Tag Archives: BREXIT

Oct 11 2017

Madrid Threatens Imprisonment & Death to Catalonia Leaders?


Armstrong Economics Blog/Politics

Re-Posted Oct 11, 2017 by Martin Armstrong

 

The Apanish Government is clearly fascist and cannot escape that stigma. The day before the appearance of Carles Puigdemont in front of the regional parliament of Catalonia, the Madrid government has come out and warned the head of the with serious bodily threats that one would expect only from a dictator – not an elected democratic government. Prime Minister Mariano Rajoy’s spokes person, Pablo Casado, came out and rejected all calls for any dialogue in Madrid with Catalonia. “We will not give in, and there is nothing to negotiate with the putschists,” said Casado.

Casados boldly stated publicly: “Anyone who declares it (independence) will end up like the one who declared it 83 years ago.” In Spanish history back in 1934, Lluís Companys i Jover (1882-1940) was the head of  Catalonia’s government, which proclaimed itself as an independent state back then as well. He and the entire regional government were arrested after a few hours by the Spanish army. He was exiled to France in 1939 but would not leave because his son was seriously ill. In 1940, Companys was captured and was handed over by the Nazi Gestapo to the dictator Francisco Franco (1939-1975). He was executed in Barcelona at 6:30 a.m. on October 15, 1940 for seeking Catalonian Independence. Lluís  refused to wear a blindfold, and was taken before a firing squad of Civil Guards barefoot. When they fired, his last words were ‘Per Catalunya!’ (For Catalonia!). Keep in mind that people were imprisoned for even speaking Catalonia’s language.

More than 90% of voters in Catalonia voted for a separation from Spain BECAUSE of Rajoy’s dictatorial attitude. Here is a banknote from the last Independence movement from our collection of the World Monetary System. The opponents of Independence, who had boycotted the vote by a majority, went to the streets of Barcelona on Sunday to protest against the separation. As the EU declines in an economic death spiral, things are only going to get worse over the next two years and Rajoy will see the Spanish outside of Catalonia rise up against his dictatorial-like reign.

For the Rajoy government to threaten killing any public official who again declares independence is just beyond belief. For the EU to standby and say nothing is even more of a disgrace. The federalization of Europe to Brussels now supersede human rights. It’s all about the politicians and power now.

The Euro has still been unable to reach the first key area of important resistance standing at the 125 area. We still see November as the critical turning point and a Panic Cycle as well. There is no doubt that Spain will impact the Euro and indeed may help to push the Italians to also vote to separate as they witness the fascist-style response of the Rajoy government. Taking to key institutions in Europe, what many now want to see is a resignation from Rajoy. He is doing tremendous damage to the image of Europe as a whole.

Meanwhile, there appears to be a run on the European Central Bank (ECB) itself. Banks have tendered this week calling in a total of 21.3 billion euros, which is the highest amount since March. Typically, this runs between 3 to 4 billion Euros. Many see this as rising concerns in Italy of a full blown banking crisis set in motion by the new ECB guidelines. Banks will now have to gradually cover all loans that are now classified as risky. In the case of new unsecured problem loans, 100% coverage is to be achieved after two years, and for new collateralized loan loans no later than seven years.

Others see the run being sparked also by Rajoy. The threats of violence against Catalonia’s leaders brings back the days of Franco and Nazi actions. This is just not going down very well behind the curtain.

Oct 11 2017

Joseph Napoleon Bonaparte & His Exile in New Jersey


Armstrong Economics Blog/America’s Economic History

Re-Posted Oct 11, 2017 by Martin Armstrong

QUESTION: Years ago, while visiting Salamanca, Spain, I was told that Napoleon’s brother abandoned his rule over Spain and made off with a large cache of gold. I know that he fled Spain to New Jersey. Is there any truth to this gold story? If so, what economic impact did he and the gold have in New Jersey?

 TF

ANSWER: Yes, I grew up in New Jersey with the story of Napoleon’s brother living there in exile. He fled the British to America I suppose like Snowden going to Russia. It was on March 30, 1814, when the allied troops reached Paris. Joseph Bonaparte and his family fled at first to Switzerland. He bought an estate at Prangins, between Geneva and Lausanne. However, when Napoleon escaped from Elba in 1815, Joseph returned to Paris to join him. Then after Napoleon’s second abdication, Joseph gallantly offered to change places with his brother so the latter could board the American brig the Commerce, of Charleston, to America. Joseph had chartered that ship for his own escape. Consequently, Joseph left for the United States only when he heard that Napoleon had surrendered to Britain’s Captain Maitland of HMS Bellerophon.

