QUESTION: Dear Martin Could you please describe more in detail what you are expecting when talking about the breakdown of the monetary system? Will there be differences between countries like Germany and Switzerland for example? Especially regarding pension systems. I assume, there might be big differences between countries. Many thanks and best regards, R.
ANSWER: The monetary system collapsed with the winning of the American Revolution. The state currencies and the federal Continental Currency were all exchangeable to the new currency which became the U.S. dollar. There was a great disparity among the states with each being rated by the marketplace for the swap. Even when they created the Euro, there were differences between each currency.
The IMF right now is pushing very hard behind the curtain to replace the dollar with an IMF digital currency that they want to become the reserve currency. This would be EXTREMELY dangerous for the IMF is deep in corruption. The complaint of China, for example, is that the dollar is the reserve currency and they see that as a dangerous power in the hands of an adversary.
I have written much on the real problem of the dollar acting as the reserve currency and that this has thrust the Federal Reserve into the default role of the central bank of the world. The problem is all the propaganda against the Fed that is spun by the goldbugs which totally distorts the real crisis. They try to sell gold only on the quantity theory of money which dates back to the 17th century. It is so antiquated it is laughable. It is entirely domestic-focused to the exclusion of the world economy and international capital flows. Unfortunately, the Federal Reserve is also living in the past and only sees the economy in domestic terms making it Fed Policy v Fiscal Policy, over which they have no control.
Only when you understand international capital flow movement will you ever even catch a glimpse of the real world. World War I sent the capital fleeing Europe and rushing to America. Because that capital was here, it increased the domestic buying power and the Europeans made the 1920s ROAR. They were participating in the Auto-Stock-Boom.
The first G4 took place in 1927 when the other central banks argued that the US had to lower its interest rates to deflect international capital which was needed in Europe to rebuild. Indeed, the capital inflows peaked in 1927 and began to decline. But it was the Sovereign Debt Crisis of 1931 that compelled major capital outflows to cover losses at home.
Hoover explained the crisis in 1931 in his Memoirs. So to answer your question will take a major report which I intend to publish. The subject is highly complicated and there will be major divergences that people must be aware of. The bottom line is that all governments intend to default on their prior debts. That is what unfolded even with the collapse of the Continental Government after winning the American Revolution.
We see similar outcomes also in France with their Revolution. We are staring into the eyes of a major global default in debt and we are on schedule cyclically for the next sovereign default period.
There are some who are claiming that the revision of the CPI is to help the Federal Reserve stop fighting inflation. This is typical for Americans who only watch the Fed and nothing else. The formula for the CPI has been routinely altered. Real Estate used to be included but when that was rising too much, they replaced that with rents. When rents started rising, they replaced them with controlled rents.
This is NOT about helping the Fed to lower rates or stop raising rates as the majority seem to be touting. Powell is not that stupid and this will have ZERO impact on Fed decisions going forward. This is all about government spending which is a far greater problem than worrying about the pressure on the Fed. Virtually EVERY government program is automatically INDEXED to CPI. Thus, agencies’ budgets are automatically increased each year based on the CPI. Your taxes are indexed to the CPI. By reducing the CPI, they collect more taxes! There is NOBODY in Congress or at the Bureau of Labor Statistics that gives the Fed a second thought.
Even if we look at inflation using the pre-1980 formulas, the CPI is approaching 10%! When we calculate inflation by eliminating everything that is really irrelevant and focusing on food, energy, transportation, and taxation, which they do not consider at all, the reality of our number came in at 32% for 2022. That is a far cry from the official number. This is simply calculated by Socrates from an unbiased perspective.
What a new wonderful world the Biden Administration has created. Thank you, COVID & the Russian Sanctions. The largest increase we found was obvious fuel between gasoline and diesel used in trucking and homes averaging 65%+ Turning to basic food, eggs were up nearly 50%, flour rose by 25%, cooking oil 23%, butter was up 35%, Chicken by 14%, and Rice by 18%. If we throw in toothpicks, paperclips, etc, then the more we can include the lower the inflation rate. We do not include rent or real estate. Our number is far more accurate to the daily living expenses than the near 10% level of the government. They also do not include sales taxes. The national average rise in rental rates was 7.8%, in Florida it was 8.5%, and in NYC 1.5% when controlled.
