Armstrong Economics Blog/Climate
Re-Posted Aug 1, 2019 by Martin Armstrong
Research is surfacing that shows Antarctica may have been without ice during the Medieval Warming Period some refer to as the Medieval Climate Anomaly (MCA) which took place between 1000–1200 AD. Mapping the MCA across the Antarctic region based on the analysis of published palaeotemperature proxy data from 60 sites has revealed something which defies the global warming hysteria. They have used ice core data, temperature proxy records from marine and terrestrial sediment cores, as well as radiocarbon dating. They have discovered that there was in fact warming of Antarctica contrary to the belief that if the ice melted we would all drown.
Back in 1773, the well-known explorer James Cook passed through the Antarctic circle for the first time. Cook officially discovered Antarctica which was generally believed to have been unknown. Later in 1929, a map was discovered in Istanbul that suggested it had been known before and has subsequently raised confirming evidence that Antarctica, at least in the West, was without ice and was noted as being a warm climate.
The chart was originally discovered in Istanbul while the German theologian Gustav Deissmann was cataloging the contents of Istanbul’s Topaki Palace’s library. He came across bundles of maps and charts that had been hidden within piles of disregarded materials. He was apparently stunned after realizing the staggering importance of this find for it was long understood that even Christopher Columbus possessed maps from the ancient world whose last capital was Constantinople – Istanbul. Constantinople fell to the Turks in 1453 and the scholars fled to Europe and to Russia and began teaching lost knowledge. This is what inspired Columbus to set sail in 1492.
Deissmann understood the importance of this map and he immediately brought it to an expert. The map was identified as the Piri Reis Map, taking its name from the medieval cartographer Piri Reis, who signed the bottom. The Piri Reis Map was astonishing for it apparently identified Antarctica at least 200 years before Cook’s discovery.
The Piri Reis Map is a world map compiled in 1513 from military intelligence. Only about one-third of the map has survived displaying the western coasts of Europe and North Africa as well as the coast of Brazil with reasonable accuracy. There are also various Atlantic islands, including the Azores and Canary Islands. Naturally, academics tried to call it a fake because it disturbed their idealized linear timeline of discovery. Nonetheless, Gregory McIntosh, who is a historian of cartography, examined the map in detail in his book “The Piri Reis Map of 1513″ (University of Georgia Press, 2000). McIntosh was able to discover the sources for much of the map in Columbus’s writings. There were some errors, such as the Virgin Islands in two locations which he attributed to the use of multiple maps as sources. Nevertheless, McIntosh traced the accuracy of the depiction of the Antarctic coast. He noted that there were two errors insofar as the coast was shown perhaps hundreds of kilometers north of its proper location and that the Drake Passage was completely missing.
Of course, with Google Maps, people have uncovered what they are claiming are man-made pyramids in Antarctica, claiming that it was once inhabited perhaps 6,000 ago and a polar shift changed the landscape of the world. This is an interesting theory, but it remains just speculation. Sure, something like that could have happened. However, there is no way to prove such a theory at this point in time, leaving it as a plot for a speculative movie.
Still, the Piri Reis Maphas baffled many because it stands in direct contrast with our perception today that the Antarctic is frigid but the notes on the map describe the region as having a warm climate. However, the map corresponds to the Medieval Warm Period that followed the Dark Ages and the Black Plague which wiped out about 50% of the population during the cold period.
However, the extreme swings from heat to extreme cold (Panic Cycles) appear to be indicative of a precursor to Climate Change. Another piece of historical evidence for the Medieval Warming Period which has been ignored by the Global Warming crowd is known as the Hunger Stones. Pictured here is a Hunger Stone from 1616 which has been exposed by the low level of water in the Elbe River in 2018. This is at Decin, in the Czech Republic. Throughout the centuries, there have been these cycles of extreme heat followed by extreme cold. Such events have been recorded when drought has resulted in the low level of water in the Elbe river.
