Posted originally on Jun 30, 2024 By Martin Armstrong
COMMENT: Living in Eastern Europe, I can see how your May 7th target marked Putin’s change in attitude. Before May 7th, it was others who brought up nuclear war. May 7th saw Putin yield to his critics, and ever since, he has been directly warning the world about nuclear war. I think your model pinpointed this change.
Very interesting
Grygoriy
REPLY: Yes. I was concerned that either Ukraine would do something stupid and assassinate Putin or he would yield to his critics. It seems the second option was the outcome. His critics have long held that he should have just invaded Ukraine and conquered it like the US did with Iraq and then release Ukraine after eliminating the anti-Russian faction. Putin did not want to appear to be an invader and termed it a special operation to defend the Donbas. It was Victoria Nuland who installed an UNELECTED government and then instructed them to attack the Donbas to start this civil war and call them “terrorists” because they wanted to separate from Kiev. This article is from April 2014.
What I find really disturbing is how the press has rewritten history and now ignore all the facts to paint Putin as evil when Nuland started this war to draw in Putin.
Posted originally on Jun 28, 2024 By Martin Armstrong
(Vladimir Smirnov, Sputnik, Kremlin Pool Photo via AP)
A week after meeting Russian President Vladimir Putin, Kim Jong-Un has declared that he will send troops to Ukraine in the Donetsk region. Russia has already received two million rounds of ammunition, ballistic missiles, and rocket launchers from North Korea, but this marks the first time that troops will actively engage in battle.
Furthermore, Ilya Ponomarev, a former Russian member of parliament, stated that North Korea has strengthened Russia’s relationship with China, as China could use North Korea as a middleman to avoid Western sanctions when sending goods or military equipment to Russia. “China is cautious not to fall foul of secondary sanctions by the US, but North Korea is not in danger,” he explained, calling North Korea one of Russia’s “key” partners. “So, there is no problem for the Chinese to assist North Koreans and then North Koreans to make trade with Russia and benefit from this both financially and in terms of military development.”
A spokesperson for the Pentagon said that the troops will be used as cannon fodder in Putin’s “illegal war.” Is war ever legal? NATO is alarmed as the partnership has quickly advanced from pledging an allegiance to assisting one another if attacked to joining the war effort in Ukraine.
North Korea is a small nation whose inhabitants live in utter darkness from the rest of the world. One must question how many troops will defect once arriving in Ukraine, especially once they meet Russian soldiers and learn how much different life is for those living outside of the hermit kingdom. Kim Jong-Un will undoubtedly use the troop’s families as leverage to prevent any defectors, but one must wonder how effective these troops could be against Western-backed forces. North Korea has not fought in a war since the 1950s, and sadly, these troops may very well be positioned as cannon fodder.
Now, North Korea has not declared war on Ukraine. They are allegedly sending troops to assist in the reconstruction efforts in exchange for an annual sum of $115 million. “The goal is to rebuild a city destroyed by fighting,” said the unnamed official, without specifying further on the location.
South Korea certainly sees Russia as a clear enemy and is likely to up its efforts to support Ukraine and NATO. This opens the door for the West to send troops to Ukraine under the same premise of reconstruction. All the chess pieces are aligned and ready, with the Neocons simply waiting for the right moment to strike.
Posted origially on Jun 20, 2024 By Martin Armstrong
If there is one country that the West and Japan fear more than Russia, it is North Korea. Dictator Kim Jong-Un repeatedly threatens nuclear warfare, but that is his last grip on power as he knows his nation would be overtaken instantly if the threat did not exist. North Korea rolled out the red carpet for Vladimir Putin’s visit, where the two nations pledged to protect one another if attacked.
North Korea gave Putin the royal treatment during his visit, the first time Putin had gone to the hermit kingdom in 24 years. Putin’s picture was displayed around the nation alongside Jung-Un’s, which is a massive sign of respect in North Korea as the dictator’s picture must be displayed throughout households and public centers. He is upheld as a diety rather than a politician. Putin rode in the motorcade with Kim Jong-Un, parading around Pyongyang. Putin is desperate for allies as all of NATO has turned against Russia. Yet, North Korea has more to gain from this partnership.
