Category Economic Subjects

Jul 17 2020

Trend in Interest Rates


Armstrong Economics Blog/Interest Rates

Re-Posted Jul 17, 2020 by Martin Armstrong

COMMENT: Marty,

Good morning. Repo rates have been creeping up ever so slightly and quietly. Points wise not much, but percentage-wise, numbers are getting bigger. Has everybody been lulled to sleep and looking the wrong way again?

Best,
E

REPLY: The shift from a Public to a Private wave is in full motion. We can see this in Moody’s AAA Corporate Bond Index. Note that the while chaotic swing in March ran right up to the top of the Downtrend Channel and then we have swung down and just closed below the bottom of the channel. We have an important turning point arriving in October. We show the next major turning point in the US 30-year bonds being September.

These governments imposing lockdowns again are acting political rather than in the best interest of the people. Locking people down results in a collapse of tax revenue. Many in the USA have been promised by the Democrats they will be bailed out if they win the White House right down to their pension funds. This is what is going on behind the curtain – cutting deals.

Clearly, these governments are not stupid. They have to realize how much revenue has collapsed and how much damage they have caused to the people and the economy. Our models are projecting HIGHER interest rates ahead and this reflects their high-risk gamble on trying to overthrow Trump. What they fail to grasp is that the private sector has lost all confidence in governments and as such, they have destroyed the old financial system of perpetual borrowing.

As fiscal mismanagement abounds, interest rates will rise to reflect credit risk. The central banks are powerless to prevent this rise. The Fed cannot buy all state debt any more than the ECB will be authorized to buy all sovereign debt in the Eurozone. We have reached the point of no return.

Jul 13 2020

Socialist Property Rights


Armstrong Economics Blog/Economics

Re-Posted Jul 13, 2020 by Martin Armstrong

Socialist’s Property Laws:

1) If I like it, it’s mine.
2) If it’s in my reach, it’s mine.
3) If I had it once upon a time, it’s mine.
4) If I can take it from you, it’s mine.
5) If it looks like mine, it’s mine.
6) If I saw it in my dream, it’s mine.
7) If it’s valuable, it’s mine.
8) If I can tear it apart, all the pieces are still mine.
9) If I get tired of it, OK, it’s yours.
10) However, if I want it back, it’s mine.

Jul 13 2020

Socrates & its Forecast of Shortages in Food for this 8.6-Year Wave


Armstrong Economics Blog/Agriculture

Re-Posted Jul 13, 2020 by Martin Armstrong

 

COMMENT: Mr. Armstrong; I am beyond impressed with the forecast your computer puts out. More than a year in advance you forecast that this wave would be inflationary but due to shortages in food. I do not know how it makes such an interesting forecast, but nobody out there can even come close which is obviously why they try to mimic you while ignoring you and hope nobody lands on your site.

Thank you for bringing clarity to this chaos

All the best

DS

ANSWER: Yes, Socrates was projecting this would be a wave of inflation coming from SHORTAGES of food. We are already witnessing rising food prices. It was picking up all the subtle shifts in the world economy and I could see that something strange was in the development by last August 2019. Obviously, like war, it cannot forecast the precise person but it does reveal their actions. This is the same forecast ability. It was showing a shortage of food for this cycle, but it could not tell me it would be instigated by Bill Gates and the World Economic Forum trying to push their Great Reset.

Nevertheless, there are serious shortages of food on the horizon. Those who are attempting to destroy the economy so they can recreate it in their image are clueless about how the world economy functions. All they have looked at is their stupid models on CO2 when CO2 is 0.04% of the atmosphere. They have wiped out crops by destroying the food chain and either they are totally ignorant of their actions, or they have deliberately also tried to invoke starvation to reduce the population. Nobody will investigate either and I am sure they would claim to be ignorant of the impact on the food supply by pushing for lockdowns. There is ample evidence that this excuse is BS and they must know what they are doing which would bring up the question of crimes against humanity. They will then probably blame global cooling.

Jul 11 2020

Europe Exploding into Civil Unrest – The Start of Revolutionary Cycle – 2020


Armstrong Economics Blog/Civil Unrest

Re-Posted Jul 11, 2020 by Martin Armstrong

Politicians are about to be confronted with the harsh reality of their insane lockdowns in Europe. Germany now realizes there is building massive civil unrest and there is no doubt that this New Green World Order is out to end the car industry which is a major industry the will leave the workers without a future. The government is preparing for major civil unrest and out computer has been warning Europe is being pushed into civil war as tourism has been crushed.

