The EU Guarantees Its Own Destruction


Posted  originally on Jul 10, 2025 by Martin Armstrong 

Leyen Ursula von der 1

Ursula von der Leyen may be the absolute worst head of state in modern history. She has single-handedly ensured the collapse of the European Union according to our computer. She destroyed the EU economy with her NET-ZERO policies, destroying farmers and sending food prices rising. She then imposed dictatorial policies demanding migrants be taken in despite the drastic changes in culture, and then has put out the BS that to protect free speech, they must censor disinformation, to ensure peace in Euirope they need to go to war with Russia, and while she advocates total sensorship far worse than whatever existed in the USSR or even Communist China, yet refuses to release her own text messages with Pfizer.

EU Break up

While Ursula, who has never stood for election, pretends to be an elected democratic leader, calling Putin a dictator who at least stood for election, survived the NO CONFIDENCE vote to the detriment of Europe. The mere fact that this came to a vote demonstrates what our computer has been forecasting. The EU will fragment because of the dictatorial policies of Ursula. She is the perfect leader installed at the precise time that our computer warns that the EU will never survive. Her policies have been dictatorial and she has had no respect or regard for the culture of Europe. She is seeking to do what Joseph Stalin did in forces unified drone-like culture upon all the republics in Russia.

ECM Euro Waves 1 2

The ECM warns that the European Commission will reach the 72-year mark of political change in 2030. Last year, on February 19, she announced her bid to secure another five-year term, which would keep her in office until 2029. Von der Leyen has unfinished business: the transition to EU “climate neutrality,” for example, and shepherding Ukraine’s hoped-for accession to the 27-member bloc. Her policies are so contrary to economic neutrality that they have sealed the fate of the EU, and anyone who voted for her should be dragged out of office, for they do not care about Europe – only their political affiliation.

IBEUUS Y FOR 3 29 2017

Von der Leyen sees herself as untouchable. The corruption with the EU is just massive. She will put Europe into a war footing for 2026 and it is UNLIKELY that the EU will even survived intact beyond 2030. This is the array from 2017 which targeted a Panic Cycle from 2021 which marked her disastrous COVID policies that she refuses to turn over her text messages. If you are being investigated for “disinformation” and refuse to turn over subpoenaed evidence, you go to prison. Ursula is above the law and all the corrupt politicians that support her are sealing the fate of Europe into the years ahead.

Bulgaria Adopts the Euro and Abandons Economic Sovereignty


Posted originally on Jul 10, 2025 by Martin Armstrong 

Face of Europe

Bulgaria’s adoption of the euro is a major step toward abandoning its remaining sovereignty. The European Union is akin to a drowning person clinging to anything nearby in an attempt to stay afloat. Bulgaria will become the 21st nation to adopt the euro beginning in January 2026.

Protests against the adoption have been ongoing for months. Citizens fear the spike in prices once the euro is adopted with good reason. In a population of 6.4 million, two million receive a pension of €226 a month. Net wages average only €355 a month. Bulgaria has one of the weakest economies in the EU, yet is expected to instantly adopt a currency with an official and fixed rate of 1 euro = 1.95583 lev. The nation’s GDP was 24.1% in 2024, far beneath the EU’s 60% threshold.

Bulgaria’s lev has been pegged to the euro since 1999 under a currency board arrangement. That means the country has already given up most of its monetary tools. But formally joining the euro locks in those losses—permanently. There will be no going back.

Proponents claim that Bulgaria will now have the European Central Bank’s liquidity facilities and bond purchasing programs. They tout that borrowing costs will be lower and joining will raise the nations creditworthiness. But for what? To take on more debt that they will never be able to default on?

