Australia: One Foot in Asia v the West


QUESTION: Hello Martin Armstrong,
Australia seems to have one foot in the West and one in the East. With the fall of the Western economies and then the rise of Asian economies, how does that affect the Australian economy? Does the real estate bubble collapse the Aussie economies and then the rise of China creates the opportunity to rebuild the economy after 2032?
Thanks for all the work you do.
J

ANSWER: The computer is projecting that Australia will first have to collapse with Western culture because it has become exceptionally left-wing. This is the collapse of socialism in general. We are collapsing just as communism did. It will be one Pi Cycle (31.4 years) from 1989, which brings us into this target of 2020/2021. We should expect serious political change on the horizon that will result in civil unrest.

Longer-term, however, with one foot in Asia, Australia will turn from the USA and Europe. As I have said, China is MUCH WISER than what we see in the West. While Europe is fighting over old economic models and clinging to theories that no longer work, China is investigating HOW the USA displaced Europe. It did so with LOW TAXES and regulation that built the American consumer market that the entire world has been dependent upon.

Germany’s economic model is still the old Mercantilist theory that national wealth is obtained by selling more stuff than you buy from others. The USA model has been internal rather than the Mercantilist external model. This is what China has realized and it is turning inward. Western society has not figured this out yet. Just look at BREXIT. The entire argument against it in Britain is that they will not be able to sell to Europe. That is really stupid and absurd.

Therefore, when the socialist model collapses in Australia, there will be a natural risk of a separatist movement. Western Australia will certainly find that, economically, they are more aligned with Asia than the East coast.

Thailand and the Future


COMMENT: Hi Marty,

As with so many others, I am very appreciative of your writing and am seeing your predictions come true as chaos piles up. Most recently, here in Thailand! The sister of the king, Princess Ubolrat (sp?) announced she would contest the upcoming election as prime minister. This is not only unprecedented in Thailand but perhaps anywhere in the world. In Thailand, the monarchy is treated with reverence and there are very strict laws about criticizing the monarchy, using their names or images for commercial or political purposes. And up until now, the monarchy has been strictly non-political. But there is a new regime now…indeed the king’s coronation is due to take place less than two months after the election on March 24 (coronation May 4).

The sister claims she is no longer a royal as she was stripped of her titles by her father, the former king (who died two years ago) when she married an American, but after 20+ years she divorced her husband and came back from America where she had been living to Thailand where she resumed royal duties. Thai people are so respectful/afraid of the monarchy that the election result is now considered to be a done deal as no one will dare to contest in any meaningful way. The small party she will lead is backed by the former billionaire prime minister Thaksin Shinawatra who has been living in exile for many years after being dumped from power in a coup. He is the darling of the impoverished rural masses while the incumbent Prime Minister General Prayut, who deposed Thaksin’s sister Yinglak as prime minister in a second coup, has the support of the business elite. Thailand up to now has been a very traditional society resting on three solid foundations…the nation, religion, and monarchy. This, despite frequent coups and regular rewriting of constitutions, has given it stability. I wonder if one of these legs is about to be kicked away…with a member of the monarchy descending down to the political fray. Now we await the battle between the general and the princess….most bets, of course, are on the princess!

The king has now criticized the actions of his sister “inappropriate”. Since the king must approve the prime minister, it seems that her name can’t go forward. So the traditions still hold after all in Thailand.

Thank you

 

ANNONYMOUS

REPLY: I love Thailand. It is one of the real gems in the world. Despite all the political turmoil, the structure keeps going. To a large extent,  this demonstrates that the economy is self-sustaining and really does not require government in any country. People will interact with or without the presence of governments. Nevertheless, the beginning of the Chakri dynasty under King Rama I took place in 1782 in Thailand, which rules to this day. The country was then known as Siam and the new capital of Bangkok was found. It was during the reign of King Mongkut (Rama IV) (1804-1868), who embraced Western innovations and initiated Thailand’s modernization.

When we look at the broader picture, the 224-year cycle of political change came into play in Thailand as well and was due in 2006. Indeed, it was during April-May 2006, when a snap election was called by the PM amid mass rallies against him that were boycotted by the opposition and subsequently annulled. This resulted in a political vacuum. The PM took a seven-week break from politics. Then in August 2006, the Prime Minister Thaksin Shinawatra accused several army officers of plotting to kill him after police found a car containing bomb-making materials near his house. Then on September 19, 2006, military leaders staged a bloodless coup while Prime Minister Thaksin Shinawatra was at the UN General Assembly. Retired General Surayud Chulanont was appointed as interim prime minister during October 2006. Finally, in January 2007 martial law was lifted in more than half of the country. Therefore, 2006 was a major turning point in Thailand.

