DEFLATION comes as governments try to collect more and more taxes. This shrinks the economy and makes it vulnerable it collapses. INFLATION comes when CONFIDENCE is lost in government. Then money declines in value and assets rise. It is always a confidence game.


The Real Reason Inflation Unfolds

Confidence-wide

QUESTION: Dear Mr Armstrong,

Thank you EVER SO MUCH for everything that you do even for ordinary folks like me who are not traders but just want to have a good grasp of where to put their money. I have already learnt a great deal by merely following your blog throughout the last two years, and I’m eagerly anticipating the investor level of Socrates. Merely from looking at how it’s supposed to work on your website is mind-blowing! Thanks for the incredible work that must go into this amazing project.

Concerning the pressure exerted by banks on Romanian politicians I find it really intriguing that these days banks usually (at least, here in Germany) may put stipulations in their mortgage contracts giving them the right, under certain circumstances, to re-evaluate the value of your property, if this has increased in terms of your currency, and to adjust your mortgage accordingly. Interestingly, they weren’t allowed to put in such stipulations before the Euro was introduced. Clearly, the banks want to have it both ways, so I agree with you when you say: “The bankers want no risk and will screw the people every time. This law is fair as the banks sold mortgages without guidance.”

What still confuses me sometimes is that assets may rise even in a deflation, but I suppose that’s due to an asset inflation then which is to do with the political climate calling for a flight to assets, correct?

Yours sincerely,
TN (Germany)

ANSWER: Correct. The banks did not believe in the euro. Even the German Central Bank was against the euro. They could not speak out back then so there were people inside who were feeding us all the inside info to get it out. We published a lot back then and the commission even attended our conference in London in 1997. This was, in part, the primary reason for that hidden clause which never got much press. Trying to cope with pricing cross currency has always been a huge problem for corporations as well as banks. Not every mortgage has such a clause. However, if a country were to exit the euro, the mortgages would most likely be revalued by political dictate rather than a free market.

We can still experience “asset inflation” during a deflationary move for one of two reasons. First are commodities that can rise due to a sudden shortage in supply, such as in an agricultural produce when a crop is destroyed for some reason. Second, asset prices can rise during a deflationary wave because taxes are rising and banks become untrustworthy. Then money seeks merely to park. It is not a speculative boom whereby people are expecting to make money on a rise. This is the typical capital flight to quality where assets replace government bonds.

declsilv-ma-waterfall

3-Hoard

The typical assumption is that Rome went through hyperinflation during the 3rd century simply because the coinage was debased. Yet, hoards of the debased coinage are common during this period. We rarely see hoards of the debased mixed with the old silver coinage. The hoard we purchased covered the period of 250 AD up to 285 AD. We bought this hoard for study because it was perhaps the widest span of time of any hoard. Most seem to be 270-285 AD period. This demonstrates that they hoarded even the debased coinage. Therefore, it was beyond merely debasement. This was the massive invasions of barbarians at the gates.

Aurelian-Wall-1R

If you travel to Rome, you will see its walls are largely intact in many areas. They were constructed by the Emperor Aurelian (270-275 AD). Banks could not be trusted and there was a question of whether government could even defend its people. It was not merely the debasement. The debasement became necessary because of massive hoarding which created deflation. The inflationary wave came AFTER the contraction bottomed. This is when we see the wage and price controls of Diocletian (284-305 AD) issued in 301 AD. This curiously was 51.6 years after Trajan Decius (249-251 AD) came to power. Decius was the first Roman Emperor to be killed in battle by the Goths. This was the start of the decline in CONFIDENCE of Roman society when they realized they were vulnerable for the first time.

Confidence-2

The deflation comes as governments try to collect more and more taxes. This shrinks the economy and makes it vulnerable long-term until it collapses. The inflation comes when CONFIDENCE is lost in government. Then money declines in value and assets rise. It is always a confidence game.

Poland taking back sovereignty!


