Category FED’s goal with the economy is like turning a F350 into a little red wagon

Mar 12 2023

Kristi Noem Sends Warning About State Level Effort to Redefine Currency, Same Legislation Currently Hitting 20 States


Posted originally on the CTH on March 11, 2023 | Sundance

South Dakota Governor Krisi Noem appeared on Tucker Carlson’s television broadcast last night to send a warning to fellow governors.  According to the background story, the South Dakota legislature passed a bill redefining currency and creating rules for a Central Bank Digital Currency (CBDC) that would block all other digital currencies from being used in the state.  Governor Noem vetoed the bill.

When asked why her legislature would do this, Noem responded the state politicians likely did not read the bill as it was constructed by lobbyists.  Noem is exactly correct and hits on a subject we have discussed here frequently {GO DEEP}.  However, one of the more alarming aspects to Noem’s discussion of the issue is that around 20 other states are considering similar legislation.  WATCH:

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Mar 8 2023

Fed Rates Up into 2024?


Armstrong Economics Blog/Interest Rates Re-Posted Mar 8, 2023 by Martin Armstrong

Federal Reserve Chairman Jerome Powell has made it clear that he sees higher interest rates ahead in his battle against inflation and their unrealistic 2% target. Many traders are now scrambling talking about how Powell said the Fed will probably raise rates more and possibly faster than previously anticipated. They are now taking that as a warning he may do a 50-bp hike this month. Our computer projected a Directional Change in 2022 and everything is on schedule for the rise into 2024.

Powell also restated his warnings to US banks about the risks of getting involved in the crypto industry. He expressed very clearly that lenders must take “great care” when engaging with cryptocurrencies. He added that the central bank didn’t want to prevent innovation, but it is not bullish on this industry and views it more like the DOT.COM Bubble.

Mar 8 2023

Inflationary Gaslighting – Fed Chair Says Interest Rates “likely to be higher than previously expected”…


Posted originally on the conservative tree house on March 7, 2023 | Sundance 

Federal Reserve Chairman Jerome Powell delivers testimony today before the Senate Banking and Finance Committee.  During his statements Powell says, “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.” Powell continued, “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.“… “We will continue to make our decisions meeting by meeting.” …  “Although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”

Everything about the testimony to the Senate, and almost everything within the questioning as presented, ignores the key and central component that inflation is being driven by energy policy.   The scale of the pretending around this issue is jaw dropping.

Western governments, including the U.S. through Joe Biden, have limited and curtailed the production and exploitation of Oil, Coal and Natural Gas.  At the core of the inflation within those same governments, this is the issue at hand.  Energy prices have skyrocketed, driving the cost of everything through the roof.  The central banks are raising interest rates in an attempt to shrink the economy to match the drop in energy production.   This is their monetary policy (interest rates) attempting to support economic policy (Green New Deal / Build Back Better).

There are no lines for consumers in the U.S and Europe of people buying durable goods, electronics or shopping for non-essential items.  Prices on the products within the durable goods economy are not being driven by excess consumer demand.  There are not 25% more people buying lemons and milk than this time last year.  The prices for goods in general, and for essential goods specifically, have risen as an outcome of the input costs around energy skyrocketing.

Everything is impacted by diminished energy production, and losses in infrastructure due to drops in investment, that contribute to the efficiency of energy distribution.  Oil prices have jumped, gasoline prices, diesel prices, natural gas prices and electricity prices have all skyrocketed.

With those raw material production policies, farming costs, fertilizer costs, cooling and heating costs, electricity costs, home heating costs, transportation costs, packaging costs, storage and warehouse costs, refrigeration costs and everything impacted by major energy costs have increased.  This is the main driver of consumer inflation.

When Jerome Powell says they are raising interest rates to “cool the economy,” the raw truth behind the statement is the central banks are trying to reduce the western economies in order to meet the diminished energy production created by policy.   If they can make the economy smaller, less energy is needed….. and this should stem the rising costs from limiting the resource development.

Their problem is that baseline energy demand remains high.  This is keeping energy prices high…. this is keeping inflation high. Their approach to continue raising interest rates, will only work if they achieve an economic outcome similar to the pandemic lockdown period.

Yes, excessive money does create devalued money, which in turn does create inflation.  However, in the current inflationary dynamic it is not excessive money in the hands of working-class people that is driving high demand for goods.  All of the consumer and sales data show that cash carrying consumers are not chasing limited goods.  Consumers and workers are trying to afford essential goods and services that have increased in price as a result of energy policy.