Ever since 2006, we have witnessed rising political change. Opposition protesters occupied Bangkok’s main government complex in 2008, and began a mass anti-government protest calling for the resignation of Prime Minister Samak Sundaravej. Eventually, Sundaravej was forced out of office by December that year. In March-May 2010, tens of thousands of Thaksin supporters emerged in their trademark red shirts. The major political change seems to be on schedule for 2032 into 2048.

Medical Professionals’ View of Brexit


Physicians were unable to reach a consensus on whether or not Brexit should take place. The Allergists were in favor of scratching it, but the Dermatologists advised not to make any rash moves. The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Brexiters had a lot of nerve.  Meanwhile, the Obstetricians felt certain everyone was laboring under a misconception, while the Ophthalmologists considered the idea shortsighted. The Pathologists yelled, “Over my dead body!” while the Pediatricians said, “Oh, grow up!” The Psychiatrists thought the whole idea was madness, while the Radiologists could see right through it. The Surgeons decided to wash their hands of the whole thing and the Internists claimed it will be a bitter pill to swallow. The Plastic Surgeons said that May’s proposal would “put a whole new face on the matter.”  The Podiatrists thought it was a step forward, but the Urologists were totally peed off at the whole idea. The Anesthesiologists thought it was all a gas, while the Cardiologists didn’t have the heart to say no.  In the end, the Proctologists won out, leaving the entire decision up to the latest poll takers in the Parliament.


The ignorance of the people, press, and the politicians regarding trade with Europe is fascinating. Ever since Britain joined the EU, it has been in a broader declining trend with respect to trade. Post-2007, the growth rate has declined progressively. This entire focus on trade is really braindead. Germany’s entire economic model is export-driven. The USA has the biggest economy, which is created by having a lower-taxed consumer base. That is why everyone from China to Germany stands in line to try to sell to American consumers. China realizes this is a no-win situation and they have turned-inward by trying to develop its own consumer-based economy with less reliance on selling to Americans. The British economy is the #1 market in Europe for German cars. A hard BREXIT will hurt Europe — not Britain!

Britain certainly does not need Europe to keep its economy going. It is the opposite way around and nobody wants to bother to even look at the data. All we get is a bunch of nonsense that trade is so critical and Britain will die without the EU. Not a single newspaper is willing to ever tell the truth. People ask me all the time why I have not done an interview to The Guardian. Quite frankly, they

Top Military Diplomat from Venezuela Breaks With Maduro and Supports Guaido…


Venezuela dictator Nicolas Maduro has broken-off diplomatic relations with the U.S. and demanded all attache’s to return home.  However the top Venezuela military attache within the U.S. has now backed President Juan Guaido as the legitimate president and will remain in the U.S.

(Via Miami Herald) The military attaché at the Venezuelan Embassy in Washington, Col. José Luis Silva, broke with the Nicolás Maduro regime Saturday and urged other armed forces members to recognize Juan Guaidó as the legitimate interim president of the South American nation.

“As the Venezuelan defense attaché in the United States, I do not recognize Mr. Nicolás Maduro as president of Venezuela,” Silva told el Nuevo Herald in a telephone interview from Washington, D.C.

“My message to all armed forces members, to everyone who carries a gun, is to please let’s not attack the people. We are also part of the people, and we’ve had enough of supporting a government that has betrayed the most basic principles and sold itself to other countries,” he added.

Silva, like all other Venezuelan diplomatic mission staffers in the United States, was ordered to return home after Maduro announced he was breaking diplomatic relations with Washington because it had recognized Guaidó as the legitimate president of Venezuela.  (read more)

The British Press


Armstrong Economics Blog/Opinion

Italy’s Silvio Berlusconi to Run for EU Seat


Silvio Berlusconi announced his candidacy for European elections in May due to a “sense of responsibility.” Indeed, this may be the best thing that ever happened. The EU pulled off a coup secretly behind the scenes to drive him from office because he wanted to take Italy out of the euro to save his country. Our deep sources all confirmed the EU intervened in the Italian elections to remove Berlusconi, which was effectively a coup back in 2013.