Poland Euroskeptic Conservatives Move to End Brussel’s Control the Press

Polish Parliament

 

Last October, Poland’s opposition Law and Justice party won the election with 37.6% of the vote, which was enough for it to govern alone. Law and Justice is a conservative and Eurosceptic party with leader Jaroslaw Kaczynski. Law and Justice has very strong support in poorer, rural areas. When I was in Poland, in all my meetings, there was unprecedented rejection of joining the Euro. EVERY single meeting was the same – the general view was if Poland joined the Euro, their economy would be destroyed by Brussels. There were large demonstrations against the Euro.

Poland’s Law and Justice conservative government took control of state media last week after new legislation giving it the power to directly appoint the heads of public broadcasters was introduced through parliament, despite EU concern and condemnation from rights watchdogs. The move was directed at ensuring there would be no pro-Euro direction of the press.

The European Union’s Executive dictatorship announced on Sunday that it would now discuss the state of the rule of law in Poland. During this initial process, the Commission will collect information and then with prejudice assess that these measures are a systemic threat to the rule of law. This is only because it is anti-Euro. They have rigged elections, intimidated the press, and shut down democratic processes throughout Europe to further their agenda. When someone fights back, they call this a democratic violation.

Iran just might take over the kingdom which would give them control of Mecca and Medina and that would give them control of Islam.


Sunni & Shia Tensions Rise in Middle East

Tehran Protest Jan 2016

Protesters stormed and ransacked Saudi Arabia’s embassy on Sunday after gathering to denounce the kingdom for executing a prominent Shia cleric. They stormed the embassy, smashed furniture, setting the embassy on fire, and threw papers from the roof. They were eventually cleared away by the police, Iran’s ISNA news agency reported.

On Saturday, Saudi Arabia announced it had executed 47 prisoners convicted of terrorism charges, including al-Qaeda detainees and Sheikh Nimr al-Nimr who had rallied protests against the government. It was the execution of al-Nimr which had been expected to increase sectarian tensions across the entire region and deepen the hatred between Sunnji and Shia minority in Saudi Arabia’s not to mention with the Shia in Iran.

Indeed, Iran’s Foreign Ministry spokesman Jaberi Ansari had been quoted on the state-owned English-language Press TV warning that the Saudi monarchy would pay a heavy price for its policies while a Iranian cleric, Hossein Nouri Hamedani, said this would raise significant tensions.

The Middle East in in total turmoil because of of the policies of Obama and Clinton!


Turkey Civil War – Is it Coming?

istanbul-06052013

Turkey seems to be going really to fight ISIS, its military actions have struck far more Kurdish Workers Party (PKK) targets than ISIS targets, leading many to suspect that the government is using ISIS as an excuse to reignite the civil war against the PKK and intimidate the Kurdish population. This is something we should pay attention to. On top of this, Turkish President Erdogan has defended his efforts to broaden his powers actually citing Hitler’s Germany as an example where the presidential system had worked.

2017 is when things break down and 2018 is probably the start of WW III


2017 the Year from Political Hell

2017-1

QUESTION: Greetings Elections were always the same dates, why is it that we’ve only started discussing them in the last week?

Regards,

JCL

Dollar-Bubble

ANSWER: It is not just the USA this time, it is France & Germany plus the referendum vote on Britain leaving the EU. All of this will be a lot of uncertainly in Europe which will drive more capital into dollar on sheer anticipation.

2017-Budget Deficit

It is not dramatic with USA alone. It is the correlation of all political trends hitting in 2017, In the USA, this is also when everything goes negative and that is the government’s own budget. So this time the public will start to hear more about the budget crisis we face.

G20-Photo

This is also why the G20 will start to track all money movement. I reported how as an employer, I cannot even give an employee a gift of more than $25. You cannot buy diner for that or a bottle of champagne. These people have mismanaged government and we are always the problem – never them.

They will FIRST raise taxes and tax enforcement before they will ever reform. What they are doing to Greeks starting today having to report anything of value held outside of banks is the BALLOON. They get away with this and you are next for it will be extended in 2017 everywhere. Then there is the mad rush to move to electronic money to prevent people from hoarding cash outside of banks. This is why we have presented the SOLUTION that necessitates the end of public debt and the end of taxes for both are obsolete when there is no intention of ever repaying the debt.

