicide rates, etc) until it finally crumbles by 2032, leading to civil unrest. Have I got this right?

Thanks again for everything that you do.

Danny

ANSWER: We have to understand that this will be the third such sequence of the Sixth Wave. At the end of the first sequence, we have civilization going into a Dark Age. That also coincided with the energy output of the sun declining and the massive volcanic eruption of Thera (Santorini), which ended the Minoan culture. That is when Mycenae invaded as well as the conquest of Troy.

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Crash & Burn & the Sixth Wave

QUESTION: Martin, as all members do, I really do thank you and appreciate you for your knowledge and insight. I am a business owner – Real Water and do approximately $10 million in annual sales right now. As a concerned citizen, I have also run for political office and was elected to the Nevada State Assembly in 2015. With Republican control, our legislature pushed through the largest tax increase in our State’s history in the name of more money for education (I led the opposition against the tax, but failed in preventing it). Of course, our latest school ratings came out and we are still ranked at the bottom – 50th. More government is NOT the solution!

I completely understand we are headed for a financial crash and burn. You have frequently stated that the only reason you are doing what you are doing is for your posterity. Other than personal preparation, extra food, don’t be in bonds, etc., what do you believe is the most beneficial thing we can do to help our country come out of the crash and burn with more freedom and limited government (like our Founders so emphatically intended) as opposed to the other potential of totalitarianism that you frequently warn us about? What is the most effective way to rally the troops so to say to help push our civilization in the proper direction?

To an elevated lifestyle,

ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing.

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Is Draghi Really Ending QE?

Mario Draghi said the euro-area economy is strong enough to overcome increased risk,  and therefore this justifies the European Central Bank’s decision to end bond purchases bringing to an end a decade-long failed experiment. The truth behind this statement is starkly different than being portrayed in the press. Draghi also pledged to keep interest rates unchanged at current record lows until his personal term is finished next year. There is the contradiction for if the ECB stops buying debt, who will do so at artificially low rates of interest?

Draghi knows full well that he has utterly destroyed the bond markets in Europe. The ECB has also made it clear that they will REINVEST when the bonds previously purchased mature. The Federal Reserves has taken the opposite position and will NOT reinvest allowing their balance sheet to shrink.

If the economy is that strong, then why not end the QE right now? The fallacy here is that this has nothing to do with the economy. The ECB has simply had the member states on life-support. Interest rates will soar in Europe on long-term debt or there will be no buyers. Pension funds cannot buy 10-year bonds at even 3% when they need 8% to cover liabilities.

The statement by Draghi is creating a total paradox. You cannot keep short-term interest rates where they are and charge negative rates for deposits and simultaneously end QE and expect to sell bonds to the public at insanely low levels.

The press interprets this as the ECB with ending QE because they are “betting that the euro-area economy is robust enough to ride out an apparent slowdown amid risks including U.S. trade tariffs and nervousness that Italy’s populist government will spark another financial crisis” reported Bloomberg.

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Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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