Fox News – “ominous Great Depression warning”

Armstrong Economics Blog/Economics Re-Posted Feb 1, 2023 by Martin Armstrong

Fox Business is reporting that economic conditions are much worse than you are being told.  Unfortunately, this is the conclusion when you have ZERO understanding of the historical trends and economic conditions. It is true that the shortages of COVID have caused prices to rise faster than economic growth and most incomes.  Therefore, they conclude that our standard of living has been rapidly declining.  The number reveals that more than one-third of all U.S. young adults are being supported in part by their parents. Thanks to COVID, this disrupted society far greater than anyone is reporting. In addition to the shortages because of the lockdowns, by the end of 2020, more than half of young adults in America were living with one or both parents. That statistic actually exceeded the record high of the Great Depression.

Here is the worst part of this analysis. Many are jumping on the bandwagon claiming that the decline in real disposable income has been the largest since 1932 and therefore, this is a warning sign of a Great Depression is coming. They seem to be focused on the fact that the GDP report showed a significant decline in real disposable income, which fell over $1 trillion in 2022. Now let’s look closer!

First of all, the entire reason why unemployment rise to 25% during the latter part of the Great Depression was the Dust Bowl. Why? At that time, about 40% of the civil workforce was still agrarian. The Dust Bowl meant job loss. If you could not even plant crops, there was no need for people to pick crops.

Service during the Great Depression accounted for 17% of the workforce compared to 44%+ today. Government, federal, state, and local, was 22% of the civil workforce during the Great Depression compared to 33% by 1980. Things have continued to evolve and by 2019, services represent 79.41%. Agriculture is now a tiny fraction of what it once was – 1.41%.

In the USA, at the state level, their share of the civil workforce varies greatly. Florida is at about 11.3% compared to New Mexico which is 22.5% – a government employee’s paradise. The lowest is Michigan at 10.1%.

During the Great Depression, the entire reason for the collapse in disposable income was the collapse in agriculture which created a collapse in income due to massive unemployment. That is totally different from the crisis we have today.

Here we have rising prices due to shortages and then central banks raising interest rates in a fool’s quest to stop inflation when it is not based on speculation. Moreover, the biggest borrower is the government, and rising interest rates will only increase their exposure to keep rolling over the debt. Therefore, governments have been borrowing year after year. What happens when the public no longer buys their debt? Real disposable income has been collapsing for completely different reasons since 1932. Here we have the costs of everything rising and then these people want war with Russia and China. Every war since the start of recorded history has resulted in inflation. Add to this, the total insanity of trying to end climate change by outlawing fossil fuels at a time when the climate is prone to getting colder.

We are already witnessing riots around the world BECAUSE of inflation. During the Great Depression, people were suffering from DEFLATION. So comparing just that statistic of a decline in personal income and projecting we now face a Great Depression, does not even qualify to be classified as analysis. That is no different from someone warning that carrots must be lethal because everyone who has ever eaten a carrot has obviously died.

Manipulated Economic News on Inflation – Prepare for Bad Corporate Earnings Reports as a Result of Poor Holiday Sales

Posted originally on the CTH on January 17, 2023 | sundance 

There has always been a general shaping and interpretation surrounding economic news, specifically as it relates to the impact of pricing on consumers and corporations. However, against the backdrop of supply side inflation, the financial gaslighting from the Wall Street Journal stands out at the top.

Without pretending, and looking directly at the Main Street reality, CTH has outlined inflation as a matter of monetary and energy policy.  From that standpoint the timing and scale of price increases (inflation measured over time) was predictable.  Our current status is an inflationary plateau, where prices remain high but stabilize for likely two quarters.

What the Wall Street Journal outlines as a “shopper rebellion against high prices” is complete hogwash.  Notice in the construct of the narrative, the demand side (consumers) is identified as the cause of diminished revenue & profits for corporations.  They continue pretending that inflation was not driven by energy costs.

(WSJ) – […] Many companies raised their prices substantially last year to offset higher fuel costs and higher prices for ingredients, parts and labor. As fuel prices have dropped and pandemic supply-chain snarls have eased, some of those costs have come down.

That is a good sign for the economy. It suggests that some inflation in the past year resulted from extreme supply-demand imbalances brought on by the pandemic and the war in Ukraine and which are now fading.

Notice the transparent lack of mentioning ‘energy policy’ as the inflation driver.

[…] The study, by economists at the Federal Reserve Bank of Kansas City, found that higher markups—the gap between what a firm charges and what it costs to produce an item—were a major driver of inflation in 2021.