One small business owner wrote to tell us that when they deposit any cash, they now must supply the bank with photo ID to deposit cash even as a small business owner dealing with the public IN THE UNITED STATES.

The sum of all our worst fears is coming. You will know it by its number – 2017.

This is a long post but its also very important as it gives a reasonable projection of the next 4 years which are very critical because of documented social cycles!


2016 – the BIG SHIFT

2016-1

As we close 2015 and begin a new year, the markets generally closed flat to neutral with a warning that as we approach the political year from hell being 2017, this is by no means going to be a walk through the park. We are more likely than not going to see some trends conclude in 2016 and others perform a false move the scare the hell out of everyone. Nevertheless, the stars may not be aligning, but the markets appear to be setting the stage to align for the BIG SHIFT.

Money-Assets

What does the BIG SHIFT mean? It means that as we face a meltdown in Socialism which has taken hold of Western Governments destroying our underlying democratic foundations, ALL assets must prepare for the HEDGE against government.

Big Shift 1975-1982

 

Relationships are NEVER constant, yet the TV analysis touts fixed concepts that people then believe. At first, many will buy or sell based upon such unfounded beliefs and assumptions. When we examine them in detail, they fall to the ground into dust.

Troika-Unelected

Europe is operating under a dictatorship and has lost any possible right to exercise a democratic process to remove the three members of the Troika since not a single one stands for any election. Lagarde is of the IMF and is not even appointed the head of the IMF exclusively by Europeans. She was a personal friend of Obama. Draghi is ex-Goldman Sachs. Once a member of Goldman, you never leave. The EU Parliament has no validity since the Commission is not bound by their vote. The people of European nations have absolutely no means to reclaim their sovereignty by any method other than force. And to prevent that, the EU Commission wants to create its own army.

2017-1

As we hurl through time and space toward 2017, we will come to realize that this is indeed the year from Political Hell. Not only will a new president take office in the USA, but we are looking at France, Germany, and Britain also going nuts.

US-Share-Markets

The $40 level becomes important resistance now in oil. The Dow closing lower than 2014 is warning that there is a risk of a retest of the lows as was the case with the S&P 500 and the NASDAQ which made a new high at last but with little follow-through. This warns we may yet see a retest of support and the Sling-Shot Move remains possible. Silver closed bearish and gold only neutral.

It appears everything lining up for a very dramatic move between 2017 and 2020. So grab your socks, this one could be very crazy and wild to say the least.

The army is “Loyal” to whom? Brussels Has no elected members!


The European Army Loyal to Brussels Only

Army Trrops

The EU is using the Muslim invasion and Paris attack as a means to achieve its dream of federalizing Europe. They are now moving to create a European Army, answerable only to Brussels. This has been the agenda all along. They will get there. It’s just a question of the media manipulating the public into their open arms for power. They are already creating a special “Rapid Forces Division” with German and Dutch troops.

The beginning of the end of cash in the EU


Happy New Year — Bail-In Passed for Europe’s Banks

ECB

The mainstream media is not extensively reporting on the “experimental” bail-in that the EU imposed on Cyrus. The bail-in, that they swore would never be applied to Europe, will officially begin in January. This new power will be in the interest of taxpayers as they will no longer be forced to pay for failed banks that were created by the childish structure of the euro that was created by lawyers who never understood the economy. But wait a minute — aren’t taxpayers the people with deposits in banks? Hm. Moving to electronic money is also about preventing bank runs. The bottom-line here is that they will just take your money to save bankers. Eliminating cash accomplishes two things: (1) they get to tax everything, and (2) you cannot withdraw money from banks.

