Posted originally on May 6, 2024 By Martin Armstrong
Eleven states may face capital gain taxes to comply with theBiden Administration’s 2025 budget, in which the government must hunt the people for taxes to pay for a fraction of their spending. The concept of capital gains was not within the original Constitution. The Founding Fathers established a completely new nation in an attempt to flee government tyranny, but yet again, Democracy has fallen into a Republic where the people have no say.
Capital gains were introduced in 1913, The 16th Amendment granted US Congress the power to levy income via taxation, which remained at around 7% until 1921. Congress quickly determined that they needed to extort citizens for more money and created two brackets. The 7% tax became a standard for income tax, but investors who held for over two years, an insignificant amount of time, were punished for saving and forced to pay 12.5% to Washington. Fast forward to 2025, and we are looking at the top marginal rate rising to up to 57.9%! The current capital extortion rate is around a quarter of one’s capital.
This idea of hunting down the rich is utter nonsense as it becomes an excuse to eliminate the middle class. The big money can take the risk, but the average investor cannot. This will deter small business investment and entrepreneurs who greatly contribute to innovation as they bring creativity and imagination to business.
Naturally, the 11 states are primarily blue. Californians really destroyed their state by voting for Gavin Newsom, and now they may face a top tax of 57.9% to cover the state’s excessive spending and growing deficit. New York and New Jersey, two states that should have stayed red, will face the second-highest capital gain taxation at a rate of 55.5%. These states already pay astronomical taxes on things such as property. Minnesota is looking at a tax of 55.45%, Oregon 54.5%, and Maine 51.75%, with the remaining states (Iowa, Kansas, Nebraska, Georgia, and Idaho) all facing capital gain extortion rates above 50%.
Why on Earth would anyone want to conduct business in these states? If Biden remains in power, it will be a wonder if major corporations continue to choose to do business in the United States at all. Businesses could go literally almost anywhere else and face lower rates of taxation. Additionally, the American consumer has been stretched so thin through dollar devaluation, inflation, and taxation that they are not spending the way they once did. Capitalism is under attack; success is a punishable offense.
America’s consumer economy will continue to decline while places like China see their middle class grow and the consumer economy rise. China is not creating worthless spending packages on climate change. Remember, they told us clear as day that the goal is to destroy America’s standing as the world’s leading superpower. Klaus Schwab has been aiming for 2030, but the computer has been honing in on 2032 before Schwab released plans for Agenda 2030. Unfortunately, this is all precisely on schedule as America enjoys its final time in the spotlight as the world’s financial capital.
Posted originally on May 1, 2024 By Martin Armstrong
I do not agree with Donald Trump’s view of the Federal Reserve. I speak on behalf of sound economic policies that benefit the people. I do not blindly support a political candidate for the sake of being on the right side. Now, I criticized Trump during his presidency for constantly pressuring the central bank to lower interest rates. There are rumorsswirling that Trump, if elected, would set the price of interest rates himself without the advice of the Federal Reserve. While this may be an extreme side of the rumor, Trump and every other president would like more power over the Federal Reserve — BAD IDEA!
What we must keep in mind is that the Federal Reserve’s original design, which lasted for about one year, was brilliant. The classic banking model involved borrowing from depositors on a demand basis and lending long-term, making a profit on the spread in interest rates, such as for business loans and mortgages. This was relationship banking, not today’s transactional banking model.
This was fractional banking insofar as about 8% of the money needed to remain free to service demand requirements. The crisis comes during an economic contraction when people run to the bank for a loss of confidence and demand to withdraw their funds. This results in the value of cash rising in purchasing power compared to assets, so asset values collapse.
The idea of “elastic money” was to increase the supply of cash during such a crisis to meet the demand for withdrawals and that would offset the need to sell assets by calling in long-term debts. By increasing the money supply on a temporary basis, the Fed could offset the contraction in theory smoothing out the business cycle.
