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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.

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

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.

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

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.

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

Do We Really Borrow From Only Ourselves? Does the Debt/GDP Ratio Means Anything?

QUESTION: Mr. Armstrong, the famous economist Paul Krugman says that debt is ok when we owe it to ourselves. He calls it “deficit scolding” as he wrote in the New York Times. Would you like to comment on this statement?

GH

ANSWER: Paul Krugman seems to lack any historical understanding of how nations rise and fall. Anyone who claims debt is OK and can be infinite because “we” owe it to ourselves is clueless. He wrote in the article you referred to that “we have a more or less stable ratio of debt to GDP, and no hint of a financing problem.” The debt to GDP ratio is interesting but totally irrelevant. China’s debt to GDP stands at 250%, the USA at 103%, and Greece buckled at 186%. Obviously, this ratio is rather meaningless as a forecasting tool. I have published this chart on call money rates previously. In my studies, I quickly discovered that you cannot reduce the cause of any effect to a single issue. We can see that the peak in call money rates took place during 1899 and it was the lowest in 1929 when the Great Depression hit. You can’t even claim that if interest rates hit some magical level the stock market would crash. The world is far more complicated than just this one-dimensional approach to everything.

Capital flows were fleeing the USA in 1899 so interest rates went higher with a shortage of money. In 1929, the capital was in the USA for it rushed here because of World War I. The inflow of capital created an excess so the peak in call money rates was lower than 1899 when capital was fleeing. We even have the world of President Grover Cleveland from the Panic of 1893 commenting on the net capital outflow because of the “unsound” financial policy of the Silver Democrats.

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

US East Coast Risk of Tsunami & Earthquakes that Threaten NYC

QUESTION:  Hey Marty,
Thanks for all your insight the last few years on what the models are projecting for volcanic & seismic activity. As usual, you’re on the money. The forecast of events laying out to 2032 is really starting to add up in their interconnectivity. God help us all.
My question is regarding the mid-Atlantic ridge and the US East Coast continental shelf faults. We all know you chose Tampa over the Florida Atlantic Coast; should we be concerned about tsunamis & seismic activity along the eastern seaboard?

As always, thanks for everything you do. You’re my hero.
Cheers,

DP
ANSWER: That is actually a very good question. The 10 Biggest Earthquakes in History have ALLtaken place around the Pacific Rim of Fire – not in the Atlantic. Ideally, the next big one is interestingly due in 2021. The modern big quakes around the Pacific Rim have been:

  • 1906 — San Francisco, California, Magnitude: 8. About 3,000 people died from the earthquake, on the San Andreas Fault, and resulting fire.
  • 1923 — Tokyo, Japan, Magnitude: 7.9. One of the world’s most destructive earthquakes, more than 142,000 people died from collapsing buildings and the resulting firestorm. The quake also resulted in enormous tsunami waves.
  • 1960 — Chile, Magnitude: 9.5. The largest earthquake ever recorded, the 1960 quake in Chile killed more than 1,600 people, with many of the deaths resulting from tsunamis. Waves reached 38 feet (11.5 meters) and carried debris as far as 2 miles (3.2 kilometers) inland.
  • 1970 — Peru, Magnitude: 7.9. Approximately 66,000 people died, many from collapsed buildings and a post-earthquake avalanche.
  • 2004 — Indonesia, Magnitude: 9.1. The third largest earthquake in the world in this century, the quake killed more than 227,000 people. Powerful tsunami waves crisscrossed the Indian Ocean and ravaged 12 Asian countries.
  • 2011 — Japan, Magnitude: 9.0

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

Supply v Demand-Side Economic & What is Never Discussed

COMMENT: Usury, first the Fed starves we savers for return for 18 years with their zero percent interest rates and gave us two giant stock market crashes in that intervening period.
The lack of return caused us to cannibalize our savings and trillions of savings lost thru the stock market crashes and ditto home equity. Then property taxes explode.
Now even the cost of funds is still at historic lows credit card rates move from 8/9% to 12% in a matter of months.

What are Grandma and Grandpa to do? Knowing what the Feds original charter was is not an answer because they have become the master manipulator for the wealth transfer from the people to their greedy cohorts.

Have followed your public work since well before your legal problems and greatly appreciate your cycle work but the wealth transfer must stop and some jail sentences applied and claw back enacted.