The bail-in directive was agreed upon on January 1, 2015, and the bail-in system will take effect on January 1, 2016. So here we are, just in case you missed this one. Their website states:

Parliament and Council Presidency negotiators reached a political agreement Wednesday on the draft bank recovery and resolution directive, the first step towards setting up an EU system to deal with struggling banks. This directive will introduce the “bail-in” principle by January 2016, thereby ensuring that taxpayers will not be first in line to pay for bank failures.

The entire system of insuring banks after their collapse during the Great Depression was to restore confidence to end the hoarding and revitalize the economy. Now they have allowed bankers to do everything they did before, and they have reversed the insurance created to restore confidence in banking. They justify this by claiming taxpayers will not have to pay for the failed banks.

FDR-Fireside Chat

Over 9,000 banks failed during the Great Depression in the United States; an estimated 4,000 banks failed in 1933 alone. Roosevelt’s fifteen-minute radio address to the American people on Sunday evening, March 12, was his first Fireside Chat. He told the public that only sound banks would be licensed to reopen by the U.S. Treasury: “I can assure you that it is safer to keep your money in a reopened bank than under the mattress.”

1933 NYT Bank Holiday

1933 Detroit Money Returned to Banks

1933 40percent deposite to be paid

When the institutions reopened for business on March 13, 1933, depositors stood in line to return their hoarded cash to neighborhood banks. Within two weeks, Americans had redeposited more than half of the currency that they had withdrawn from the banks due to the collapse in confidence.

Banks failed even after the bank holiday. The process was indeed a “bail-in”. People would get whatever the scraps were worth upon the collapse of the bank. Absolutely everything the governments did to restore confidence has been reversed in Europe. Yet, they try to “stimulate” the economy with QE? Just brain-dead.

Australia Cannibalizing its own Economy


Australia-Behind-Curtain

The Australian Tax Office (ATO) has applied to access to everything to hunt for money. They want access to phone calls, emails, posts, and SMS text messages. We have verified this with several sources. Like Rome, Australia is cannibalizing its own economy. They will succeed in destroying Western civilization and when the G20 tracks every penny in 2017, the 2017-2020 period will look like a cliff on a global scale.

The ATO asked for these powers back in 2012. Guess what? They are getting them. They have already begun using children to hunt their parents. This is precisely how they force people to to hoard their savings and withdraw it from banks, which become highly dangerous whenever government needs money. They have created wars to enable taxation. For you see, historically the king had NO RIGHT to impose taxes. He had to summon Parliament and ask for their “consent” to tax the people and the only justification was war to DEFEND the country, not to invade another, hence 100 year war. Even in the USA, income taxes are technically “voluntary” and Congress must introduce legislation to raise taxes by pretending to be the people requesting to be taxed. They cannot imprison you for NOT PAYING your taxes, the crime is failure to “file” as it is your criminal obligation to tell them you owe taxes. They cannot imprison you if you cannot pay what you do not have.


A reader forwarded this except from a professional accounting newsletter in Australia. As the reader points out, Australia is copying USA’s every move. At least our politicians are openly saying they are hunting taxes instead of pretending the phone tapping is to prevent terrorism!

Phone Tapping Powers for ATO

A parliamentary committee has recommended that the Australian Taxation Office should be able to intercept stored phone calls, emails and SMSs as part of its efforts to crack down on serious criminal behaviour and tax fraud.

The report into financial related crime which was released in September this year recommends the ATO be listed as a criminal law enforcement agency under metadata retention laws passed in 2014 and would grant the ATO powers similar to those utilised as part of the Project Wickenby investigation, the largest tax-evasion investigation undertaken in this country. The report also looked at the threat of technology-based financial crime such as money transfers and thefts and recommended ASIC improve their response time to limit internet scams.

In the meantime, the ATO plans to target up to 90,000 small businesses that are deemed to be failing to comply with their tax obligations. This follows the Tax Office’s launch of a social media campaign earlier this year which called for consumers and business owners to ‘dob in’ businesses suspected of evading tax bills.

America’s Failed Foreign Policy!


The Lost Decade

By: Angelo M. Codevilla

 Posted: October 20, 2011

This article appeared in: Vol. XI, Number 4 – Fall 2011