This was a brilliant scheme. However, it has been Congress, and not the Fed, that corrupted that mechanism. The banks technically owned the Fed as this was supposed to save the taxpayer money. The banks should contribute to their own bailout fund. Furthermore, the Fed’s design was also about buying in corporate paper when banks would not lend money. This was a mechanism used to offset rising unemployment if corporations could not fund their operations. They supplemented this by the management of regional interest rates to balance the domestic economy. Each branch of the Fed could raise or lower their local interest rate autonomously to attract capital when there was a local shortage or deflect capital when there was too much.
Congress began to manipulate the Federal Reserve for their own self-interest when World War I broke out on April 6, 1917. The alteration to the design of the Fed was to direct it to buy government bonds, not corporate. In this first step, they never reverse this decree after the war. They removed the brilliant design to stimulate the economy directly by purchasing corporate paper during a recession. In the last 2007-2009 crisis, the government wrote a check to TARP and hoped that the banks would lend money, but they did not. Removing this first pillar of the independent Fed distorted the entire system. It then made little sense for bankers to own shares in an entity that was no longer privately controlled.
Banks became traders during the 1929 Boom-Bust Cycle. Goldman Sachs became deeply involved in the bull market, establishing numerous trusts and mergers. Goldman Sachs expanded the leverage going right into the eye of the storm that was about to hit starting on September 3, 1929. The crash wipes our 70% of Goldman’s entire market.
The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibited commercial banks from engaging in the investment business. Around 5,000 banks failed during the Great Depression largely because banks sold trusts and foreign sovereign government bonds to the public in small denominations. Bill Clinton later repealed Glass-Steagall and handed the power back over to the bankers. Disaster strikes every time the government tries to manipulate the free market.
People believe the Fed has the power to create money out of thin air, yet never explain why the Fed was given that power. You cannot have a fixed money supply as the population increases, then you end up with DEFLATION, which is the rise in the value of money. You can double the money supply, but if the people hoard it, as they tend to do during private waves when the public loses all trust in government, you will never create inflation. There was a huge contraction in the velocity of money during the Great Depression for this very reason.
The Biden Administration, as has the Trump Administration, has come after the Fed. Politicians merely want the economy to appear strong under their reign and fail to see the long-term impact of policies. Politicians have no knowledge of economics or the insight to run the Fed. Not to mention that law does not permit Washington to bark orders at the Fed, although Washington does oversee the Fed and can force the central bank to change its policies to align with government spending or repel debt buyers.
Trump is a borrower, not a lender. His bankruptcies were the result of the business cycle and he leverages himself to the hilt so when the recession comes, he gets in trouble and when it is booming he claims to be a fantastic investor. But he is no trader. He could have hedged the business cycle but did not.
Chairman Jerome Powell and Trump clashed repeatedly. Not so coincidentally, Powell and numerous Fed bank presidents have their terms expiring in 2028 – a key year, as indicated by our models. The Biden Administration has already driven the economy off a cliff. The central bank is merely trying to heal an already injured economy with a limited medical kit.
The Fed is INDEPENDENT and will not be bullied by Biden or Trump. The Fed understands that it has become the world’s central bank and its actions in raising rates have had a far greater impact externally particularly in emerging markets because so many other nations issue their debt in US dollars.
Posted originally on Apr 30, 2024 By Martin Armstrong
In 2021, the Extreme Left Labour Government seized power in Norway, overthrowing the eight years of Conservative rule. Labour won 48 of the 169 parliamentary seats, one less than in 2017, but the Conservatives lost nine seats and were left with only 36. We can see that 2021 was low for the US dollar after COVID against the Norway Krone, and ever since the leftists seized power, they have been steering Norway in that direction where all Marxist regimes have died violently and inevitably.
All leftist governments impose their will to crush any individualism. They are obsessed with someone who has more than they do. Every leftist government ends in utter disaster. They reduce the standard of living and inevitably drive the most talented people out of their domain. Every Marxist government, from Russia to China, has committed suicide by suppressing innovation, and the most talented people will always seek to leave. In the case of Communism, they built the Berlin Wall in 1961 to prevent people from fleeing. These LEFTIST governments are now moving to impose an EXIT tax if you seek to leave their depressing economic domains. Human nature will ALWAYS prevail, and this is why every single government that has abused its power and then tried to prevent people from leaving with EXIT TAXES or a version of the Berlin Wall crumbled to dust and is all buried in a common grave by history.