Once Bulgaria joins, it will no longer be able to devalue its currency to remain competitive. That’s how small economies adjust in a floating system. But inside the eurozone, you’re stuck. All monetary policy decisions are made by the ECB in Frankfurt, which answers to no elected body. If Bulgaria experiences a downturn, they can’t cut rates or devalue—just like Greece in 2010. They will be told to cut pensions, raise taxes, and accept IMF mandates. That’s not sovereignty.

shutterstock_495258178

The former communist nation has a long history of political instability. In fact, there have been seven national elections in the past four years alone. Citizens have no trust in their government and do not bother with voting, as voter turnout reached only 34.4% in June 2024. The nation is also internally divided when it comes to support for Russia.

Alpha Research conducted a poll in July 2025 that found 46.5% of the population was in favor of euro adoption while 46.8% are in opposition. Eurobarometer conducted a separate poll in March 2025 that found 45% in favor and 53% against. Nationalism was already rising in Bulgaria, but this adoption of the euro will heighten the nation’s political divide as half the population does not want to surrender its identity to Brussels.

Adopting the euro is a politically motivated rather than a strategic economic move. Bulgaria has lost its remaining freedom from the EU and surrendered all economic freedoms.

Former UK Prime Minister Returns to Goldman


Posted originally on Jul 10, 2025 by Martin Armstrong 

Sunak Rishi

The door continues to revolve at Goldman Sachs as former UK Prime Minister Rishi Sunak announced he is returning to the firm as a senior advisor. Goldman Sachs has successfully penetrated governments globally. The revolving door is deep, systemic, and a clear conflict of interest that will never be addressed.

“I am excited to welcome Rishi back to Goldman Sachs in his new capacity as a Senior Advisor,” David Solomon, chairman and CEO of Goldman Sachs, said in a statement. “In his role, he will work with leaders across the firm to advise our clients globally on a range of important topics, sharing his unique perspectives and insights on the macroeconomic and geopolitical landscape,” he added. Rishi formerly worked for Goldman before entering the UK parliament in 2015. He then went on to hold numerous positions of power, including acting as the nation’s finance minister. In fact, Rishi is STILL a member of the UK parliament even though he stepped down from his role as the leader of the Conservative Party.

Rishi attempted to return to Goldman this past May but a government watchdog agency insisted he wait a year as his advise could “overlap” with his political obligations and his “appointment could be seen to offer unfair access and influence within the UK government.”

That is how Goldman operates. The Revolving Door Project created an Independent Federal Agencies Leadership Tracker to show how often government employees swing back and forth between their positions at Goldman and the government. This is a global issue that spans across party lines.

GoldmanSachs

There has NEVER been any investigation of former Goldman Sachs people who take strategic government positions and alter policy only to leave. Robert Rubin ushered through the repeal of Glass-Steagall and resigned. Hank Paulson saved AIG, whose default would have taken down Goldman, while he eliminated two top Goldman competitors over who had the authority to bailout Lehman and Bear. There was no authority to bail out an insurance company operating in London, no less, to skirt US regulation. Even the seizure of our former company, Princeton Economics, was run by a court-appointed receiver who was a full-time board member of Goldman Sachs – Alan Cohen.

Yet, the burning question is simple. Is Goldman or its people going just too far? Their “former” people seem to be controlling the world financial system. Why is that so many people come from the same firm? Nobody will investigate because Goldman is simply one of the too big to jail and otherwise known as the Untouchable.

Goldman traded against clients

It would be very nice if someone simply conducted an investigation to see what perks these people collect after they leave government service. But why should anyone do that? Everyone in Washington and the Department of Just Us dreams of getting a job at Goldman. Every charge filed against Goldman has been dropped or paid off. They not only control the politicians but also every regulatory agency.

Again, Goldman has infiltrated every single government. It helped in structuring the euro, for example, and was accused of hiding the debt of Greece to permit it to enter the EU. Luckily Petros Christodoulou worked for the nation’s public debt management agency and led the National Bank of Greece after working for Goldman Sachs.

Mario Draghi, former PM of Italy, President of the European Central Bank, and Governor of the Bank of Italy worked as the Vice Chairman at Goldman Sachs International. Former Prime Minister of Italy and EU Commissioner Mario Monti was an international adviser at Goldman. Again, another former Italian Prime Minister, Romando Prodi, worked for Goldman and later became the President of the European Commission.

