Posted originally on Mar 6, 2026 by Martin Armstrong |
COMMENT: Marty, you have shown us that history repeats because human nature never changes. Trump just demanded total surrender from Iran. President Franklin D. Roosevelt, first publicly demanded the unconditional surrender of Germany on January 24, 1943, at the end of the Casablanca Conference. The Actual Surrender was signed on May 8, 1945 (V-E Day). Over 2 million soldiers died after that demand.
It never fails.
ANSWER: When faced with a similar situation, no matter who is in power, they will say and do the same thing.
The European Parliament has now thrown its support behind the creation of a digital euro, marking a significant political step toward introducing a central bank digital currency across the eurozone. While the project has been under development for several years at the European Central Bank, this vote signals that lawmakers are increasingly prepared to move the concept from theory toward reality.
Members of Parliament approved amendments endorsing a digital euro that would function both online and offline, effectively aligning with the European Central Bank’s vision for a publicly issued digital form of money. The vote passed with a strong majority, signaling broad political backing for the idea that Europe should create a digital currency controlled by its own monetary institutions rather than relying entirely on private payment networks.
The move reflects growing concern within Europe about the structure of global payment systems. A large portion of digital transactions within the European Union currently run through networks such as Visa and Mastercard, companies headquartered outside the EU. European policymakers have become increasingly uncomfortable with this dependency, arguing that payment infrastructure is no longer just a technical system but a strategic asset tied to economic sovereignty.
Officials have openly framed the digital euro as a way to regain control over the “rails” of Europe’s payment system. If payments are moving steadily away from cash and toward electronic platforms, central banks want to ensure that sovereign currency continues to play a role in that environment rather than being displaced by private payment systems or foreign financial networks.
Under current proposals, the digital euro would complement cash rather than replace it immediately. Citizens would access the currency through digital wallets provided by banks or financial institutions, allowing them to send and receive payments electronically using money issued directly by the central bank. Supporters argue this would preserve public access to central bank money in an economy where physical cash is used less frequently.
Yet the broader implications extend beyond convenience. A digital currency issued by a central bank changes the architecture of the financial system itself. For the first time, individuals could potentially hold digital money backed directly by the central bank rather than commercial bank deposits. That raises complex questions about the relationship between central banks, commercial banks, and the public.
The project remains in its legislative and technical stages. EU governments agreed on a negotiating framework in late 2025, and the European Parliament’s vote now signals that lawmakers are prepared to move forward with the next phase of legislation. If the regulatory framework is finalized in the coming years, the European Central Bank hopes to begin pilot testing around 2027, with a potential public rollout later in the decade.
Posted originally on Mar 6, 2026 by Martin Armstrong |
The conflict now unfolding with Iran is beginning to expose a series of geopolitical lines that had been quietly building for years. What is striking about the current situation is not simply the military confrontation itself, but the reaction of various nations. The world is no longer responding as it did in earlier conflicts where alliances moved almost automatically behind Washington. Instead, governments are drawing their own lines in the sand.
The United States and Israel are presently the two nations directly engaged in military operations against Iran. While Washington has access to bases throughout the Middle East, most of those countries are not actively participating in combat. Gulf states such as Qatar, Bahrain, Kuwait, Saudi Arabia, and the United Arab Emirates host American military infrastructure, but their involvement largely reflects long-standing defense agreements rather than enthusiastic participation in a new regional war. These nations find themselves caught between two competing pressures: their security arrangements with the United States and the geographic reality of living within missile range of Iran.
What has been particularly revealing is the response in Europe. Spain openly refused to allow the United States to use its bases at Rota and Morón for operations against Iran, sparking a diplomatic confrontation with Washington. That decision has highlighted the growing divide inside NATO. During the Cold War and even in the early post-Cold War era, European governments generally aligned themselves with U.S. military policy. Today that unity is no longer automatic. European leaders increasingly calculate their own political and economic risks before committing themselves to American military campaigns.
The reluctance to join the conflict reflects deeper concerns about escalation. Many European governments are already facing fragile economies, political fragmentation, and rising social tensions. Opening another military front in the Middle East while the war in Ukraine continues would add another layer of uncertainty to an already unstable geopolitical environment. As a result, several governments are publicly urging diplomacy rather than military expansion.
