Armstrong Economics Blog/Interest Rates
Re-Posted Feb 17, 2020 by Martin Armstrong
QUESTION: Mr. Armstrong; I can see your warning about Big Bang and the bonds markets would crash after 2015.75 going into the bottom of your business cycle on January 18, 2020. However, it seems that the negative interest rates have created your bond crash not in price but in participation. There is no viable bond market outside the United States with small exceptions of Britain, Canada, Australia, and New Zealand. Is there any way to come back from this destruction? Do you see the bond markets ever reviving or is this destruction permanent?
ANSWER: If there was a free market, then you would have witnessed the bonds crash price and interest rates rise as people perceived risk. The introduction of negative interest rates which began in late 2014 going into 2015.75 and Quantitative Easing, shifted the risk from the free market to the central banks. This is what I mean that they are now TRAPPED! If interest rates rise, their portfolios crash in value (price). Such an outcome would raise the question of will the private sector return to the government bond markets when they see there is a rising risk factor? Our model shows that this will not be the case. In other words, the Sovereign Debt Crisis has taken place and to prevent the PRICE crash, the central banks became the buyer to hold interest rates down and bond prices up.
Some would think that the forecast was wrong simply because the prices have not crashed. We have had the Bank of Japan saying they will buy government bonds on an unlimited basis. This is NOT a free market. It has “crashed” from the perspective of participation.
It is like the creation of the Euro. Yes, it effectively eliminated the volatility in the currency markets between the Eurozone members. However, it really only transferred the volatility from the currency market to the spreads between the bond markets of member states. Obviously, Greece and Germany both use the Euro. The volatility which would have been reflected in the currency simply moved to the bond markets.
Now we have a serious crisis that has shifted from the bond markets exclusively to the central banks. This is now part of the crisis unfolding in the REPO Market. There does not appear to be any recovery on the horizon. Politicians are undermining the confidence in government, to begin with, and that will influence bond buyers.
Armstrong Economics Blog/Central Banks
Re-Posted Feb 17, 2020 by Martin Armstrong
QUESTION: How can interest rates can rise when central banks are the only market maker, & pension funds FORCED to buy gov.debt by their statutes?
but why is the REPO crisis starting in the US where rates are WAY higher than in japan & Europe?
you would expect this crisis to start somewhere in European debt markets/ instruments…why isn’t all the capital that is fleeing to the US not financing REPOs?
ANSWER: This is laid out in the Repo Crisis Report (an update goes out this week). Central Banks do not control long-term rates. They set the short-term rate such as Fed Funds and Discount Rate. That is what Quantitative Easing was all about. The central banks began to BUY the long-term debt in hopes of “influencing” the long-term rates by reducing the supply of government long-term debt and in theory then the free market would have been willing to buy private long-term debt such as mortgages. That failed because banks had no confidence in the real estate market and were loaded to the gills with real estate debt which people were defaulting on.
The Repo Crisis has begun in the states BECAUSE this is the only viable free market to speak of. Both Japan and Europe have destroyed the bond markets. The Repo Crisis is the manifestation of our forecast that we would enter a liquidity crisis by September 2019. We listed that as one of the major points to take homes from the May World Economic Conference in Rome.
The Repo Crisis is a liquidity crisis because of the collapse in confidence. Banks are unwilling to lend to each other because they are deeply concerned about a crisis in the international banking sector. The Fed was lowering short-term rates into August 2019 because the yield curve inverted on the 10yr-2yr during the 3rd quarter of 2019. Then the Repo Crisis hit on September 17th. That forced the Fed to stop its intended policy to lower rates for the Free Market dictated otherwise.
The image that central banks are in control is an illusion. They too are subject to the Free Market. They are not in control of interest rates as they like to make everyone believe. If that were true, then there would have been no Repo Crisis to start with.
Armstrong Economics Blog/Products and Services
Re-Posted Feb 17, 2020 by Martin Armstrong
We have received many inquiries about the 3rd edition. We have added some text and an index. It is going to print this week. With respect to those asking if we can reserve a copy or those asking if they can buy a quantity at a discount to redistribute, we do not get involved in selling the books. It really is a big project having to handle shipping even internationally.
