Published on Oct 29, 2018
Armstrong Economics Blog/Uncategorized
Re-Posted Oct 31, 2018 by Martin Armstrong
COMMENT: Dear Marty,
This is interesting weather change in Saudi Arabia. We usually have the air-conditioning running 24/7 365 days a year.
Also, I found your blog on Avenatti very interesting…. If he runs for President, and it looks like he is planning on doing so, he could be the man that polarizes the U.S. even more, pushing it over the brink to major civil unrest and resulting breaking-up of the U.S. with certain states like California leaving the Union. Californians believe just silicon Valley is there the that State is some exception to rules of economic and the markets. “This time it’s different” mentally will become their motto, which will lead them down the path of no return like Venezuela, etc. If that happens, one could call California the Venezuela of the future. And, Governor Brown will finally become President. Something he has always wanted to be…. Thoughts?
Can one download or stream your newest documentary on the bond market – how and when?
Keep up the great work enriching us all with Socrates’ forecasts and your insight!
REPLY: We are getting very strange weather patterns everywhere. It seems where it supposed to be hot it turning cold and the cold places are turning hot. There has been more snowfall in the USA south of Canada already than there has been in Alaska. Something is happening and the magnetic shield is weakening as the north pole is moving faster than anyone ever saw since 2010. It would be nice to really silence these Global Warming people who stand in line for their cut of $1 billion in grants for fake research to justify raising taxes and turn to what is really taking place for humanity’s sake.
They say that people hate others for their own characteristic faults. Avenatti hates Trump with a passion and he will exploit women to just get noticed. Those who hate Trump so much and prefer this guy, they have no idea what they are signing up for. Trump is a businessman. Avenatti makes money I believe by exaggerating and falsify people’s claims.
Through Avenatti’s career, he’s has secured huge payouts for his clients and claims to have pulled in no less than $1 billion for his clients throughout his career. Given what lawyer take as a percentage, this is why he runs around representing these women for free allegedly just to get noticed so he can run for President in 2020. He claims the legal fees are paid by Stormy Daniels, which is an example of how a lawyer like him plays with the truth. It was a fund set up for her legal fees, not her personally. Who are the donors to this fund? That would be very interesting to know and also has Avenatii charged the normal rates or have they been deeply discounted? Is this really a slush fund for him to launch a presidential bid?
The new documentary I believe will be up this week. We do not sell it nor do we have any control over that or make anything from it. Not sure if you can download it, but you will be able to watch it in an online type of movie theatre
In the past several election cycles CTH has posted ‘Ground Report- Open Discussion’ threads to review perspectives of ground reports from your state, city and neighborhood. ‘Ground Reports’ are a valuable resource to gauge the non-quantifiable elements around elections; they are often quite insightful.
Many states are currently in the process of early voting. If you have a ground report you would like to share, please use the comment section below to provide your perspective.
Additionally, there are often obscure events that can help identify voting trends and possibilities; so don’t limit your review to traditional perspectives. Sentiments and senses are also very useful. What do you sense? What is going on in/around your town and location? Good or bad; positive or negative; what do you see happening?
First the wonky stuff. The Conference Board Consumer Confidence Index (CBCCI) has jumped again for October and now measures the highest current sentiment among consumers since 2000. The CCI now stands at 137.9 (1985=100), up from 135.3 in September. Additionally, the future outlook of consumers, known as the “Expectations Index” (consumers’ short-term outlook for income, business and labor market conditions) increased from 112.5 last month to 114.6 this month. More DATA winnamins.
What does that mean? Well, it means middle-America feels GREAT about now, next week, next month, and well into next year. Additionally, now that the winnamins are starting to catch up to them, the pontificating wonkified actuaries will begin to project a splendidly “strong” holiday season. Duh! They’re always playing catch-up. LOL.
The key to understanding MAGAnomics is to focus on the middle-class. If the middle-class is thriving and doing well, all of the economic indicators will tell the same story. MAGAnomic benefactors (ordinary working people outside the investment class) are scantly impacted by the Stock Market.
This is the key and cannot be repeated enough.
Trump’s MAGAnomic policy focuses on Main Street. The preceeding 30+ years of economic policy focused on Wall Street.
That’s the essential difference.
The benefactors of MAGAnomics are those working week-to-week, month-to-month, to take care of their family. The middle-class; not the uni-focused investment class.
When the middle-class is optimistic, confident and positive, you can be certain of an exceptional holiday season. This is not challenging to understand.
As we shared when the third-quarter GDP results were announced a few days ago; everything is pointing to a great fourth quarter and holiday retail season.