Revolving Door

Former European Union leader José Manuel Barroso went back and forth from Goldman to politics. Canada’s Mark Carney is a former employee. In the US, you have Robert Rubin, Gary Gohn, Steve Mnuchin, Jon Corzine, Jim Himes, Steve Bannon – the list goes on.

Germany’s Alice Weidel is called far-left and anti-establishment for being the head of the AfD but she too is a former Goldman employee. Malcolm Turnbull, who previously headed Goldman Sachs Australia, later became the Prime Minister of Australia and Minister for the Environment. Montenegro’s PM Milojko Spaijic is Goldman, as is Sweden’s Minister of Finance Erik Asbrink and Nigeria’s Minister of Finance Olusegun Agana. The head of international affairs at Goldman, Robert Zoellick, even went on to become the President of the World Bank and US Trade Representative, Deputy Secretary of State.

The revolving door is never-ending. It seems like it’s only a matter of time before the conspiracy theories finally give up on bashing the Rothschilds and open their eyes to who really has the power to be a mover and shaker.

Jeffrey Epstein Did Not Kill Himself


Posted originally on Jul 10, 2025 by Martin Armstrong 

(Pam Bondi in February 2025)

Jeffrey Epstein carried out the most successful, deeply rooted blackmail operation in modern history. US intelligence agencies suddenly pivoted to say that Jeffrey Epstein never kept a client list, did not blackmail political figures, and was not murdered. Epstein’s case has been deemed a conspiracy by the deep state, but the truth of the matter is that his connection runs so deeply that unveiling the plethora of information he kept could topple governments.

Those familiar with my writings are aware of “The Club,” a group of powerful market manipulators who possess the financial means to create shadow governments. Robert Maxwell is Ghislaine Maxwell’s father with deep ties to Mossad. In an earlier post, I explained in detail Maxwell’s connection to the Club, Goldman Sachs, Lehman, Safra, and other major players. “The Plot to Seize Russia” also details his connections that tie into the deep state intelligence agencies. Epstein Island was far more than a pedophile ring.

(Pam Bondi in February 2025)
Maxwell

I believe Epstein was running one of the largest honeypot schemes in modern history. He likely offered two big services: one being the most detestable crime known to man, and the other being the service of blackmail. He used his money and connections to grow his successful operation and was protected by his powerful clients. The blackmail he compiled on countless elites is now in the hands of the US government.

ClintonEpsteinMaxwell
Gates Epstein Photo
EpsteinwithTrumpMaxwell

Everyone visited Epstein Island on both sides of the aisle of government. I’d imagine the majority of major public figures would be on the Epstein list to some capacity. The FBI and CIA have been sitting on a mountain of evidence for years. Not a single person, besides Ghislaine Maxwell, has been arrested or prosecuted. Maxwell is serving a 20-year sentence for trafficking children to no one? We know of numerous high-profile members of Epstein’s inner circle already but they have neither been canceled or investigated. The government began deliberately releasing information incrementally to distract the public from bigger issues. These news stories reach every outlet GLOBALLY, but nothing ever comes of it.

EpsteinBinders

The Trump Administration put on quite a show by handing out binders filled with alleged classified information on Epstein. “This material… is never going to be released. Never going to see the light of day,” AG Pam Bondi recently stated. Yet in February 2025, Bondi said that the new administration wanted the public to have transparency regarding the Epstein files. “It’s a new administration and everything is going to come out to the public,” further suggesting imminent disclosure of significant new information related to Epstein’s case. She clearly stated that there was, in fact, a client list that would be released to the public.