Iran does not stand entirely alone. Its support network is less conventional than traditional state alliances but still significant. Groups such as Hezbollah in Lebanon, the Houthis in Yemen, and various militias operating in Iraq form part of a regional structure that Tehran has cultivated over decades. These organizations are not merely political sympathizers; they possess their own military capabilities and can operate across multiple fronts simultaneously. This creates a form of distributed conflict that complicates any direct confrontation with Iran itself.
What we are witnessing is the emergence of a fragmented geopolitical landscape where alliances are no longer rigid. Countries are evaluating their interests in a far more transactional way. Some governments provide logistical support while avoiding direct involvement. Others refuse cooperation altogether. Meanwhile, regional actors pursue their own strategic agendas independent of traditional Western alliances.
When crises arise, the difference between formal alliances and genuine strategic alignment becomes visible. The current situation with Iran is exposing those differences in real time. Nations are making calculations not only about military risk but also about energy markets, economic stability, and domestic political pressures.
The phrase “lines in the sand” has long been associated with the Middle East, yet today it applies equally to the diplomatic landscape surrounding the conflict. Countries are defining the limits of their involvement, sometimes publicly and sometimes quietly behind the scenes. These decisions reveal a world where geopolitical loyalties are becoming far more fluid than they once appeared.
Posted originally on Mar 6, 2026 by Martin Armstrong |
Existing home sales just delivered one of the clearest signals yet about the true state of the housing market in 2026, and it is not the rebound narrative the mainstream keeps promoting. The latest data shows that existing-home sales fell 8.4% in January to a seasonally adjusted annual rate of just 3.91 million units, the steepest monthly decline in nearly four years and the slowest pace in over two years. Sales were also down 4.4% compared to the same month last year, and declines occurred across every region of the United States.
The median existing-home price rose to $396,800, marking the 31st consecutive month of year-over-year price increases, indicating that prices remain historically elevated even as transaction volume collapses. Inventory stood at roughly 1.22 million units, representing just a 3.7-month supply. Yet, this is still well below historical norms needed for a healthy market turnover.
What makes this particularly significant is that the drop took place even as mortgage rates eased to their lowest levels since 2022. In a normal liquidity-driven market, lower borrowing costs should stimulate demand. Instead, the opposite occurred. Even though affordability has technically improved for several consecutive months, buyers are not returning in force. That disconnect is critical. When affordability improves, but sales still fall, it means the restraint is psychological and economic, not purely financial.
Regional data reinforces the structural weakness. The West experienced the sharpest decline, down over 10%, while the South and Midwest also fell notably, showing that this is not a localized slowdown but a nationwide contraction in transaction activity. First-time buyers accounted for only about 31% of purchases, far below the historical norm of nearly 40%, indicating that entry-level demand remains severely constrained.
Real estate does not turn on interest rates alone. Real estate factors in confidence, taxation, job stability, and the long-term economic outlook. Existing-home sales have now been stuck near a roughly 4 million annual pace since 2023, well below the historical norm of about 5.2 million, confirming that the housing market has been in a prolonged structural slump rather than a cyclical boom-bust phase.
What we are witnessing is a frozen market, not a crashing one. Homeowners remain locked into ultra-low legacy mortgages and are unwilling to sell, while buyers face high prices, economic uncertainty, and long-term affordability concerns despite slightly lower rates. The result is reduced turnover rather than forced liquidation. The real estate market remains cautious and tied to the broader economic confidence cycle.
Posted originally on Mar 5, 2026 by Martin Armstrong |
Trade has increasingly become the weapon of choice for politicians who cannot resolve disputes through diplomacy. Now we see tensions erupting between the United States and Spain after Madrid refused to allow American forces to use joint bases for operations related to Iran. Washington responded by threatening to cut off trade entirely with Spain. This type of reaction illustrates the dangerous trend that I have warned about for years where politicians increasingly treat trade as a geopolitical weapon.
