Category Economic Collapse

Oct 7 2022

The Japan Outlook


Armstrong Economics Blog/Japan Re-Posted Oct 7, 2022 by Martin Armstrong

QUESTION: Marty, I greatly appreciate all you do to try to prevent this war cycle. You have said many times Socrates beats you. With missiles flying over Japan here, what do you see ahead?

AS

ANSWER: Nice to hear from you. It does not look very good. A year-end closing below 6805 will warn of a major crash in the Japanese yen next year.  I cannot stop the cycle. The best I can possibly do is perhaps reduce the amplitude. Even that is speculative. It just seems that we have insane leaders who care more about defeating Russia for this climate change nonsense. What they are doing to farmers in the Netherlands is insane. They know that the current monetary system is collapsing. They are using the war in hopes of creating an excuse and a diversion from their own sovereign debt defaults – hence you will own nothing and be happy.

All the market look to be cascading into 2023. This is not my opinion. I wish I did not even have to talk about this nonsense. The ray of hope is we get to restart the world economy post-2032. That is when we will hit the control-alt-delete. All I can do is try desperately to get society just for once to look at history and see what systems worked and what failed.

Oct 7 2022

US National Debt Reaches Historic High


Armstrong Economics Blog/Gov’t Incompetence Re-Posted Oct 7, 2022 by Martin Armstrong

The US national debt has reached a historic high under Biden after surpassing $31 trillion. The national debt has always been chaotic as politicians push spending agendas with no plans to pay their debts. The only time the national debt was paid in full was in January 1835 under President Andrew Jackson. The US fell into debt just one year later as a result of the Civil War and Jackson’s war on the banks.

The last time the US experienced a surplus was in 2001, although the debt still increased. COVID spending pushed the nation’s debt to new levels, and the US government spent $3.1 trillion more than it earned. In 2021, the federal government spent $2.8 trillion more than it earned. Now in 2022, the Biden Administration is announcing a new spending plan each week.

Biden spent $1.9 trillion on the American Rescue plan last year, which many blame for fueling inflation as $400 billion was earmarked for Americans to stay home and not work. Biden attempted to pass the $5 trillion Build Back Better bill, the largest proposed bill in US history. When that bill failed, Biden signed the Inflation Reduction Act for $740 billion. Numerous independent studies have stated that the act will only worsen inflation.

Biden plans to spend around $400 billion to cancel student loan debt for families earning as much as $250,000 annually. To add insult to injury, Washington has sent Ukraine nearly $17 billion this year alone. This administration is not worried about taxpaying citizens, and eventually, the citizens will be the ones footing the bill for Biden’s excessive spending.

Oct 6 2022

The Advisory Committee on Racial Equity


Armstrong Economics Blog/Politics Re-Posted Oct 6, 2022 by Martin Armstrong

ALL AMERICANS ARE HURTING FINANCIALLY. But the Treasury Department plans to prioritize people based on the color of their skin. Secretary of the Treasury Janet Yellen announced the first “Treasury Advisory Committee on Racial Equity.”

From the Treasury’s website:

“[T]he Committee will identify, monitor, and review aspects of the domestic economy that have directly and indirectly resulted in unfavorable conditions for communities of color. The Committee plans to address topics including but not limited to: financial inclusion, access to capital, housing stability, federal supplier diversity, and economic development.”

The 25 inaugural members are completely unqualified as many have no experience in finance. Former mayor of Philadelphia Michael Nutter will act as chairman. He was unable to manage his home city, let alone work for the Treasury. Vice chair Felicia Wong said they will make “racial equity central to the Treasury Department’s mission.” Wong has strong ties to George Soros.

Wong is part of the liberal megadonor foundation, Democracy Alliance. Wong argues that every policy has “racialized effects” and believes capitalism strengthens the patriarchy and white supremacy. Wong, the CEO of the Roosevelt Institute, penned many articles noting her radicalized view of the world with no basis in economics or logic.

“True equity means equity of outcome, and not accepting the promise of ‘opportunity’ within a system that continues to systematically exclude,” Wong wrote. “It demands redistribution of resources—especially when wealth for some has been extracted from many—and a redistribution of decision-making power.”

This is an absolute disaster as we are putting socialists in charge of a department of our Treasury. The Roosevelt Institute wants to “reimagine” capitalism and views everything as a form of racial inequality. Naturally, the Democrats are appointing this useless agency as a desperate attempt for votes. Discrimination is now legal against the majority.

Oct 3 2022

The Federal Reserve is Raising Rates – Get Used to It


Armstrong Economics Blog/Interest Rates Re-Posted Oct 3, 2022 by Martin Armstrong

The title speaks for itself. The Fed is going to continue raising rates until inflation shows notable improvement. Some still question whether the Fed will ease on its hawkish policies, but there is absolutely every indication to believe they will continue at full speed. Core PCE rose 4.9% in August from the year prior and increased 0.6% for the month.

Before the aforementioned data was released, Chicago Federal Reserve President Charles Evans said he was “cautiously optimistic” that the US could avoid a recession. “There are lags in monetary policy and we have moved expeditiously. We have done three 75 basis point increases in a row and there is a talk of more to get to that 4.25% to 4.5% by the end of the year, you’re not leaving much time to sort of look at each monthly release,” Evans, who is set to retire next year, said.

The truth of the matter is that the White House simply changed the definition of a recession. The majority is hurting financially right now, and I don’t think we need the talking heads to tell us that we are already in a recession. The typical analysis looks only at domestic conditions, but internationally, most central banks are in the process of raising rates and backtracking on failed QE policies.

Every month there are reports of the market being “spooked” by rate hikes. People come on TV and act surprised that the Fed has the audacity to raise rates yet again. Why? Powell stated in every possible way that the FOMC will raise rates for “some time.” In Powell language, that means rates will continue to rise for a while. The computer foresees havoc going into 2023. Things must get worse before they become better. Unemployment must rise, rates must go higher, and you must adjust your strategy accordingly.