The US justice system acknowledged the crime when Maxwell was indicted in 2021:

  1. The charges set forth herein ster fron the role of GHISLAINE MAXWELL, the defendant, in the sexual exploitation and abuse of multiple minor girl’s by Jeffrey Epstein. In particular, fron at least in or about 1994, up to and including at least in or about 2004, MAXWELL assisted, facilitated, and contributed to Jeffrey Epstein’s abuse of minor girls by, among other things, helping Epstein to recruit, groom, and ultimately abuse victims known to MAXWELL and Epstein to be under the age of 18. The victims were as young as 14 years old when they were groomed and abused by MAXWELL and Epstein, both of whom knew that certain victims were in fact under the age of 18.
  2. As a part and in furtherance of their scheme to abuse minor victims, GHISLAINE MAXWELL, the defendant, and Jeffrey Epstein enticed and caused minor victims to travel to Epstein’s residences in different states, which MAXWELL knew and Intended would result in their grooming for and subjection to sexual abuse. Moreover, in an effort to conceal her crimes, MAXWELL repeatedly lied when questioned about her conduct, including in relation to some of the minor victims described herein, when providing testimony and under oath in 2016.
Epstein when will he die

I am the ONLY person who can speak with any authoritative knowledge of 10 South – the “HOLE” where Jeffrey Epstein supposedly killed himself, which is a joke! When they were taking my lawyers away, they did not want them to talk to me. They amazingly put me in 10 South with all the terrorists, which is the MOST SECURE facility in New York City – PERIOD! They later said they had no idea how I got there. This is where the Feds love to torture people. Let me make a fundamental statement that nobody in the media talks about. They have a SPECIAL ROOM for people on suicide watch. Epstein was not in that cell. It has a large concrete bed with perhaps a 1-inch plastic mattress. Your hands and feet are tied, so you cannot harm yourself. I was in the hole there not on criminal charges or anything – but in civil contempt of court, thrown in with the terrorists from the World Trade Center attack – the 1st one. I was not in the suicide cell – you knew that was the ultimate torture chamber.

On July 25th, 2019, I warned that Epstein would NEVER be allowed to go to trial. They tried to kill me, but I survived after being in a coma for several days. This is what they do when they cannot take you to trial. Remember the torture they were doing in Abu Ghraib? The US pays professionals to learn how to tortureGuantanamo Bay would be an empty prison if they were guilty. They would put them on trial publicly and pump up the press and the prosecutors would become famous and then run for political office. Their best case was put on trial, and the jury found him innocent of over 200 charges and guilty of only one count of conspiracy.

VanceEpstein

Epstein would have been able to call everyone to the court as a witness. It would have been the most sensational trial in history. There was no way he would be allowed to go to trial. From inside sources on Capitol Hill, I was told they tried to release Guantanamo Bay prisoners quietly, but they were killed back home, assuming they were converted to CIA spies. They have been completely denied Due Process of law and anything that remotely resembles human rights. The entire video surveillance on Jeffrey Epstein that was released is not only fake, but there is a key minute missing. Then they claim that the two guards supervising the highest profile prisoner were asleep on the job. The guards were not punished because they cooperated.

Jeffrey Epstein DID NOT KILL HIMSELF.

Donald Trump’s sudden pivot on the Epstein case comes at the same time as Netanyahu’s visit–no surprise there. The US government may have seized the files from Epstein Island, but Epstein was working for Mossad, and they, too, have all the information. The ties are absolutely everywhere, and no one in the US government will ever allow the Epstein trial to see the light of day. So now the entire Epstein Island debacle has been classified as a conspiracy to protect the deep state. Confidence in government has been permanently undermined.

The 2025 World Economic Conference – Save the Date!


Posted originally on Jul 9, 2025 by Martin Armstrong 

Save the date

We’re pleased to announce that the next World Economic Conference will be held in:

Orlando, Florida on November 21– 23, 2025

As many of you know, the WEC is not your typical financial conference. It’s where we bring together minds from around the world—investors, analysts, and policymakers—to explore how capital truly moves across borders, markets, and cycles. This is your chance to understand what Socrates sees ahead before the rest of the world catches up.