When I would buy a desktop IBM XT during the 1980s, it was always about $7,000 for a top-of-the-line. Today, that cost has come down significantly. Obviously, we do not buy computers every week. Should that really be part of a formula? The BLS has made so many revisions to the CPI over the decades it is really a political tool these days.
Back in the ’90s, our staff was dissecting every statistic. We discovered that they were overstating economic growth because they counted government employees twice. The total all personal income, and then government spending. I called the head of the BLS and asked surely this had to be backed out somewhere for hiring government employees to increase GDP rather than the private sector. They reviewed it and finally just said – no comment.
The idea that this latest revision of using one year as a weight instead of two will allow the Fed to stop tightening is really the rantings of people who only look at the Fed for everything as their guidance. There is a lot more incentive behind this revision and the Fed was not a consideration.
Armstrong Blog/Tyranny Re-Posted Jan 23, 2023 by Martin Armstrong
COMMENT: Marty, As you know I worked for _____________ in NYC. We all know you were innocent back then. I have followed you for probably 30 years. Everyone knew that the bankers told the CFTC that you had to be silenced. Your forecast cost them a lot of money when they assumed they could control the market.
It is no longer a mystery why the mainstream press refuses to ever even talk about your Economic Confidence Model and how it has always been right. The press is on the payroll of George Soros who hates your guts for his biggest losses were always against you.
I am passing this article on because I think it sheds light on who is on Soros’ payroll.
Cheers
All the best
WH
REPLY: Thank you. I have heard that from many sources. The CFTC wanted to stop our forecasting at the request of the bankers. They thought they could manipulate markets for “the” perfect trade. They always blew up and blamed me because we had more than $3 trillion under contract back in the ’90s – the equivalent of 50% of the US National debt at the time.
Soros is manipulating the press to press for the destruction of Russia to further his one-world government. Perhaps making that much money causes mental illness whereby you become a demigod to redesign the world. I have ZERO respect for Soros, Gates, or Schwab. They should all be thrown into a padded cell, handed a game of monopoly, and let them try to manipulate each other.
QUESTION: Is it true that J.P. Morgan was also an ancient coin collector?
DV
ANSWER: Absolutely. He collected both Greek and Roman coins. This was a Syracuse Dekadrachm of Dionysios I (405-367BC). The difference between the Greeks and the Romans is quite plain. The Greeks were into art. As you can see, their coinage was often of spectacular artistic value. The coin firm Stacks of New York had auctioned off part of the collection in September 1983 which you can download that catalogue.
The Romans were more practical. They used their coinage to announce events, great accomplishments, or some military victory. Here is a coin announcing the opening of the Colosseum.
Here is a silver antoninianus issued by Philip I (The Arab) in 248AD announcing great games for the 1,000th year anniversary of the founding of Rome.
Because the Roman Emperors pretended to be elected, each year noting their titles. Because one coin was discovered in Pompeii, it rewrote history. It was then possible to actually date the event from a coin.
Likewise, the discovery of this coin in Egypt with the inscription of an emperor Saturninus, clearly proved that the academics were all wrong and that the book Historia Augusta was in fact correct – not some story written for children.
We know that Julius Caesar was in fact assassinated on the Ides of March (15th) in 44BC because Brutus bragged about killing Caesar on his coinage. The statement “EID MAR” meant that he killed him on the Ides of March.
The entire theory of the Petrodollar dares back to the collapse of Bretton Woods and the subsequent oil embargo protesting US support for Israel and the price shock of raising prices. Those were the days when everyone was obsessed with gold and the whole idea of a floating currency that was popular to say will crash and burn for money had to be backed but some commodity. Those were indeed the days when that theory was very popular and it dominated the thinking process of the 1970s.