Then there is what many call the Christopher Columbus Map which is undated, but there are clues it was created in 1491: The Smithsonian reported that the map quotes a book published that year, and Christopher Columbus may have consulted the map (or a copy) before his great voyage. When he landed in the Bahamas, he believed he was close to Japan, for this map did not show the Americas. The map, made by a German working in Florence named Henricus Martellus, has been another map which has been ignored by academics.
Scientists at Yale University have been using multispectral imaging on this 15th-century map believed to have been used by Christopher Columbus. They have uncovered hundreds of place names and more than 60 written passages. I have written before that 
Roman artifacts have been discovered also in Canada. This clearly establishes that the ancient Romans may have sailed across the Atlantic long before Columbus or the Vikings. This discovery in Canada has created a storm for it rewrites history. The unquestionable discovery of a Roman sword in Canada is rather stark evidence that history is different from what academics believed. Yet Roman coins have been also discovered in Japan. Then there was the discovery of the Cocaine Mummies from Egypt which have confirmed there was trade between Africa and South America, although it could have been through the Pacific to India and off to Egypt.
Only two historical cases of pre-Columbian contact are widely accepted among the scientific mainstream. They have accepted maritime explorations by Norse peoples from Scandinavia during the late 10th century which led to the Norse colonization of Greenland and of L’Anse aux Meadows in Newfoundland which predate Columbus’ arrival in the Americas by some 500 years.
From China, we have historical evidence that the Roman Emperor Marcus Aurelius sent a diplomat envoy to establish contact with China, which they were long trading with through intermediaries on what was called the Silk Road. The history of Rome that it claimed to rule the world (orbis terrarum) stood at the opposite end of the globe from the strikingly similar Han Dynasty (206BC-220 AD) in China, which also claimed to have ruled the world (tianxia). There is the History Book for Tang-Dynasty in China covering the period 618-907 AD. Yet the text mentions 17 times what appears to be the Roman Empire. It also describes an envoy that was sent by the Roman Emperor to China. The Roman Emperor was recorded to have been “Anton.” The account of such an envoy who visited the older Han Dynasty predates the Venetian traveler Marco Polo (1254-1325) by more than 1,000 years. This envoy has been attributed to 166 AD during the reign of Marcus Aurelius Antoninus (121-180 AD). It is the death of Marcus Aurelius that has marked the peak in the Roman Empire and the turning point that begins the Decline and Fall of the Roman Empire where the monetary system collapses just 72 years thereafter. This envoy established diplomatic contact at the peak in the Roman Empire from which a disastrous decline begins. Any political-economic aspirations to further such a relationship would then die with Marcus Aurelius. Yet also, both empires would suffer the same fate of barbarian invasions. The Han Dynasty falls in 220 AD from which emerges the chaotic period known as the Three Kingdoms (220-280 AD ) – the division of the once unified Chinese Empire.
The Minoan society began the Bronze Age. To make bronze, they needed tin. Low and behold, the Minoans traded with the British of Stonehenge Age period prior to 1650 BC, sailing into the Atlantic and they too must have created maps of the areas they sailed to. It was essential to sail into the Atlantic for trade giving birth to the Bronze Age.
The Minoans were perhaps the first International Economy. They traded far and wide even with Britain seeking tin. Their civilization was of the Bronze Age rising civilization that arose on the island of Crete and flourished from approximately the 27th century BC to the 15th century BC. Their trading range and colonization extended to Spain, Egypt, Israel (Canaan), Syria (Levantine), Greece, Rhodes, and of course to Turkey (Anatolia). Many other cultures referred to them as the people from the islands in the middle of the sea. However, the Minoans had no mineral deposits. They lacked gold as well as silver or even the ability to produce large mining of copper. What has survived are examples of copper ingots that served as MONEY in trade.