The rumor that Joseph sailed with tons of gold from Spain was another conspiracy theory. However, the Commerce was twice boarded and inspected by the British. Joseph was prepared with fake papers. They worked and he managed escaping detection. He arrived in New York on August 28, 1815 . His Spanish ordinance officer Unzaga, his interpreter James Carret, his cook Francois Parrot, and his secretary Louis Mailliard all accompanied him. The rumor was that Congressman Henry Clay assisted Joseph and provided him with a hotel to stay in. Joseph left his wife Julie and his daughters in Paris. They later moved to Frankfurt and then to Brussels.

Joseph left New York City with the intention of meeting President Madison. Madison sent someone to intercept him and told that a meeting could not take place with the President. Joseph assumed the title of the Count of Survilliers, after a small property he owned near Mortefontaine. He was able to transfer a large part of his fortune to the United States, where he invested it. He rented a house in Philadelphia and bought an estate called Point Breeze in Bordentown, New Jersey. He also bought a large tract of land in upstate New York, to which he made extensive improvements. The latter contained a 1,200 acre lake which Joseph named Lake Diana, after the goddess of the hunt. It is now known as Lake Bonaparte.

Joseph’s home became gathering places for other Napoleonic exiles, including Charles and Henri Lallemand and Charles Lefebvre-Desnouettes. He contributed generously to the French exiles’ Society for the Cultivation of the Vine and the Olive. Nevertheless, Joseph also developed friendships with many prominent Americans, including Nicholas Biddle of the First Bank of the United States, as well as Charles Ingersoll, Stephen Girard, Charles Stewart, and Joseph Hopkinson. He was elected a member of the American Philosophical Society, where he met more of America’s great names.

Joseph Bonaparte’s home in Bordentown burned down though in 1820. When they excavated the site they recovered some 14,000 artifacts. He left with some gold, but there is no real record of how much he took with him into exile. As for his wealth, it was transferred by banks from Switzerland to America at the Bank of the United States as a valued customer of Nicholas Biddle.

Oct 11 2017

Germany Moves Ahead with Nord Stream II


Armstrong Economics Blog/Energy

Re-Posted Oct 11, 2017 by Martin Armstrong

EU lawyers have sided with Germany and effectively told the European Commission their bid to regulate a new Russia-Germany gas pipeline known as- Nord Stream 2 (NS2) is seriously flawed. The now former German Chancellor Gerhard Schröder  is working with the Russians to push this project forward. This clearly demonstrates that Germany has the upper-hand in Brussels.

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Oct 10 2017

Democrats Collapsing with Socialism?


Armstrong Economics Blog/Politics

Re-Posted Oct 10, 2017 by Martin Armstrong

QUESTION: Marty; I just read Time Magazine that said the Democrats are in the worse shape since 1929. I understand you take no personal credit for all of these amazing forecast you provide on so many topics. You have clearly shown that the world is connected and the global trend is identifiable. Can your computer also forecast that you will make a difference when it comes to push v shove?

ND

ANSWER: Political change is driven by economics. That is fundamental. Time Magazine correctly wrote: “On the surface, the Democratic Party has been united … [b]ut dig an inch deeper and it’s clear the party is divided…” I have warned that the seeds of discontent were rising inside the Democratic Party back in February. In September 2016, I warned that: “By 2018, we just may see a completely different party forged out of the collapse of both the Democrats and Republicans we have come to know.” Trump has recast the Republican Party even though the elites are still in denial and fighting back. Trump beat all their candidates. So even the Republican think this is a fluke.

The people now handling Trump, are doing their best to steer him clear of the Deep State to protect the inner-workings. Trump is finding it very difficult to Drain the Swamp because the Press is defending the Swamp to their last gasp of air like CNN, New York Times, and the Washington Post. CNN fell below all the other news programs because of their extreme bias.

 

The numbers are the numbers. The computer has no personal bias. If we simply step back and look at this chart objectively, it is not hard to see why the computer has been forecasting the demise of the Democratic Party which has maintained the mantra that business is evil as are the rich.

That view dominated the union movements of the 20th century and they succeeded in driving quality down and their jobs to leave by boat, train, and plane. New York use to be the biggest port in the United States. Today only a few Cruise lines sail from NYC at Pier 88/90/92 by 55th street. Here is a postcard from 1909 showing all the activity. The unions drove the shipping industry out of New York with this anti-business attitude inspired by the Democrats and Karl Marx.

Socialism is dying and taking the Democratic Party with it. Time Magazine quotes Democrat Tim Ryan is an 8 term Congressman who was even considered as a potential VP with Hillary. He is frustrated with his own party and finds the message with “its fixation on divisive issues and its ‘demonization’ of business owners” is not a message people want to hear any more.

The Democrats are living in the past and their message is not embracing anyone except those Democrats who cannot think for themselves and simply vote because they are Democrat.

