Category World Economic Form

Oct 30 2017

Idiots who try to control the world and blame everyone else for their failure


Armstrong Economics Blog/Economics

Re-Posted Oct 30, 2017 by Martin Armstrong

 

COMMENT: Ok Mr. Armstrong, this is nuts; You are starting to freak me out with this forecasting. The last 2 months has blown me away when a few more elements of your methodology lit my bulb a little brighter. This may sound like you paid me to advertise for you but most of us know you’re not like Hillary. My simple approach combined 3 pieces important to me: 1. Basic knowledge of the markets on a global scale, 2. Basic understanding of your models and Socrates reports 3. Basic interpretation of the ArmstrongEconomics Blog. (utmost importance, hints included) Like Erwin said last year “it might save your life.”

He is so right.

Best to all;

RH

REPLY: I assume you are probably talking about this Vertical Market. This report is probably one of the most important I may have ever released. It’s not easy because so many people have been caught up in the Austrian School of economic thought and the Quantity of Money theory. The entire Quantitative Easy has proven that theory to be completely wrong.

I know this is like having to relearn everything. But that is just the way it is. I and my senior staff even are going to private meetings with central banks. Everything we have ever been taught in school is just dead wrong. This whole nonsense of Conspiracy Theories of people who are steering the world economy is just insane. If that were even true, then why call us at all?

The world economy is coming unglued. This is no joke. The sooner people wake up and just follow the money flows and forget the old theories, the sooner you will arrive at clarity. The only economic theories that were spot on were Adam Smith, who had no ax to grind in the observation of the Invisible Hand, and David Ricardo’s Comparative Advantage. Everyone else ever since has been about trying to eliminate the Business Cycle. This has caused a vast mess and we are about to pay the price.

We have insane politicians like the new Prime Minister of New Zealand, Jacinda Ardern who has declared that capitalism is a blatant failure while the former Greek finance minister Yanis Varoufakis says capitalism is ‘merely’ coming to an end because it is making itself obsolete.

Both witnessed the economic collapse, but instead of blaming the government and its socialist attempt to control the business cycle, they blame the people for not performing as they demand. What they are harping on is the disparity of wealth and want to take the wealth from the hated rich and somehow that is going to make it better. They are ignorant of the fact that this hated group they despise so much create the economy and jobs – not Marxism. Their failure to even recognize the collapse of Russia and China under Marxist theory is a tragedy that will only lead to internal class warfare.

I thank God I do not have much longer on the planet. I am compelled to watch idiots try to control the world and blame everyone else for their failure.

Oct 30 2017

Catalonia (Catalunya) – Legal or not Legal


Armstrong Economics Blog/SPAIN

Re-Posted Oct 30, 2017 by Martin Armstrong
There are many who write in from Spain supporting Madrid against Catalonia. The core of their argument is that the call this movement an independent “socialistic movement” and they argue it is not at all but democratic.
“There’s indeed a strong independence feel in Catalunya, they have been like this for centuries although they never really were able to achieve a country status. … But one cannot claim to be democratic if you plan to force a secession with an election attended by less than half the people who can vote. Most people agreed on the national court’s decision that the referendum was illegal and supported the court rule by no attending to vote, they were 58 percent of the registered voters, those who were against the decision were able to vote anyway.”

Catalonia is an autonomous region in north-east Spain with a distinct history dating back almost 1,000 years. It is a wealthy region that has its own language, parliament, flag and national anthem. It also has its own police force and controls some of its public services.

Maximum of Barcelona

Historically, during the 12th century, Catalonia was taken under the same royal rule as the neighboring kingdom of Aragon. Catalonia has been part of Spain since its genesis in the 15th century when King Ferdinand of Aragon and Queen Isabella of Castile married and united their realms. Nevertheless, the history of Barcelonia extends back into ancient time. It was Maximum of Barcelona (409-411AD) who rose up to be independent of the collapsing Roman Empire.

