Tag Archives: Central Planning

Apr 3 2018

Dollar Hegemony – Real or Sophistry?


Armstrong Economics Blog/Uncategorized

Re-Posted Apr 3, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I really wish I found you sooner. A friend of mine has been telling me to listen. He bought the Dow at 17,000 and sold it 26,000 on your advice. He paid off his house and has told me – see, I told you so. I get these emails from the gold community who seem to never give up on every day will be the start of a new rally. This latest one also paints the United States as “dollar hegemony” and they claim that the US expanded greatly following the fall of the Soviet Union. They say China has woken up making money on trade with America. They now say the dollar will collapse and China will be the new world order so buy gold and sell the dollar.

These people seem to have no morals. They sleep perfectly fine raking in the money from people like me robbing us of our savings and preventing us from participating in the real economy as we should. Is there any real dollar hegemony or is this also just hot air?

WH

ANSWER: No, it is total nonsense and you are correct – it is designed to rob people of their life savings. There is no “dollar hegemony” for that assumes that the USA is somehow imposing the dollar upon the entire world by sheer will. History shows that the USA has pursued a policy of lowering the value of the dollar for trade purposes. Even the Plaza Accord in 1985 was a deliberate attempt to lower the dollar and it was at that meeting when the USA argued that Europe needed to create a single currency to compete with the dollar.

There is no competition with the dollar and that is the problem. The Fed wanted to raise interest rates back in 2014 but was lobbied by everyone not to. The Fed has lost control of the local economy because the domestic policy has been suppressed by international policy. The IMF, Europe, and emerging markets all pleaded with the Fed NOT to raise interest rates regardless of the domestic policy objectives.

This is complete sophistry and the arguments of people who really have no clue about how the global economy functions. I have been in meetings in Washington where I have been asked how to PREVENT the dollar from being the reserve currency. The answer is simple. There is no law that the USA can pass to bring about such a result.

It is coming. That will be the Monetary Crisis. But every such crisis has resulted in the dollar rising. That will bring the new monetary system. Not a lower dollar

Apr 3 2018

Is There a Cycle to Religion?


Armstrong Economics Blog/Religion

Re-Posted Apr 3, 2018 by Martin Armstrong

QUESTION:

Mr. Armstrong,

 With the rise and fall of civilizations comes the rise and fall of religion. Are we due for a new religion to be born, or to have a rapid growth of popularity? Christianity grew rapidly during the fall of the Roman empire, and with the persecution of believers, where are we today in this cycle?

Thank you for your education. I’ve read your blog since I was in high school and realize how life is governed by cycles. Some weeks are rough, some are fantastic, but it all regresses to the mean eventfully.

CO’C

ANSWER: Oh yes. There is a Cycle of Religion that prevails throughout all cultures. It is clearly tied to economics and the business cycle. I am sure some people will naturally disagree with that one, but it cannot be removed from the business cycle itself. Religion has so often inspired war with some even called Holy Wars. The dominance of a given religion has turned with the economy. The rise and fall of civilizations have been clearly linked to religion. Even if we go back to the Stone Age, we find graves with goods place in there with the deceased with obvious demonstrations of love as well as a belief in an after-life.  Burial rites characterize religion and extend back into the Middle Paleolithic, as early as 300,000 years ago, coinciding with the first appearance human communities.

Religion is an integral part of the entire human society. But keep in mind that this goes beyond the simple shifts from Paganism to Christianity and the rise of Islam. There are cycles within each as there are cycles in Asian cultures and religions all tied to the business cycle. The English Civil War was the Protestants against the Catholics which ended up beheading the King. The Puritans seized power under Oliver Cromwell who placed his own portrait on coins wearing a wreath as if he were a Roman Emperor. The Puritans outlawed kissing your wife in public, plays, all sports, and celebrating Christmas. They were so strict that the Protestants rebelled and overthrew the Puritans. It was the Puritans who infected the United States for they were the Pilgrims. This illustrates that there were subcycles within the same religion and the cycle does not always involve Christianity against Islam or Pagans.

During the 3rd Century, as the Roman Empire was economically imploding and the barbarians were at their gates, this is when the persecutions of the Christians became common. The Pagans believed Rome was being punished because the Christians were not worshiping the gods. When the Christians became the majority inspired by the economic collapse of Rome, then they turned against the Pagans and persecuted them. We see collections of ancient sculptures many are beheaded and defaced. This was the Christians assuming and sculpture was a god.