This is BY NO MEANS my personal opinion. This is simply based upon the trend in motion. The left is losing around the globe for it has been a hateful agenda that always blames the rich, yet constantly reduces the standard of living for everyone the same a s Communism did while making politicians rich and the elite. This is how empires, nations, and city states collapse into the dust of history.

The Democrats with their hardcore supporters, are simply in a state of denial. The Republican elite are likewise in a state of denial and think Trump was just as passing fad. Both sides will learn the hard way – this is about them. It is time for political change.

I am not sure of the outcome for myself. I can say that the demand for access to our systems is growing unbelievably. Hopefully, if someone will just look at the global trend in motion and realize we need a change, then my job is finished.

Oct 10 2017

Why would anyone buy European bank stocks?


Armstrong Economics Blog/Banking Crisis

Re-Posted Oct 10, 2017 by Martin Armstrong

The European banking crisis is still brewing. The biggest problem rises from the rules that if a bank is in trouble, they just seize the bank and sell it for €1 and all the shareholders lose everything. This is having serious impact upon the European Banking System as a whole as I previously warned. The Italian bank Carige has had difficulty in trying to raise capital to meet requirements. If any bank cannot raise enough capital to meet the requirements, the European supervisory authorities can seize the bank in accordance with the new rules.

Once again, the government solution is to make up rules that totally disregard the private reality. Why would anyone buy bank stocks in Europe today if the government can seize everything and shareholders get zero? Spain’s Banco Santander bought rival Banco Popular for €1. This is Brussels’s new system to rescue failing banks without burdening taxpayers or stressing markets. This was cheered around the world because the shareholders lost absolutely everything. The bank which was valued in the collapse at €1.6 billion was bought for €1.

Hello! Why would anyone buy European bank stocks? I cannot recommend buying any in Europe. It’s just too risky. An Industrial corporation goes into bankruptcy and its assets are sold. The shareholders get something back. Banks are becoming more like government bonds. The normal rules just do not apply.

Oct 9 2017

The Epidemic of Fake Analysis


Armstrong Economics Blog/Economics

Re-Posted Oct 9, 2017 by Martin Armstrong

COMMENT: Mr. Armstrong; I want to thank you for your work on Europe. We hear nothing from European analysts but up-up-and away and it makes one wonder if that is not fake analysis just like the news. Nobody seems to be talking about how retail sales are declining in Europe and even my mother, who is 90, said it is because they tax us too much.

Keep up the analysis. We need someone to tell the truth who is not told what to report here in Europe.

PF

REPLY: Yes, that has always been the NUMBER ONE problem in analysis. A famous bank has analysts but they cannot speak truthfully for the ECB will pick up the phone and they are silenced or fired. BTW, your mother is spot on. They keep raising taxes and hunting money and then wonder why there is deflation. Ah! The illogical thoughts of those in power.

The retailers in the Eurozone had posted the second monthly decline in sales falling 5% in August. This was the sharpest drop in one month since October 2015 when the ECM turned. It does not speak well as we head into 2020. The official news reported was that European Economists came out and forecast in response that sales will increase of 3% next year.

During the holiday season in August, which is traditionally the best month of gasoline sales, reported a stunning fuel sales decline by 9%. This is reflecting the growing concern about terrorism as people are showing a distinct decline in travel.

Our problem is that we have career politicians. This infects everything. They are only concerned about their reelection so they manipulate the analysis to deny that there are problems. All we hear is constant complaints about the quality of analysis. The shocking trend is now central banks want to just subscribe to Socrates because even they are fed up with what you call “fake analysis” that is getting really bad.

Oct 7 2017

Global Warming Taxes – Or Just Another Excuse?


Armstrong Economics Blog/Germany

Re-Posted Oct 7, 2017 by Martin Armstrong

Now that the German elections are finished, Merkel now comes with the tax hikes. This shows the contempt for the people assume that they are just stupid so do nothing before and election, then raise the taxes after. According to a report, Germans should not expect about a 50% tax increase on electricity. As the Bild newspaper reported on that the Federal Association of Energy Consumers will raise the taxes significantly all in the name of causing people to save the planet while government lines its pockets.

Oct 7 2017

The Bull Market – This time It Really Is Different


Armstrong Economics Blog/Understanding Cycles

Re-Posted Oct 7, 2017 by Martin Armstrong

This current Bull Market has indeed been the most hated in history. Typically one expects complete euphoria as new highs are made. However, this bull market is really different this time. This rally is by no means the product of euphoria. While the majority of analysts have been calling for a crash since 2010 and every new high was supposed to be the last, this cannot be compared to the Roaring 20s.

If we lift the rug and look closer, you will start to put the pieces together. There has been a bond and property rally over the past seven years whereas rates were rising into the 1929 high and property burst in 1927 with the Florida Land Bubble. This is not even similar to the roaring Dotcom Mania of 2000. The PE Ratio was significantly higher in both instances.