Tickets go on sale to the public on Tuesday, July 29.

These events typically sell out quickly, and with growing global demand and virtual attendance now available, we recommend acting early. Whether you’re attending in person or online, this year’s WEC promises crucial insight into where we stand on the Economic Confidence Model—and where we’re going.

Stay tuned for more details!

We look forward to seeing you in Orlando.

WEC Conference 2011

C

Inflationary Pressures Began After 2015 – Tariffs are a Distraction


Posted originally on Jul 9, 2025 by Martin Armstrong

ECM 2015 2020 Detailed

The Federal Reserve’s Survey of Consumer Expectations foresees inflation returning to “pre-tariff” levels. As I have mentioned, the rising costs were a mere price correction and not a permanent rise in inflation. Tariffs were NEVER the root cause of inflation.

The central bank predicts that inflation will read 3% in 13 months, which would be the same level of inflation—at least by the Fed’s calculations—since Trump entered the White House. The Fed was stating that prices would rise 3.6% back in March and April when the tariffs were announced. They blamed the Smoot-Hawley Tariff for the Great Depression, just like they’re now blaming Trump’s tariffs for inflation. It’s a political narrative.

Central bank members see inflation remaining unchanged over the next three to five years at 3% and 2.6% respectively. However, members see prices increasing in food (5.5%), medical (9.3%), gas (4.2%), rent (9.1%), and college tuition (9.1%). There is a plethora of factors leading to inflation in the aforementioned categories, none of which have any relation to tariffs.

BIG BANG ECM 2015.75

Prices have simply not returned to what they once were before the global economy came to a standstill during COVID. Every nation has been affected. The lockdowns and supply chain cracks were exacerbated by a massive increase of government spending. Then the government doubled down on green policies, causing energy prices to rise, and lit the situation ablaze amid the Ukraine war and Russian sanctions. The world was already amid a sovereign debt crisis before COVID, and in fact, the Economic Confidence Model clearly stated that the landscape would permanently change after the Big Bang target of October 1, 2015 (2015.75)—the peak in government confidence.

2015.75 was the beginning of the decline we are witnessing in sovereign bonds globally. The migrant crisis began in 2015 when former German Chancellor Angela Merkel invited Syrian refugees to Europe, leading other Build Back Better nations to follow suit in the years since. Anti-establishment sentiment was already on the rise when Trump first secured the presidency the following year in 2016.

Trump was not the cause, he was the symptom. The people lost faith in the establishment starting in 2015.75 and this is part of the global shift predicted precisely by the system. The Fed thinks inflation is a monetary issue. We are in a sovereign debt crisis, a confidence crisis, and a geopolitical storm and not a normal business cycle.

Bolsonaro Accused of Attempted Coup


Posted originally on Jul 9, 2025 by Martin Armstrong 

Bolsonaro Brazil

Former Brazilian President Jair Bolsonaro was once deemed the Donald Trump of his nation. In a similar fashion, the establishment has accused Bolsonaro of orchestrating a coup to retain power after the 2022 presidential election against Luiz Inácio Lula da Silva.

The people independently denied the results of the election and stormed government buildings a week after Lula was inaugurated. The Federal Police uncovered a draft of a coup announcement in former Justice Minister Anderson Torres’s home. After months of detainment, Torres maintained that the document, which he received from a private citizen, was taken out of context and held no legal validity. The plans outlined in the document never occurred, but the establishment maintains that Bolsonaro is a threat to Brazilian democracy.

