Armstrong Economics Blog/Armstrong in the Media
Posted Nov 26, 2022 by Martin Armstrong
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New Interview: Energy, Russia/Ukraine, Cryptos, US Civil War, Real Estate Crash
Category Economic Collapse
Tucker Carlson Accurately Cites the Source of U.S. Inflation, Biden Energy Policy
Posted originally on the conservative tree house on November 26, 2022 | Sundance
The true cause of inflation, and yes that includes ‘global inflation ‘, is the collective western economic jump into climate change energy policy known as “build back better.” Stopping the use of oil, gas and coal as the source for cheap energy, has resulted in every element of the inflation now outlined.
As an outcome of their ideology, the central banks of the western economies began desperately to lower economic activity to reduce energy consumption. The goal was/is to lower human economic activity to the point where windmills and solar farms can sustain it. Everything else is pretending. Tucker Carlson finally points this out. WATCH:
Coming out of the pandemic, western oil, coal and gas energy development was blocked. Immediately energy prices skyrocketed, driving up the costs of everything. Using the justification of “too much demand” the central banks (including the U.S. Federal Reserve Bank) are raising interest rates to lower the need for energy.
Western political leaders are pretending this is not a collective intention. However, their prior promotion of the Build Back Better agenda belies their current protestations.
G20 To Impose COVID Vaccine to Restrictions on International Travel
Armstrong Economics Blog/Economics Re-Posted Nov 25, 2022 by Martin Armstrong
The world masters dictating to us, the scum of the earth, have adopted under the pretense of the COVID vaccine the means to shut down migration and travel internationally. This will naturally further restrict global economic growth, and everywhere we turn, these people claiming to be world leaders are leading us into a cliff on the other side of 2032.
We were hoping to hold a WEC in Dubai where everyone can fly into without vaccines — an international reunion face to face. These leaders of the world’s largest economies at the Bali G20 drafted and signed a declaration in which the 20 countries agreed to adopt vaccine passports with the purported goal of promoting global travel and tourism. In fact, any country adopting this will have the opposite impact. I have resigned myself that I will never see Australia, New Zealand, or Europe ever again. Whatever these people can do to destroy the world economy, they are doing
Those who understand what is really taking place and that we are on the edge of global defaults post-2024 are not likely to take these vaccines. Hence, they are really trying to prevent movements that will overthrow governments. Just like communism fell in 1989, our Western economies will collapse, and they cannot prevent it. It will not necessitate massive civil unrest. People are not buying their long-term debt anymore, and when they cannot keep funding this insanity, they will collapse of their own accord. This is not some child’s game of blowing bubbles. We live in the real world.
Interview: The Economy and Geopolitical Trends
Armstrong Economics Blog/Armstrong in the Media Re-Posted Nov 24, 2022 by Martin Armstrong
Click here or on the video above to view my most recent interview with the Financial Repression Authority. Our friends at MoneyTalks created a nice overview of the interview that you may read here.
Cleaving Beginning? – Climate Change Policy Makes Europe Too Expensive for Low-Cost EV Manufacturing
Posted originally on the conservative tree house on November 24, 2022 | sundance
We have been closely monitoring the signs of a global cleaving around the energy sector taking place. Essentially, western governments’ following the “Build Back Better” climate change agenda which stops using coal, oil and gas to power their economic engine, while the rest of the growing economic world continues using the more efficient and traditional forms of energy to power their economies.
Within the BBB western group (identified on map in yellow), the logical consequences are increased living costs for those who live in the BBB zone, and increased prices for goods manufactured in the BBB zone. In the zone where traditional low-cost energy resources continue to be developed (grey on map), we would expect to see a lower cost of living and lower costs to create goods. Two divergent economic zones based on two different energy systems.
This potential outcome just seemed to track with the logical conclusion. The yellow zone also represented by the World Economic Forum, and the gray zone also represented by an expanding BRICS alliance. Against this predictable backdrop we have been watching various events unfold, some obvious and some less so.
Today, we get an obvious example:
NEW DELHI, Nov 24 (Reuters) – Fiat parent Stellantis (STLA.MI) has concluded it can’t currently make affordable electric vehicles (EVs) in Europe and is looking at lower-cost manufacturing in markets such as India, its chief executive told reporters.