Government bonds have moved even to negative yields at times in Germany and creditors have demanded insane levels of credit to buy housing in the States opposite of the free lending going on in Europe as banks are desperate for yield.

Rarely has high-end property prices around the world soared so high. We have seen this is London, Toronto, New York, Miami, Vancouver, Hong Kong and Sydney to mention just a few. The price of the average American house remains still 20-50% off from 2007 levels depending on where you look.

Rare coins, art, and antiques have soared around the globe. Add to all this the craze, we have  cryptocurrencies and BitCoin going nuts. Yet the entire bull market of the Roaring ’20s was 97 months. We passed that mark in April 2017. This is also the longest bullish trend suggesting there is something else afoot.

So exactly what is going on? Do we really have a bull market in EVERYTHING? Well the answer is yes and no. If we look closely at the high-end property market, much of the sales are for CASH – not leveraged. This too is highly unusual. Historically, such asset bubbles have been funded by banks. Yet the bitter experience has shown that debt-funded asset bubble implode taking the banks with them. The assets collapse in value because the banks need cash with withdrawals. The leverage magnifies the cash on the way up, and on the way down, assets crash to rebalance against the actual supply of cash.

For this reason, banks must be able to withstand such a contraction and the theory is to raise bank capital. That means raising bank capital to meet “stress tests” imposed by the various government authorities. The European Banking Authority (EBA) published the list of public sector entities (PSEs) that may be treated as regional governments, local authorities or central governments in the area of credit risk, in accordance with the Capital Requirements Regulation (CRR). This list will assist EU institutions in determining their capital requirements for credit risk. The problem with all of this “stress test” criteria is the fundamental assumption that government debt is risk free. In particular, the EBA includes those PSEs that are treated as regional governments, local authorities or central governments due to their reduced risk level. As a result of this treatment, exposures to the PSEs included in the list will qualify for the same risk weight as for the respective regional government, local authority or central government. The assumption that government debt is superior to private debt backed by assets underscores the real risk on the horizon.

The bull market in everything is really a global realization that government is in trouble. We are looking at money getting out of banks and government to REDUCE the risk of government as we move forward.  So this time it is different. Normally, we have one sector at a time in a bubble, commodities, stocks, real estate, tangible assets. We normally do not see a bull market in everything unless there is a wave of movement away from government.

 

Oct 7 2017

Madrid Waged Cyber-War & Catalonia Votes Overwhelmingly to Leave Spain


Armstrong Economics Blog/Politics

Re-Posted Oct 7, 2017 by Martin Armstrong

Catalonia voted overwhelmingly to secede from Spain. Of course, the hard line invasion of riot police who beat and threatened the people discouraged many from showing up with the turnout being only 43%. The fascist government in Spain has demonstrated to the entire world that there is a major country risk in dealing with Spain. Any government that uses force against democracy will do whatever it takes to sustain power as the economy gets wose going into 2021.

Hundreds of people were injured by riot police attempting to prevent voting, and this has only caused outrage and further protests solidifying the resolve to separate from such a fascist government. Both Canada and Britain allowed separatist votes. Why Spain deemed the vote illegal was clear that they knew they would vote to leave.

Madrid even waged a cyber-war against Catalonia. They sought to shut down the internet and even ordered Google to shut down traffic coming from Catalonia. Madrid has shown the future civil war tactic will be to shut down the internet to prevent communication.

Catalonia’s parliament may well now declare independence; Madrid could decide to impose direct rule on the region and the police have been transformed into terrorists resembling the imported Russian police in Ukraine. Barcelona is perhaps the most beautiful city in Europe. Obviously, Madrid will be off the tourist agenda in the years ahead.

Oct 6 2017

Communism/Socialism = Better Sex for Women?


Armstrong Economics Blog/Politics

Re-Posted Oct 6, 2017 by Martin Armstrong

Believe it or not, the latest twist is Marxism provides better sex for women than capitalism. According to the latest study, Eastern women had twice as many orgasms as Western women when comparing the Germans after the Wall fell. What they fail to explain is that you really had no entertainment other than sex. Eastern European women who come to the USA have a hard time shopping even for toilet paper. I use to have a Russian girlfriend we met in Tokyo back in the ’90s. When she came to the States and we would go shopping, she was perplexed. How do you make a decision between so many brands of toilet paper? she would ask. In Russia, she said, there was just one.

Researchers claim that women under Communism reported greater sexual satisfaction. They remarked that East German women suffered from the notorious double burden of formal employment and housework compared to postwar West German women who remained at home and enjoyed all the labor-saving devices produced by the the capitalist economy. The women who stayed home in the West had less sex than women who had to line up for toilet paper under Communism.

Well I suppose the less is, bring back Marxism, surrender all rights, TV isn’t worth watching since all the news is fake, and just have sex.