Overall the 3.5% GDP growth is exceptionally strong. To see the data bolstering a positive future forecast I would draw attention to Table 2 (lines 43 through 49) and the analysis for net impact over Exports/Imports. The heavy import number delivered a net subtraction of 1.78% from GDP growth; that’s a result of a large increase in imported durable goods [likely anticipatory holiday inventory buildup].
As you can imagine from your own shopping experiences, durable goods inventories generally climb in the third quarter as companies increase inventory in preparation for holiday sales in quarter four. The growth in the buildup of this inventory is significantly higher than historic trend; this means companies are forecasting strong consumer demand for goods in Q4, the holiday season.
Further support for a booming Q4 purchase prediction can be found in the current 4% growth of consumer spending. With wages growing (3.8% avg), and with an incredibly strong jobs market, people are making large purchases with confidence. Additionally, price data in the current GDP report shows inflation at a 1.6 percent annualized pace.
Add it all up and you can see the reason for companies to boost inventory ahead of a very strong holiday season. The middle class drives the MAGAnomic economy. Workers are getting paid more and being taxed less; our paychecks are bigger.
Simultaneously inflation is low (prices not increasing), so the net is more disposable income to make purchases, combined with confidence in wages/jobs allowing people to spend more.
President Trump, First-lady Melania Trump, Jared and Ivanka Kushner along with Treasury Secretary Steven Mnuchin visit the Tree of Life Synagogue in Pittsburgh, Pennsylvania, to pay their respects and condolences to the victims of a mass shooting on Saturday.
President Trump laid a stone of remembrance and First Lady Melania laid a white rose upon each of eleven Star of David markers outside the Synagogue prior to going inside to visit survivors and family members.
After leaving the Synagogue the President and first lady traveled to the University of Pittsburgh Medical Center to meet with additional victims of Saturday’s shooting. Their visit to the hospital included meeting with medical staff and wounded law enforcement officers: Officer Tim Matson (remains in intensive care); Officer Daniel Mead (discharged); Officer Anthony Burke (discharged); and Officer Tyler Paschel (wounded).
A few months ago, when discussing overall immigration policy, I wrote: “There is no greater disconnect from ordinary Americans -on any singular issue- than the policy positions of Democrats and Republicans in Washington DC surrounding immigration. President Donald Trump is confronting their unified interests.” The reaction from Speaker of the House Paul Ryan is directly related to this truism:
(Via Associated Press) […] The top Republican tells WVLK radio in Kentucky, “Well you obviously cannot do that. You cannot end birthright citizenship with an executive order.”
Ryan’s comments Tuesday offered a rare challenge to the president — from his own party. […] Ryan says Republicans didn’t like when then-President Barack Obama “tried changing immigration laws via executive action. He says “obviously as conservatives we believe in the Constitution.”
Ryan is retiring but the No. 3 House Republican, Louisiana’s Rep. Steve Scalise, said on Fox that he’s glad Trump is considering options. (read more)
It does not go unnoticed that Speaker Ryan never challenged DACA.
It does not go unnoticed that Paul Ryan fully supported the June 2014 house vote for the Senate Gang-of-Eight immigration bill; until Majority Leader Eric Cantor was primaried 48 hours before the vote.
The issue of lax immigration, and the subsequent lack of enforcement, is the cornerstone for the UniParty in Washington DC. It is one of the central elements that isolates the professional political class from the majority of common sense Americans.
For the Democrats, support for open-borders and lax immigration enforcement is part of their overall ideology and fabian world-view. For traditional republicans support for lax immigration, which allows exploitation of labor, is driven by the Wall Street views of the U.S. Chamber of Commerce (President Tom Donohue), and various elements associated with multinational corporate interests (Koch Brothers).
No amount of external political pressure upon DC will change this dynamic.
The only thing that will fracture this entrenched DC ideology is a long-process to dismantle the system that enables mutually beneficial arrangement.
A few perspective examples:
Senator Lindsey Lindsey Graham will likely support Trump’s initiative to end the anchor baby process, or birthright citizenship. However, tread cautiously, because Graham looks at this issue as a foot-in-door opportunity to force comprehensive immigration reform. There’s nothing altruistic within the “comprehensive.”
McCain dies; Martha McSally has the same view funded by the same benefactor. Corker resigns; Mitt Romney has the same view funded by the same benefactor. Paul Ryan exits; Kevin McCarthy has the same view funded by the same benefactor. See the problem?