If India, with its low-cost supplier base, is able to meet the company’s quality and cost targets by the end of 2023, it could open the door to exporting EVs to other markets, said Carlos Tavares, CEO of the group whose brands also include Peugeot and Chrysler.
“So far, Europe is unable to make affordable EVs. So the big opportunity for India would be to be able to sell EV compact cars at an affordable price, protecting profitability,” Tavares told reporters at a media roundtable in India late on Wednesday.
Stellantis is investing heavily in EVs and plans to produce dozens in the coming decade, but Tavares warned last month that affordable battery EVs were between five and six years away.
On his first visit to India since taking over as Stellantis CEO, he said the company was still working out a plan regarding EV exports from the country and had not yet taken any decisions. (read more)
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Normally we would expect to see market forces determining the ultimate economic outcome. Historically, we would not expect government policy that puts their nation at an economic disadvantage. However, in this WEF controlled new western economic normal we see multinational corporations’ making decisions and government leaders creating policy to support the corporations.
There is money to be made by corporations within the climate change agenda, and there is money to be made by producing goods with low-cost wages and cheap materials. Eventually, if you keep following this to its natural conclusion, the entire yellow zone becomes a service driven economy.
Multinational corporations in control of government are what the BRICS assembly foresaw when they first assembled during the Obama administration. When multinational corporations run the policy of western government, there is going to be a problem. Brazil, Russia, India, China and South Africa (BRICS) saw President Obama sub-contracting, actually giving away, U.S. trade policy.
In the bigger picture, the BRICS assembly are essentially leaders who do not want corporations and multinational banks running their government. BRICS leaders want their government running their government; and yes, that means whatever form of government that exists in their nation, even if it is communist.
BRICS leaders are aligned as anti-corporatist. That doesn’t necessarily make those government leaders better stewards, it simply means they want to make the decisions, and they do not want corporations to become more powerful than they are. As a result, if you really boil it down to the common denominator, what you find is the BRICS group are the opposing element to the World Economic Forum assembly.
The BRICS team intend to create an alternative option for all the other nations. An alternative to the current western trade and financial platforms operated on the use of the dollar as a currency. Perhaps many nations will use both financial mechanisms depending on their need.
The objective of the BRICS group is simply to present an alternative trade mechanism that permits them to conduct business regardless of the opinion of the multinational corporations in the ‘western alliance.’
Again, if you follow the Build Back Better agenda to its natural conclusion, the entire yellow zone becomes a service driven economy.
Housing Sales to Institutional Investors Dropped 30% in Third Quarter
Posted originally on the conservative tree house on November 24, 2022 | sundance
There is a significant lag in all data within the housing market. That said, the third quarter (July, Aug, Sept) data reflects a significant drop in institutional investment within the housing market.
If you look closely at the timing (keep in mind the data reporting lag) what you will notice is that financial institutions began a big surge in purchasing hard assets, specifically real estate, as soon as Joe Biden took office (Jan ’21), and the economic policy became evident. Intangible financial instruments became an immediate risk as the professional financial control groups recognized energy policy would drive inflation (supply side) and devalued money would fuel it (demand side).
As an offset to predictable inflationary policy (the insiders’ game), institutional money (Blackrock, Vanguard etc) was moved into hard assets with tangible value. This shift in asset allocation, institutional sales, helped fuel a false surge in home prices and their valuations. CTH was writing about this in 2021, and sounding alarms as it took place. 25% of all real estate purchases were being made by institutional investors.
The dynamic was predictable. The Biden administration economic policy, energy policy and monetary policy, was going to cause massive inflation. CTH was shouting about it in early 2021 and warning everyone to prepare for waves of price increases that would naturally surface first on high-turn consumable goods, and then embed into longer-term durable goods.
Despite claims to the contrary, this 2021 inflationary explosion had nothing to do with the pandemic or supply chain shortages. It is entirely self-created by western governmental policy; the collective ‘Build Back Better’ agenda. You can see now from the background moves within the financial sectors, they too knew the reality and their money shifts reflected that despite their ‘transitory’ pretending they were mitigating their own exposure.
We the People were yet again going to be victims of specifically intended monetary, regulatory, energy and economic policy.
The investment class rulers of the WEF assembly shifted assets to avoid the pain that we would feel. We “would own nothing and be happy,” and their shifts would position them to own everything and be in control.
