Kidnapping for Profit

COMMENT: I read your piece on taking the profit out of prostitution to end kidnapping young girls. That has been a huge problem in Eastern Europe and girls were even getting kidnapped in Western Europe on vacation. Here in Italy, there was a huge problem of kidnapping people and demanding money from their families. The government passed a law that if a family member was kidnapped, they froze the accounts of the family to prevent people from paying. At first, it seemed cruel. But once it was no longer profitable to kidnap people, it stopped. I think your idea would probably work.

VSZ, Rome

REPLY: When they tried prohibition in the USA, it did not stop people from drinking. What it did do was establish the Mafia in the USA. Suddenly booze was profitable. When prohibition ended, the Mafia was well funded and expanded into other ventures. When you make anything illegal, it becomes tax-free and there is the incentive to expand whatever that business might be. We are talking about human nature. During a crisis, legal goods are suddenly going for a premium. They call it price gauging which is illegal in Florida but it still goes on in a storm.

They are now warning Americans traveling to some parts of Mexico for they are starting the same scheme – kidnapping people for ransom. If there is a profit to be made from any illegal activity, it will be exploited. It does not matter what the subject might be from drugs, booze, to prostitution. Just follow the money.

Why Parliamentary Political Systems are Dangerous

COMMENT:  Hi Martin, reading your article about the SPD imposing Marxism on Germany is horrifying. To see established political parties so greedy that they’re willing to partner with fringe parties to maintain control is nuts.

We’re currently seeing this in British Columbia where the Liberal party lost its majority due to a government formed by new Democrats and the Greens. Now, this handful of green party MLAs wield enormous powers. They’re impeding the expansion of kinder Morgan’s pipeline to Vancouver, despite FEDERAL regulatory approval.

How can so few, be so greedy, as to crush the economic activity and benefits that this creates for thousands of workers? Bring on the crash and reboot, I’m sick of this.

Mike C.

REPLY: This is what is wrong with the Parliamentary System. There should be a run-off with a second election between the two top candidates. This is what they do in France. The systems employed in most other countries allow fringe groups to get control. Do not forget that Hitler won during the 1932 German election less than 36.8%. This is what is wrong with such political systems. You would think that we have learned our lessons from the past by now.

Gold v Dollar

QUESTION: Hey Martin
You always say that us in Europe better get our money out while we still can.
I know that you recommend bank account in US but that isn’t always so easy.
As some kind of alternative, what do you think about storing some gold in Asia ( Hong Kong, Singapore etc.)

I am no gold bull and I understand that you take the risk of gold still going under 1000 dollars but in the long game you always say that the tangible asset survive.

mainly I like this option because it’s easy to set up, relatively cheap and I don’t have to report it.

If you could find the time to give me the possible down sides in this and that way keep me from doing a big and costly mistake I would really appreciate that.

ANSWER: What you have to keep in mind is timing. Many people like to refer to the Great Depression as their guide. Keep in mind we were on a gold standard so the rise in the dollar meant a rise in gold. As the Sovereign Debt Crisis hit in 1931, first the capital fled to the dollar. Then when the dollar was the last one standing, pressure on the dollar began as people assumed the US would default like everyone else. That did not happen, by FDR devalued the dollar relative to gold moving it from $20.67 to $35.

There are already 13 nations in default of their national debts. If interest rates go up 1%, we will see another almost 30 join the default list. Takes interest rates up 2.5%, and the list will soar to probably 100 nations in default.

The first crack in the world monetary system will ONLY be caused by a strong dollar – not a weaker one. First, you get the dollar rally, then you get the dollar collapse. So keep this in mind. If you buy gold and then see a decline, will you panic and sell the bottom, which is typical? That becomes the game.

There are other places to have dollar accounts. But the USA is not part of the reporting system back to Europe. Most other places are.

The Failure of Human Judgment

QUESTION: You have said it is a waste of time to try to persuade a government to act in advance of a crisis. Nobody seems to even come close to you with experience and contacts. Still, do you think it is possible to ever change that reality?


ANSWER: Sadly no. The only possible way to change it would be to eliminate career politicians and people would serve one term as originally intended. People make a judgment in the own self-interest. Then you have the problem of human judgment. The majority is always wrong in markets as I have stated many times. But that decision-making process is wrong in so many other fields that also require a judgment.

The author of Harry Potter, JK Rowling, told her readers on Twitter that she received “loads” of rejections before she finally got published. She said she was rejected 11 times before someone took a chance on her. This is the fate of human judgment in so many fields far too often because people also judge others by themselves. Some women were angry that I dared to say that not all prostitutes were forced. They judge others by themselves. There are people who have always slept around and others who value celibacy. We are all not the same. Likewise, Goldbugs cannot accept that gold is not money because that is their view and the rest of the world is wrong.

When you judge others by yourself, you will never arrive at an objective decision. This is why the majority will ALWAYS be wrong in just about anything that requires human judgment. So eleven publishers rejected Harry Potter. What does that say about human judgment?

Nicaragua Protests Over the Collapse of Social Security

At least 10 people have died in Nicaragua during this week’s violent protests over the government’s planned changes to the social security system. Nicaraguans began protesting on Wednesday against measures that increase worker contributions and lower pensions. The economics of Marxism has completely failed and the decline in the birthrates spells doom for most pension models.