The fall of the Minoan Civilization coincided with the eruption of Thera (today it is known as Santorini). This destroyed their ships and commerce and allowed the barbarians, then the Greeks from Mycenae, to plunder their society and also that of Troy before collapsing into a Dark Age due to climate change and global cooling. What is very clear is that there must have been maps which long predated the Piri Reis Map which apparently relied on numerous maps which had previously existed.
The latest is again they assumed the ice will all melt and the seas level will rise by 25 meters. They claim that if emissions don’t start to fall until 2030 and the world does not abide by the 2015 Paris Agreement, where anyone who disagreed was not allowed to present anything or speak, then the sea level will rise by 25 meters by 2050. This all opinion and no proof or historical evidence has ever been presented to show what would happen.
Reconciling John Solomon’s Reporting on Comey…
July 31, 2019
To say there is broad-based confusion is an understatement. The recent reporting by John Solomon of The Hill only makes the confusion worse. Let’s stand back and reconcile two issues (with evidence to support) that are MASSIVELY conflated.
First, go read the full Solomon article. Notice the entire construct of the article surrounds “The Comey Memos“. As you will see, this specific topic is important. Within the Solomon article you will find (emphasis mine):
[…] Inspector General (IG) Michael Horowitz’s team referred Comey for possible prosecution under the classified information protection laws, but Department of Justice (DOJ) prosecutors working for Attorney General William Barr reportedly have decided to decline prosecution — a decision that’s likely to upset Comey’s conservative critics.
Prosecutors found the IG’s findings compelling but decided not to bring charges because they did not believe they had enough evidence of Comey’s intent to violate the law, according to multiple sources.
[…] Patrick Fitzgerald and Daniel Richman, two of Comey’s lawyers, and Keith Urbahn, his spokesman, did not return repeated calls and emails seeking comment.
[…] While they cautioned that the IG’s final report won’t be complete until it gets feedback from Comey’s lawyers in the next few days, it is expected to conclude that the former FBI director improperly took with him memos that were FBI property when he was fired, transmitted classified information via an insecure email account, and shared some of the memos with his private lawyers. (read more)
It sounds like the OIG report on FISA abuse is in the end-stages. What is described in the highlighted sentence above would be what is technically called “The Principal Review Phase of the OIG Final Draft”. That’s where targets are given the opportunity to review an IG report and provide feedback prior to public release.
However…. Note: This reference is not to the IG report on FISA Abuse.
Full Stop.
Repeat: This is NOT the Inspector General Michael Horowitz report on DOJ and FBI FISA abuse.
This is a carve-out.
John Solomon is conflating two distinct issues…. and there is no effort to explain, because the sourcing is compartmentalized. Now the comment earlier in the week by Matthew Whitaker makes sense. Bear with me….
From the outset it was reported and confirmed that U.S. Attorney John Huber was assigned to assist Inspector General Michael Horowitz. Huber’s job was to stand-by in case the IG carved out a particular concern, discovered during his investigation, that might involve criminal conduct.
Earlier this week Matt Whitaker said: “John Huber is reviewing anything related to Comey’s memos and the like.”
Put the two data points together and what you realize is that during the OIG review of potential DOJ and FBI FISA abuse… IG Horowitz investigated the Comey Memo’s and then passed that specific issue along to John Huber for DOJ review.
The IG criminal referral for the James Comey memo leaking was a carve-out sent to U.S. Attorney John Huber.
Back to the Solomon article, only this time I will insert modified clarifying language to highlight what happened:
[…] Inspector General (IG) Michael Horowitz’s team referred Comey [to John Huber] for possible prosecution under the classified information protection laws, but [John Huber, working for AG Bill Barr] reportedly has decided to decline prosecution — a decision that’s likely to upset Comey’s conservative critics.
John Huber found the IG’s findings compelling but decided not to bring charges because he did not believe they had enough evidence of Comey’s intent to violate the law, according to multiple sources.
This is a carve-out IG report and referral; with a specific target of James Comey; based on evidence discovered during the larger OIG review of possible FISA abuse.