Overall govt spending and regulatory controls drove inflation for these past two years. The ‘demand side’ was blamed, despite the lack of demand. I will be proven right when history is concluded with this. Interest rates were raised by central banks in an effort to support the policies that are driving ‘supply side’ inflation, not demand side.
Energy policy was/is crushing the consumer by driving up the cost of all goods and services. To support the overall goal of changing global energy resource and development (a false and controlled global operation), central banks raised interest rates. Various western economies, including our own, have been pushed deeper into a state of contraction by central banks crushing consumer demand, and eliminating investment via increased borrowing costs.
In short, the goal was/is to lower energy consumption by shrinking the economic activity. This, according to the BBB plan, was needed at the same time as energy development was reduced. These economic outcomes are not organic, they are all being controlled by collective western government agreement.
Within this control dynamic, there was always going to be a point where the reaction of the people to their economic reality means the financial control elements need to shift direction. They will always maximize profit and minimized risk, while knowing what the larger objective remains.
Just like every other durable good, housing demand contracts as prices and costs become unaffordable. The loss of equity within your home is damaging to your own value or ability to borrow against it. From the perspective of an institutional asset, that same equity drop is an investment loss. Thus, just as a consumer would exit the housing market, so too will institutional investment groups now control the slow dumping of the asset to remove the equity they pumped into it.
Much of the investment housing will be retained as rental housing, with the monthly rents being part of the returns on the investments. However, as this dynamic unfolds further purchases of houses stop, because the asset overall is declining in value.
(Via Wall Street Journal) – Investor buying of homes tumbled 30% in the third quarter, a sign that the rise in borrowing rates and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too.
Companies bought around 66,000 homes in the 40 markets tracked by real-estate brokerage Redfin during the third quarter, compared with 94,000 homes during the same quarter a year ago. The percentage decline in investor purchases was the largest in a quarter since the subprime crisis, save for the second quarter of 2020 when the pandemic shut down most home buying.
The investor pullback represents a turnaround from months ago when their purchases were still rising fast. These firms bought homes in record numbers last year and earlier this year, helping to supercharge the housing market.
Now, investors are reducing their buying activity in line with the decline in overall home sales, which have slumped with mortgage rates rising fast. (more)
At a macro level, if you bought a home in the last 18 months, or refinanced your home to pull out equity, you still have significant downside exposure. Home prices will continue dropping until they plateau on the downside at the price that existed in roughly June of 2021.
The drop in value is directly related to the regional purchases by the institutions. In areas where higher percentages of overall home sales were made by institutional investors, the subsequent drop in value will be larger (see chart above). In areas where actual people purchased homes to live in, the drop in value will be less significant.
I keep getting this buying question, so with the above in mind I will answer it in the most brutally honest way I can present…..
At a macro level, if you are going to purchase a home on this downslope, look at the historic valuation of that property (or a comparable property) in/around approximately the spring of 2021. Start there, and put your offer in that vicinity, then hold firm without any emotional attachment to it. Do not purchase another groups loss.
Murkowski Wins Alaska Senate Race with Support from Democrats
Posted originally on the conservative tree house on November 23, 2022 | Sundance
As expected, the insufferable Lisa Murkowski has won reelection in Alaska despite losing the first-round republican vote.
As a result of neither Murkowski or Tshibaka winning 50% in the first round, the ranking system then adds the second choice of all voters. Democrat voters chose Murkowski as their second choice providing her the win in the ranked choice voting system.
JUNEAU, Alaska (AP) — Alaska Republican U.S. Sen. Lisa Murkowski has won reelection, defeating Donald Trump-endorsed GOP rival Kelly Tshibaka.
Murkowski beat Tshibaka in the Nov. 8 ranked choice election. The results were announced Wednesday, when elections officials tabulated the ranked choice results after neither candidate won more than 50% of first-choice votes. Murkowski wound up with 54% of the vote after ranked choice voting, picking up a majority of the votes cast for Democrat Pat Chesbro after she was eliminated.
“I am honored that Alaskans — of all regions, backgrounds and party affiliations — have once again granted me their confidence to continue working with them and on their behalf in the U.S. Senate,” Murkowski said in a statement. “I look forward to continuing the important work ahead of us.”