Meanwhile, yesterday night demonstrators in Belgrade attacked the Serbian Parliament throwing stones and bottles at the windows of the parliament building. We are looking at serious civil unrest which can lead to revolution insofar as breaking up the EU as they push for this New Green World Order which will destroy the future of so many in Europe. Only elitists view that such a transition is no problem. They underestimate the economic damage and this is the END of perpetually borrowing with no intension of ever repaying any debt.

Jul 10 2020

Risk Seems to be Everywhere


Armstrong Economics Blog/ECM

Re-Posted Jul 10, 2020 by Martin Armstrong

QUESTION: Dear Martin,

Thank you for your commitment to helping others through this unsettling time.

Long before I found you, I was fascinated with the capital markets and historical financial crashes, in particular. I spent many years on Wall Street (and LaSalle ST) building and marketing trading systems for the listed options industry.

Through the numerous currency failures, be they inflationary or deflationary, running to private assets has been a lifesaver for some clever enough to figure it out or those lucky to be serendipitously well positioned. Yet, it is always about timing. That is the subject of this question.

If the value of a currency is based on the productive power of the people behind the currency, it makes sense that Socrates is pointing to private assets going forward. It seems to me that the very best private assets would be businesses that enjoy productive power (not so easy to predict/choose in this environment). Whether we are denominating in dollars, rice, or seashells, it seems that a solid business will crank out currency units in whatever form and be a good hedge.

Hugo Stinnes emerged after WWI as an industrialist. Controlling coal, steel, electricity, and other fundamental businesses, he was able to profit as the currency collapsed. Stinnes continued this work straight through the introduction of the Rentenmark and Reichsmark seemingly not skipping a beat. He possessed productive power but was also very politically connected, which is key to this question. Later, The Third Reich was notorious for shutting down or nationalizing businesses. We look to be headed in that direction.

For those accumulating profits in, for example, mining stocks during the commodity boom, or wheat contracts, or equities, the question is, how do we get out of those trades? What is the risk that we sell/trade at the right time only to have our assets seized? For example, do you foresee a day, here in the U.S., whereby the government liquidates a portion of an account’s common shares for a bail-in or wealth tax? If so, then illiquid private placements (productive real estate or businesses with durable Free Cash Flow) that are very hard to value (and liquidate) might be the only real safe haven.

The risk seems to be everywhere. The risk most concerning and most difficult to predict or quantify is Government Risk – even here in the U.S. I can understand why the very wealthy buy paintings and rare items. Such items represent a real possibility to function as a “time machine” to bridge this insanity.

I would love to hear your thoughts. Above all, Socrates is a lifesaver and I am humbled to have access.

With respect,
JC

Texas

ANSWER: Yes, I knew a client who bought up all the old coins for scrap metal. Then it turned out there was a shortage of metal so the old coins were deemed valid at a new exchange rate. He made a fortune. There are definitely commodities that will preserve wealth in times like this. We must be careful about the Socialists, for they will do the same as the Nazis and nationalize just confiscating assets.

I believe the best shot we have is Socrates — let it monitor the subtle shifts. The one thing you can count on is the greed of those in power. Just as I began to see the subtle shifts with the Repo Crisis last August 2019, thereafter the markets were showing something was not right. I stood up at the WEC in Orlando and warned that something was seriously wrong and that the market would undergo a serious correction with the turn in the ECM.

Historically, Socrates seems to pick up things we humans do not see because they are subtle. It is like playing chess. You have to come up with a strategy and play in your mind the next several moves. You will lose if you simply react on a one move at a time basis. This is what Socrates is doing. It is playing out strategies. It looks for the possible paths and then monitors the movements across the entire globe to determine the eventual path. This is why NOBODY can forecast the future with 100% accuracy. We cannot as humans see all the possibilities. Socrates is mapping out the future and it reveals the most likely path and course of action.