Here is an advertisement from my past days as a market maker in gold during 1970s to about 1983. I too believed in all those theories until the crash came in 1975. I too had bought into all that nonsense. Gold was going to be legalized in the United States in 1975 for the first time since 1934. Being a very large dealer domestically and internationally, all my European clients were talking up the scenario that gold was going to $500 if not $1000 once Americans could buy.
Because Teddy Roosevelt was an ancient coin collector, when Franklin Roosevelt, who was a stamp collector, recognized that gold coins existed from ancient times thanks to Teddy, he confiscated gold on deposit at the banks but exempted collector coins. That was the reason why we have rolls of $20 gold coins trading to this day.
As a result, those who were really believers in gold would buy common date American $20 gold coins by the roll in those days. So when the Europeans were talking themselves into gold was going to explode in 1975 as soon as it was legalized in the United States, as a dealer, I never got a single call about buying gold from anyone other than those who already owned it. The gold crowd was only looking at gold and had no idea that any American who wanted gold bought it in coin form. They were cheering gold without understanding the reality of the marketplace.
I went short gold in January 1975 not using even technical analysis. The hype was so much and I knew that there was no line standing at the door to buy gold. My gut feeling was that gold was going to decline – not rally. I saw that in 1970 when the two-tier gold market they created in 1968 saw gold drop below the official price of $35 in 1970 – something that was not supposed to happen.
Even the Senate of New Jersey came to me and I wrote the law on sales tax regarding gold in 1974. Gold peaked in December 1974 at $197.50. It fell to $97.70 while inflation continued but economic growth declined and they called it STAGFLATION. I learned back then that all the scenarios and theories that gold rises with inflation and the dollar would not survive without some backing. I was confronted by the reality that exposes all these theories to be a throwback to times long since passed. This all only inspired me, even more, to investigate everything in detail. By 1979, I published what I called the WHY REPORT. I later republished this in 1981 and again in 1983.
To explain the survivability of the dollar since it rose between 1972 and 1976 against the British pound, with the collapse of Bretton Woods, the rise in gold, and the entire oil embargo, that is when they came up with this idea that the dollar was backed by oil. They had to explain why their theories were wrong just as they changed global warming to climate change to explain away global cooling.
All the theories were wrong. The dollar rose, and inflation soared, as did gold. None of this made sense under their theories. Something had to be done. It became obvious that it was impossible to make investment decisions based upon these theories that people just made up to sell gold which are still being used today. I also remembered that in January 1970, gold fell in the London market to $34.70. Gold was not supposed to sell below the Bretton Woods fixed exchange rate of dollars to gold. It was like being smacked in the face and told to wake up!
Without question, the dealers could not sell gold if it did not rise with inflation and against the dollar since it was no longer backed by anything. They had to invent something new. That is when the sophistry specialists stepped in and boy did they succeed in bullshitting everyone.
The explanation was ah ha – the dollar is really backed by oil because it is priced in dollars. That’s it. It is really the Petrodollar! Suddenly the dollar became de facto-backed by oil. They needed an explanation to explain why all the old theories were wrong. They sold this theory and it made the front cover of Newsweek. Everyone said YES! That must be the reason. OPEC priced oil in dollars! Naturally, everything was priced in dollars because, under the fixed exchange rate of Bretton Woods, everything from wheat and corn to copper and gold was all priced in dollars.
Many people are now calling for the collapse of the dollar all because Saudi Arabia has confirmed that they will be selling oil in various currencies. Hence, relying on this old fictitious their of the Petrodolarr from the ’70s, they are telling everyone the dollar will collapse and gold will soar. They never get tired of kicking the same theories down the road without EVER just once being honest and looking if they have any validity whatsoever.
The value of any currency is NOT some commodity. It is the people. You can have all the gold in the world, but if the people do not produce, it means nothing. Indeed, Russia had the largest gold reserve of any nation ahead of the Communist Revolution. They took the gold reserves and hid them so the communists would never find them. They are still missing to this very day. Likewise, Germany and Japan has no gold reserves post-WWII yet they rose to the strongest economies in their respective regions. How is that possible? It is very simple. The true backing of a currency is the total productive capacity of its people. The US became the largest economy in the world NOT because of gold, but because the US had a consumer-based economy built of freedom rather than Marxism as the problem with Europe. China, Japan, and Germany, all focused on the old-world mercantile economic model. Produce to sell to someone else. They failed to follow the strength of the United States in building a consumer economy.
