Spotless Sun


Recently, NASA’s photo of the sun showed ZERO sunspots. The previous and current solar cycle has been declining significantly in solar activity beyond what has been known before. There still remains the risk that we will see a further decline in the next cycle that will begin in 2020. This may have a significant impact upon weather and could be a significant reason why the computer is projecting an inflationary cycle ahead that will be created by a cost-push effect rather than a speculative boom.

Of course, Global Warming advocates who support government raising taxes to prevent this fictional disaster they have created like AOC says we will all be dead in 12 years, refuse to ever do REALscientific research and backtest their theories before 1850. They simply ignore history and nature which just so happens to move in a cyclical fashion with everything. BTW, the reason we are born, live, and then die, just so happens to also be because of a cycle. OMG – cycles do exist? No way! According to their theories.

Climate Change Has Not Impacted Polar Bears


There are too many polar bears in parts of Nunavut that it is posing a risk to humans. Climate Change hasn’t yet affected polar bears and reports are to be released which defy the Global Warming agenda. As long as government funds only Global Warming research to support new tax schemes, we run the risk of a rise in disease and famine around various parts of the globe.

Climate Change is a reality. There is insufficient data to forecast that we are headed toward an ice age. It appears more that we will retest the former lows and then resume a warming trend after 2032. The Little Ice Age should be a major low based on our computer models.

Most people have no idea that it was Climate Change which began the entire investigation into cycles. I have called this the clash between catastrophe and uniformity. The idea that systems just collapse in a catastrophic manner can be disquieting, to say the least. For this reason, uniformitarianism (linear thinking) soothes the senses and brings order to the future dominated by uncertainty. Yet, these two clashing schools of thought that lie at the core of just about everything from the Big Bang to Charles Darwin’s (1809-1882) Theory of Evolution, began with the discovery first in 1772 near Vilui, Siberia of a intact frozen woolly rhinoceros followed by the more famous discovery of a frozen mammoth in 1787.

You may be shocked, but these discoveries of frozen animals with grass still in their stomach, set in motion these two schools of thought since the evidence implied you could be eating lunch and suddenly find yourself frozen to be discovered by posterity.

This entire period of the late 1700s sparked a truly profound Intellectual Revolution that erupted in every field. In 1821, there was a Swiss engineer Ignaz Venetz who took a bold position also inspired by the Siberian discoveries, that there had been a former Alpine glaciation on a massive scale. His 38-page report was published posthumously in 1859. It was the birth of the idea of an Ice Agetheory. A Norwegian geologist Jens Esmarch also argued that the Norwegian glaciers had been much greater in size.

What was emerging was a view that history was in fact non-linear. The weather was not a static progression of uniformity. Just as there was a cycle to the seasons, the idea that cycles existed on a much larger scale began to emerge. The very idea of an ICE AGE implied a change in weather patterns. History was perhaps not linear even within the context of nature.

In 1832, Professor A. Bernhardi argued that the North Polar ice cap had extended into the plains of Germany. To support this theory, he pointed to the existence of huge boulders that have become known as “erratics” he suggested were pushed by the advancing ice. This was a shocking theory for it was certainly a nonlinear view of natural history. Bernhardi was thinking out of the box. However, in natural science people listen and review theory unlike in social science where theory is ignored if it challenges what people want to believe. In 1834, Johann von Charpentier (1786-1855) argued that there were deep grooves cut into the Alpine rock concluding, as did Karl Schimper, that they were caused by an advancing Ice Age.

The catastrophists could claim greater influence in the birth of the field of physics all based upon this idea of cycles. Sir Isaac Newton (1642-1727) developed his laws of gravity and was inspired by his friend to publish the work who underwrote the project, Edmund Halley (1656-1742). This was the same Halley who discovered the cyclical nature of comets. Halley believed that the comet that carries his name was the same comet reappearing throughout history at regular intervals recorded by contemporary historians of all ages. Halley saw hidden within history, the same periodic intervals of a comet.

Why do these people insist that Climate Change is manmade when all the historical evidence shows it has always changed and there are cycles to it? The answer is simple. Money! They will sell out the human race to get their hand on money. They are not scientists for they distort the history for personal gain.

 

Assets v Currency


QUESTION: Hello Mr Armstrong. I read your blog daily, and i can t say thank you enough.
on interest rate, you say market rallied when they got the rumors of roosevelt devaluating the dollar creating a currency inflation. am i wrong when i understand they feared losing money so they bought tangible assets?
best regards from France

M

ANSWER: Correct. Tangible assets are always the hedge against a decline in the currency. This is why gold has been rising more so in other currencies than US dollars.