This idea that Catalonia somehow belongs to Madrid in perpetuity is rather strange. Spain itself did not exist as a country until the marriage of Ferdinand & Isabella during the 15th century. There are coins issued in Barcelona which predate Spain. Back in the 11th century, the Iberian peninsula was divided into three kingdoms; (1) Caliphate of Córdoba in Taifa, (2) The kingdoms of Leon, (3) and The Kingdom of Pamplona and the County of Barcelona. Historically, Barcelona was not conquered by the Arabs who dominated most of Spain during the 11th century. From that period onward, Barcelona has always harbored a sense of independence from the rest of the Iberian peninsula.

So why such intensity against Catalonia? On October 27th, 2017, the Catalan parliament declared independence, in a 70-10 vote. That seems to be a clear majority vote. Granted, this came after an independence referendum on October 1st, 2017, in which just under 90% of Catalan voters backed independence, however, turnout was only 43%. That was, in part, because Madrid sent in troops to try to prevent the vote. Now Madrid has called for a new vote after dismissing the Parliament and thus appears to be setting the stage for a rigged election no different than Russia taking Crimea. The West sanctions Russia for such tactics but not Madrid?

The Supreme Court decision is used by Madrid to claim there is no right for Catalonia to separate. That is clearly a violation of human rights and it is the very same argument the King of Britain made against America so I suppose the United States is a totally illegal entity as well. Someone should serve notice to Trump to hand power back to London and surrender.

Oct 28 2017

Spain Demonstrates to the World Democracy Means Nothing


Armstrong Economics Blog/SPAIN

Re-Posted Oct 28, 2017 by Martin Armstrong

 

The Madrid government sacked Catalonia’s president and dismissed its parliament on Friday, hours after the region declared itself an independent nation in Spain’s gravest political crisis since the return of democracy four decades ago. The Spanish Prime Minister Mariano Rajoy, who seems to think he has the power of Franco, called for new elections and fired the Catalan police chief. The crisis in Spain is a reflection of the crisis in the EU as a whole. This unprecedented dictatorial array of measures to seize control of the administration in Barcelona is so undemocratic, it is guaranteed to send warning signals to many other regions of the EU especially Italy.

Oct 26 2017

Cars Sales Dropping as Taxes Rise


Armstrong Economics Blog/Europe’s Economic History

Re-Posted Oct 26, 2017 by Martin Armstrong

The demand for cars has been declining rapidly in Britain and that is impacting German car sales rather sharply. All price levels in cars have been declining, not just the high end. The sales figures for small cars and the medium class have already declined significantly in the last few months. Now the losses are also becoming apparent in the case of expensive brands, especially for the German car manufacturers.

As taxes have risen upon the average person and this hunt for more tax revenue unfolds globally, this is what creates the recession and deflation. It a strange paradox for many as they see deficit spending rise. Many have a hard time comprehending that if the money supply increases, how can there be deflation? It is always the bottom-line. If you keep raising taxes, you will reduce the standard of living, and that in turn comes back and results in lower economic activity.

Oct 23 2017

Catalonia is not Just About Spain – it is About Brussels!!


Armstrong Economics Blog/European Union

Re-Posted Oct 23, 2017 by Martin Armstrong

There are of course those in Spain who side against Catalonia. Others write who are in Catalonia yet disagree with the separatists. Let me make this very clear. It is the government of Rajoy who has acted abusively, and this is all about protecting Brussels and federalizing Europe behind everyone’s back.

Rajoy should have allowed a fair referendum and then negotiate if they won. Canada allowed two refferendums in Quebec and Britain allowed the Scottish referendum. This nonsense that the Constitution does not allow any democratic process is pure TYRANNY. That was the same argument in America by England and in France that led to revolution.

Had Rajoy NOT played the hardline tactics, allowed the referendum to take place, then many who voted for independence may have not done so.  This is about political power – not the dignity, right, or freedom of the people. This is basically stating the people mean nothing and you will obey or else.

This is a political power play that centers around the EU not just Spain.

If Texas or California want a referendum to separate from the USA, it is a human right to take such a vote. There can be no exceptions!!!!!

Oct 22 2017

Rajoy Continues to Act in the Spirit of Franco Warning Spain Cannot be Trusted?