The hermit kingdom has only China as a trading ally and partner as it has been exiled from the global economy. North Korea has been facing an ongoing famine and agriculture composes over 21% of the nation’s GDP. Farming and all other industries are completely controlled by the government. The nation could never be successful with or without open trade. Nearly half (44.7%) of North Korea’s GDP is derived from industrials such as cement and steel, but few are willing to open trade lines as they are sure to anger other nations due to international sanctions.
Kim pledged “full support and solidarity with the struggles of the Russian government, military and the people” and will help Russia “to protect its own sovereignty, safety and territorial stability.”
“Situations continue to be complicated and ever-changing, but I would like to take this opportunity to reiterate that we will continue to strengthen and closely engage in strategic communication with the (Russian) leadership,” Kim added. Putin said that Russia would also act to protect North Korea if it were invaded, opening new opportunities for false flags. North Korea has allegedly been supplying Russia with arms, but Moscow really needs soldiers.
There is nothing more that Russia could do to anger the West. Perhaps Putin would have hesitated to call upon North Korea for help before, but he has nothing to lose now as the West is clearly moving to mobilize against Russia.
Posted originally on Jun 17, 2024 By Martin Armstrong
Russian President Vladimir Putin is once again offering Ukraine the option to end this senseless war. Putin said that he would order an immediate ceasefire and call a truce if Zelensky 1) withdraws troops from four annexes regions, and 2) declines any invitation to join NATO.
Putin is effectively attempting to prevent World War III. He knows that a global conflict will erupt instantaneous if Ukraine joins NATO thanks to Article V. His comments were given ahead of the summit in Switzerland in which world leaders are allegedly going to discuss peace talks. The option for peace has ALWAYS been on the table.
The West has been the instigator, and every word from Austin’s mouth is an outright lie no different from the Weapons of Mass Destruction. It was Victoria Nuland, who has a Ukrainian heritage, who selected the interim given and directed them to start this civil war to attack the Donbas. His famous call said it all – the Neocons were waging war against Russia – “Fuck the EU!” she boldly said. Now Blinken is a ruthless Neocon who has openly said that the Russians persecuted his family because they, too, were Jewish like Nuland and from Kiev. He is in charge, and these people have usurped American foreign policy to use that for personal vendettas against Russians. There is NOBODY in Washington willing to stand up and defend our country, for they fear the Neocon’s wrath.
Zelenskyy had run of peace and then did exactly the opposite. Many Ukrainians now see him as a traitor to their country. They cannot seek peace for that decision come only from Washington and Blinken since Biden is not mentally competent to even stand trial. Russia was hopeful that he was serious and end the civil war that Kiev began on instructions from Victoria Nuland.
To ensure Putin would come to the aid of the Russian in the Donbas after Nuland instructed Liev to attack them. He told the press the day before that Ukraine would rearm with nuclear weapons violating every treaty on the books to make sure Putin invaded.
Zelenskyy told the Washington Post, who learned that he had all the info and knew when Russia would invade thanks to American intelligence. They asked why he did not warn the civilians. He said it would have cost him $7 billion in capital flight. He has proven time and again he is just lining his pockets at the expense of his people. When there was a peace deal, Boris Johnson ran to Ukraine to make sure Zelenskyy killed the deal. He was instructed that there would be no peace with Russia.
Before Zelenskyy gets his golden parachute and is whisked off to Miami as a reward for following Neocon orders, over 1 million Ukrainians will be dead. On the May 7th ECM turning point, two Ukrainian military officers tried to assassinate Zelenskyy. He claimed it was a Russian plot. No way. There are many Ukrainians who have said if he was on fire, they would not urinate on him until he was dead. He is a disgusting traitor to Ukraine, and history will remember his vile actions for posterity.
Zelenskyy has even called for nuclear war. These people hate Russians, and they want to unleash genocide and kill every last one of them. The Ukrainians were never prosecuted for all the killings they did of Polish, Jews, and Russians in ethnic cleansing with the Nazis because the CIA exonerated and protected them because they hated Russians.