 

If we look at China, we can see quite easily how religion and the business cycle were interlinked even in Asia. The Chinese emperor was seen as being handed the Mandate of Heaven (天, Tian). The Chinese economic, political, and religious doctrine that supported the rule of the Emperor of China was a belief that heaven embodied the natural order and will of the universe. Therefore, it was this natural order that gave the mandate to the ruler of China for he was the “Heavenly Son” of above. In order to maintain that philosophy, if the emperor was overthrown, this was interpreted that the ruler was unworthy, offended the universe, and had therefore lost the mandate. They also believed that natural disasters from earthquakes, famine to floods were all signs from Heaven that the emperor wronged the Heavens and such disaster would often justify revolts of the people.

We see how this belief system interpreted the fall of China to the Mongolian invasion. Genghis Khan began the conquest of China with just raids in 1205 and 1207 across the border. However, by 1279, Kublai Khan had established the Yuan dynasty in China crushing all resistance, which was the first time in history that China came under the rule of a foreign or non-native power.

Most people in the West know little about the history of China. They saw the movie the Last Emperor and assumed that the Emperor ruled until the Communist Revolution in 1946. In reality, following the outbreak of the Wuchang Uprising against Qing Dynasty rule in 1911, the revolutionaries elected Sun Yat-sen as the “provisional president” of the transitional government, with the Republic of China officially established on January 1, 1912. More like the UK, the Chinese Emperor was not eliminated, just the political-economic power. It was against this republican form of government that the Chinese Communist Revolution was launched in 1946 following the beliefs of Karl Marx. Finally, on October 1st, 1949, Mao Zedong proclaimed the establishment of the People’s Republic of China ending the Emperor forever.

 

There is nothing that is exempt from cycles be it the economy, seasons or even religions. The Hindus believed their religion and gods are invincible not much different from the Romans. Hindus were prosperous, powerful, and became economically very rich and therefore known as was Rome or the United States. They believed that would last forever as every society does. They believed they are special, which is also a common theme. They believed that their gods were in charge of the world as well as the universe. Their culture and community also experienced a very difficult time adjusting to the reality of their collapse. Like the Romans, the Hindus also believed that their gods would bring all good things back and restore them to their former glory. Some resorted to extreme devotion and concluded the same as the Pagans of Rome that their fall was because there was not enough devotion.

In the United States, Rev Jerry Falwell and Pat Robertson came out and said that God was angry and punishing New York allowing the terrorists to succeed on 911. They said God allowed the attack because of “abortion, homosexuality, secular schools and courts, and the American civil liberties union.” (see Guardian). This is the standard reaction when fortune shifts. Many will blame some group that God is punishing the entire community because of these people. This human response was the same in the Hindus as it was among the ancient Romans and Greeks.

Socrates was sentenced to death for corrupting the youth and offending the gods. It is not clear whether he believed in just one God or many. The Greek word Plato used in the original text is “θεός” (theos) which is translated to “God” or “the deity”. Nevertheless, “θεοί” is the plural form of “θεός” and Plato also used this in sections of his Phaedo. Plato does indeed use both the singular and plural forms in the text.

 

Christianity went through dark periods of the cycle of religion. Because Roman bathhouses were communal and were places one went to even for prostitutes, when Roman fell, bathing was then connected with sin. Mathematics also became associated with the Devil. The entire idea that the Earth was flat and the center of the universe emerged from the idea of heaven and hell and there had to be an up and down. Bruno was burned alive for saying the Earth revolved again the Sun. The Church jailed Galileo (1564-1642) for believing the same concept. The knowledge that came from the fall of Constantinople in 1453 introducing schools brought the West out of the Dark Ages. But this took time. Christopher Columbus had maps that came from the East and set sail to discover America in 1492, about 40 years following the fall of Constantinople.

Every religion undergoes a cycle of change. It does not matter which religion we are talking about. Nonetheless, this is tied to the business cycle. When economic decline hits, we see rising civil unrest as one group blames the other for their ways and non-devotion.

Islam and Christianity preached a level of equality, which provided a flat social structure as distinguished from a class system. This was the foundation of capitalism for people were allowed to change their professions at will and new converts to their religions were welcome. Hinduism, on the other hand, has a rather strict ordered and hierarchical structure of society. This structure was flexible at the beginning and the ancient texts contain examples of people changing their castes. Over time, this flexibility was lost and the caste began to be decided at birth.