China understands the difference and has shifted to develop that type of economy whereas Germany oppresses its people with high taxes on its citizens to sell manufactured goods to everyone else. That is why they wanted the Euro to expand their European economic marketplace. Germany’s high taxes have put it near the bottom insofar as the German people have less net worth than Italians. The more Marxist the country, the lower the economic standard of living.
Elizabeth Warren’s Wealth Tax is now moving forward in the leftmost Democratic States – California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington state. Naturally, Pennsylvania, Delaware, and New Jersey are paying very close attention as they lick their lips at the thought of untold billions in new revenue to cover faltering government employee pension plans caused by artificially low interest rates. Even federally, the US has bumped its head on the debt ceiling. Without question, the ceiling will have to be raised again but with a lot of pomp and circumstance and perhaps a few fistfights on the floor. Yet the primary dealers cannot handle all the debt pouring out and there is a declining appetite for anything long-term as the Bide Administration wages direct proxy war against Russia until the last Ukrainian falls on the battlefield and NATO troops then revenge their deaths.
Socialism is collapsing and governments will fight to their last breath until the politicians are dragged out and hung on the streets as is typical in such cases of economic malfeasance. What is emerging at the state level is simply versions of Warren’s Wealth Tax which will be applied to WORLDWIDE assets. The hated rich policies, who have provided all the jobs over the centuries by creating industries, are to be stripped mined.
SELL YOUR HOUSE WHILE YOU STILL CAN AND MIGRATE NOW!
Once these Wealth Taxes enter the game in 2024, that will be the peak of the ECM and only a braindead person would want to buy your house in those states! The Year 2024 will be the Decline and Fall and you better pay heed to what is unfolding on this level. The Wealth Tax will be a permanent property tax you will pay even when you are losing money. It will NOT recognize a decline in the value of assets until they are sold.
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.
Following the crowd of what is popular and supposed to be the cutting edge of investment, Robert Belfer, the oil Barron, lost billions with ENRON and then Bernie Madoff. Then he became a shareholder in FTX. With a track record like that, you certainly would be firing your financial adviser. The inside joke about DAVOS is that whatever the theme forecast they put out and what they all talk about has NEVER been right. The joke is to do the opposite of the DAVOS forecast and you will make money. Andy Serwer, editor-in-chief of Yahoo Finance, asked Warren Buffett in a 2019 interview about the DAVOS forecasts. He responded: “Well, I pay none as a guideline to doing anything,” Buffett responded. I have said many times, the majority MUST be wrong for they provide the market energy to create the boom/bust cycle. Because the majority buy the high, when they sell, you get the crash. When everyone is short at the bottom, you get the rally.
QUESTION: I went to the New York show and I sat in on that CNG auction to watch the Diocletian medallion. A friend said you told him you thought it would bring $750,000 on an estimate of $500,000. Well, it brought $1.9 million to everyone’s shock. It seemed that prices were generally double estimates on most things. I was curious if you would comment on that.
Cheers
CP
ANSWER: Yes I know. I was watching it online. I do not know who was the buyer or the underbidder. One dealer told me it was a collector. Ancient coins are rising because they are a global market. If you have American, British, or German coins, naturally the best market will be in those countries. However, when it comes to ancients, there are buyers in China and Russia coming into the marketplace in addition to Americans and Europeans. Simply put, ancients are a global market for they bring to life history and much of history has even been confirmed by the coinage.
The prices have continued to rise even in the face of rising interest rates and the Fed’s attempt to cause a soft landing. The fact that these coins are still rising sharply confirms what I have been warning that our computer does NOT see another Great Depression and complete collapse in the share market. We are in this trend where money is simply trying to get off the grid.
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!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
Centinel2012 