Armstrong Economics Blog/European Union

Re-Posted Oct 22, 2017 by Martin Armstrong

Spain is showing that it truly remains a fascist state in the spirit of Franco and Rajoy plans to just seize Catalonia. Meanwhile, the Catalan citizens’ movement, Assemblea Nacional, is calling on all Catalans to withdraw all their money as much as possible from one of the five largest Spanish banks to increase pressure on Madrid, These include Caixa Bank, Bankia, Sabadell, BBVA and Santander. Americans supporting Catalonia are also urged to withdraw all funds from Santander in the USA.

Behind closed doors, many are becoming very disturbed by the action of Madrid. They fear this is spilling over as a contagion within Europe for populist movements. The election in the Czech Republic with the overwhelming vote against the EU many fear will be repeated next year in Italy and much of the finger-pointing behind the closed doors our sources are calling Rajoy a “f**king idiot” to directly quote some political sources.

Oct 22 2017

Macron’s Call to Federalize Europe


Armstrong Economics Blog/European Union

Re-Posted Oct 22, 2017 by Martin Armstrong

France’s President Emmanuel Macron is calling for a radical restructuring of the whole EU. Macron has presented his map for the EU into 2024. He is proposing that the Eurozone budget must include a joint force for military operations. Macron intends to finance this new budget with its tax – the “EU tax” he calls it.

Macron has looked at the numbers and see that France will go the way of Greece if something is not changed and soon. Macron hopes just to throw all the rotten eggs into one basket and hope nobody will notice. It’s the Three Musketeers – All for one; One for All just times 28.

Germany is still dominated by its misunderstanding of the Hyperinflation. Former Greek finance minister Yanis Varoufakis supports Macron’s federalist proposals on the euro single currency but believes only a real threat could make Germany budge on the issue. It has been Germany that opposed the consolidation of the debts to form the Euro. They are trying to remain isolated in their austerity posture refusing to budge on the debt consolidation, while at the same time they want the single currency to facilitate German exports eliminating foreign exchange risk among other members. They just cannot have it both ways.

The extent of Macron’s plan goes beyond just an EU Tax.  He also says that Europe is moving at “different speeds” and that those states which fall behind should not stand in the way of his proposals. He is calling for a European defense budget and a standard minimum rate for company taxes.

Macron has noted the high cost of taxing the rich. The Socialist agenda under Hollande imposed a wealth tax which drove 10,000 people with about 35 billion euros to flee the country. And that is just what they admit publicly. The tax was imposed on personal assets of more than 1.3 million euros is part of Macron’s reform, but the socialists are demanding they be taxes even more until they all leave one must assume.  As promised by President Emmanuel Macron in the election campaign, the tax will now only apply to real estate, meaning other forms of wealth such as shareholdings in companies will be exempted. Macron realizes that the French share market has one of the worst performance in Europe next to Greece. While the world is worried about bubble markets, Macron is concerned that new lows will unfold on the next crisis.