M

The Fed’s Real Crisis – To Cut or Not to Cut


 

QUESTION: Mr. Armstrong; You seem to be the only person who distinguishes private interest rates v public. Has the marketplace gone insane along with Trump demanding 100 basis point cut by the Fed? I find it curious how they only quote the same people in the press who seem to preach the government position all the time. They constantly try to ignore you in the press and even Wikipedia distorts everything and fails to mention the banks pled guilty and had to repay your clients. Just so biased. Now they say deep negative rates are no problem. They only say what the government wants them to say. Will this all end very badly?

KN

ANSWER: There is ABSOLUTELY no historical evidence that negative interest rates will ever stimulate the economy no less are they even viable. This wipes out pension funds where many around the world are obligated by law to buy government paper. Social Security in the USA is 100% in government bonds. It is beyond comprehension where all these people cheer negative rates as if this is a good thing. The US share market declined with the rate cut, it did not rally.

People are convinced that an INVERTED YIELD CURVE foretells of a recession. They have no idea about capital inflows. Even in Thailand, which has benefited greatly from the China-US Trade War shows that its currency has been the RARE exception rallying against the dollar. That may change now if the dollar closes above the July high here at the end of August.

I am in Asia right now. The greatest fear is that China will send in troops to squash the protests in Hong Kong. Many fear this will be another Tiananmen Square. I would not go that far. The solution would be a political one and to repeal the extradition order. People do not fear that a wanted Chinese will flee to Hong Kong and be protected, but that they could be extradited to Beijing and put on trial for things they did or said in Hong Kong.

This is sending capital to the USA and the same capital flows from Europe and doing the same thing. That capital is now incentified to buy US debt looking for more rate cuts and their bonds will appreciate. It takes a sublime idiot not to see this trade. They are punting – not actually buying negative yields for the long-term. This seems to be coming to an end in 2020.

As I have stated many times, DO NOT EXPECT the official rates to rise outside the USA. All other central banks are trapped. They cannot afford to allow rates to rise and blow up government budgets. This will widen the gap between public and private debt. Back in the ’30s, as governments defaulted, smart money fled to private AAA corporate bonds. We will see the same trend here again, but at the same time, banks will look to the future with tremendous uncertainty and will NOT be lending so easily. Expect rates to rise on credit cards where they make their money and long-term mortgages. If the banks cannot resell the long-term debt mortgages, rates will rise widening the gap with the government.

Chairman Powell is not is a nice place. He cut rates NOT for the USA, but because the rest of the world is imploding and Europe shows no signs of reversing their policy. If Powell lowers the rates 50 or 100 bp, domestically people will be taking this as confirmation a recession is coming and the stock market will continue its decline.

Powell is in a no-win situation. This is the FIRST time in history the Fed cut rates at the top of a market and instigated a decline rather than cutting rates in response to a decline. This only proves the Fed’s actions are concerned NOT for the domestic economy, but primarily for Europe and Asia second.

This going to make for a HIGHLY unusual WEC this year. We are breaking historical ground. There no way for this to end but VERY badly. They do not want people to read this blog. They want to keep people accepting the government narrative.

 

ECB Will Lend to Banks Long-Term in Hopes They Will in Turn Lend Again


Come September, Draghi at the ECB will make loans to Eurozone banks on a long-term basis at rates less than the short-term lending window. The objective is to encourage banks to lend money to businesses. Nobody thinks about letting businesses bypass the banks mainly because the banks are in such a vulnerable state because Europe never took the toxic assets out of the banks as did the USA. To do that would have meant that some countries would have been bailed out more than others so they cut rates and hoped for the best which never happened.

The world economy is crashing BECAUSE of negative interest rates. These insane people have REFUSED to consider that this entire idea of lowering interest rates to stimulate the economy will NEVER work. You are wiping out pension funds and the elderly who are a vital part of the economic base. They keep using the same theories that are decades old and have ALWAYS failed each and every time.

Just look at the Great Depression. Lowering interest rates FAILED to reverse the decline. The market rallied when the rumors proved correct that Roosevelt would devalue the dollar creating currency inflation. Lowering interest rates has NEVER worked even once, yet they keep trying the same theory over and over again because they cannot think of anything else to try.