This has been a direct confrontation with Ortega, a former Marxist guerrilla who has had to face the reality of Marxism as did Russia and China. Protestors in Managua threw rocks and set fires in unrest that started Wednesday, and police responded with tear gas and rubber bullets. Late on Saturday, local media stated that a reporter was shot and killed during a live broadcast from Bluefields, a town on Nicaragua’s Caribbean coast that has been hit by the violence.

This is the CIVIL UNREST that will rise up around the West as socialism continues to collapse. The taxes must rise and the benefits must decline and even that will not keep the social systems in place for more than two years. We will have to face a complete revision of the monetary system. How that is approached will determine if we have violent confrontations with government and the rich are dragged from their homes and hanged as has so often taken place in the past.

Europe v America

QUESTION: Why is Europe still in an economic crisis among its banks while the US banks are obviously beyond the crisis days of 2008-2009?

Thank you for your insight.


ANSWER: The bad loans in the states were really dumped into Freddie Mac, is a public government-sponsored enterprise created in 1970 to expand the secondary market for mortgages. The main difference between Fannie and Freddie boils down to who they buy mortgages from. Fannie Mae primarily purchases mortgage loans from commercial banks, while Freddie Mac primarily buys mortgages from smaller banks that are often called “thrift” banks.

The bad real estate loans were stuffed into Fannie and Freddie so the bad debt was not in the banks. In Europe, the bad loans are still on the books of the banks. Hence, the European banking crisis was not been addressed and this is the primary difference between American v Europe.

Has Trump Poisoned the Well?

QUESTION: At first, I thought you were just pro-Trump. But I have seen you criticize him on a number of things from trade to Syria. Do you think Trump has poisoned the well with regard to politics? What comes after him?


ANSWER: Actually, your question is constructed upon a political fallacy. You assume that ANY politician can really change the game. Many conservatives credit Reagan for bringing down Communism. True, he talked hard and confronted Russia and applied pressure militarily. However, communism was failing. True, he yelled to tear down the Berlin Wall. But proof that this was just coincidence was the fact that China collapsed FIRST – then the Berlin Wall. Economically, you need free markets to further society. It is human ingenuity that creates progress allowing individuals to have ideas and act on them like Facebook. Centralize control by government fails in the creativity department and this is also why big corporations buy startups to get creativity they lost.

To say that Trump has poisoned the nation is a similar fallacy. The nation is HIGHLY divided and it did not matter who stood up against the career politicians – the economy is pushing the change. To blame Trump for the chaos in politics and the nation is the same mistake of attributing the fall of Communism to Reagan.

Socialism is collapsing because the system was never designed properly and politicians will always pursue their own self-interest. As pensions collapse so will socialism.

To blame Trump for the discontent is rather strange. This has been building up for decades. He is the symptom, not the cause. Reagan was also the symptom and not the cause. We have to stop throwing all the blame or credit to a head of state. Nobody can change the global trend. They are simply going to be driven by it. Merkel let the refugees in because she was criticized over her hardline position on Greece. She acted in her own self-interest to try to improve her image. She responded to the failure of the Eurozone by adding to it with the refugee crisis and then tried to force all other members to take their share of her mistake. Merkel responded simply because of the failed design of the Eurozone.

The real crisis is that people think that if they can just get rid of Trump, somehow everything will go back to the way it was. THAT will never happen. We are in a trend that will not conclude under 2032. Trump is a reaction to people getting fed-up with the endless lies of career politicians. This is by no means just in America. I am in Europe and it is getting really bad here as well. The Democrats have embattled Trump over a failed theory that Hillary lost because Putin released emails from a hack that revealed the dishonesty within the party. Nobody ever said that the emails were fake

Agriculture & Global Cooling


QUESTION: Mr. Armstrong; Are you familiar with Professor Easterbrook of Western Washington University who agrees with you and is projecting a decline in temperatures for the next three decades? It seems that those who simply claim that it has been getting warmer live in a bubble of biased news. One even said to me that it has been getting warmer for the past 10,000 years because of civilization. I asked what was the solution? Should we just commit suicide to save the planet? Just can’t understand these people who deny there are cycles within every trend.


ANSWER: I know. We are closer to the lows than the historic highs in temperature. Our model does agree with Professor Easterbrook that the immediate decline in temperatures should extend out for about 43 years from 2007. It was unseasonably cold in Florida and snowed in the northern regions also for the first time since the Blizzard of 1899 and even that was about 120 years before. It was excessive snow and gold in Britain, Japan, and China, as well as Russia. They ignore these reports as one-time flukes.

The Global Warming crowd tries to deny that there are also cycles set in motion by the Sun and they attribute everything to human activity. Nobody wants air we cannot breathe. I lived in London back in the 1980s when the busses were blowing out diesel. It was horrible. But to stop pollution by distorting history or claiming the trend is really warmer for 10,000 years is the danger. That is like saying the Dow Jones Industrials is only in a bull market since 1932 pretending there are no corrections.  We must understand that nature is bigger than we are and the Sun just maybe the majority of climate change.

800,000-year Ice-Core Records of Atmospheric Carbon Dioxide (CO2)

There have simply been historical periods with far greater amounts of CO2 than today. Pollution is a separate issue from blaming everything on CO2. There is absolutely NO EVIDENCE that CO2 changes the climate. The ice core sample demonstrates that there have been periods of significantly higher levels of CO2 before civilization. There is a natural cycle of everything. Their analysis is always to deny a cycle and presume whatever trend is in motion will remain in motion. With this analysis, I am alive today the same as yesterday so therefore this trend will last forever.