“When someone leaves the country because of the wealth tax… collectively all French lose.” But the Socialists just refuse to stop their hatred of the rich. Macron has abolished the wealth tax and the socialists are calling him the “President of the rich” and remain oblivious to reality.
More than fifty years ago, back in 1965, it was the French President Charles de Gaulle who withdrew his ministers from the Council of the EU, thereby constituting a de facto veto over all decisions, which became known as the “Empty Chair Crisis.” There were several issues regarding European political integration led to The Empty Chair Crisis. There was a push at that time to create the quasi-federalization of Europe. De Gaulle believed that national governments should move towards integration, but he did not agree with the Commission’s attempt to create some new super central state or a federalized Europe, extending powers of the EU beyond national borders as we have today, which Margaret Thatcher also opposed.
President Charles de Gaulle has proposed the Fouchet Plan was a plan back in 1961 to create a new grand design for Europe. Charles de Gaulle wanted to develop a three-power directorate, consisting of France, Britain and the United States. The idea was to form a new ‘Union of States’, as an alternative to the European Communities (EC). De Gaulle feared a loss of French national influence in the EC as there was a drive to federalize Europe back then.
After the failure of the Fouchet Plan and De Gaulle’s veto of the United Kingdom’s application for EC membership, the Commission attempted to move towards integration by proposing an idea that would combine the Common Agricultural Policy (CAP), the European Parliament, and Commission. De Gaulle supported the creation of the CAP and favored its enactment. However, he disagreed with the Parliament’s new role, the Commission’s strength, the shift towards federalization and a super central state, and the budget proposals for financing the CAP. De Gaulle made it a condition that majority voting with a right to veto must exist if France was to participate in the EC. When de Gaulle was denied a more intergovernmental Commission or voting and veto rights, the French representative left the Council of Ministers thereby creating the Empty Chair Crisis.
The Luxembourg Accord was an agreement reached in January 1966 to resolve the “Empty Chair Crisis” which had caused a stalemate within European Economic Community. Then on June 21, 1966, de Gaulle withdrew France in a shocking move taking its troops from the North Atlantic Treaty Organization (NATO). This decision led by French president Charles de Gaulle complicated relations between the U.S. and Europe amidst clashing American and Communist spheres of influence. Though France remained politically in NATO, its actions cast doubt on the organization’s future as a counter to Soviet military power and control back then.
Disagreement within the EU is by no means something new. We may yet see a political breakdown as the economy continues to spiral lower and the ECB bond-buying program has been transformed from an economic stimulus to simply life-support for government debts to try to keep interest rates from exploding and no bid for government debt.

Apart from the new EU tax, Macron did not make any funding proposals for his very far-reaching program. The FT reported his “wish list” and presented the most desired demands of Macron:

  • EU intervention group and budget by 2020
  • a European Intelligence Academy to train spies
  • a European civil protection group for responding to disasters
  • a European prosecutor for terrorism and organized crime
  • a European asylum seeker for the joint processing of claims, common procedures
  • a European border police
  • a carbon dioxide tax levied on imports into the EU
  • a European innovation agency for the investigation of artificial intelligence
  • EU subsidies to support the development of electric vehicles
  • Taxation of US tech companies with a tax on sales, rather than on profits
  • a larger EU budget to finance investments and dampen economic shocks
  • Review of agricultural policy and the new EU Food Authority
  • accelerated harmonization of corporation tax bases
  • gradual harmonization of corporation tax rates and social security contributions
  • a guaranteed minimum wage for each country
  • all young Europeans will be able to spend six months as a student or trainee in another EU country
  • Creation of European universities on the basis of networks of institutions
  • six-month series of national and local conventions to discuss the future of Europe
  • half of MEPs to EU Parliament is to come from EU-wide lists until 2024
  • a much smaller European commission, only 15 commissioners
  • a Europe of different speeds, to which Great Britain could also return
  • a new European prosecutor ensures that the competitors comply with the EU rules
  • a Franco-German cooperation agreement focusing on the harmonization of company regulation
Oct 21 2017

450,000 March in Spain After Government Announces Dissolution of Catalonia Regional Government…


Re-Posted from The Conservative Tree House on October 21, 2017 by

Hundreds of thousands of Spaniards took to the streets of Barcelona after the Spanish government announced they would dissolve the Catalonia Regional Government and hold new elections through an Article 155 declaration.

Article 155 allows Madrid to dissolve the Catalan regional government and force new elections, which Prime Minister Mariano Rajoy says will take place within six months. The PM insisted the move would not result in a loss of autonomy for Catalonia, but hundreds of thousands of pro-independence Catalans have taken to the streets in Barcelona in protest.

(Via UK Express) Prime Minister Mariano Rajoy’s Cabinet in Spain met this morning to agree to roll out hardline rules to penalise the breakaway region and impose direct rule.

Elections could be held in just six months as the government seeks to oust all those involved in the “illegal” referendum – including Catalan leader Carles Puigdemont who could even face jail for his role in the crisis.

But now Catalonia has hit back over his stinging rant, as calls for immediate independence erupt among fierce secessionists.  Supporters of independence had already called a demonstration in Barcelona this afternoon to protest the arrests of two Catalan activists accused of sedition.

However, the event has now changed its focus and is directing its anger at Madrid for triggering of Article 155.