Now the ‘Principal Review Phase‘ makes sense, because the only principal is James Comey. Therefore the IG has written a final draft report specific to James Comey and his memos. James Comey and his lawyers are now reviewing that final draft report and will provide feedback.
Inspector General Michael Horowitz, together with the OIG referencer, may put the response from Comey in the report along with additional rebuttal from the Inspector General’s office.
That process will generate a final IG report; but the report is only specific to the Comey memo aspect and James Comey’s conduct in handling that memo content. That IG report on James Comey will be released pretty soon, likely within the next week.
This is not the inspector general report on DOJ and FBI FISA abuse. This is an IG report carved out of the larger investigation.
Bottom Line: We are soon going to see an IG report exclusively on James Comey.
Does that make sense now?
FOIA Release: FBI Agents Picked Up Comey Memos From His House Day Before Senate Testimony…
July 31, 2019
A recent FOIA release from Judicial Watch (full pdf below) reveals that two of Mueller’s initial FBI agents, based on dates and redactions – likely Peter Strzok and Joe Pientka, visited James Comey on June 7th, 2017, to retrieve a collection of his memos.
[However, a word of caution, one of the memos was titled “last night at 6:30pm” and is being widely misinterpreted to have been written the night before (June 6th, 2017) when that is not accurate. It is likely that memo relates to the January dinner in the White House with President Trump that held the same sentence.]
(pdf here)
If we ignore the misinterpreted “last night” memo aspect (dinner with potus in January ’17), here’s what we can learn from this FOIA release:
♦First, the memos were picked up while FBI agent’s Peter Strzok and Joe Pientka were lead FBI agents that transferred into the Mueller team. Therefore it’s likely they were the two who traveled to Comey’s house for this June 7th effort.
♦Second, the memos were picked up June 7th, 2017, the day before James Comey appeared before the Senate Select Committee on Intelligence, June 8th, 2017 [See Link].
It was during this June 8th SSCI committee testimony where Comey first revealed the scope of his memo keeping. Keep in mind, all prior research shows SSCI Chairman Richard Burr and SSCI Vice-Chair Mark Warner were part of the corrupt effort against President Trump. Their committee was where leaker James Wolfe (sleeping with journalist Ali Watkins) was operational. The SSCI was part of the aggregate coup effort.
WARNER: I think that’s a very important statement you just made. Then, unlike your dealings with presidents of either parties in your past experience, in every subsequent meeting or conversation with this president, you created a written record. Did you feel that you needed to create this written record of these memos, because they might need to be relied on at some future date?
COMEY: Sure. I created records after conversations that I think I did it after each of our nine conversations. If I didn’t, I did it for nearly all of them especially the ones that were substantive. I knew there might come a day when I would need a record of what had happened, not just to defend myself, but to defend the FBI and our integrity as an institution and the Independence of our investigative function. That’s what made this so difficult is it was a combination of circumstances, subject matter and the particular person.
WARNER: I think that is very significant. I think others will probably question that. Now, the chairman and I have requested those memos. It is our hope that the FBI will get this committee access to those memos so again, we can read that contemporaneous rendition so that we’ve got your side of the story. – Transcript Link
Understanding the timeline; and overlaying the ideological intents and purposes; it would make sense that Robert Mueller and the ‘small group’ would want to exploit the memo content (hell, they likely knew all about it as soon as written), and simultaneously keep those memos buried and under their ‘small group’ control.
By taking custody of the memos, the Mueller investigative team would be able to block any outside inquiry. That’s the motive for the FBI visit to James Comey on June 7th, 2017. Comey could then talk about the memos the next day while knowing the ‘small group’ would use the “ongoing investigation” to keep them hidden from review.
Senators Mark Warner, Richard Burr and the media would be able to frame discussion of the memos to undermine President Trump, while knowing the memos would be kept out of public review. With hindsight go back and review the SSCI testimony; this approach appears to have been pre-planned.