Amazon picks up the books directly from the printer. So they do not even come to us in the process. With respect to selling quantities, we would have to make an inquiry of the printer if they can even make independent shipments and if so what would be the minimum quantity.
All we know is that there were people who bought multiple copies from Amazon. A number of people purchased multiples to send to third parties based upon emails we received were usually friends or politicians. There was a group that sought to purchase one for every member of Congress but there were not enough left to accomplish that goal.
We will make inquires of the printer to see if they could make individual shipments. I would suspect it would be probably a minimum lot of 20 books. We will let everyone know.
With respect to autographed copies, I will always be glad to do that at conferences only
Senator Tom Cotton appears on Fox News to discuss the latest on the troubling issues with the Coronavirus. China has approximately 70 million people in quarantine during their effort to contain the spread of the virus.
Senator Cotton has been a leading voice in the U.S. warning about the potential risks from Coronavirus spread. Interestingly Mr. Cotton explains the origination of the virus did not come from the food market initially blamed. However there is a level-4 bio-lab within a few miles of the Wuhan market. Occam’s razor? Interesting information.
Foolishness and betrayal of our country have served to reveal dangers within our present condition. Misplaced corrective action, regardless of intent, is neither safe nor wise. The intelligence apparatus was weaponized against our candidate by those who controlled the levers of government. This is what AG Bill Barr needs to explain to the nation.
The position of Bill Barr today is a direct result of decisions made by the DOJ in the Fall of 2017 & Summer of 2018. The events surrounding the leaking of the FISA warrant used against U.S. person Carter Page, and the 2018 DOJ decision not to prosecute SSCI Security Director James Wolfe for those leaks, was the fork in the road moment for the DOJ.
Attorney General Jeff Session was recused, Deputy AG Rod Rosenstein was in charge and the Mueller investigation was ongoing. That was when the DOJ made a decision not to prosecute Wolfe for leaking classified information. DC U.S. Attorney Jessie Liu signed-off on a plea deal where Wolfe plead guilty to only a single count of lying to the FBI.
If the DOJ had pursued the case against Wolfe for leaking the FISA application, everything would have been different. The American electorate would have seen evidence of what was taking place in the background effort to remove President Trump. We would be in an entirely different place today if that prosecution or trial had taken place.
Three 2018 events revealed the Wolfe issue:
EVENT ONE – On February 9th, 2018, the media reported on text messages from 2017 between Senate Intelligence Committee Vice-Chairman Mark Warner and Chris Steele’s lawyer, a lobbyist named Adam Waldman.
EVENT TWO – Four months after the Mark Warner texts were made public, on June 8th, 2018, another headline story surfaced. An indictment for Senate Select Committee on Intelligence Security Director James Wolfe was unsealed on June 7th, 2018.
EVENT THREE – Slightly less than two months after release of the Wolfe indictment, another headline story. On July 21st, 2018, the DOJ/FBI declassified and publicly released the FISA application(s) used against former Trump campaign advisor Carter Page.
♦ Later on December 14th 2018 a fourth albeit buried public release confirmed everything. The FBI filed a sentencing recommendation proving it was the Carter Page FISA that was leaked by Wolfe:
HINDSIGHT – What we didn’t know at the time, simultaneous to the decision-making regarding Wolfe, was another (a second) DOJ cover-up effort was taking place surrounding the origin of the Russia-collusion fraud.
To further understand the decision-making of Rosenstein/Liu, as to why they hid the James Wolfe leak it is important to note the DOJ in the Eastern District of Virginia was creating the cover-story to block sunlight on the origin of how Wikileaks gained the leaked DNC emails.
On April 11th, 2019, the Julian Assange indictment was unsealed in the EDVA. From the indictment we discover it was under seal since March 6th, 2018:
On Tuesday April 15th 2019 more investigative material was released. Again, note the dates: Grand Jury, *December of 2017* This means FBI investigation prior to….