They concluded that companies in some cases were raising prices in 2021 in anticipation of future cost pressures, rather than because of market power or outsize demand. Andrew Glover, a senior economist at the Federal Reserve Bank of Kansas City who was involved in the study, doesn’t expect prices to fall this year, he said, but he anticipates that the pace of increase will continue to slow.

Inflation is the rate of increase over time. We have experienced two years of massive price increases. Yes, the rate of those increases will moderate, this is the plateau, but the price will never drop. The current prices are a direct result of fixed energy policy.

[…] Unit sales of food and beverages fell 3% last year, but on a dollar basis they rose 10%. That showed consumers were willing to pay higher prices for groceries but bought fewer items.

[…] “People need to eat,” said Krishnakumar Davey, a president at IRI. Shoppers are nonetheless buying less when possible and, in many cases, buying less expensive versions of necessities such as toilet paper and laundry detergent.  (read more)

Meanwhile the Fed is worried that wages will be forced to increase.  Here is the real worry for the Wall Street Journal, “If consumers believe high prices will persist, they could seek bigger raises, and businesses, seeing higher labor costs, could continue raising prices.”  Yes, workers, forward inflation is your fault.

Government policy drives up prices, but workers needing wage increases to pay for those higher prices… well, that is not acceptable to the government, comrade proles.

Rut Roh, USDA Approves First Vaccine for Honeybees

Posted originally on the CTH on January 8, 2023 | Sundance

Um, I’m not saying that introducing a genetically modifying vaccine into the human population through the use of the pollinizing process in agriculture via honeybees was a plot line for an X-Files movie, except it actually was. Now this:

(New York Times) – A biotech company in Georgia has received conditional approval from the U.S. Department of Agriculture for the first vaccine for honeybees, a move scientists say could help pave the way for controlling a range of viruses and pests that have decimated the global population. It is the first vaccine approved for any insect in the United States.

The company, Dalan Animal Health, which is based in Athens, Ga., developed a prophylactic vaccine that protects honeybees from American foulbrood, an aggressive bacterium that can spread quickly from hive to hive.

[…]  The vaccine is incorporated into royal jelly, a sugar feed given to queen bees. Once they ingest it, the vaccine is then deposited in their ovaries, giving developing larvae immunity as they hatch.

[…] In 2015, she and two other researchers identified the specific protein that prompts an immune response in the offspring and realized they could cultivate immunity in a bee population with a single queen. 

[…] The introduction of a vaccine comes at a critical moment for honeybees, which are vital to the world’s food system. […]  honeybees pollinate about one-third of the food crops in the United States and help produce an estimated $15 billion worth of crops in the United States each year. Many beekeepers lease their hives across the country to assist in pollination of almonds, pears, cherries, apples and other types of produce.  (read more)

Wait,… wasn’t there some weird story about some vaccine promoting guy buying up a bunch of farmland in the United States for some unknown reason?…

“Gates is the largest private owner of farmland in America after quietly amassing some 270,000 acres across dozens of states, according to last year’s edition of the Land Report 100, an annual survey of the nation’s largest landowners.” (link)

I’m sure there is nothing to worry about.  I mean it’s not an mRNA vaccine…

… yet.

FBI Reveals Seth Rich Computer Showed He May Have been The DNC Leaker

Armstrong Economics Blog/Conspiracy Re-Posted Dec 12, 2022 by Martin Armstrong

The entire story about the murder of Seth Rich, the DNC staffer who the “conspiracy theories” claimed that he was the one leaking DNC documents to Wikileaks. The mainstream media called that a conspiracy theory for the actual source was the hacking by the Russians. He was just gunned down and the police instead claimed he had been the victim of an attempted robbery that just went wrong. His parents were out to sue anyone who dared to claim their son was the leader of those documents. Of course, the passing of time always brings out the truth. The entire investigation into RussiaGate has shown that it was created by Hillary and promoted as the real story, which we now know was all fiction and in itself its own conspiracy theory that the mainstream press preferred to spread. Of course, if the mainstream press spread the story, then conspiracy theory is magically transformed into fact.

Seth Rich’s computer, in the possession of the FBI, showed the DNC staffer had relayed DNC documents to WikiLeaks. There never was any Russian interference by hacking the DNC computers for the 2016 election. Of course, that leak, Hillary maintained, cost her the election. Here we have the never-ending conspiracy theories of all the people who crossed Hillary were somehow dead. Seth Rich would neatly fit into that list. I for one as a parent, would not slander my son’s name, but perhaps look deeper and if he was the leaker, then the motive to have him killed would not be a fake robbery.