Here is the FOIA release on the FBI records:
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Now lets overlay the Archey Declarations” against the FOIA release.
David Archey was the lead FBI agent who took over the Mueller investigation after FBI agent Peter Strzok was removed. David Archey came into the small group effort in August of 2017.
After the media sued the DOJ and FBI to get the Comey memos, David Archey described them. Now we find a disparity.
David Archey gave sworn testimony to DC Circuit Judge Boasberg that the memos were assembled by the FBI “on or by May 12, 2017”.
(pdf source – page #3 of declaration #3)
Obviously if the FBI was picking up memos on June 7th, 2017, the Archey declaration to the court is incorrect. However, remember, Archey didn’t join the team until August 2017, so his sworn statement in October 2017 has to be based on information from others.
Regardless of how the error was made, a lie – or intentional mistake, the declaration to Judge James Boasberg was obviously inaccurate.
Again, the bottom line is the Comey Memos (of unknown quantity) contain a diary of record keeping by FBI Director James Comey. Obviously he was writing these memos because he was covering his ass. The fact that he was keeping these notes at home, and/or he moved the memos to his home after the election, is even more indication that Comey knew the operation against President Trump had the potential to go sideways.
I would strongly advise everyone to be familiar with the Archey Declarations (pdf below) which are descriptions of the Comey memo content.
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The DOJ has until August 2nd, 2019 (Friday), to file a response to the CNN motion supporting an earlier court order that mandated the release of the Archey Declarations
[Full Backstory].
CNN Detroit Debate, Night Two – Biden vs Harris – 8:00pm Open Discussion Thread…
July 31, 2019
Tonight CNN is the broadcast host for the second night of Democrat presidential primary debates in Detroit Michigan. After a live lotto-draw, the line-up was announced for only the 20 presidential candidates who the DNC qualified the second set of debates.
[Former Senator Mike Gravel, Mayor Wayne Messam, former Representative Joe Sestak and billionaire Tom Steyer did not qualify for the second round of debates. Sad.]
Tonight puts all of the peoples’ of color candidates together. In a luck-o’-the draw, ‘spank me’ Harris is in position to finish off ‘creepy’ Joe Biden. Consequently, most of the pressure is upon Creepy to have a good debate and stop the downward spiral of support losses to Spank Me and How.
However, that possible conflict opens the door for fellow New Yorkers Gillibrand and Booker to play the creed-card, mounting racist attacks with opening statements in Spanglish while comrade De Blasio attempts to gain traction.
CNN holds exclusive broadcast rights to the debate. Consider this an open discussion thread for anyone watching…
Comeuppance – Chinese Aluminum Billionaire Indicted in $1.8 Billion Tariff Evasion Scheme…
July 31, 2019
We previously outlined Mr. Zhongtian Liu [HERE] as part of the early 2018 explanation for how China was exploiting the NAFTA loophole as an end-run around tariffs. Today the Central District of California U.S. Attorney announces his indictment.
LOS ANGELES– A federal grand jury indictment unsealed late Tuesday alleges a complex financial fraud scheme in which a Chinese company exported to the United States huge amounts of aluminum – disguised as “pallets” to avoid customs duties of up to 400 percent – and “sold” the purported pallets to related entities to fraudulently inflate the company’s revenues and deceive investors around the world.
The 53-page indictment alleges that China Zhongwang Holdings Limited, Asia’s largest aluminum extrusion company; Zhongtian Liu, the company’s former president and chairman; and several individual and corporate co-defendants lied to U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping and countervailing duties (AD/CVD) that were imposed in 2011 on certain types of extruded aluminum imported into the United States from China.
The aluminum sold to United States-based companies controlled by Liu were simply aluminum extrusions that were spot-welded together to make them appear to be functional pallets, which would be finished goods not subject to the duties, according to the indictment. In reality, there were no customers for the 2.2 million pallets imported by the Liu-controlled companies between 2011 and 2014, and no pallets were ever sold. (read more)
Photograph of Mr. Liu Zhongtian’s aluminum stockpile hidden in Mexico.