As our computer warned, there would be intense, politically motivated civil unrest worldwide in November 2022. Ahead of the election, Brazil’s leftist opposition Workers’ Party (PT) Marcelo Arruda was enjoying his birthday celebration in the city of Foz de Iguacu, Parana, when he was shot dead. The vote of 49.1%-50.9% was the closest Brazilian presidential election history since 1985 and marked Bolsonaro’s first political defeat. Bolsonaro supporters held mass protests across the nation to protest Lula’s victory and blocked hundreds of major roadways. Bolsonaro first sided with the protestors, saying they felt “indignation and a sense of injustice.” The intense backlash from across the globe caused Bolsonaro to change course. “I know you are upset… Me too. But we have to keep our heads straight,” Bolsonaro said in a video posted online. “I will make an appeal to you: clear the highways.” Bolsonaro confirmed with Brazil’s Supreme Court that he would willingly hand over power to Lula. “I have always played within the four lines of the constitution,” he said, without declaring defeat. Bolsonaro is already barred from running for office until 2030. The establishment wants to ensure that he is never up for reelection.

This is the precise move that they attempted after January 6 with Donald Trump, who posted on Truth Social: “The only Trial that should be happening is a Trial by the Voters of Brazil – It’s called an Election. LEAVE BOLSONARO ALONE!” Trump has stated that he believes Bolsonaro is “a legal aberration (lawfare), a clear case of political persecution that is now obvious to anyone with common sense.”

As we head into 2032, the United States has shown the world that you can rig elections using criminal law. I reported how Argentina was bringing criminal charges against the opposition simply for saying, do not save pesos because the currency is collapsing. Thus, the government has turned that comment into a crime. In Brazil, the leftist government is desperate to stop former president Jair Bolsonaro, alleging that he was the mentor of “a wilful and premeditated coup attempt,” copying the US on its desperate attempt to imprison Trump on the January 6th nonsense, calling it an insurrection.

Luiz Inacio Lula da Silva scaled

Lula was the establishment candidate. Luiz Inácio Lula da Silva is a member of the World Economic Forum. His policies align with other WEF leaders and stand in stark contrast to Bolsonaro, who was hated by the globalists. Perhaps more importantly, Bolsonaro refused to align himself with the globalist neocons. He attempted to remain neutral in the Russia-Ukraine conflict and offered to host peace talks. Let us not forget Brazil’s strong economic ties to Russia. Also similar to Trump, Bolsonaro was the victim of a failed assassination attempt when he was stabbed in the abdomen during a political rally. Again, the deep state insisted the assailant was crazed and acted alone, bypassing all security measures to reach one of the most controversial political figures in the nation.

Bolsonaro of Brazil

Our models for South America indicate potential civil unrest and even a Panic Cycle in 2025 in Brazil. Our target of 2023 for a Directional Change has appeared on time both in Brazil and in Israel. Brazil is divided like most countries today. The polarization is severe, and the government is desperate to maintain power. This is the total collapse of Republican forms of government as we head into 2032.

Attempting a coup in Brazil is punishable by up to 12 years’ imprisonment. Collectively, the charges against Bolsonaro could result in a prison sentence of up to 40 years, effectively barring him from reentering the political arena. Nations are no longer allowing people to vote for elected officials. It is too much of a risk as confidence in government has collapsed, and the people are increasingly eager to elect anti-establishment candidates who threaten grander plans.

Leftist Billionaire Blames Climate Change for Texas Flooding


Posted originally on Jul 9, 2025 by Martin Armstrong

Michael Bloomberg

The catastrophic flash flood in Texas claimed over 100 lives across six counties last Friday. Torrential rain caused the Guadalupe River to surge over 20 feet in a mere 90 minutes. Despite the area having a historic record of acute flooding, the climate zealots are blaming human behavior for a natural event.

Failed presidential candidate Michael Bloomberg has attempted to politicize the disaster by penning an op-ed in his paper entitled, “The Texas Floods Were Made Worse by Climate Denialism.” Bloomberg states that the government owes the victims’ families a sincere commitment to righting their deadly wrong, by tackling the problem they’ve turned their backs on for too long: climate change.” Later adding, “The refusal to recognize that climate change carries a death penalty is sending innocent people, including far too many children, to early graves.”

