Here is the latest example of corrupt politicians voting in favor of their own self-interests. Bernie Sanders may be a bit fanatical, yet he has been trying to push a bill through to allow Canada and other countries to import prescription drugs to the U.S., which would significantly decrease the price that consumers have to pay for medication.
Trump commented that the big pharmaceutical companies “get away with murder,” and even Republicans Ted Cruz, John McCain, and Rand Paul voted in favor of the bill. Yet, 13 Democrats blocked the bill from passing. Those same Democrats receive large payouts from the pharmaceutical companies. The list even includes Cory Booker — the next rising darling of the Democrats. This is why we MUST impose term limits – one time and out.
Kenneth Rogoff is a Professor of Public Policy and Economics at Harvard University. Rogoff calls critics of negative interest rates “ignorant” despite the fact that negative interest rates have been used since 2008 without any success. He had the audacity to say that people should not look at their short-term personal losses, but rather look at the long-term vision of the central banks. He is such an elitist. I cannot find words appropriate to describe how this academic, who has zero experience in the real world, is incapable of comprehending that his Marxist style intervention is creating the next crisis.
Yes, negative interest rates lower deficits. But who will buy the negative debt besides central banks? Why borrow money at all and compete against the private sector? Interest rates are negative to punish savers for saving. He wants them to spend their money. Fine – stop government borrowing altogether and just print what is needed for the expense of government. Stop this elitist Marxist concept that people like Rogoff can play the role of emperor and manipulate society to do whatever they believe is appropriate.
Just before his death in 1946, John Maynard Keynes (1883-1946) told Henry Clay, a professor of Social Economics and adviser to the Bank of England, that he hoped that Adam Smith’s invisible hand would help Britain out of its economic hole. “I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”
Economists such as Rogoff are still basking in the ideas of Karl Marx that government CAN and SHOULD manipulate society to achieve the public policy dreams of those in power. Rogoff is not willing to even think about what he has done to the pension system and how we are looking at states like Illinois becoming broke.
In California, less than four years have passed since it fought to achieve a balanced budget by raising taxes to the highest level in the nation. Politicians cannot manage the economy and negative interest rates are destroying pensions. There is no long-term gain, for Rogoff cannot imagine the next step. The central banks are trapped and can NEVER resell what they have bought under Quantitative Easing. We are rapidly approaching the point of no return or NO BID. That is when government tries to sell its debt to pay off the last chunk and there is NO BID. Oops! Checkmat
COMMENT: Martin, A story I received: A guy looked at my Porsche the other day and said I wonder how many people could have been fed for the money that sports car cost. I replied I am not sure, it fed a lot of families in Bowling Green, Kentucky who built it, it fed the people who make the tires, it fed the people who made the components that went into it, it fed the people in the copper mine who mined the copper for the wires, it fed people in Decatur IL, at Caterpillar who make the trucks that haul the copper ore. It fed the trucking people who hauled it from the plant to the dealer and fed the people working at the dealership and their families. BUT,… I have to admit, I guess I really don’t know how many people it fed.
That is the difference between capitalism and welfare mentality. When you buy something, you put money in people’s pockets, and give them dignity for their skills. When you give someone something for nothing, you rob them of their dignity and self worth. Capitalism is freely giving your money in exchange for something of value. Socialism is taking your money against your will and shoving something down your throat that you never asked for.
JS
REPLY: This is a very good example of the difference between Capitalism and Socialism. Hillary said during the campaign that Trump was worth a few billion – “Think of what we could do with that money.” They only do look at the wealth and not at the contribution to the economy and society. You can look at Henry Ford and say yes – another rich bastard. How many jobs did he create inventing the assembly line? The difference is jobs compared to just entitlements for existing.
I had an old friend from high school call me when I was around 40. He called to ask me for a job. I ask; “Frank. What have you been doing?” He told me he never worked. He has his plane, car, and boat. When we grew up, his mother own the luncheonette all the kids would go to for lunch and after school. She was a widow and spoiled Frank. She never made him get a job and just bought him whatever he wanted. When his mother died, the money stopped. When he called me and said he never worked, I was shocked. I said I did not have a job for him. He was the classic example of socialism.