Every economic analysis that does not take this majority factor into consideration is either: (a) making a mistake; (b) being intentionally obtuse and willfully blind; or (c) intentionally not discussing it because the motives of the analyst are to support the climate change agenda.

Once you accept that energy policy is the majority driving influence of current inflation (6.4%), then you can estimate how much economic damage will be needed in order to drop energy demand to a level that matches the diminished energy development, production and investment.

Feb 28 2023

War Footing or Ukraine? – Biden Waives Section 303 of DPA Related to Weapons, Ammunition, Explosives and Components


Posted Originally on the CTH on February 27, 2023 | Sundance 

The Defense Production Act (DPA 1950 amended, pdf) essentially is a legislative hurdle that stops the executive from stepping into the private sector and restricting trade, commerce or manufacturing, unless the President says a critical shortage of “xxxx” is present and national security is at stake. It prevents citizens from the threat of govt nationalization of resource “xxxx”.

In the event the President makes a national security determination, he/she is required to inform congress, invoke the waiver authority, and identify which sectors he/she is now outlining as a national security… such that government purchase orders take precedent in the supply of “xxxx”.  Yesterday, President Biden invoked this authority.

Given the pandemic shortages are over, and given the sectors outlined, it looks like munitions, raw material, explosives, electronics and certain component issues related to the Defense Dept are outlined.

Key section: “Therefore, I waive the requirements of section 303(a)(1)-(a)(6) of the Act”…

…”specifically for defense organic industrial base supply chains critical to the Department of Defense and critical supply chains for electronics, kinetic capabilities, castings and forgings, minerals and materials, and power and energy storage.” (link)

It’s a use of the DPA definitively targeting defense materials.  Which raises the question(s):

Is this to secure weapons for shipment to Ukraine?..  OR, Is this to secure a buildup of weapons for a larger purpose?   Meaning, is this preparing for an expanded war effort?

There is a lack of media curiosity.  However, perhaps drawing attention to it will stimulate someone to ask the Pentagon?

In the interim, ammunition might become a little harder to find.

Feb 24 2023

Markets & War


Armstrong Economics Blog/Capital Flow Re-Posted Feb 24, 2023 by Martin Armstrong

The financial markets had become integrated globally prior to World War I. It was the globalization and openness of world financial markets that became the problem and are important to understand for we will face the same problem today. The capital was free to flow from one country to another before World War I.  All the major countries of the world were on the Gold Standard at that point in time so exchange rates were not as volatile.

We can easily see that the currency market was very stable pre-1914 looking at the French Franc. Keep in mind that this was also a period of fiscal responsibility – pre-Socialism and Marx. Therefore, governments practiced balance budgets to retain confidence in their currencies. That enabled the gold standard to function. Furthermore, any differences in exchange rates were arbitraged. That is how the United States went into crisis in 1896 because the Democrats were inflating the system by overvaluing silver at 16:1 compared to 15:1 in Europe. That resulted in gold fleeing the United States and silver pouring in from international arbitrage.

There was also a viable arbitrage that took place trading the spreads between international bonds listed on the various world stock exchanges. Many countries would issue bonds in British pounds just as they do in dollars today to sell more to the investors in the financial capital of the world, which was London at that point in time.

A country such as China or Russia would issue a bond that was listed on the stock exchanges in London, New York, Paris, Berlin, Amsterdam as well as St. Petersburg in Russia. Here is a Chinese bond issued in British pounds in 1913 paying 5%. The differences in exchange rates, which would still fluctuate marginally, would be arbitraged by buying and selling bonds in different markets.

Consequently, during World War I, there was a global marketplace. In effect, this integration of markets presented a problem when the war hit. Capital could flee from one country to the next and thus the method to deal with the capital flows was to close the stock markets. The United States also closed the market in sympathy with Europe.

We will be taking a closer look at the various global markets. What you can count on is clearly CAPITAL CONTROLS. It would be best for those in Asia and Europe to have some capital tucked away in the United States. Once bullets start shooting, it will most likely be too late to move money.

Keep an eye on our Capital Flow tracking. This may become very critical in the months ahead.

Feb 23 2023

Corruption inside the Deep State


Armstrong Economics Blog/Ancient History Re-Posted Feb 23, 2023 by Martin Armstrong

History repeats because human nature never changes. During the Roman Republic, the name of the moneyer would appear on the coinage just as today the Secretary of the Treasury’s signature appears on our paper currency – i.e. Steven T. Munchin.  To this day, our coins are denoted by which mint produced them – Philadelphia, Denver, or San Francisco.