Or is the wealth transfer already accomplished and the taxpayer/consumer left holding the bag?
Martin, thank you for your efforts.

LL

REPLY: I fully agree. This is the battle between Demand v Supply-side Economics. This age of “New Economics” that was ushered in by Marx and Keynes, justified that government had the power to manipulate society to achieve their goals. The idea of raising and lowering interest rates to influence demand has utterly failed. The 800-pound gorilla in the room is the $200 trillion+ of sovereign debt around the world. Demand-Side Economics cannot possibly work when the biggest debtor is government and the raising of interest rates only increases their deficits that come back as tax increases reducing the net wealth of the people and lowering economic growth.

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

The Misconception of Central Banks

QUESTION: Mr. Armstrong; I was at the Treasury Management Association of Canada (TMAC) conference in Vancouver when you appeared as a speaker as well as Peter Detallis of the Bank of Canada if I remember his name correctly. I was there at the cocktail party when the Finance Minister of Nova Scotia said you diminished the central bankers. They were right there as well and he did not know it. You introduced him to them. He was upset. I laughed at that. My question is why are you the exception to meet with central banks?

HWF

ANSWER: It should come as no surprise that I routinely argue against “demand-side” economics which justifies central banks manipulating demand by raising and lowering interest rates. It has never worked. That said, the Democrats vilified “supply-side” economics when Reagan lowered taxes. They vilified it calling it “trickle-down Economics.” They never actually explain the difference because they want to do as they desire and then expect the central banks to clean-up their mess from the fiscal mismanagement of the economy. That said, the conspiracy theorists blame the central banks for absolutely everything and assign no blame to the politicians for the fiscal side.

Consequently, it still took me some time to understand why the central banks would talk to me. They clearly knew I understood the real dynamics of the system as a whole with both the fiscal and monetary side in addition to Demand v Supply-side Economics. They also knew I lived in the real world community and was one of the few true international advisers. The difference is I really had some $3 trillion under contract which was about 50% of the US National Debt at the time. They knew I spoke with real-life experience – not theory. That was even part of the Congressional record when I testifiedbefore the House Ways & Means Committee.

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

ECB & Bonds – People Believe What They Want to Believe

QUESTION: the ECB is arguing that given the low free float of EU bonds (especially German), bonds not owned by the ECB or other central banks, the impact of an end to APP purchases will be nowhere comparable to the tapering sell-off in the US in 2013. Bank research teams are hanging on to this idea to make positive forecasts in the EUR exchange rate versus the USD. They say an end-date for the APP programme may not result in a higher risk/term premium in the European government bond market.
Could you comment on this, please? Many thanks for all your work,
GM

ANSWER: The ECB knows it has to stop the QE program. They also know that Yellen was correct in lecturing them that interest rates had to be “normalized” so they know there is a real meltdown coming. That is inevitable. Pension funds cannot buy 10-year bonds at 1.5% or even 3% locking in losses for 10 years. I really fail to see that claiming there is such a small float, because the ECB has been the 800-pound gorilla buying everything, that interest rates will not rise. That is just complete fallacy. There is a small float because they have DESTROYED the bond market in Europe.

Draghi has proved something incredibly important – Demand-Side Economics has been a complete and utter failure. After 10 years of manipulating interest rates, that they want to put private bankers in prison for under the Libor Scandal, the ECB has failed completely. In just 7 days, the German bunds dropped from 16415 to 15939 – that was 5.9%. The 2013 decline in US 30-year Treasuries back in 2013 was 16%. So what the Bunds did in 7 days in their decline based upon events in Italy reflect that the ECB is trying to paint a picture that yes – rates will rise and bonds will decline.

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

Volcanic Activity Melting Ice at the North & South Poles

Scientists have long suspected that there is a thermal heat source under the ice in Antarctica that may be the real cause of some ice melting in that region rather than climate change theories. NASAhas confirmed that indeed this heat source exists which many have been searching for over a long period of time.

At the North Pole, there is the Gakkel Ridge which runs about 1800 miles from Greenland to Siberia. It is a ridge which is littered with volcanic activity and has countless hydrothermal vents. REALscientists in geology see this ridge as a hotbed of irregular volcanic activity. It appears that the rise in volcanic activity is building in the Arctic Oceanas well. This is of serious concern for if the ice melts, then the water will evaporate and return as snow building up the glaciers in the North and ensuring that we will indeed see crop failures for the next cycle.