The Bible is a very interesting historical document. Socialism violates the Ten Commandments, and I am shocked that nobody has challenged this progressiveness of taxation as a violation of their religious beliefs. This very reason this prohibition against LEFTIST political agendas is in the Ten Commandments is because human nature has never changed, and such LEFTIST experiments have been tried for thousands of years and have always failed.
Communism first appeared in historical records back in Ancient Greece. This was a classic battle, like our modern Cold War. Athens was a capitalistic system that had its own internal battle between the Oligarchy and Democracy, which we still have today. Sparta was a communist state, so much so that it NEVER adopted coinage, and these spits were maintained to PREVENT people from hoarding wealth—sound familiar with electronic money and canceling currencies? The Spartan system was based on the idea that the collective came before the individual. This is the cornerstone of all LEFTIST regimes.
Marx believed Communism would prevail because Sparta defeated Athens in 404 BC. However, Sparta was in league with its neighbors, especially Corinth, whose coinage competed with Athens in trade. So Sparta was the Communist state, but it was aided by other capitalistic cities to knock out the financial capital of the world so they could replace it.
This division eventually led to the opening of the door for the northern Macedonians to take all of Greece under Philip II (359-336BC) and his son Alexander the Great. This Cold War between effectively Spartan Communism and Athenian Capitalism weakened Greece and allowed them to be conquered by Macedonia, which was not originally part of Greece.
To be a Spartan citizen, one had to undertake the Agoge’s rigorous military education. Only those who had completed their education in the Agoge were entitled to be citizens. The criteria for a Spartan citizen were very high. While the system ensured that the Spartans were well-trained warriors, it also led to problems replacing those who died in battle. To be a citizen, the Spartan had to pay his way into the agoge, such as supply his armor. The economic burden upon the common people was its undoing. Lacking a flourishing economy because people were steered into the military for the state, it sealed its fate with a gradually declining economic base. With the rising costs over time, fewer and fewer people could afford to pay their way into agoge.
Sparta emerged victorious during the Peloponnesian War in 404 BC, and by 400 BC, it had replaced Athens as the greatest military power in the Greek world. However, it neither contributed to the economy no less art and creativity. Then, in 371 BC, in just about 31.4 years by Thebes, the Spartans were defeated in the battle for the first time. They lost that military power and Greece’s leadership. Nothing lasts forever. During that entire period, Sparta never issued any coinage because it was an anti-capitalistic state.
Whenever a LEFTIST government turns to restrict the movement of people by building Berlin Walls to keep them in or an EXIT tax to confiscate their wealth as a punishment for leaving since they are not being taxed to pay any fair share of the state when they are not there, the end is merely inevitable. The LEFT will always impose dictatorial decrees and refuse ever even once to consider that what they are doing is against human nature and the basic human right to live in peace.
In recent developments in Norway, the failure of the government’s economic policies has been taxing the “hated” rich; they are planning to introduce a more stringent exit tax to punish anyone who leaves their draconian policies. This move has attracted much criticism from many sources, but historically, the LEFT has never listened. Even in the United States, just look at those states that have extreme LEFT regimes, and you will find EXIT Taxes as well.
California in the US is an absolutely horrible place, and it is following the same path as Norway. California is no longer a place to invest, as is the case with New York and most of the New England states. New Jerseyhas an EXIT Tax applied if you sell your home and buy something in another state. Connecticut has a 2.25% EXIT Tax. New Jersey has an Exit Tax. All of the LEFTIST government sees you as just an economic slave. It has nothing to do with paying your fair share – they are only interested in economically punishing you. If you do not get the hell out of these states, it will only get worse because they NEVER have enough and will NEVER change their policies until there is a political revolution and they are voted out of power. But the brightest will always leave, and in the end, they commit economic suicide, no different than ancient Sparta.