QUESTION: Marty; Do you still see 2017 as the end in the decline in gold or 2018? Also, I think I now understand that coins are better than bullion for confiscation purposes. Right?
ANSWER: We are starting to run out of time. We elected a minor Monthly Bullish of 1142 at the end of December, so that has given us the bounce. The benchmarks come into play in 2018, but they could be the first high rather than a low and that would confirm a change in trend. The 2015 closing is the lowest, and that would be a three-year reaction from the highest closing of 2015. Markets never act randomly. The failure of 2016 to produce the lowest closing was for a reason. It was not a fluke.
Yes, coins are better than bullion for they have some historical value. Their historical value could be an excuse to prevent confiscation if government simply declares that “gold is for criminals,” as they are trying to do with cash. I believe Trump would not go along with that move, but keep in mind that the left is the most violent of all. They pretend to be tolerant, but they are only tolerant if you agree with them. They have no problem assassinating anyone else.
The left has painted Trump as some sort of Nazi racist. They fail to understand that “Mexican” is not a race any more than “American,” just as “Muslim” is not a race any more than “Christian.” They mix up their slogans and accusations to get people chanting this nonsense because they are too stupid to think on their own. I would keep in mind that these people will try to assassinate Trump, for in their mind the rich have to be destroyed. They are very dangerous people.
We will be issuing the 2017 Gold Report soon
COMMENT: Martin, Im a regular reader of your blog and I agree with you that the Ice Age is upon us. I fell on this video of ice on the Danube and would like to share with you. Even here in Singapore we can feel that something is going with the climate and it is not global warming.
Thanks for your regular post and look forward meeting in Singapore if you appear to come here.
L from Singapore.
REPLY: Scientists in both Russia and China are warning of an Ice Age. The real scientists in Europe and America are yelling this too, but the press preaches about global warming because the government uses it for taxes. Too much money at stake to say, “Sorry, we got this one wrong!”
Temperatures in Russia have plummeted, dropping to even -80 degrees Fahrenheit. This is very serious. The winters will keep getting colder and this is not good for economic growth.
We are overdue for the flipping of the poles. The poles reverse on the Sun every 11 years. On Earth, that is about 720,000 years. So there is no recorded history to document what has happened. Perhaps that is the 2032 event since the Minoan Bronze Age was sent into a Dark Age with the eruption of Thera. Geologists can tell you where the poles have been since rock is magnetized to the North Pole when it is formed. When volcanoes erupt, we can tell where the poles have been historically. Yet, there is no human record of what impact it has had. We do know that animals have been frozen with plants still in their mouths. It would appear to be very abrupt (see Maya Report). Most likely, this climate change has attributed to the migration of humans around the globe.
Europe is already experiencing a very cold winter now in 2017. Unfortunately, this is the real trend and not global warming. The reason I am so against the global warming crowd is that they put forth this proposition that man is causing this change and that they can reverse the trend if they tax everyone. My point is that a lot of people will die, as historically has always happened with such events. If you know what is REALLY happening, then perhaps you can take steps to deal with this real change in climate that no tax will prevent. I moved to Florida — so I follow our own model.
QUESTION: Hi Marty! I would like to have your thinking about one important thing: the exit of this mess. I was in the last two WEC with my friend Mark and enjoy them a lot and we will be on the next one for sure.The two months that follow the last one in November 2016, I really connect all the dots for the first time even if I read you since 2008. So, I realize what we face to 2032,95 and after. The actual private wave of 51,6 is going to push money flow to the privates assets and end the confidence in government. This wave is the last one of the 309,6 years cycle that will end socialism. If we put in perspective that this 309,6 cycle is the last one of the mega cycle of the 1857,6 years (6 x 309,6), we know without question that what is coming to 2032,95 and after, will be epic and horrible time for the world. If you add the war cycle and the maunder minimum cycle to that, it’s become even worst. I Know that the private assets are suppose to improve in value to 2032,95. I know that the government will do whatever he can to tax us to death and in some cases, confiscate our assets.