Tshibaka in a statement posted on her website congratulated Murkowski but took fault with ranked choice voting.
“The new election system has been frustrating to many Alaskans, because it was indisputably designed as an incumbent-protection program, and it clearly worked as intended,” she said. (read more)
Kari Lake Provides Update on Status of Arizona “Botched Election” Lawsuits
Posted originally on the conservative tree house on November 23, 2022 | Sundance
Arizona Governor candidate Kari Lake appears with Steve Bannon to discuss the status of her campaign lawsuits against Maricopa County officials in advance of a rush to certify the election. {Direct Rumble Link} – WATCH:
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Comrade Citizens, Dear Leader Sends Instructions for Thanksgiving
Posted originally on the conservative treehouse on November 23, 2022 | Sundance
Comrades, Dear Leader wants to help you with correct thoughts this Thanksgiving.
The administration cares about you. With magnanimous intent Dear Leader provides the correct guidance for your discussions. Please follow the transcript as outlined for your family gathering this year. All the best comrade citizens will be reciting it. [Source]
Good citizenship begins at the family table by honoring Dear Leader’s accomplishments.
Dear Leader provides appropriate instructions for the way all good citizens should thank him. It is no longer your burden to say, “this holiday we celebrate and are thankful for friends and family.” Instead, Dear Leader is providing thoughtful guidance, so you do not have to worry about appropriate thinking.
Horrible News – United Furniture (Lane Brand) Lays Off 2,700 Workers Immediately Via Text Message
Posted originally on the conservative tree house on November 23, 2022 | Sundance
This is terrible news for many blue-collar families in Mississippi and North Carolina. Last night, United Furniture, makers of Lane brand, fired all of their manufacturing employees and transportation workers effective immediately.
Fortunately, other manufacturers are quickly messaging the displaced workers with job offers {link}, but the overall message from the collapsed company is alarming.
Read the email letter from today that accompanied the late-night notification:
(Via Furniture Today) – “At the instruction of the Board of Directors of United Furniture Industries, Inc., and all subsidiaries (the “Company”), we regret to inform you that due to unforeseen business circumstances the Company has been forced to make the difficult decision to terminate the employment of all its employees, effective immediately, on November 21, 2022, with the exception of over-the-road drivers that are out on delivery. Your layoff from the Company is expected to be permanent and all benefits will be terminated immediately without provision of COBRA.
Over-the-road drivers that are out on delivery will be paid for the balance of the week. Whether or not you have completed your delivery, please immediately return equipment, inventory, and delivery documents for those deliveries that have been completed to one of the following locations: Winston-Salem, N.C., Verona, Miss., or Victorville, Calif. location. To be clear, do not complete any additional deliveries.
We regret that this difficult and unexpected situation has made this necessary. Additional information will be provided shortly.
Thank you for your service and dedication.
UFI/Lane Corporate Communications” (link)
A few quick points.
First, everyone who is not pretending is well aware the U.S. durable good economy is in a severe state of contraction. This manufacturing announcement is deeply troubling and sad, but unfortunately not unexpected – all things considered.
Second, while understanding that an unexpected loss in operational funding is usually what leads to these “immediate” types of total operational collapse, most often the result of a lender backing away from a desperately needed continuation loan, the callousness of the job loss communication reflects disconnected corporate management.
Third, while the economic framework would preclude it happening on his watch, United Furniture Industries is damn lucky President Donald Trump is not in office right now or there would likely be an eviscerating response to this announcement.
I have never met President Trump, but I have watched closely enough to accept that we are tuned to the same business frequency. This is not the way an American company, or any company for that matter, should conduct itself during crisis.
My prayers are for those families who woke up this morning with the financial rug pulled out from under them.
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Father of mercy and comfort wrap Your loving arms around the families who received notifications of job losses today. Trepidation and financial fear can lead to horrible family stress. Lord God and provider of all security, within Your Word You have said for us to cry out in Your name, and we can receive.
For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future;” (Jeremiah 29:11)
And so, I am asking for Your peace and reassurance to lay upon the troubled families and workers. I pray today knowing there but for Your grace we too may find ourselves.
Father, of love and support send Your spirit of strength into the hearts of those who received this employment news. Guide them closer to You and toward financial security in every tomorrow. In Jesus’ powerful name, I believe and pray.
Amen
Centinel2012 