Thousands of people have taken to the streets with cries of “independence” or “TV3 will always be ours” after the government took control of the Catalan broadcasting company – akin to Britain’s BBC.  (read more)

Broad Generalization Alert – The issue(s) are all internal to the specifics of Spain and the current conflict traces it’s past back to the time of General Francisco Franco and promises made thereafter.  The Catalonia secessionists are, generally speaking, left-leaning socialists and occupy an ideological space similar to the governing philosophy of the far-left-wing in California.

Simply for comparative purposes: If far-left Californians were to advance their current anti-Trump cause celéb and succeed from the U.S., the blends of secessionists and non-secessionists would break down similar to Catalonians -vs- Spaniards.

The larger Spanish electorate, the generally silent majority, is, well, silent; however, it’s generally accepted that most Spaniards want Catalonia to stay and not break-away into a fully antonymous region. (although some parts of Spain are reported to have previously held rallies in support of the region’s right to hold a referendum).

Democracy is challenged in this construct because the democrat majority of “all Spaniards” probably would not support secession; however, the democrat majority of just “Catalonians” likely support secession.  Which democractic group does the Spanish Prime Minister adhere to?

Therein lies the dilemma.

Spanish prime minister Mariano Rajoy, a 62-year-old from northern Galicia who studied law and has been in politics since his 20s, has vowed he will do everything in his power to stop Catalonia from seceding, but was previously vague on the details. Rajoy’s center-right Partido Popular has governed since 2011, when it won a landslide victory in the middle of the European debt crisis.

The current status reflects the more Prime Minister Rajoy pushes back against the secessionists, the more sympathy is generated toward their cause.

Oct 21 2017

Has the OECD Been Told to Put Out Fake Opinions?


Armstrong Economics Blog/BRITAIN

Re-Posted Oct 21, 2017 by Martin Armstrong

 

They just don’t give up. Now the OECD is coming out telling Britain to have a new referendum and stay in the EU. They claim, without any evidence to back up one work, that they “believe” it will have a positive impact on the British economy. One really has to wonder if they have not turned the charts on GDP upside down.

 

Categories: BRITAIN, European Union
Oct 16 2017

Make Austria Great Again – Nationalism Rises Amid Europe’s Latest Election Result…


Re-Posted from The Conservative Tree House on October 15, 2017 by

Against growing immigration policy backlash, early results in the Austria election show the center-right People’s Party (OVP), led by Sebastian Kurz, winning with around 31 percent of the vote.  The second place party, Freedom Party (FPO), with around 27% is even more euro-skeptic and nationalistic minded.  The Social Democrat Party, the former lead party, has dropped to third place with around 26%.

(Via Express UK) The People’s Party (OVP) got 30.2 per cent of the vote, according to exit polls from Austrian news channel ORF.

Mr Kurz’s party is tough on migration, easy on taxes and widely Eurosceptic after rebranding itself over the last few months to propel its popularity in the wealthy Alpine nation.

He is expected to form a coalition with the right-wing populist Freedom party (FPO), who got 26.8 per cent of the vote, according to the latest projections.

Speaking after 85 per cent of the votes were counted, he told his cheering supporters: “Today we have won a huge mandate to change this country, and I promise you I will work with all my energy for change.

“We want to establish a new culture in politics. And we want to change the country for the better.”

Meanwhile, the Social Democratic Party, the largest party in the last government, are in third place with 26.3 per cent. (link)

(Via Reuters) There was a temptation after the Dutch and French elections this year to declare an end to the nationalist/populist wave in Europe. But last month’s German election, which saw the anti-immigration Alternative for Germany (AfD) party surge into the Bundestag, and now the Austrian election, say otherwise.

Despite a hard shift right by the conservative OVP under Kurz, the FPO appeared close to the all-time high of 26.9 it won in 1999. That result paved the way for it to enter government, a move which prompted a horrified European Union to impose sanctions against Austria. If the FPO enters the government this time, expect little more than a whimper.

The Austrian result showed that the refugee crisis of 2015 has left deep scars among European voters, especially in countries that were at the center of the storm. The number of asylum seekers entering Austria has fallen sharply over the past year. But migration was the dominant theme in the election.  (read more)