The same area of Texas experienced severe flooding in 1932, 1973, 1978, 1987, 1991, and 1997. San Antonio/Central Texas experienced a catastrophic flood in 1921, with the San Antonio River flooding the following year and once more in 1998. The Blanco River experienced a significant flooding event in 2015. Unfortunately, the nearby terrain causes rapid rainfall to rush into the rivers and creeks. Clay-rich soil leads to poor filtration and high runoff during these events. The Guadalupe River Basin has been known as one of the three most dangerous places in the nation for flash flooding.

Nature abides by cycles. Yet, the leftist billionaire elite preach that humans are powerful enough to cause catastrophic weather events, despite there being absolutely no concrete evidence to support these claims. Bloomberg, one of the wealthiest men in America, is worth at least $104.7 billion and will not relinquish his seven private aircrafts or mega-yacht. Fox News reported that Bloomberg emitted 10,000 metric tons of CO2 during the 1,700 flights he took on his private aircrafts in a four-year period. Yet, he was appointed as a United Nations envoy for climate action since the globalist elite declare they have the authority to tell the people how to exist. These politicians do not actually believe the nonsense they spew.

Bloomberg has been in adherence with the World Economic Forum on the quest to eliminate the entire carbon sector by 2030. He has personal interests in forcing America onto the grid and eliminating fossil fuel usage. Climate change is one of the largest psyop measures in history that the media and politicians adamantly demand everyone accept as truth without evidence.

People Flee Taxation


Posted originally on Jul 8, 2025 by Martin Armstrong 

PopulationOfRome

I have written about how Rome fell, and just by mapping the population of Rome, you can see the fate of many current nations and states operating under poor fiscal policies – people sell and just leave. It is different this time because, under socialism, the government has become abusive. When it came to integration, they sought to implement it by sheer force.

You can’t legislate the poor into prosperity by legislating the wealthy out of prosperity. Jobs are created by the wealthy who become wealthy because of their innovative vision – i.e., Henry Ford, Bill Gates, Steve Jobs, and so on. Henry Ford’s vision created the auto industry. Bill Gates, in bringing DOS to life, created the personal computer industry, as did Steve Jobs. How much employment did just those three men create? Far more than government.

Government creates nothing to advance society or to increase GDP in any positive manner. It is a natural human response not to pay taxes and this is why taxes have been the number one reason for civil war and revolution. It is always resentful to pay taxes, whereas giving money to help someone is rewarding. Taxes tend to support politicians and their pensions. If they must sell some assets to take a government job, it is tax-free. Few leave government without growing their net worth far beyond what one could typically earn through income or investments.

The great welfare state has produced a large segment of fraud and kept many people down since they would rather be taken care of than work to take care of themselves. Even in prison, many people are sentenced to 10 or 20 years, and the first thing they do is commit a crime to get back in, where they do not have to pay taxes, and they are taken care of. You destroy people’s lives for such a long period for non-violent crimes, and then expect them to have a fulfilling life thereafter?

The Evolutionary Cycle of Civilization scaled

In the United States, we have witnessed a significant shift in the population since the COVID-19 pandemic. People are continuing to flee authoritarian states with high taxes like California, New Jersey, and New York in favor of financially friendly states like Arizona, Texas, and Florida.

New Zealand once had a program where if a woman was pregnant and she had no idea who the father was, the government provided everything right down to a free home. They ended up with the highest percentage of women who had no idea who the father of their child was. Naturally, they did know the identity of the biological father, and he would jump out the back window when the social worker visited. They got everything for free then.

Any of these types of programs employ a divide-and-conquer strategy. The government cannot give to anybody anything that the government doesn’t first take from somebody else.  When you reach a state where 50% of the people depend upon the other 50% to pay their bills, you end up with class warfare and bitterness. This is the cycle where civilization rises, peaks, and then crashes when government becomes the enemy of the people.