The FBI investigation took place prior to December 2017, it was coordinated through the Eastern District of Virginia (EDVA) where Dana Boente was U.S. Attorney at the time. The grand jury indictment was sealed from March of 2018 until after Mueller completed his investigation, April 2019.
How does this all connect?
What does it mean?
James Wolfe was confronted about his leaking by the FBI in December of 2017. At the same time the FBI were investigating Wolfe and the SSCI, the FBI was also investigating Wikileaks and Julian Assange. This matters because it shows what the mindset was within the DOJ in late 2017 and early 2018.
In both examples, Wolfe and Assange, the actions by the DOJ reflect a predisposition to hide the much larger background story:
• A prosecution of Wolfe would have exposed a complicit conspiracy between corrupt U.S. intelligence actors and the United States senate. Two branches of government essentially working on one objective; the removal of a sitting president. The DOJ decision protected multiple U.S. agencies and congress.
• A non-prosecution of Assange would have exposed a complicit conspiracy between corrupt U.S. intelligence actors and a host of political interests who created a fraudulent Russia-collusion conspiracy with the central component of Russia “hacking” the DNC. If Assange were allowed to show he received the DNC emails from a leaker, and not from a hack, the central component of the Russia interference narrative would collapse. The DOJ decision protected multiple U.S. agencies and Robert Mueller.
As soon as Robert Mueller was going to release his Russia report, the EDVA shut down Assange with the DOJ indictment; in a similar way the DOJ shut down Wolfe with a weak plea agreement.
Again, the key takeaway here is the timing. Both DOJ operations were taking place at the same time (Fall 2017 through spring/summer 2018). Both hold a similar purpose.
What we can see from both DOJ operations is an intentional effort by Main Justice not to expose the epicenter of a multi-branch effort against the White House.
Some people within the FBI were obviously participating along with people within the DOJ. However, not all Washington DC FBI agents/officials were involved. We know there were genuine investigators, at least in the Wolfe case, because their investigative evidence shows Wolfe was leaking classified information. If they did not present the investigative evidence that proves Wolfe leaked, quite simply we wouldn’t have it to show you.
Unfortunately, in hindsight we can see something internally within the DOJ happened because the FBI evidence against Wolfe was buried. Some high-level group inside the DOJ in Washington DC, in the Summer of 2018, was making decisions on what NOT to do.
These two events highlight corruption within the DOJ that existed despite the presence of AG Jeff Sessions, and apparently with the participation of DAG Rod Rosenstein.
The decisions in the Wolfe case are critical. That’s the fork in the road. If the Wolfe prosecution had continued it would have undoubtedly surfaced that key government officials and politicians were working together (executive and legislative).
The ramifications of the Wolfe case are stunning. Had the prosecution continued it’s very likely a seditious conspiracy would have surfaced.
♦ I often field a question: If you know this; if all of this information is in the public sphere; then why didn’t any member of the media cover it?
Here’s the answer: They couldn’t…. At least they couldn’t cover it and still retain all of the claims they had been making since March 2017 when journalist Ali Watkins gained a fully non-redacted copy of the Carter Page FISA application and first renewal.
Politico, The New York Times, CNN, MSNBC and The Washington Post are all implicated in the James Wolfe leak to Ali Watkins. They had the FISA information since March 2017, yet those media outlets were disingenuously falsifying their reporting on the actual content of the FISA application despite their actual knowledge.
Remember all of the media denials about what Devin Nunes wrote in the “Nunes memo”? Remember the media proclaiming the Steele Dossier was not part of the FISA application?
How was the media fifteen months later (July 2018) going to report on the Wolfe leak to Watkins without admitting they had been manufacturing stories about its content for the past year-and-a-half?
It was in the media’s interest NOT to cover, or dig into, the Wolfe story.
Additionally, from both the DOJ and Media perspective, coverage of the Wolfe leak would prove the senate intel committee (SSCI) was, at a minimum, a participating entity in the coup effort. That same SSCI is responsible for oversight over the CIA, FBI, DOJ-NSD, ODNI, DNI, and all intelligence agencies.