I cannot stress the importance of the Minsk Agreement enough, in which Russia was ensured by numerous world leaders that the people living in annexed areas that were traditionally Russian would have the opportunity to vote on whether or not they wished to be part of Russia. Russia patiently waited for the elections and did not act. Then, former German Chancellor Angela Merkel admitted that the Minsk Agreement was purely a sham to buy time to build up Ukraine’s military.
Trust has been annihilated. All we hear is of Russia’s “unprovoked full-scale invasion,” but the truth of the matter is that the West forced Russia’s hand. They never intended to honor their promises to Russia, and Russia felt compelled to act on behalf of the ethnically Russian people living in those regions. A simple election could have prevented tens of thousands of deaths. The neocons had other plans.
Ukraine called Putin’s potentially final attempt at peace negotiations “manipulative” and “absurd.” Zelensky is too deeply indebted to the West to back out now, and he was initially installed as the puppet president to carry out the plans of the neocons who are hell-bent on conquering Russia. I have explained countless times that Ukraine simply cannot win this war. We are rapidly moving toward World War III, and the decisions made at these upcoming summits will have drastic effects on the future of civilization itself.
Posted originally on Jun 12, 2024 By Martin Armstrong
Both Russia and Ukraine have seen tens of thousands of soldiers die amid this seemingly endless war. Russia has begun seeking new recruits by turning to female inmates and foreigners. The New York Times reported that 30,000 were voluntarily serving Russia’s armed forces at the beginning of the war. Now, Russia is promising a form of freedom to female inmates who agree to join the war effort.
Russia sent military recruiters to female prisons last year. The nation already implemented a program to pardon male inmates in exchange for serving in the war, but this is the first time Russia has called upon women to do the same. Tens of thousands of men have agreed to join the war in exchange for a pardon. Russia is now offering women a pardon in exchange for only on year of military service and a monthly salary of $2,000, which is over 10 times the nation’s minimum wage.
Now, the New York Times reported that conditions in Russia’s prisons are extremely brutal. Prisoners are expected to remain silent for up to 12 hours per day and are forced to perform physical labor even in the winter climate. Still, the majority of female inmates have opted to remain behind bars rather than fight in the war.
Ukraine needs even more recruits than Russia and plans to mobilize up to 20,000 inmates, but under 5,000 have signed up thus far. Russia has a population of 144 million whereas Ukraine is composed of only 38 million. “There is competition between military commanders to hire (prisoners) since there is a lack of manpower, so they really want to have access to these people,” Justice Minister Denys Maliuska told Reuters. Ukraine has plans for prisoner-only brigades, which one may find concerning. Unlike Russia, Ukraine will not allow prisoners who have committed certain offenses to serve just yet. “They (will be) in the media spotlight, and if there is a single deserter or a single crime, that would be the type of thing in the media that would be bad PR for us,” Maliuska said.
They do this during drafts throughout the world. They offered US prisoners the option to serve in Vietnam, for example, but only men were enticed with that offer. Women are likely to be targeted for military service during the next draft.
Ukrainian women are already forced to sign up for conscription, whereas Russia has not yet called upon its women to serve. Zelensky has simply refused to entertain any peace talks or do the unthinkable and actually honor the Minsk Agreement. The West has just provided Ukraine with another aid package, and it looks as if they will soon provide them a loan with frozen Russian assets. Both sides are desperate for manpower and will need to look beyond their own nations for willing fighters.
Posted originally on Jun 10, 2024 By Martin Armstrong
John Maynard Keynes in his 1936 book, ‘The General Theory of Employment, Interest and Money,” argued aggregate demand was too volatile to be stable and would lead to inflation or recessions. His theory honed in on spending as a means of price control. Low aggregate demand, Keynes argues, would lead to high unemployment and stagflation. Government could intervene through fiscal policies to increase aggregate demand, as an example, increased government spending could tame inflation. Interest rates, according to Keynes, could also be modified to encourage spending and stimulate demand. So why are these theories failing miserably today?
To begin, the United States had a balanced budget when Keynes presented his theory. The government is now the biggest borrower, acting in its own self interest under Adam Smith’s theory of the invisible hand that Keynes spent his career attempting to deny. According to Keynes, “there is no self-correcting mechanism in a free market economy that automatically restores full employment.” He believed that the government could change the business cycle but arguably regretted this notion on his deathbed.