Vincent Walker Foster Jr. (1945–1993) was an American attorney who served as the Deputy White House Counsel and was under subpoena to testify. The popular fake story was that he was depressed and went to a park to commit suicide. I was told by sources in Congress that he was not killed in the park for (1) there was a piece of his head that was missing, and (2) they brought his car over 30 minutes later when they realized his car was back at the White House.

Instead of Seth’s parents trying to prevent anyone from suggesting their son was the leaker, perhaps they should consider that he was perhaps a patriot and try to expose what made him do that on behalf of his country. Wikipedia is a propaganda machine for the government. Even in college, Wikipedia is not a valid source for reference. The government directs what it is to say on anything that impacts their political agendas.

Maker of Electric Jeep Vehicles Closing Illinois Plant and Moving to Mexico

Posted originally on the CTH on December 11, 2022 | Sundance 

Stellantis is a multinational automaker contracted for the electric version of the Jeep Cherokee.  Citing high costs to produce electric vehicles, on Friday Stellantis announced a decision to idle the Belvedere, Illinois plant starting on Feb. 28, 2023, and notified 1,350 workers of the layoffs.

(Via Fox) […] “This difficult but necessary action will result in indefinite layoffs, which are expected to exceed six months and may constitute a job loss under the Worker Adjustment and Retraining Notification (WARN) Act. As a result, WARN notices have been issued to both hourly and salaried employees,” it said. “The company will make every effort to place indefinitely laid off employees in open full-time positions as they become available.”

Today The Daily Mail is reporting that production of the electric Jeep will take place in Mexico.

Hundreds of workers are expected to be laid off when automaker Stellantis closes an assembly plant in northern Illinois early next year, citing the challenge of rising costs of electric vehicle production.

The company, which employs about 1,350 workers at the plant in Belvidere, Illinois, said the action will result in indefinite layoffs and it may not resume operations as it considers other options. 

Stellantis said the industry ‘has been adversely affected by a multitude of factors like the ongoing COVID-19 pandemic and the global microchip shortage, but the most impactful challenge is the increasing cost related to the electrification of the automotive market.’

The Belvidere plant, produces the Jeep Cherokee SUV, will be idle starting on February 28, 2023, Stellantis said. The plant in Toluca, Mexico will now produce the vehicles. (read more)

One aspect of this move that deserves additional attention is the U.S. and Canada focus on new energy policy, against the backdrop of Mexico telling the Biden administration the USMCA partner was going to continue development of traditional oil, coal and natural gas energy production.

Should Mexico continue to maintain a more traditional energy policy, they will likely create a greater cost incentive for all manufacturers.  With electricity rates skyrocketing in the U.S. and Canada, any energy dependent manufacturer would see an additional advantage to production in Mexico.

It will be worthwhile watching this dynamic closely and seeing what type of pressure the Biden administration will apply to Mexican President Andres Manuel Lopez-Obrador to fall in line.

Flirting With the End Times?

Armstrong Economics Blog/Economics Re-Posted Dec 8, 2022 by Martin Armstrong

QUESTION: You have said you have backtested your ECM into ancient times. Have these cycles been consistent? Have you arrived at a conclusion as to why?

Thank you. It was a great WEC. I for one always lean a lot.


ANSWER: Yes, I have reconstructed the monetary system of the world using the coinage so it is possible to actually backtest to see how these cycles have prevailed for millennia. The debasement of the silver coinage. The reforms of Diocletian and how the bronze follis declined once more.

No matter where you look, you see the steady unfolding of a decline and fall of the monetary system. These people who think a return to the gold standard will somehow prevent corruption or inflation are just living in a dream world. When money was just a coin, inflation still existed. You cannot escape this – EVER!

My next book is to get this out ASAP. Here, I have backtested the model and I believe that this incorporates everything from climate, war, and human nature that is behind the rise and fall of civilizations throughout history. Naturally, academics will be against it because they do not want to accept that there is any regularity to the business cycle for that means that government does NOT have the power to manipulate society as Marx and Keynes told them.

We are clearly flirting with the end times insofar as the decline & fall of Western Culture. I have traced this back to ancient times and its regularity has been impressive.

Even the collapse of the Bronze Age Civilization was two times the 31.4-year intervals of the 51.6-year wave. You can feel it. We are tearing everything that held society together apart at the seams. Civilizations rise when everyone benefits. They fall when one group begins to exploit another. That is what is taking place right now.