If President Trump, on our behalf, is going to defeat the “Big Club” on the issues around immigration he will need two essential elements:
♦First, President Trump will need the unwavering support of common sense middle-America. When I say ‘unwavering’, I mean total and complete support from everyone, anyone, who wants to see immigration law enforced. Every entity who supports left-wing progressive globalism will spare no expense in attacking him. The entire planet will align against him. If you think things are bad now… oh man, we haven’t seen anything yet.
♦Second, POTUS will need to take the same strategic approach deployed in the trade and financial confrontation to new levels of strategy. President Trump will need to replace everyone within the administration that is ‘Big Club’-sketchy; with extreme prejudice. The attacks will come from all directions. Having to deal with a weaponized intelligence apparatus, a duplicitous cabinet, and a complicit DOJ and FBI will make any immigration enforcement/reform effort almost impossible. Right now, on the issue of immigration, many within the Trump cabinet are allied with the Donohue/Koch ‘Big Club’.
Suffice to say if the Republicans do not gain seats in the Senate and hold the House of Representatives it won’t even be worth starting.
“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”
According to a widely repeated Axios interview with President Trump the administration is considering an executive order to eliminate the “Anchor Baby” interpretation within the 14th Amendment focused on “Birthright Citizenship.”
If the initial review of the intent is accurate, President Trump would sign an executive order that would remove the right to citizenship for babies of non-citizens and unauthorized immigrants born on U.S. soil.
Until the 1960s, the 14th Amendment was never applied to undocumented immigrants, illegal aliens, or temporary (Visa) immigrants/visitors. The legal issues of birthright citizenship surrounding children born to non-legal parents inside the U.S. has never been decided by the Supreme Court.
Attorneys representing the interests of President Trump in the case of Clifford v. Trump previously won a dismissal of all claims against Mr. Trump. As a consequence the court ordered the plaintiff “Stormy Daniels” and her creepy porn lawyer, Michael Avenatti, to reimburse Donald Trump’s legal team for all expenses incurred during their defense of the frivolous lawsuit.
The lawyers representing Mr. Trump filed a motion with the court and now submit a claim for $341,559.50 for legal costs incurred (full pdf below). The court will also likely impose monetary sanctions upon CPL Avenatti.
Ms. Clifford raised more than $580k from left-wing political supporters via her “Crowd Justice” campaign as established by her Creepy Porn Lawyer. It would now appear that Mr. Trump’s legal team will be the biggest benefactors of that crowd-funding campaign.
Here’s the full motion submitted to the court:
Armstrong Economics Blog/The Hunt for Taxes
Re-Posted Oct 31, 2018 by Martin Armstrong
QUESTION: Mr. Armstrong,
I remember you mentioning US is the only country to tax world wide income, it seems that China is moving to modify their IIT effective Oct 1, 2018, to include anyone staying in China for more than 183 days. Is this the same as the US? Can you comment/share with us your opinion?
ANSWER: No, the US and Japan tax worldwide income. That means that their citizens owe taxes even if they no longer live there. The application of taxes to anyone staying in China 183 days is similar to most countries, but its time limit is rather generous. An American living in Britain would need to pay British Taxes plus American Taxes. A foreign working in the USA would pay taxes to the government. Taxes are applied on a residency basis but worldwide income is applied as if you are the property of the government. Of course, the Socialists want to argue that the “rich” do not pay their “fair share” but how they define that is as a slave. If you do not use any services because you live overseas, that why is it fair that you should pay any tax for services you never use?
Armstrong Economics Blog/Climate
RE-Posted Oct 31, 2018 by Martin Armstrong
QUESTION: Do you think that a pole shift will be devastating to society?
ANSWER: No. I think many turn such events into a looming existential threat destined to destroy us. That is probably up there with the Yellowstone Supervolcano. These treasured theories of our impending doom seem to lurk in a myth that some event will kill us all. I am not exactly sure why people tend always to want to create such doom like the Year 2000 computer bug that was going to destroy all technology. There is no evidence that the entire world would be destroyed by such a pole shift. It may be unpleasant for some and suddenly nice for others. But a pole shift is a natural event and may disrupt communications and air travel, but we will adjust.
The same thing when I am warning about Global Cooling. These are events that have taken place throughout recorded history. It was such an event that led to a massive migration south back to North Africa known as the Sea Peoples. This brought about the collapse of the Bronze Age with very few societies, empires or city-states surviving. It was Global Cooling that resulted in the Black Death. When temperatures decline, crops fail and famine rises and with that combination diseases increase. The childish notion that Global Warming will result in the ice melting and sea levels rising is really absurd. It really is when the Arctic Ocean has been free of ice that the water can evaporate and return as snowfall which then builds the glaciers.
Climate has had a very major impact on the history of civilization. We have expanded during warm periods and contracted during gold periods.