The collapse of the monetary system following the capture of Emperor Valerian I in 260AD by the Persians, set off a collapse in public confidence whereby the people suddenly saw Rome as vulnerable. What is fascinating is that the “hyperinflation” of Rome which took place in just 8.6 years,  was aided by the corruption within the Deep State of the Roman Empire. This raises the question: We will see the same thing take place during our final 8.6 years into 2032 which begins by May 2024. The debasement of the coinage was NOT on the decree of the Emperor. This was the greed of those in the Deep State.

Following the assassination of Emperor Gallienus, that is when Claudius II came to power and the debasement reached it lowest point during his reign. The Goths invaded Rome and brought the plague with them from the East. Emperor Claudius II died of the plague. Claudius’s brother, Quintillus tried to succeed him, but Aurelian and his troops marched against him. His troops deserted him and he committed suicide.

Therefore, Aurelian became emperor in 270 AD and he returned to Rome in 271 AD, where he had to pacify a terrified city. He immediately halted the rioting and restored order to the capital. The controller of the mint in Rome began a rebellion over the monetary reforms laid out by Aurelian. He ordered that all the debased currency be purchased back and replaced with a new currency of higher content in silver. The rebellion was led by Felicissimus. It appears that those who had been running the mint were embezzling the intended silver and issuing the debased coinage at least in part on their own authority.

Obviously, any reform to the monetary system that called for an increase in silver content would have been unprofitable for those running the mint for personal gain. In the rebellion, as many as 7,000 soldiers died when Aurelian was forced to trap and execute them and their allies, some of the senatorial ranks, in a terrible battle on the Caelian Hills. Thereafter, Aurelian then introduced mintmarks to identify if any mint was cheating the silver content.

When Diocletian (284-305AD) reorganized the coinage when he came to power as well as the political structure of the Roman Empire. With respect to politics, he divided the empire in two creating two emperors with their eventual successors given the rank of Caesar. This became the Tetrarchy.

The monetary reform introduced the new bronze coinage silver plated known as the follis terminating the radiate antoninianus which had begun as a double denarius during the reign of Caracalla (198-217AD). Diocletian required each mint to engrave their coins with an identifiable mint mark, and also letters or marks to indicate the individual workshops (officina) within the mints. Thereby, any collusion to debase the coinage would be identifiable to a specific group within each mint.

Each mint mark from Diocletian onwards consists of a group of letters identifying the mint (normally in the exergue) and usually (but not always) letter(s) and/or mark(s), sometimes in the exergue, sometimes in the field, These identified the individual workshop within the mint. In the West, workshops were numbered either in Latin numerals I, II, III or in the initial letters of Latin ordinals such as P(rimus), S(ecundus), T(ertius). The problem with Latin surfaced when trying to distinguish between S(ecunda) and S(exta) or between Q(uarta) and Q(uinta). They had to develop in the West a mixed system of Greek and Latin to give P(rima), B, T(ertia), Q(uarta), E, and S(exta) valid meanings. Western mints sometimes used the Greek system at varying times.

Here we can see a silver Argentius (2.87 grams) with the “R” Roman mint mark. Lugdunum used “PL” for their mint mark as illustrated by this follis of Maximianus – Diocletiuan’s co-emperor.

History repeats because

HUMAN NATURE NEVER CHANGES

Feb 22 2023

Ukraine – The Pawn of Foreign Powers


Armstrong Economics Blog/Ukraine Re-Posted Feb 21, 2023 by Martin Armstrong

QUESTION: Hi Marty,

Would it not be better for Putin to follow the American model and invade all of Ukraine vs. using nuclear weapons? There is still time to execute such a strategy.

Taking control of all of Ukraine would give Russia control of the borders, hence no more major offensive weapons would cross to Ukraine from Poland.

On the flip side, using nuclear weapons is bad PR. The public opinion is against nuclear weapons, so if Putin were to use them, NATO would then have an excuse to enter the conflict directly. All it would take is a PR spin.

Cheers from Canada,
Lucas

ANSWER: If Russia nuked Ukraine, that would not provide a legal excuse for NATO since Ukraine is not a member of NATO. The whole criticism of Putin in Russia is that he has been too “soft” because he is too nostalgic and regards Kiev as the first capital of the Rus. To him, nuking Kiev would be like the US nuking London. He launched his “special” operation to defend the Donbas because the West lied about the Minsk Agreement to buy time for Ukraine to create an army.