Spearheaded by Finance Minister Trygve Slagsvold Vedum, the initiative aims to deter affluent Norwegians from relocating to countries with more favorable tax regimes, such as Switzerland, by imposing a hefty tax on unrealized gains. Here in the USA, Janet Yellen wants investors to pay a tax on the increase in the value of stock every year, even if it is not sold. So if a stock goes from $100 to $150 you must pay tax on that $50. Then there is a crash, and it drops 25%. You will get no tax credit, and then it bounces 10%; you owe on that 10% bounce.
These people are absolutely destroying capitalism and Western Society. We have only 8 years left because this entire economic system will collapse. This is unsustainable. In Australia, the LEFT wants to confiscate all your wealth upon death and you should be prohibited from leaving anything to your children. Everyone should start from ZERO – except LEFTIST politicians of course. This is what 2032 is all about. These people are destroying our future and the very foundation of a free society.
Posted originally on Apr 30, 2024 By Martin Armstrong
People have been leaving California in droves due to Governor Gavin Newsom’s socialistic Utopia that demands everyone be taxed on every penny they earn. I’ve long warned that California was unfriendly for businesses and investors. Those who stayed behind will now need to pay to leave under Assembly Bill 2088.
California plans to implement a one-time tax for businesses and individuals fleeing the Golden State. The government will look at all of your assets and investments to determine how much you will need to pay, which is usually 0.4% of someone’s net worth. Wealth historically flees when taxes rise, and to combat this issue, California plans to tax anyone with an income for $30 million for up to a full decade after they leave the state. Someone leaving the country entirely will still be forced to pay California for the privilege of leaving.
California first implemented an exit tax in August 2020 when they saw businesses and individuals lining up to leave the state that faced some of the harshest lockdown penalties in the nation. Uhaul and other moving organizations reported shortages on shipping vehicles as the demand to flee was so high.
Per usual, this tax was first introduced as an “eat the rich” penalty for those earning over $30M. And again, as usual, the tax expanded to target everyone. Small businesses that are already struggling to survive in California’s climate may feel trapped in the state. Individuals who can no longer afford the cost of living in California are also unable to leave without forfeiting money to the state. Afterall, the majority of people who live in California rent if they actually have shelter. Why anyone would want to conduct business in or through California is beyond me as Newsom is clearly targeting everyone who merely associates with California.
Another reason the Socialists introduced this tax is to steal capital gains. They wanted to tax unrealized gains to no avail but were prohibited by the courts. Now they are worried people will move out of state and cash out elsewhere. So California wants to tax all investments to ensure they get a cut of YOUR money that they do not have a right to claim.
The state dug themselves into the deepest deficit in the nation. The decision-makers do not believe they are the problem. They believe the greedy businesses and individuals are the problem and deserve to pay for their mistakes through unending taxation. Accumulating wealth is now a punishable offense in parts of the “free world.”
Success is a punishable offense in Biden’s America. Joe Biden and his administration would like to implement a 44.6% tax on capital gains, the highest tax on capital gains in the nation’s history. Washinton says this tax is necessary to address the looming national debt, but they are simultaneously implementing measures to ensure that the nation falls deeper into debt. Perpetually issuing new debt to pay for the old is equivalent to a Ponzi scheme that WILL FAIL.
Donald Trump’s implemented tax deductions are set to expire in 2025, which is precisely when these measures could go into effect. The proposals essentially rob those who have achieved success to pay those who leech off of the government.
The proposal is over 250 pages in length but looks to target all investments. The MSM will report that they are only going after the wealthiest Americans but the truth of the matter is that they will seek to squeeze everything they can out of every American, unless they fully rely on government assistance and are therefore owned by Washington.