So, even if I know all that, I feel trap. With the increase in interest rate, the debt bubble, the increase of taxes on houses thank to the fund pension crisis plus the real estate cycle that go down until 2033, I am sure that real estate is not the good place to protect our money. Physical gold and cash will be probably be chased by gouvernement. The blue chips are a good choice only if your broker or your bank stay alive during this crisis. Like you see, we are trapped.
So my question is, what do you think about the rare collection items, like old coins, old sports cards, or other smalls things collection that have a big value and can be move easily to an other country, even by plane. Thank so much for what you do for people! You help me a lot to open my eyes and see the world like he is. I will always grateful for that.
See you in november at the WEC!
Thanks,
GL
ANSWER: Collecting is instinctive within humanity. Everyone has formed a collection of something, no matter how small. From childhood, we all have accumulated objects in different categories, be it matchbox cars to collections of Barbie dolls. Their questionable usefulness is only second to the fascination of playing with them. The first coins used in China were cowrie shells. They were beautiful and rare since they could not be found everywhere. The first attempt to expand the money supply, and make bronze appealing and acceptable, involved making the money into the image of a cowrie shell.
I got the bug when I bought my first Roman coin for probably $5 when I was 10 to 12. I would recommend ancient coins, for their market is global. Canadian coins are salable in Canada just as the best market for the U.S. coins is in the United States. Yet, ancient coins cross all borders. The Chinese and Russians are big buyers these days. Cars are too hard to store. Fine art is also something I have collected over the years. I can more than quadruple my investment in things like Rembrandt etchings (the one pictured is of his father).
I have collections of rare books and autographs as well. There are collectors for every category of object. There was the Villa of the Papyri, a private house in the ancient Roman city of Herculaneum, who collected art and books. This tremendous collection has fascinated visitors beyond belief. Collectors have existed throughout history.
Franklin Roosevelt was a stamp collector, and Teddy Roosevelt was an ancient coin collector. Then there was the ancient coin collection of the Egyptian King Farouk. There was also the fabulous ancient coin collection of Nelson Bunker Hunt – yes, of the silver market.
Other famous coin collectors included Thomas Jefferson, John Quincy Adams, King George III and King Louis XIV. Pope Boniface VIII was also an ancient coin collector. The first major collector of ancient coins was the first Roman Emperor Augustus (27BC-14AD) according to Suetonius.
Collectibles are always a hedge against government. They survive the great monetary crash that sweeps through the world economy every so often. Money is ONLY a medium of exchange – it is NEVER the store of value. That is true even when gold is used as money for whatever might be used as money is then on the opposite side of everything else. So small collectibles are always a good bet. Keep in mind the scope. So ancient coins are salable worldwide while a 1955 Double Die penny will find its best market in the United States. Hence, you can hop on a plane with a Double Die with no problem. However, the sale value in a foreign land may be 20% less than in the States.
QUESTION: Dear Mr. Armstrong
As a long time reader I rarely see you mention the possible long term benefits of also holding corporate bonds. I understand the obvious down side to government bonds and the reason for stocks to move higher, but since bond holders get paid before stock holders when things go bad would corporate bonds not be a lower risk investment.
Thanks for sharing your work.
TG
ANSWER: Corporate bonds of blue-chip companies will eventually move to a premium over government. We can easily see that when government was the place to run, the premium shifted to governments and then declined after 1932. If you are looking at high grade corporate bonds, towards the end of this bull market in shares, you would shift to corporate bonds – not government.
We can see historically, no relationship is ever solid or fixed. You can see that 90-day commercial paper was at a huge premium during the 1840s when banks were collapsing during the State Sovereign Debt Defaults. Then during 1930s you see 90-day commercial paper drop below government. This particular cycle you want to avoid municipal, state, and federal debt issues.