Keynesian economics gave the government the green light to manipulate the economy, or at least make numerous failed attempted to do so. There is that old joke about communism that you can vote your way in but must shoot your way out, seemingly fitting to the utter disaster governments have created in regards to our economic situation.
The government is by far the biggest borrower. Raising interest rates can have no impact on demand, as the government will simply borrow more, and the central banks simply have no say. During the Great Depression, for example, Washington forced the Federal Reserve to implement QE policies to artificially lower rates to increase demand. Yet, when Washington ordered the Federal Reserve to do the same during the Korean War in 1951, the central bank first broke with Washinton and refused to comply as it knew it would hurt the economy as America’s budget was no longer balanced.
Quantitative Easing destroyed the Keynesian model, and there is now no other alternative for central banks to control the economy. If they raise rates, the budget explodes. The Keynesians advocate manipulating demand and advocate fiscal spending that the central bank cannot control. However, the other part of Keynesianism is the manipulation of taxes. Keynes argued that to stimulate demand, you lower taxes. He saw this correctly, but again, it does not fit with government agendas.
There is no limit to what the government will spend with “money” that simply does not exist. Governments continue to borrow perpetually with no real intention of paying back their debts. This is one piece of the Sovereign Debt Crisis that will implode like a nuclear bomb the likes of which we have never witnessed. The business cycle cannot be manipulated, and what’s more, the Keynesian model cannot account for declining confidence in both government and the economy.
Posted originally on Jun 5, 2024 By Martin Armstrong
Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation.
“I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate high inflation,” he told the Financial Times’ The Economics Show podcast. Kashkari is speaking as if we are not already in a recession. It is not difficult to understand the “visceral” hatred people around the world feel toward rising prices. The effects of inflation are felt with every purchase, causing the average person to adjust their entire lifestyle.
Vague issues such as rising unemployment or declining wages do not impact everyone. “I lose my job, I lean on my sister or my parents or my friends, and they help me through it. But high inflation affects everybody. There’s no one I can lean on for help because everyone in my network is experiencing the same thing I’m experiencing,” Kashkari explained. Mass layoffs, for example, would only impact a fragment of the overall population, and people would feel lucky simply to keep their jobs.
“In the US, GDP has been remarkably strong, very strong,” he noted. “The labor market has been resilient. Wage growth has been mostly resilient. And we’re seeing even the housing market has shown signs of resilience. So if I look at this resilience and economic activity, that does not look like an economy that is under pressure of very high, very tight monetary policy.” Yet, inflation is outpacing wage increases and people are watching their savings dwindle while spending less. The average person cares not of the health of the overall economy as they simply want to be able to continue maintaining or improving their standard of living. Most Americans, for example, do not invest and live paycheck to paycheck.
Real prices have far surpassed anything they calculate in CPI. Everyone understands that prices have risen far more than the arbitrary number the Fed provides us. Taxes are continually increasing for everyone in every tax bracket. The government not only adds to inflationary issues with their spending but then expects their citizens to foot a portion of the bill with taxes, which will simply never be enough.
Then we have Washington telling the masses to blame corporations for price gouging while raising their taxes and making it increasingly difficult to conduct business and maintain a large workforce. It is not that the people would prefer to be in a recession, the real issue is that countless people are entering survival mode. People everywhere want to hold onto whatever they may have out of fear for the future, but they are unable even to hoard as real prices now demand they hand over whatever they have to maintain their lives.
Posted originally on May 29, 2024 By Martin Armstrong
All those investigating cycles within the economy made a simple mistake. Kondratieff followed agriculture/commodity prices when agriculture accounted for 70% of the GDP pre-19th century. That only began to decline from 1850 forward, dropping to 40% by 1900 as the Industrial Revolution emerged with the invention of the steam engine. Moreover, aside from climate impacting the food supply, there were also wars. So the Kondratieff Wave failed to take into account all of the external forces.
If we extend the K-Wave 54 years from the commodity high in 1919, that brings us to 1973, which was close to the end of Bretton Woods in 1971 and the OPEC Oil crisis. Another 54 years from there will bring us to 2027. Therefore, this may be based entirely on commodities, but they were impacted by weather and war. Note that 2027 is the ideal target on our model for war derived from entirely different sources.