The problem we really face is that the West has conspired to create war with Russia and to use Ukraine as cannon fodder. From the start, Zelensky has drafted 18 to 60-year-olds. Tass has reported that Ukrainian prisoners taken recently are 16 and 17-year-olds.

The West does not care about the Ukrainian people. The more civilians killed, the better. That will enable the West to rally troops for revenge. This war could have ended in 10 minutes. All the West had to do was to allow Ukraine to seek peace and honor the Minsk Agreement – nothing more.

But the West is outright trying to destroy Russia and the bankers are in line once again licking their lips at all the wealth of Russia from gold and platinum to rare earths, diamonds, and energy. Just as I was solicited to join them back in 1999 and I refused, they are back again cheering war.

The Ukrainian people have nothing to gain from this. The Donbas is occupied by Russians for hundreds of years. The Ukrainian people NEVER had a country. They finally got one in 1991 and they are throwing that all away for the Donbas. Zelensky will fly at the last moment to Florida when Ukraine falls. This is the leader of a country who takes orders from foreign powers.

Feb 22 2023

Chairman Xi Plans Moscow Visit, Putin Suspends START Treaty, Maersk Exits Russia, Biden Talks Moldova, Planets Aligning for War


Posted originally on the CTH on February 21, 2023 | Sundance 

First things first, history may not always repeat, but it always rhymes.  Secondly, history tells us that only two things have ever pulled what we now call “western nations” out of a collective economic depression; (1) war, and (2) housing starts.

If you accept the WEF climate control agenda of a ‘managed transition‘, where economies are reduced in size to match lowered energy production, as generally speaking akin to a western economic depression.… then, you begin to ask the logical question.  How do the managers avoid the consequences?

If global (non BRICS) economic contraction is akin to a western economic depression, I would argue the consequences are identical.  Then, when major economies are in a state of shrinking and the citizens are feeling the horrible effects, something large is needed to change the economic equation.

With central banks raising interest rates to achieve the policy supporting contraction, the option for ‘housing starts’ to change the dynamic is removed.  That leaves, ‘war’.

President Putin and Chairman Xi are not stupid men.  They are big picture strategists.

♦DATA POINT – Russian President Vladimir Putin’s move to suspend his country’s involvement in the last remaining arms control treaty with the U.S. came as a disturbing surprise to multiple former officials who negotiated the pact and nonproliferation experts committed to ending the expansion of nuclear forces. (read more)

Can you blame him?  The Western Alliance has already blamed Putin for the global food crisis they created by the World Economic Forum energy policy shift.  The Western Alliance accepts no responsibility for advancing hostility -through NATO expansion- on to Russia’s doorstep.  The Western Alliance has attempted to sanction Russia out of the global economy.  With the same Western Alliance now positioning for war, why would Putin adhere to their limitations?

♦DATA POINT – Chinese leader Xi Jinping is preparing to visit Moscow for a summit with Russian President Vladimir Putin in the coming months, the Wall Street Journal reported on Tuesday, citing people familiar with the plan. (read more)

Can you blame them?  Pay no attention to the Reuters narrative woven inside the article about China wanting to negotiate peace.  To accept that narrative is to believe there is no dragon behind the panda mask.  We are too far into the geopolitical awakening to say the dragon doesn’t exist and simultaneously hold its own interests (belt & road, and/or Taiwan) within the context. Ignoring the dragon behind the mask is really quite silly.  BRICS exists as an economic alliance of like-minded nations for exactly this geopolitical dynamic.

♦DATA POINT – Shipping and logistics group A.P. Moller-Maersk (MAERSKb.CO) has agreed to sell its two logistics sites in Russia to IG Finance Development Limited, it said on Monday, nearly marking the end of its business activities in the country. […] After that, Maersk will not have any business in Russia. (read more)

The major multinationals always position themselves to avoid the consequences of war.  Additionally, Moller-Maersk is already going to feel a major financial impact from the shrinking of the Western economies they generally service with their cargo transportation.  Smaller economies = less cargo = less ships = less revenue.  Moller-Maersk has to pick a side; they are aligned with the Western Alliance.  Hence their exit from Russia.  China/India will eventually fill the void. Again, BRICS.

These are data points just in the last 12 hours.  In addition to these data points from today, the saber rattling from the DC foreign policy and war machine financial system is on display in the Biden policy as transmitted from Warsaw. Again, just today.