Fractional Banking v Matched Funding


Posted originally on Jul 8, 2025 by Martin Armstrong 

Roman Banker

Banking has existed from the earliest of times and has taken many forms, from safe deposit storage, money changers, merchants with the ability to move money internationally, to money lenders. Some people wrongly assume that they can eliminate the business cycle by eliminating fractional banking. They assume that it will be possible to match lenders and borrowers to maturity contracts. They do not comprehend that this is the line of thinking that always leads to authoritarianism, all the way to communism.

The problem that will emerge from matching lenders and borrowers to a maturity contract is that the boom-bust cycle will still exist. There will always be the perpetual rise and fall in asset values caused by other factors (including human nature), not least of which will be changes in technology, civil unrest, and war that can alter capital flows. History offers a catalogue of solutions. All we need to test such an idea is to open the books.

Athen Akropolis_by_Leo_von_Klenze

People assume the cause of the business cycle is the fractional banking issue, as if that were eliminated, then you would flat-line the business cycle, creating utopia. Be very careful. This was the goal of Karl Marx as well. So the starting point is a basic question. Has fractional banking always existed? NO! Since the answer is no, then did the boom and bust cycle in banking exist even without fractional banking? The stark answer – YES.

In ancient times, financial panics also occurred without fractional banking. In Athens during 354BC, people borrowed money from the Temple unbeknownst to everyone else. They were speculating in real estate. The real estate market collapsed without fractional banking, and then it was exposed that the money was borrowed behind the curtain, so to speak, from the temple. Corrupt priests had all this money donated to Athena. She obviously was very frugal since she never seemed to go on a spending spree to buy shoes, owls, or spears. She wore a helmet so she didn’t need a hairdresser. So the priests could keep their hands out of the treasury. Oops – they were caught lending it out to their buddies for spare change. There was no fractional banking involved. They had the money and lent it to their buddies. The assets collapse because, as always, the mood of people changes with the seasons.

Wisselbank-2

Fast forward to the 17th century, and we find the very same scheme played out by politicians. There was the collapse of Wisselbank in Amsterdam, where people had deposited their money and assumed the bank was strictly a safekeeping facility. They offered no loans and paid no interest. Little did they know, the government was using their deposits to fund its own trading.

Netherlands Provinical - GELDERLAND Provincie 1581 - 1795

The Wisselbank was founded in 1609. Upon first opening an account, a depositor paid a fee of ten guilders, three guilders, and three stuivers for each additional account. Two stuivers were paid for each transaction, except those of less than three hundred guilders, for which six stuivers were paid, in order to discourage the multiplicity of small transactions. A person who neglected to balance his account twice in the year forfeited 25 guilders. A person who ordered a transfer for more than what was upon his account, was obliged to pay three per cent for the sum overdrawn. The bank made further profit by selling foreign coin and bullion, which fell to it by the expiration of receipts, and by selling bank money at five percent and buying it at four percent. These sources of revenue were more than enough to pay for the wages of bank officers and defray the expense of management. (Adam Smith)

In 1602, the United East India Company (VOC) was formed from six trading companies in the Netherlands and granted a trade monopoly over the Indies. The bank was administered by a committee of city government officials concerned to keep its affairs secret. It initially operated on a deposit-only basis, but by 1657, it was allowing depositors to overdraw their accounts, and lending large sums to the Municipality of Amsterdam and the United East Indies Company (Dutch East India Company). Initially, this was kept confidential, but it had become public knowledge by 1790. The City of Amsterdam took over direct control in 1791 as a bailout, before finally closing it in 1819.

There is plenty of history of banking BEFORE fractional banking. Sorry, but that did not stop banking panics nor did it stop the business cycle with the boom and bust events. The Tulip Bubble was not leveraged with fractional banking. No matter what, the boom and bust cycle is driven by human nature. We do have a tendency to change our minds about everything from fashion to money.

The idea of matching lenders and borrowers sounds appealing. However, that will not eliminate the cycle. I can find no instance of such a flat line except during a Dark Age where there was no banking, private ownership, or any real economy. Coinage during the period is rare and is typically confined to the region where it was struck, demonstrating the lack of an economy or circulation due to trade.