Of course, there is no money to be had if the melting ice is not caused by humans but mother nature herself. So we should expect a fierce battle and a denial that volcanic activity has ANYTHING to do with melting ice.

So welcome to living in a complete state of denial as long as there is money on the table to grab. It makes sense that our models are showing a sharp rise in volcanic activity from 2018 onward on a global scale. It looks like just maybe the ice ages are created by the increase in volcanic activity that starts the massive snow that creates the glaciers & ice ages.

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

German Court Rules Govt Can Intercept Communications Without Just Cause

Federal Administrative Court in Leipzig ruled last week that the Federal Intelligence Service (BND) may continue to access data at the world’s largest Internet node in Frankfurt am Main without just cause. In the ruling, the court dismissed an action brought against this practice by the operating company and the government demanded they turn over all communications. The court ruled that the Federal Ministry of the Interior can compel any company to take part in measures of “strategic” surveillance. Since any such measure is always classified as secret, they need not explain anything to anyone.

Governments around the globe have used terrorism as the new excuse to listen to what anyone does. There have been countless prosecutions and investigations for avoiding taxes arising from such powers far more than terrorism. The prosecution ration in over 1000:1 between taxes v terrorism. It seems as though governments want more terrorism so they can increase their powers to hunt for taxes.

The Pension Crisis Will Break Up the EU

The German public broadcast agency ARD is proposing structural changes. Due to the low-interest rates, the ECB has placed the agency in hard times with its pensions. Karola Wille, the director, has called for structural reform to reduce costs. The proposal centers on technological change to increase efficiency in the performance of its mandate. They are also looking at developing cross-media applications to modernize the agency.  The ARD is non-profit so the German government has to fund it. As the low-interest rates have undermined pensions throughout Europe, the governments will have to step up and bail them out. This is going to put tremendous pressure on the entire EU budget and austerity policy embedded within the single currency.

We are looking at the same story being painted throughout Europe. The low-interest rate policy for nearly 10 years has not merely destroyed the bond market in Europe, it has undermined the pension system both privately and publicly. Indeed, adding to this crisis is the mandate that all pension funds hold some or the majority of their investments into government debt. The combination of these policies clashes with the ECB and the nightmare on the horizon and why Draghi can’t leave fast enough to avoid personal blame.

This crisis all stems from the structural design of the EU. They tried to be half pregnant with only a single currency and dictatorial control over member state budgets. The refusal to consolidate the debt emphasized the problem of the great disparities in cultures and the prevailing prejudices that exist through Europe between member states as well as within member states such as Bavaria v northern Germany or Spain v Catalonia, Scotland v Britain, Italy v Sicily, etc.. This prevailing prejudice is also why the bail-in policy was adopted.

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

Making Sense of The Federal Reserve

I was given a lecture in Toronto to our institutional clients years ago and the central bank of Canada came with ten people. It was an interesting session because the audience began to ask me questions about what the central banks were looking at to make their decisions. I would answer and then the audience would immediately turn to see their response. It was a really fascinating session that turned me into this quasi-spokesperson for the central banks. I would respond and usually swat down these absurd theories one after another. The head of the Bank of Canada I knew well and the whole table was unbelievable poker-players. They never flinched nor did you get any read from any body language. When it was over, I went up to them and apologized saying I hoped I did not insult them in any way. They reply was astounding: “Marty, I only wish I could tell these fools we do not look at this stuff!”

People attribute the central banks will also sort of theories you would think they were the all-powerful demigods of finance. Decoding what a central bank says is very important. Yet I find all the commentary to be so off the mark it is laughable. The new word the Fed likes to use is its increasing reliance on “transitory” factors to explain the past six-year problem of being unable to reach the Fed’s 2% inflation target. They explain the failure with “transitory price changes” in some components such as health care and financial services. That was in their minutes from the May 1-2, 2018 meeting. When you look closely, price changes become “transitory” on the downside as well as “transitory”when they move on the upside. Indeed, they love to explain trends as “transitory” for that avoids any permanent trend forecast.

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

The 8.6-Year Frequency is Within Nature

QUESTION: You have noticed that the 8.6-year frequency even allowed you to see that volcanic eruptions would begin in 2018. Are there other examples from history where you have found this to also be true or was Hawaii just unique?