Worse yet, all officers within those agencies require confirmation from the SSCI (including Chair and Vice-Chair); and any discussion of the Wolfe leak would highlight the motive for ongoing corruption within the SSCI in blocking those nominations (see John Ratcliffe).
There was a clear fork in the road and the DOJ took the path toward a cover-up; which, considering what the DOJ was simultaneously doing with Mueller and the EDVA regarding Assange, is not entirely surprising.
Was that decision wrong? Oh hell yes, it was corrupt as heck. .
Were the decisions done with forethought to coverup gross abuses of government? Yes.
Where the DOJ is today is directly connected to the decisions the DOJ made in 2017 and 2018 to protect themselves and internally corrupt actors from discovery.
It is often said: “the coverup is always worse than the crime.” This is never more true than with these examples, because where we are today… now miles down the path of consequence from those corrupt decisions… is seemingly disconnected from the ability of any institutional recovery. That’s now the issue for Bill Barr.
If Bill Barr wanted to deal with the issue he would not be telling President Trump to stop talking about the corruption; instead he would be holding a large press conference to explain to the American people about that fork in the road.
That type of honest sunlight delivery means taking people back into the background of the larger story and explaining what decisions were made; with brutal honesty and without trepidation for the consequences, regardless of their severity and regardless of the friends of Bill Barr compromised by the truth.
Here’s a big reason why Bill Barr should take that approach: We Know.
We know; the DOJ trying to hide it doesn’t change our level of information.
Regardless of whether Bill Barr actually admits what surrounds him, there are people who know… We know…. You know…. AG Bill Barr shouting ‘don’t tweet‘ into the microphone like the Wizard of Oz doesn’t change the fact the curtain has been removed.
Turn around Bill, it’s time to come clean.
Former congressman Trey Gowdy appears with Maria Bartiromo to discuss the issues surrounding the non-indictment of Andrew McCabe for lying to DOJ-OIG investigators about his leaks to the media.
Gowdy breaks out the narrow issue surrounding the internal McCabe investigation as compared to potential criminal conduct that may exist outside that narrow window.
Additionally, Gowdy notes John Durham is looking at specific issues related to former CIA Director John Brennan and activity within the intelligence community that took place prior to the official opening of Crossfire Hurricane on July 31st, 2016.
Included in that Durham review are documents that show CIA activity….
…and CTH has a pretty good idea exactly what “communications” Durham is looking for. It sounds like U.S. Attorney Durham is looking for what Comey outlined in the “crown material” discussion. First, the article from the New York Times (emphasis mine):
WASHINGTON — The federal prosecutor scrutinizing the Russia investigation has begun examining the role of the former C.I.A. director John O. Brennan in how the intelligence community assessed Russia’s 2016 election interference, according to three people briefed on the inquiry.
John H. Durham, the United States attorney leading the investigation, has requested Mr. Brennan’s emails, call logs and other documents from the C.I.A., according to a person briefed on his inquiry. He wants to learn what Mr. Brennan told other officials, including the former F.B.I. director James B. Comey, about his and the C.I.A.’s views of a notorious dossier of assertions about Russia and Trump associates. (more)
U.S. Attorney John Durham appears to be looking for a very specific email written by John Brennan to James Comey. Because Comey wrote another email saying: ..”Brennan is insisting the Crown Material be included in the intel assessment.”
Do you remember the “crown material“?
The Christopher Steele dossier was called “Crown Material” by FBI agents within the small group during their 2016 political surveillance operation. The “Crown” description reflects the unofficial British intelligence aspect to the dossier as provided by Steele.
In May 2019 former House Oversight Chairman Trey Gowdy stated there are emailsfrom former FBI Director James Comey that outline instructions from CIA Director John Brennan to include the “Crown Material” within the highly political Intelligence Community Assessment.
Specifically outlined by Gowdy, the wording of the Comey email is reported to say:
…”Brennan is insisting the Crown Material be included in the intel assessment.”