There is a cycle of industrialization as well. Rome began as an agrarian society and moved toward trade, which brought them into conflict with Carthage. Rome itself became more like New York and grain was imported from Egypt. As agriculture became more of an import, Rome blossomed like New York into the arts and culture. The shift toward industrialization also resulted in a decline in birth rates for children. Large families were needed in an agrarian society but not so much in a developed society – hence the family laws of Augustus.
The first known Clean Air Act occurred in 535 AD by Emperor Justinian in Constantinople. He proclaimed the importance of clean air as a birthright. “By the law of nature these things are common to mankind—the air, running water, the sea.” Even Cicero wrote about pollution in the ancient city of Rome. This went hand and hand with developed societies and urbanization.
Consequently, when looking at long-term cycles, a few hundred years is not enough data. If Kondratieff were alive today and based his study on the current system, he would focus on services rather than commodity-based economies. Agriculture has fallen to just 1.2% of the civil workforce, so we cannot follow K-Waves as the innovator intended.
Posted originally on May 29, 2024 By Martin Armstrong
All commodities, including gold, trade substantially differently than stocks or real estate. Pictured here is wheat back to 1200. Note that you see what appears to be a brain wave. Commodities trade differently because they are subject to nature. Manufactured items can be produced on a more regular basis. However, commodities are subject to weather, and even mining is subject to discovering supply.
Look at energy. The US was dependent on imports and was virtually self-sufficient from foreign production until Biden was appointed.
Here is wheat impacted during the Black Death. Two trends were clashing. There was a 50% drop in population, so demand dropped, but also there was a collapse in labor, so production declined. Prices rose because there was still a shortage of supply because land went vacant and that forced landlords to begin paying wages. There are always far more complicated trends involved in commodities.
War has also impacted commodities. But when gold was MONEY, it declined in purchasing power WITH inflation. When gold is a free market as present, it moves opposite to inflation because, yes, it too is then a commodity. Making gold money will NEVER prevent the cycles as illustrated above and it will decline in purchasing power with inflation that is in part driven by nature.
Consequently, even gold makes runs to the upside (bursts) that are largely catch-ups. It does not remain constant even against silver. Gold is the worst investment from an inflationary standpoint if you expect it to track inflation, for it does not and will not. Right now, we are in a cycle where CONFIDENCE has waned, and we will see gold rise with the stock market, but it trades far differently from stocks.
Cyclical analysis is all about defining WHEN such events will take place. Price is entirely a different aspect. The burst is just that – a rally that appears to come from nowhere playing catch-up because EVERYTHING has an international value.
Posted originally on May 29, 2024 By Martin Armstrong
The old idea that inflation is created by an increase in money supply has distorted the minds of many people. Inflation is caused by numerous factors for it is not a one-dimensional aspect. For example, say a bird flu has rendered half of the egg production to be worthless, which would send egg prices soaring. This would have nothing to do with the quantity of money. So, obviously, a decline in the supply of some service or commodity can also lead to rising prices. Supply and demand.
Then there can be cost-push inflation as we saw during the 1970s due to OPEC. The first OPEC price shock was October 1973 from where we should see the next low in 2016 (43 years later). The sudden rise in oil sent a shockwave through the economy, driving up prices because the entire economy had to readjust to higher energy. This was not the result of an increase in demand nor an increase in the money supply.
When gold was used for money during the 19th century, it fell sharply in value with each new discovery from California, Australia, and Alaska. Inflation rose because of a dramatic increase in the money supply, which is exactly what took place in Europe when Spain brought back ship after ship of gold from the New World. The sudden dramatic rise in the supply of money unleashed inflation, and during both periods, money (gold) failed to provide a store of value.
Steady, slow growth in the supply of money does not lead to inflationary waves. We find that major waves of inflation are often tied to waves of speculation, which differ with each wave moving from real estate, commodities, stocks, or bonds, constantly rotating over decades within a domestic economy and then this movement of capital takes place internationally.
Inflation is not a single one-dimensional aspect. It moves up and down between the rise and fall in the demand for private assets vs. hoarding and uncertainty.
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