President of China Xi Jinping made a statement last year that has sparked a number of comments over the past few months. Xi Jinping said:
“The world is on the verge of radical change. We see that the European Union is gradually falling apart, how the US economy is crashing, and that all this will end with a new rearrangement of the world. In 10 years we can expect a new world order in which the key factor will be the alliance between China and Russia.”
You must understand that while China is technically under the Communist Party, they are by no means communist. Private industry and personal wealth has exploded. They may not have changed the party name, but the foundation of China is capitalist — not communist.
Some comments are saying that China follows every word I say. I think that is an exaggeration. Yes, before my ordeal, we entered into an arrangement with China to do the forecasting for about 1,000 government entities. Yes, I was invited to the Central Bank when the Asian Currency Crisis hit. Yes, I recommended going to the US Treasury and demanding to buy bonds directly circumventing the New York bankers. True, our services are not blocked in China.
All of that said, whether Xi Jinping is referring to our ECM and the turning point of 2032 that shows the financial capital of the world moving to Asia is up to anyone’s interpretation. Nevertheless, cycles are part of their core beliefs whereas in Western society we are trapped in Marxist thinking of a linear system.
Richard E. Nesbett wrote a good book entitled “The Geography of Thought, How Asians and Westerners Think Differently … and why.” He attributed his work to a Chinese student who said, “You know, the difference between you and me is that I think the world is a Circle, and you think it’s a line.” He goes on to quote him:
“The Chinese believe in constant change, but with things always moving back to some prior state. They pay attention to wide range of events; they search for relationships between things; and they think you can’t understand the part without understanding the whole. Westerners live in a simpler, more deterministic world; they focus on salient objects or people instead of the larger picture; and they think they can control events because they know the rules that govern the behavior of objects.”
This is the best description I have encountered of the difference between east and west. It is right on point. We think everything is a straight line (linear) and in Asia they see it as a cycle. So you can say Xi Jinping is following our model. Yes, perhaps. But on the other hand, they know it is a cycle without me. Granted, he may be using us for the timing. But the end game – that is inevitable
QUESTION: Dear Mr. Armstrong: I have been to the Orlando conference and probably read every single one of your blogs since about a year ago and now wanted to ask you about Bitcoin and/or other alternative currencies. If I am not mistaken, this topic is not something that you have really touched upon. Recent spike in the price of Bitcoin appears to be, at least in part, to be driven by certain countries such as China and Venezuela where people use it to bypass their country’s currency restrictions. Would be it fair to say the more restrictions that we will see by various countries and governments the more Bitcoin or other alternative currencies will be poised to increase in price? Would it also be reasonable to expect this same result if, as you alluded to, governments around the world continue to limit and/or eliminate cash, similar to what we see in India? Your thoughts would be greatly appreciated!
I personally thank you for everything that you are doing!
ANSWER: We must be realistic. Governments are fighting for their very existence. The BREXIT and Trump elections are direct attacked upon government that are rising among the ranks of the silent majority. I do not believe that Bitcoin can survive against governments trying to shut down the flight of capital. Countries like Venezuela are in a state of chaos. China is something different. The flight of cap[ital out of China threatens the continued weakness of the yuan and Trump will misread that as a trade war.
Long-term, the safe haven may become stocks as was the case in Germany during the 1920s. Yes there were people who used the gold coins of foreign countries just as the Japanese turned to Chinese coins when they did not trust their government. But gold you cannot ship between countries without a trace and you cannot hop on a plane with a suitcase full of gold. What did survive were things such as blue-chip shares and real estate. But the real estate is not movable.
As far as gold is concerned, I have recommended old common date coins rather than bars and bullion. I have recommended that because you can then claim it is a collection and historical rather than bullion that can be remelted. That worked before, but it may not in the future. You can mail it around with the country, but trying to send it to a foreign land is not so easy anymore.
The higher the price, the more likely government will look at Bitcoin. It is a very sharp doubled-edge sword. We have to be concerned that the government simple do not declare it illegal and all guilty of money-laundering. Then it could become worthless overnight. The whole reason for Bitcoin is the distrust of government. Why would you trust them to also turn a blind-eye to Bitcoin?
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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