Southern Europe has been seriously disrupted from joining the euro. They were forced to convert their past debts to euros and then the euro doubled in value, causing their real world national debts to double in terms of international value. Is it any wonder their economies have been in a death spiral? Unemployment among the youth has reached 60% in some regions, and they are now known as “The Lost Generation.”

The May elections for the EU are looking like a lot more anti-EU and people will be taking up seats in Brussels.

Five Eyes Leverage – Europe Imposes Steel Tariffs on China…


In November of last year the New York Post interviewed President Trump asking specifically why he was not declassifying “spygate” documents, and inquiring about the purpose for his reluctance.  President Trump responded: “Maybe it’s better that the public not see what’s been going on with this country.”  Many people were disappointed, but its always been President Trump’s primary MAGA agenda to focus on economic security.

As the president has repeatedly stated: “economic security is national security.”  And with that cornerstone as the foundation, any evidence of a ‘Five-Eye’ ally participating in the scheme against Trump becomes leverage.  Cue the example:

EUROPE – European officials said today they will make tariffs on steel imports to the region permanent to help stem the glut of supply sparked by Donald Trump’s trade war against China.

The move highlights that protectionism is spreading and Donald Trump’s trade war with China is entrenching itself into the global economy.

The EU will impose quotas on 26 product categories and levy a 25% duty on imports exceeding those quotas, the executive arm said on Wednesday. The move cements proposals laid out last July with the stated aim of protecting European steelmakers amid Chinese overcapacity.

[…] The European auto manufacturers association ACEA said it was “extremely disappointed” and called the measures protectionist, citing statistics showing that steel exports to the US had only dropped marginally, meaning little extra steel was being imported to Europe.

“These measures do not take into account the needs of downstream users of steel, such as the automotive sector,” it said in a statement.  (read more)

A reminder from last year.

[…] President Trump has fifty years of business skills in various predatory and adversarial financial deals.  Leverage, or the ability to force an opponent to take an action that benefits your position, is the most valuable weapon in deals; business or politics the same is true.

This type of leverage is extremely valuable and it’s not just against Democrats, Obama and the Never Trump alliance (ie. Sea Island group).  President Trump is in a fight against multiple enemies from all sides, across all aisles and political alignments.  The declassification leverage is like an atomic hammer that strikes everyone in a 360° blast radius.

And it is not limited to domestic adversaries.  This leverage has a geopolitical value.

Think about geopolitical trade deals with Five-Eyes allies.  Think about how President Trump may need an ally to take a position adverse to their preferred interests. The potential for declassification of intelligence documents showing complicit corruption within the U.K. and Australia could destroy politicians external to the U.S.

Think about an ally being asked to take a position on China (trade), Iran (sanctions), Russia (energy), etc.  Movement on any of these geopolitical issues, and many more, can be tilted -in part- based on the threat of sunlight or declassification. Leverage is a tool.

Getting particular democrats to support the USMCA; what’s that worth?

Getting a southern border wall and sensible immigration law; what’s that worth?

What does President Trump value?  What is important to him?

What part of the transactional relationship can be enhanced by leverage?   Pro-tip: it’s not personal; it is not leverage to benefit Trump personally; he doesn’t care about that shallow stuff… his view of the horizon is much longer, much further; much more consequential.

It annoys the heck out of many people, me included, that Donald Trump is willing to absorb so much inbound fire, unnecessarily; which, by extension, means that his supporters are forced to absorb so much inbound and unnecessary fire; but he is.

What is President Trump’s primary objective?   Save the U.S.A. through economics.

Economic security is national security.

I think much of our angst is because we look too short-term; and the media does a great job of convincing us President Trump is selfish.  Perhaps they are correct. Perhaps I’m wrong; but I see this leverage issue as something Trump views as important – obviously; or he wouldn’t approach it that way.

Would President Trump trade a $500 billion per year positive benefit to the U.S. economy in exchange for never outlining the fraud against him?

Would President Trump accept new jobs for a million Americans in exchange for never outlining the 2016 fraud against him?

Yeah.

He would.

Without question.

And he wouldn’t care if it meant he could never win in 2020.

He ain’t a politician.

Piss you off?

Probably.

That’s Trump.

All of those resistance “politicians” and their schemes, ploys, games and strategies are annoying gnats.  Nothing more.  President Trump’s MAGA agenda is the primary focus. That agenda is bigger, much bigger and far more consequential, than their obstruction.

All of the collective political gnat activity is less than.