PK

ANSWER: Oh, there are plenty of examples. Let’s take one of the most famous volcanic eruptions in history – Vesusius. Everybody has heard of Pompeii which was destroyed by the eruption of August 24th, 79AD. That eruption was so violent, it hurled stone and ash 20,000 meters (65,000+ feet) into the sky which then came down and buried Pompeii and Herculaneum. There is even a current song out on the destruction of Pompeii by Bastille.

However, there was a major earthquake 17.2 years before (2 x 8.6) that took place in 62AD which was devastating and also produced a tsunami. On February 5th, 62 AD a powerful earthquake that was probably a 7.5+ in magnitude occurred, with the epicenter at Pompeii the prelude to the eruption. The Latin adviser to Emperor Nero (54-68AD) Seneca the Younger wrote a description of the event. Sheep died from falling rocks and statues were toppled. He even said some people lost their minds and wandered around in their madness.

This earthquake was as significant and 1906 San Francisco earthquake which destroyed much of the city. Like the 1906 San Francisco Earthquake led to the Financial Panic of 1907, which inspired the creation of the Federal Reserve by 1913 almost 8 years following that disaster, we see similar reforms in Rome which also included a monetary system reform.

Pompeii at the time had a population of at least 20,000 and was a tightly packed city which was not particularly favorable for surviving earthquakes. Much of the city was constructed from bricks which tend to crumble easily. Seneca reported that while Pompeii was severely damaged, Herculaneum had far less damage while Naples was barely touched. He described the earthquake in vivid terms:

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

 

Climate Change & the 43-Year Cycle

QUESTION: Dear Martin,

I was browsing through the website of NASA and came across a graph (see attachment).
It shows the temperature differences between 1880 and 2012. As far as I can see there seems to be a +/- 40-year cycle. I have edited it with the red vertical lines. The end of the current 40-year cycle should be around 2020, which, if I am not mistaken, coincides with a date you have mentioned previously in one of your blogs. This could mean that around that date a new 40-year cycle should start and temperatures should decline. What is your opinion on this?

Best regards,

SG

ANSWER: Yes, not bad. Look closely. The Japanese data seems to be the least messed with. The others have recalculated the data numerous times to get the biggest effect. Our model shows a 43-year cycle to be precise. That is driven by the energy output of the sun for it tests back into ancient times as well. The Japanese data is the least “politically correct” data whereas the US versions have an agenda behind them to justify raising taxes as if we can really change the climate of the entire planet. They get away with this because they confuse people with pollution and climate change. Hospital waste dumped in the sea does not change the climate but is disgusting and dangerous in spreading disease.

The energy output of the sun peaked in 2015 and has been crashing faster than anyone thought possible. The fascinating thing as you look at the chart and see the cycle. They do not. They forecast linearly whatever trend is in motion will last forever.

Weather Impacted Wars & Migrations in Pre-Recorded History

Archaeologists working in the wetlands of Denmark have uncovered 2,000-year-old human remains are revealing that the Germanic “barbarians” were engaging in warfare in northern Europe against other barbarian tribes which had nothing to do with Rome. The research, which was published in the journal Proceedings of the National Academy of Sciences, provides a unique look at how Germanic tribes memorialized their battles. The sheer magnitude of the number of remains demonstrates that the Germanic armies were clearly organized with leadership. There is no recorded history of this people so all we have to go on are the things left behind.

One thing to emerge is that the climate in Northern Europe was turning very cold. Even by 170AD, when the Roman Emperor Marcus Aurelius was battling the Germanic attempts to invade the south most likely due to climate change. He wrote his Mediataions to keep his mind distracted from the cold at night. He sent his children home to Rome to live with their great-great-aunt Matidia because Marcus thought the evening air of the country was far too cold for them. He even asked his friend for “some particularly eloquent reading matter, something of “your own, or Cato, or Cicero, or Sallust or Gracchus—or some poet, for I need distraction, especially in this kind of way, by reading something that will uplift and diffuse my pressing anxieties.” id/ Ad Antoninum Imperator 4.1 (= Haines 1.300ff), qtd. and tr. Birley, Marcus Aurelius, 120.

It appears from this new evidence that as the weather grew colder and colder, barbarians first fought against each other for resources. It appears that after such inter-tribal warfare proved fruitless, this is when the Germanic invasions of Rome begin. The Germanic invasions of Rome began during 113 BC and lasted until they finally conquered Rome by 596 AD.

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

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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