MAGA Irrelevant – Federal Reserve Cuts Rate Quarter Point, First Since ’08 – Why It Doesn’t Matter…
July 31, 2019
In 2015 CTH outlined how candidate Donald Trump’s proposals were in-line with those who had long argued for a return of “economic nationalism”. We also outlined when those proposals (now policy) are implemented, Fed action would be essentially irrelevant.
The Federal Reserve is pegged to the Wall Street Economy. President Trump’s policies are pegged to the Main Street Economy. There is a disconnect; a new dimension in U.S. economics; and very few people understand what happens in this space between them.
Thirty-five years ago Fed monetary policy impacted the U.S. economy directly because almost all activity (durable good manufacturing) was within our borders. The natural dynamic of inflation could be influenced by the Fed. Rate changes could offset inflation and also enhance domestic investment etc.
However, as time progressed that manufacturing activity -the basic underpinning of middle-class jobs, wages etc- shifted overseas. When monetary policy became controlled by multinationals (Wall Street influencers purchasing politicians), capital investment moved to generate purely higher profits. Businesses, specifically manufacturing, went abroad. As a consequence the determination of prices, ie ‘inflation’, was no longer influenced by the Fed because the actual economic activity was/is outside the U.S. borders.
We see this today.
President Trump’s middle-class policy, through tariffs, is intended to bring manufacturing back to the U.S. China and the EU are trying to keep their manufacturing foothold by devaluing their currency and subsidizing their industries.
This action by China and the EU lowers the value of their currency, increases the value of the dollar, and simultaneously lowers the prices of their exports. This offsets the U.S. tariffs, and the China/EU stuff costs less to import. In essence, we import deflation.
No action by the U.S. Fed can change this pricing mechanism because the price determination is outside the reach of the Fed. Hence, the disconnect.
NEW YORK (Reuters) – The U.S. dollar rose to two-year highs on Wednesday after Federal Reserve Chair Jerome Powell, having made the first cut to interest rates since 2008, signaled the move was not the start of a rate-cutting cycle.
[…] In a widely expected move, the U.S. central bank cut rates by 25 basis points to shore up the economy against risks including global weakness. But in the subsequent press conference, Powell said he viewed the cut as a “mid-cycle policy adjustment” rather than a broader loosening of monetary policy.
[…] The statement upended expectations of some market participants who anticipated confirmation of further rate cuts. A day prior, traders had forecast at 35% chance of three cuts by the end of the year; on Wednesday afternoon that figure had fallen to 12%, according to CME Group’s FedWatch tool.
“They acknowledged strong labor markets, recent reasonable signs of moderate growth. It still leaves the playing field wide open as to what they’re going to do in future months,” said Tony Bedikian, head of global markets at Citizens Bank in Boston. (more)
♦RATE CHANGES – Currently multinational investment is in a holding pattern, waiting to see what happens with President Trump’s global trade reset. Manufacturing multinationals don’t know exactly where to put their investment money because they are waiting to see what happens with trade and tariffs. They don’t want to invest in a new China factory only to see the end product become subject to POTUS Trump tariffs.
The Fed views those stalled investment dollars through the prism of a global economy, their historic reference. Financial pundits have also been selling the global economy model for 35 years; so they too mistakenly view stalled (unappropriated) investment dollars as a sign the U.S. economy might be weakening. It ain’t.
We are in the aforementioned flux space where Trump is favoring Main Street…. and all trade policy is shifted therein.
U.S. Federal Reserve lending rates won’t make the multinationals move their investment money until the geopolitical trade reset is worked out. Ergo, lower Fed rates won’t currently help Wall Street…. Nor will lower Fed rates have much impact on Main Street because internal U.S. economic influences are larger and stronger than the Fed influence.