“A new 25- percent minimum income tax would be imposed on extremely wealthy taxpayers. For high-income taxpayers, gaps in the law that allow some pass-through business owners to avoid Medicare taxes would be eliminated, and Medicare tax rates would be increased. Additional loopholes, including the carried interest preference and the like-kind exchange real estate preference, would be eliminated for those with the highest incomes. Together these reforms would sharply curtail tax preferences that allow the wealthy to pay lower tax rates on their investment income and exacerbate income and wealth disparities, including by gender, geography, race, and ethnicity.”
We are equal in rights, not talent. This proposal clearly states that successful individuals must be punished financially. Will the government curtail its own spending or address the utter deterioration of fiscal policy that has hurt all Americans? No. There are no mirrors in Washington.
C corporations, under this proposal, would be subjected to a 28% tax rate – a 7% increase. The corporate alternative minimum tax (CAMT) would rise to 21% compared to the current 15%. How on Earth does this support American business? Does he truly believe this will aid in job growth, as we have primarily only seen the public sector grow?
Think crypto is safe? Think again because this proposal wants to permit the government to determine which assets are considered actively traded.
“The proposal would add a third category of assets that may be marked-to-market at the election of a dealer or trader in those assets. Assets in the third category would be actively traded digital assets and derivatives on, or hedges of, those digital assets, under rules similar to those that apply 230 General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals to actively traded commodities. The Secretary would have authority to determine which digital assets are treated as actively traded. The determination of whether a digital asset is actively traded would take into account relevant facts and circumstances, which may include whether the asset is regularly bought and sold for U.S. dollars or other fiat currencies, the volume of trading of the asset on exchanges that have reliable valuations, and the availability of reliable price quotations.”
Forget offshore digital investments because Washington wants a cut of that too:
“Tax compliance and enforcement with respect to digital assets is a rapidly growing problem. Since the industry is entirely digital, taxpayers can transact with offshore digital asset exchanges and wallet providers without leaving the United States. The global nature of the digital asset market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore digital asset exchanges and wallet providers. U.S. taxpayers also attempt to avoid U.S. tax reporting by creating entities through which they can act. Requiring individuals specifically 228 General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals to report their offshore holdings of accounts with digital assets, subject to significant penalties if they fail to do so, is critical to combat the potential for digital assets to be used for tax avoidance.”
This proposal is LOADED with extreme restrictions and penalties for investors, both domestic and foreign.
They want to reform how companies pay dividends. They want to reform international taxation and reporting. The statute of limitation for financial penalties would be expanded, including the payouts the government lavishly handed out during COVID.
The proposal would increase the top marginal tax rate to 39.6% for married individuals filing a joint return and surviving spouses. Single filers earning $400,000 for unmarried individuals will face the highest tax penalties, as will those earning $425,000 for head of household filers, and $225,000 for married individuals filing a separate return. In comparison, the current top marginal rate for married filers is currently on those earning over $731,2000 and single filers earning over $609,500. So the cost of living is rapidly rising, inflation has no change of relenting during this time of ongoing wars, but the government wants to tax those earning less more?
So, if one sells their small business, they will need to give the government about half of what they worked their entire lives to achieve. If an American’s house rose in value and they attempt to sell the estate—too bad, Uncle Sam needs half. This is a MIDDLE-CLASS TAX. The ultra-wealthy already have ways to bypass these measures. The ultra-wealthy may begin leaving America in general if they continue to demonize capitalism.
The people did not create the deficit we face today. The government continually spends with no plans to curtail spending. They have created a massive Ponzi scheme whereby they issue new debt every year to roll over the debt from the previous year. Eventually, there will be no buyers, and that is precisely how nations fail.
Posted originally on Apr 29, 2024 By Martin Armstrong
QUESTION: Hi Martin, What are you thoughts on holding cash into 2028? You said cash was king, but there would come a time to abandon cash. It seems this CBDC thing is what you are talking about. Do you have any time yet?
See you in London
Kind regards,
HF
ANSWER: Europeans are much more familiar with canceling currency. Those governments are much more Marxist and have been canceling currencies routinely since WWII. What happens is you are forced to bring your cash in to swap it for the new version. In this case, it will be digital. What they are going to do is then look to see who accumulated that cash. If it is a large chunk, you may be taxed, and the burden will be on you to PROVE you paid the cash.