However, on May 23rd, 2017, in testimony -under oath- to the House Permanent Select Committee on Intelligence (HPSCI) John Brennan stated [@01:54:28]:
GOWDY: Director Brennan, do you know who commissioned the Steele dossier?
BRENNAN: I don’t.
GOWDY: Do you know if the bureau [FBI] ever relied on the Steele dossier as part of any court filing, applications?
BRENNAN: I have no awareness.
GOWDY: Did the CIA rely on it?
GOWDY: Why not?
BRENNAN: Because we didn’t. It wasn’t part of the corpus of intelligence information that we had. It was not in any way used as a basis for the Intelligence Community Assessment that was done. Uh … it was not.
Video of the exchange [prompted 01:54:28 just hit play]
As Victor Davis Hanson wrote at the time:
[…] James Clapper, John Brennan, and James Comey are now all accusing one another of being culpable for inserting the unverified dossier, the font of the effort to destroy Trump, into a presidential intelligence assessment—as if suddenly and mysteriously the prior seeding of the Steele dossier is now seen as a bad thing. And how did the dossier transmogrify from being passed around the Obama Administration as a supposedly top-secret and devastating condemnation of candidate and then president-elect Trump to a rank embarrassment of ridiculous stories and fibs?
Given the narratives of the last three years, and the protestations that the dossier was accurate or at least was not proven to be unproven, why are these former officials arguing at all? Did not implanting the dossier into the presidential briefing give it the necessary imprimatur that allowed the serial leaks to the press at least to be passed on to the public and thereby apprise the people of the existential danger that they faced? (read more)
Fox News Maria Bartiromo has more knowledge of the details within the 2016 political surveillance scandal than any other MSM host. Bartiromo has followed the events very closely and now she is the go-to person for those who are trying to bring the truth behind the scandal to light.
On the morning of May 20th, 2019, on her Fox Business Network show Ms. Bartiromo outlined the current issues between Comey and Brennan. WATCH:
It certainly looks like former CIA Director John Brennan has exposed himself to perjury. However, beyond that and even more disturbing, what does this say about the political intents of a weaponized intelligence apparatus?
CTH has previously outlined how the December 29th, 2016, Joint Analysis Report (JAR) on Russia Cyber Activity was a quickly compiled bunch of nonsense about Russian hacking.
The JAR was followed a week later by the January 7th, 2017, Intelligence Community Assessment. The ICA took the ridiculous construct of the JAR and then overlaid a political narrative that Russia was trying to help Donald Trump.
The ICA was the brain-trust of John Brennan, James Clapper and James Comey. While the majority of content was from the CIA, some of the content within the ICA was written by FBI Agent Peter Strzok who held a unique “insurance policy” interest in how the report could be utilized in 2017. NSA Director Mike Rogers would not sign up to the “high confidence” claims, likely because he saw through the political motives of the report.
(JUNE 2019 – New York Times) […] Mr. Barr wants to know more about the C.I.A. sources who helped inform its understanding of the details of the Russian interference campaign, an official has said. He also wants to better understand the intelligence that flowed from the C.I.A. to the F.B.I. in the summer of 2016.
During the final weeks of the Obama administration, the intelligence community released a declassified assessment that concluded that Mr. Putin ordered an influence campaign that “aspired to help” Mr. Trump’s electoral chances by damaging Mrs. Clinton’s. The C.I.A. and the F.B.I. reported they had high confidence in the conclusion. The National Security Agency, which conducts electronic surveillance, had a moderate degree of confidence. (read more)
Questioning the construct of the ICA is a smart direction to take for a review or investigation. By looking at the intelligence community work-product, it’s likely Durham will cut through a lot of the chatter and get to the heart of the intelligence motives.
Apparently John Durham is looking into just this aspect: Was the ICA document a politically engineered report stemming from within a corrupt intelligence network?
The importance of that question is rather large. All of the downstream claims about Russian activity, including the Russian indictments promoted by Rosenstein and the Mueller team, are centered around origination claims of illicit Russian activity outlined in the ICA.
If the ICA is a false political document…. then guess what?