Things can change and we get cycle inversions. But it is always playing one region against another. This is why all of these pundits fail because they focus typically just domestically and never see the trends coming from external factors. Things are so bad in Europe and the politicians are deliberately blocking travel from the USA to Europe in an effort to overthrow Trump to further their New Green World Order. In the process, before year-end, they will bankrupt at least 20% of all small businesses and wipe out the tourist trade for Southern Europe. These morons think they can placate the public with minimal subsistence from Guaranteed Basic Income they are beginning in Spain.

They will NOT be able to defeat the Monetary Crisis Cycle no matter what schemes they come up with. This is totally insane. Nevertheless, we will be monitoring what markets we need to exit in advance to try to preserve assets. This is a game of survival of the fittest. We do not have to run around naked on some island eating bugs. But we may have to take precautions and move to safe havens outside of urban cities for sure.

Jul 8 2020

Schwab’s Insane Stakeholder Economics is Marxism in Sheep’s Clothing


Armstrong Economics Blog/Economics

Posted Jul 8, 2020 by Martin Armstrong

QUESTION: It would please me if you would comment on the subject of “Stakeholder Capitalism” vis-a-vis this article from Forbes.

PR

ANSWER: I have actually have gone into detail on Schwab’s absolute Marxist philosophy of “stakeholder” economics where a corporation’s first loyalty is to the community and not the shareholders to the point it must even take care of the homeless. This is the foundation or core objective of the World Economic Forum. It is simply Marxism and it will fail in such a grand way, it will completely destroy our economic system. Corporations are overtaxed for they pay taxes on income, then a dividend tax, and then the shareholder pays income tax. They are not charitable organizations and no government treats them in such a manner. This nonsense of being fair is the same reasoning applied so many times and it has ALWAYS, without exception, destroy the economic system where it has been deployed – NO EXCEPTIONS!!!!!!!!

Yes, I have personally met Klaus Schwab. Sorry, I really see him as a serious threat to the world economy because he has built his following with the World Economic Forum which in itself is not allegedly known for its own transparency when it comes to its finances. This Stakeholder Economics of Schwab is nothing more than Marxism in Sheep’s Clothing.

Jul 7 2020

The Great Reset


Armstrong Economics Blog/Reports and DVDs

Re-Posted Jul 7, 2020 by Martin Armstrong

The Great Reset may go down as the most important book perhaps with hindsight. I will be adding to it over the next month with a section reviewing the demise of every economy which has ever tried to impose precisely what they are doing. We need not just look at Russia and China and how Marxism collapsed force political change, and we need not even regurgitate the ongoing example of Venezuela. There are more shocking examples that warn of civil war and the breakup of nations such as Yugoslavia and the collapse of Spain which was the wealthiest nation in Europe that fell to third world status. Spain became a serial defaulter beginning in 1557, 1575, 1575, 1596, 1607, and 1647. You would think that people would wise up and stop lending to governments. That is the definition of insanity when you keep doing the same stupid thing and expect a different result.

Then there is even Argentina. Most just write off South America and pay no attention to it assuming they are all just corrupt banana republics. Believe it or not, Argentina was actually one of the richest countries in the world at the start of the 20th century. Then the Marxists dominated South America and when they did, they absolutely destroyed Argentina which has never been able to ever recover much as was the outcome of former Yugoslavia, Spain, Russia, and just about every other country Marxists seized control.

How will we survive in this third attempt by Marxists to take over the world they are calling the Great Reset – their words not mine! These are indeed the times that will test the strength of our character and our determination to retain freedom. The markets will be our greatest guide. We are adding a new module to the Premium Socrates level which is a pattern recognition whereby it reveals a complete search for a similar pattern in each market on the yearly level to report on the pattern that followed.

Jul 5 2020

Stores Must Take Cash by Law


Armstrong Economics Blog/Rule of Law

Re-Posted Jul 5, 2020 by Martin Armstrong

QUESTION: Dear Mr Armstrong,

Here is a softball question for the holiday weekend.

If US currency is legal tender, aren’t retail stores obligated to accept it?

This would seem to restrict the ability of retail stores to 1) demand electronic payment and 2) reject payment using $100 bills.

Happy 4th to you.

MB

ANSWER: You are correct. Stores MUST accept cash – that is what LEGAL TENDER means! Congress would have to pass an Act and the President MUST sign it to eliminate paper money.