You are better off swapping it out for gold, stocks, and even real estate outside of the Blue States and generally cities. As people migrate from those regions, the people left behind will have their taxes increased. California is the #1 state people are leaving. They have noticed, and as I have been warning, you should have got the hell out of that God-forsaken state. They are now imposing an EXIT tax to leave. The downside of real estate is that they impose a property tax on it annually. Some states include even your car. People I know used to have Ferraris no longer because they paid a sales tax to buy it, and then you are taxed on the price you paid for it annually as property tax. If you keep the car for 10 years and it depreciates, the taxes you pay just to have it will consume half the price of the car or more.
We are through the COVID crisis when it was wise to hold the case. Now, you do not want to hold cash into 2028. We are facing STAGFLATION, so inflation will rise faster than GDP. Thus, the purchasing power of cash will decline. Then, when they do the CBDC, which they plan to introduce as soon as January 2025, they will cancel all cash, force you to bring it to the bank, and report how much you had to the IRS.
Australia is rapidly becoming the most censored “democracy” in the world. The Australian Communications and Media Authority (ACMA) regulates all media from broadcasting, telecommunications, online search results, video games, to social media platforms. The Classification Board and Classification Review Board decides what information Australians can and cannot see. The government has even appointed an eSafety Commissioner to specifically oversee “online safety” and prohibit Australians from viewing anything the government deems unfit.
Bishop Mar Mari Emmanuel is an Orthodox Christian priest with a massive online following. Mari preaches at the Christ the Good Shepherd Church in Wakeley, delivering powerful messages that have been resonating with believers and non-believers alike. Everyone is aware that Australia has a migrant crisis no different from other developed nations. A few weeks ago, Mari was delivering a sermon when an Islamic extremist approached him with a knife. Australia does not want the people to bear arms but that does not deter attacks.
The 16-year-old terrorist, who was clearly motivated by religion, rushed the altar with a knife and attempted to repeatedly stab Mari. The unarmed bishop held his crucifix up to the attacker and miraculously prevented the switchblade from fully opening, saving his life. The video of the attack has gone viral across the internet, met with an outpouring of sympathy from people around the world. The Australian government is angry that this video is painting migrants in a poor light and is demanding that it be scrubbed from the internet.
Australia’s eSafety Commissioner is attempting to remove the video from the internet. X (formerly Twitter) owned by Elon Musk revealed that the eSafety Commissioner contacted them to take down the video. “The Australian eSafety Commissioner ordered X to remove certain posts in Australia that publicly commented on the recent attack against a Christian Bishop. These posts did not violate X’s rules on violent speech,” the company stated.
Julie Inman Grant of the eSafety Commissioner is far within the deep state. She was offered a role with the CIA in the 90s but declined as she wanted the acknowledgement. “I wouldn’t be able to tell my friends and family what I was doing,” Grant stated on turning down the job. She proceeded to find a role in Microsoft as a government affairs manager before moving to Australia in 2000. Grant was awarded the title of national eSafety Commissioner in 2017.
Australia is livid that Elon Musk will not remove the video. “We know, I think overwhelmingly, Australians want misinformation and disinformation to stop. This isn’t about freedom of expression,” said Prime Minister Anthony Albanese. “This is about the dangerous implications that can occur when things that are simply not true, that everyone knows is not true, are replicated and weaponized in order to cause division and in this case to promote negative statements and potentially to just inflame what was a very difficult situation.”
What disinformation? It is a real video of an attack that occurred as a direct result of hatred against Christians. “I’d like to take a moment to thank the PM for informing the public that this platform is the only truthful one,” Musk responded, adding, it is “absurd for any one country to attempt to censor the entire world.”
The World Economic Forum has praised Australia for their extreme censorship efforts, deeming the eSafety Commissioner Grant “the world’s most influential leaders revolutionizing government.”
One must ask – why are they afraid of this particular video circulating? We must recognize the content that the globalists do not want us to see in order to understand the larger agenda.
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 