Like us, I’m pretty sure from watching his statements and eventual policies over the past several years, President Donald Trump views foreign policy through the prism of economics.   If “economic security is national security,” then what is it when economic insecurity is an intentional design policy?

All of the economic data points have aligned toward direct military conflict between the Western Alliance and Russia that expands beyond the proxy war in Ukraine.

If the path is continued, this process eventually ends up with World War III.  Which, not coincidentally, boils down to the Western Economic Alliance -vs- BRICS, with a few remaining neutral and the middle east as the unknown variable.

Sound familiar?

Look below, you might find a familiar visual reference:

Yep, history rhymes.

Any questions? 

Feb 22 2023

West’s Duplicity – Biden’s Surprise Visit Before Putin’s Speech


Armstrong Economics Blog/Ukraine Re-Posted Feb 21, 2023 by Martin Armstrong

Biden made a surprise visit to Ukraine one day ahead of Putin’s National Address scheduled for February 21st. Biden had the audacity to put out the West’s constant propaganda:

“One year later, Kyiv stands. And Ukraine stands. Democracy stands,” he declared. “The Americans stand with you and the world stands with you.”

Putin is elected the head of Russia by its Parliament the same system that takes place in Britain, the EU, Canada, and every country with a Parliamentary system. Only the United States is where the head of state stands for election by the people. This nonsense that Ukraine stands for democracy against Russia is just total outright lies. This only demonstrates that we cannot trust a single word from governments in such times. As they say, truth is the first casualty in war.

Had the West simply been honest and honored what they negotiated that the Donbas under the Minsk Agreement was to be allowed to vote on their own separatist movement. All the deaths in Ukraine and their blood are on the hands of the West. This war would have NEVER taken place if the Minsk Agreement was honored.

Blinken has made it clear that the US will NEVER accept the Minsk Agreement and it was indeed only to buy time for a war they wanted from the start. The Biden Administration changed the arrangement with Ukraine in 2021 altering all previous agreements since 2008. This is a Neocon’s dream come true – a direct confrontation with Russia. He outright said that there shall be no peace by returning any land to allow the Russians of the Donbas to live in peace free of Ukrainian domination.

“If we do that, we will open a Pandora’s box around the world, and every would-be aggressor will conclude that, ‘If Russia got away with it, we can get away with it,’” Blinken said. “And that’s not in anyone’s interest, because it’s a recipe for a world of conflict.”

This illustrates the duplicity of the West and the desire for World War III. These are the people who are cheering the destruction of our future all for a strip of land that has been occupied by Russians for centuries.

Even China has come out and bluntly stated: “We would like a political solution to provide a peaceful and sustainable framework to Europe.” The US refuses to seek peace on any reasonable terms whatsoever. The arrogance of the United States is just astounding. They have told China not to aid Russia. As Fox News reported, China is furious after the US warns against arming Russia: “The US is in no position to tell China what to do.”

In all my years of dealing with governments, NEVER have I ever even once witnessed such stupidity and arrogance on the part of any government. This Biden Administration seems to be going out of its way to piss off just about everyone in the world to create World War III. This is just unimaginable. They seem to want to “shrink” the world’s population by 50% with war to get their pat on the back from Gates, Rockefeller Foundation, and Schwab. When you say it is your way or no way, that is not how you negotiate anything.

History will remember the Biden Administration with contempt as the Hitler or Napoleon of the 21st Century.

Feb 22 2023

The Hunger Games Begin – Soaring Energy Costs Lead to Rationing of Vegetables in U.K.


Posted originally on the CTH on February 21, 2023 | Sundance 

Follow the bouncing ball of consequence….

(Via Daily Mail) Vegetable rationing could last for ‘weeks’, it was warned today, after Morrisons joined Asda to became the second major supermarket to limit sales of certain items. 

Perishables like tomatoes, potatoes, cucumber and broccoli have been restricted to just two or three per customer in a host of stores up and down the country.

The crisis has developed in recent weeks due to soaring energy costs which have forced British farmers to switch off greenhouses as they desperately try to make ends meet – leaving a dearth of home-grown produce. (read more)

While it is prudent to remind everyone how fortunate we are to have Florida, California and Mexico for North American vegetable supplies, ie. no dramatic supply shortages, the energy price pressure being applied by Biden policy will lead to even higher consumer prices for all row crops.

18 months ago (Oct 2021), CTH first strongly recommended restarting victory gardens at home. The same recommendation only strengthens.