Because the Fed cannot influence prices of manufactured goods, the Fed cannot influence inflation. The U.S. worker wage rates are stronger than any inflation; again the disconnect that CTH has noted for three years that will work in favor of the middle-class.
So long as the Fed is pegged to Wall Street, meaning has primary focus on lending to U.S. manufacturing multinationals; and as long as that lending (investment) is stalled pending the outcome of Trump’s trade and economic reset; the Fed is essentially irrelevant on the bigger dynamic.
If a variable rate mortgage loan goes up by $100/month, and simultaneously (outside of the Fed influence) the worker is getting a $300/month wage increase (currently 5.5% wage growth), there is no material negative impact.
If a variable rate mortgage loan goes down by $100/month, and the worker is still getting a $300/month wage increase, blue collar spending and savings jumps [current status], no substantive downside. The blue-collar spending is a self-fulfilling prophecy. This is the reason why we noted in 2016 the Fed would essentially be irrelevant to Main Street.
The Fed remains pegged to Wall Street.
Trump policy remains pegged to Main Street.
We are in the space between.
Until this dynamic changes and the majority of the underlying economic activity is returned to the U.S action by the Fed is essentially moot to Main Street.
Once the U.S. economy rebalances; meaning once the trade policy brings more production based manufacturing and assembly back into the U.S; and once we reverse the 35-year Wall Street dynamic and become a more production-driven economy (where the best return on investment is inside the USA); then yes, Fed action will start to have influence.
When? Once the USMCA is ratified, President Trump will trigger tariffs on China. This will move all of the multinationals who are in a ‘holding pattern’ because they will see what areas are safe. Capital investment will flow very fast.
Where? The China exodus will benefit North America (USMCA) and those ASEAN nations who have partnered with Trump and made proactive trade agreements. That’s where the capital investment will flow.
MAGAnomics – BEA: Upward Revisions – Blue Collar Wage Growth 5.5% in June, Inflation Remains 1.4%
July 31, 2019
The Bureau of Economic Analysis (BEA) released significant wage and salary datayesterday which held stunning upward revisions for 2018 and 2019. Wage growth of 5.5% combined with low inflation remaining at 1.4 percent; the disposable income of U.S. workers jumped to a stunning 4.1%. [Data Tables]
Within the revised BEA data, we find employee compensation rose 4.5% in 2017 and 5% in 2018. Importantly the growth trend continued into 2019, with compensation increasing 3.4 percent in the first six months alone. Year-over-year wages and salaries were revised upward to 5.3% for May, and 5.5% in June. These are stunning increases in worker pay.
There are various economic indicators we have shared through the years, but wage growth is one of the more critical. First, wage growth lags behind business activity – workers don’t get pay raises until after business volume demands/provides it. Second, wage growth is generally uni-directional – once businesses hike pay, the increases cement.
As the Wall Street Journal put it:
(VIA WSJ) […] Recall how liberals blamed “secular stagnation” as the reason worker incomes weren’t growing faster during the latter years of Barack Obama’s Presidency. Yet employee compensation has increased by $150 billion more in the first six months of 2019 than all of 2016.
Compensation increased 42% more during the first two years of the Trump Presidency than in 2015 and 2016. This refutes the claim by liberals that the economy has merely continued on the same trajectory since 2017 as it was before.
The economy barely skirted recession in the final Obama years, and economic policy changed in 2017. Deregulation has unleashed repressed animal spirits, especially in energy. Tax reform has also spurred business investment in new facilities and equipment, which over time should translate into higher worker productivity and wages.
Those reforms are continuing to pay economic dividends despite the damage from Mr. Trump’s trade policies. While Democrats and even some conservatives complain that workers haven’t benefited from tax reform, the evidence suggests otherwise. (read more)
SUMMARY: The U.S. consumer is driving the economy. The jobs and labor market remains strong. Wage growth is rising in proportion to the diminished availability of the labor pool. Price inflation is low because manufacturing economies (EU and China) are devaluing their currency, and subsidizing their industries (China), in an effort to avoid Trump’s trade policies (tariffs). Their efforts increase the value of the dollar and we are importing deflation.