Spanish Prime Minister Pedro Sánchez publicly condemned Israel and the US for “playing Russian roulette with millions of lives” and called the strikes “unjustifiable.” “Spain has absolutely nothing that we need,” President Trump responded, noting he told the Treasury Secretary to “cut off all dealings with Spain.”
Trade was originally intended to bind nations together economically so that war became less attractive. Adam Smith understood this centuries ago. When nations rely upon each other economically, they have a strong incentive to maintain peace. The moment governments begin using trade as a punishment tool, the entire framework collapses. We saw this repeatedly in the 20th century when sanctions and trade barriers escalated conflicts rather than resolving them. History shows that once trade becomes weaponized, it rarely stops with a single country.
Spain’s refusal to allow its bases to be used reflects Europe’s growing discomfort with the escalation of conflicts abroad. Yet responding with threats to sever trade does nothing to solve the dispute. Instead, it drags the entire European Union into the matter since Spain cannot be isolated from the EU’s trade system.
Trade is tied directly to capital flows. When capital moves into the United States seeking safety or investment opportunities, the trade deficit expands automatically as a balancing mechanism. Attempting to manipulate trade through threats or sanctions does not change the underlying economic forces driving capital movement around the world.
Weaponizing trade also accelerates fragmentation in the global economy. Nations begin forming blocs, bypassing one another with alternative financial systems, payment networks, and supply chains. We have already seen this process unfolding as countries search for ways to avoid sanctions and political interference in commerce. The more trade is politicized, the faster this fragmentation accelerates.
What we are witnessing is not simply a dispute between Washington and Madrid. It is part of a broader shift where governments are increasingly willing to use economic systems as tools of coercion. The problem is that once this door is opened, every nation eventually adopts the same strategy.
Posted originally on Mar 5, 2026 by Martin Armstrong
The European Union is quietly constructing what may become one of the most sweeping digital identity systems ever attempted. Under new legislation, every EU member state must provide citizens with a government-approved “European Digital Identity Wallet” by 2026. This system will allow people to store official documents, verify identity, access government services, sign legal contracts, and potentially interact with financial institutions through a single digital platform. It is being marketed as a modernization effort designed to make life easier for citizens navigating an increasingly digital economy.
Supporters claim the digital wallet will simply replace physical paperwork. Instead of carrying passports, driver’s licenses, or other credentials, individuals will be able to verify their identity online with a government-issued digital key. The European Commission argues that this will streamline bureaucracy and allow citizens to interact with both public and private services more efficiently across all 27 member states.
Yet the implications extend far beyond administrative convenience. Once identity becomes centralized within a digital framework controlled or approved by government authorities, participation in everyday life increasingly depends on that system. Access to banking, employment verification, healthcare services, travel documentation, and legal contracts can all be integrated into the same identity infrastructure. What begins as a convenience quickly becomes a gateway through which access to modern society is managed.
Governments have always maintained population registries in one form or another. What makes digital identity systems fundamentally different is the speed and scale at which they operate. When identification becomes digitized and interconnected across borders, the ability to monitor economic and social activity expands dramatically. Identity verification can occur instantly, records can be updated in real time, and information can be shared between institutions with unprecedented efficiency.
This development becomes even more significant when viewed alongside other technological initiatives currently underway in Europe. The European Central Bank continues to explore the creation of a digital euro, a central bank digital currency that would exist entirely within electronic financial systems. If digital identity platforms and digital currency systems eventually intersect, financial activity and identity verification could become closely linked within the same infrastructure.
Proponents emphasize security and convenience, but critics argue that centralized identity systems create vulnerabilities of their own. Large databases containing personal information become attractive targets for cyberattacks. More importantly, the consolidation of identity into a single digital framework gives authorities significant influence over how individuals interact with economic systems. Access to services, verification processes, and regulatory compliance can all be mediated through the digital identity network.
Europe’s digital identity wallet represents a major step toward integrating identification, financial systems, and digital services across an entire continent. Whether it ultimately functions as a tool of convenience or evolves into something far more intrusive will depend on how these systems are governed and how widely they are integrated into everyday life. What is clear is that the infrastructure for a new form of digital administration is being built now, and its long-term implications will extend well beyond simplifying paperwork.
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