Simultaneously, global manufacturers -multinationals- need access to the U.S. consumer market. As President Trump applies a series of strategic global trade moves, intended to draw manufacturing back to the U.S., those multinationals are in somewhat of a holding pattern for further investment. Simply, the multinationals are trying to figure out where to put their investment capital for the highest return.
Example: The U.S. economy is strong, unemployment is low and wage rates up; so if China is a non-option, the profit determination shifts. Where to manufacture? It might be more profitable for a multinational in either Southeast Asia or North America. The key is which country has a long-term agreement with the U.S. That’s why the USMCA is critical.
CTH still predicts POTUS Trump will eliminate the uncertainty as soon as the USMCA is ratified. I suspect President Trump will drop massive tariffs on all Chinese goods.
Think of China like a big lake filled with U.S. economic value. Through his Asian discussions with Vietnam, S Korea, Malaysia, Singapore, Australia, Japan, et al, President Trump has stealthily built a thin levy, an ASEAN dam of sorts, that will direct the China lake of economic value into Southeast Asia.
Once the USMCA is signed, Trump will blow the dam by triggering the tariffs. This will move all of the multinationals who are in a ‘holding pattern’, and capital investment will flow fast. The China exodus will benefit North America (USMCA) and those ASEAN nations who have partnered with Trump and made proactive trade agreements.
The Crossover – China Views Lack of ‘Spygate’ Accountability as Evidence of Trump’s Weakness…
July 31, 2019
It was only a matter of time before someone explained how the Chinese advisors to Chairman Xi Jinping are using President Trump’s inability to hold the coup plotters accountable as evidence they can wait out the President.
This is the crossover, where a lack of accountability for “Spygate” now begins to negatively influence the geopolitical, economic and strategic position of President Trump. However, there’s an upside to this dynamic….
In several interviews the president has noted his preference to keep the DOJ and FBI issues at a distance and deferred action to others. The economic reset is President Trump’s #1 priority. If Trump identifies the lack of DOJ and FBI accountability as an impediment to the economic program, he may become much more engaged.
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SHANGHAI—Plodding progress in trade negotiations between the U.S. and China this week is partly the result of a new tactic from Beijing, which increasingly thinks waiting may produce a more-favorable agreement.
U.S. and Chinese trade negotiators held four hours of talks Wednesday, after a dinner the night before, and then wrapped up their first face-to-face meeting since negotiations foundered more than two months ago. Both sides described the talks as constructive and said the next round will be held in September.
[…] “China can take it easy and wait patiently,” said Mei Xinyu, a researcher at a think tank under China’s Commerce Ministry. China’s economy is recovering, he said, while the U.S.’s is likely to slow: “The impact of the trade war falls in the early stage on China’s economy but in a later stage for the U.S. economy.” (read more – paywall)
David ShoelessJoe@yohiobaseball
.@TheLastRefuge2 Right Again! They think they can wait out Pres Trump, he needs to bring the pain!
“China can take it easy and wait patiently,” said Mei Xinyu, China’s economy is recovering, while the U.S.’s is likely to slow:https://www.wsj.com/articles/slow-progress-in-trade-talks-is-partly-a-result-of-chinas-new-tactic-to-wait-11564574957 …Slow Progress in Trade Talks Is Partly a Result of China’s New Tactic to Wait
Plodding progress in trade negotiations between the U.S. and China this week is partly the result of a new tactic from Beijing, which increasingly thinks waiting may produce a more favorable agreem…
wsj.com
…Every minute spent outraged at what Comey, McCabe or Muller did yesterday, is one minute less that Bill Barr is being held accountable for what he is not doing today…
Centinel2012 