Islam regarded stealing severely where Christianity was more forgiving, but the government and Christain Fundamentalism turned to the unforgiving policies that have led the United States to have almost 25% of the total world prison population when it has only 4.4% of the world’s population. People are imprisoned for any offense whatsoever. If you drive on federal property and do not have your drivers license on you, you MUST go to jail and will be given typically a sentence of 30 days. When John Ashcroft was Attorney General under Bush, Jr., he imposed his unforgiving religious belief system upon the nation. Prosecutors would not get credit for a mere conviction. The defendant MUST do some jail time. It was Ashcroft who has turned the United States into the most anti-Liberty nation on the face of the Earth. Nobody imprisons people for every offense no matter how minor than the US Federal Government.

Islam and Christianity both demand absolute faith in their own version of God. Hindus are much more tolerant of what you should believe, but conversion to Hinduism is more difficult than that to Islam/Christianity. In polytheist Hindu system, if you want to bring in your god, then it is just one more idol in the already crowded temple of Gods. Hinduism offers a rich variety of texts and encourages debate as well as the pursuit of knowledge. Hinduism and most other Eastern religions, tend to believe that humans are part of the environment and that animals and plants should all be respected. Western religions, including Islam and Christianity, tend to accept the principle that humans are created in the image of God and are therefore a superior species on the planet which was created for humans.

So there are differences in philosophy between East and West. In the East, they tend to believe in cycles as part of nature where in the West the core starting point was linear. That said, there are cycles in the belief system but there are also cycles within each religion.

Apr 3 2018

Conservative v Trader


Armstrong Economics Blog/Training Tools

Re-Posted Apr 3, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I know my friend sent an email to you and is finally listening only after racking up losses. I explained how I followed you since 2015 and bought the Dow back at the end of 2015. I made almost 10,000 points and paid off my house. My family toasts you every Thanksgiving around the table. I know you warned that April could make a new low in the Dow and the first half of this year would be a period of consolidation. The rally into March made new highs in the Nasdaq but the Dow failed. You have taught me to just follow the numbers and I appreciate your comments trying to explain events as they unfold. The Global Market Watch was fantastic. On the yearly level it said potential major high in January and then it flipped back and now says new highs remain possible. To watch how that sifts on the yearly level has been a tremendous indicator in itself. That gave me the confidence to sell the close of January. My question is simple. Do you see this as a major buying opportunity? How long should I keep the powder dry?

Thank you

SJ

ANSWER: This is a consolidation period and it will be difficult to guess where the market will go from one day to the next. Yes, the Global Market Watch has been fluctuating on the yearly level on the Dow and that is a reflection each day what the future would look like assuming that was the end of the year. It did by itself state potential major high and that confirmed the correction into February. Now it is saying new highs are possible which is reflecting that we are indeed in a consolidation mode.

This will provide a major buying opportunity. We needed this pause in trend to shift the majority back to bears. When the market rallies and breaks out again, they will fight it as they have all the way up. The biggest losers have been the asset allocation followers. They assume they cannot forecast the future so they spread their assets hoping that the traditional 60% equities will make up for the losses on the 40% bonds. That will bankrupt most people on this next move. It has failed to save pension funds.

Just remember. You MUST be disciplined. The hardest part of successful investing is to remove your emotions as much as possible from the decision process. This is why the decision must be on the NUMBERS and not even what I have to say. Nobody can forecast a market from a gut perspective. If they are looking for someone to be a guru, then kiss your portfolio goodbye right now.

I will be doing video updates for those who purchased the 2018 Share Market Report. We will be holding a WEC in Singapore in June. We will be opening up both Singapore and Orlando for general ticket sales shortly. Prior attendees get first dibs. We will be covering all of Asia in Singapore and the world in general. Orlando will be focused on Europe and North America with also a general overview of the world. That will be held after the 2018 US elections.

So follow the Reversals and the Timing. They will tell us when to ac

Apr 2 2018

White House Trade Director Peter Navarro Discusses China, NAFTA and Wall Street…


Re-Posted from The Conservative Tree House on April 2, 2018 by

CTH takes a little flak for pointing out the obvious; that’s ok, it doesn’t change the reality: When you confront the manipulated multinational trade system – the multinational Wall Street entities who have historically benefited from that system will lose.

It is impossible for Wall Street corporations invested overseas not to lose some financial position. This is reality, and this is also necessary.  Meanwhile U.S-centered  corporations will gain valuation in direct proportion to the amount of investment they hold inside the U.S…

White House Trade Director Peter Navarro discusses the ongoing trade initiatives, China, Wall Street and NAFTA.  President Trump has indicated a strong preference for U.S.T.R. Lighthizer to make a determination about NAFTA as soon as possible. WATCH:

Apr 2 2018

Lucky Day, Lucky Day – Mexico’s Version of Hugo Chavez is Holding 18 Point Lead In Election Polling…


Re-Posted From the Conservative Tree House on April 2, 2018 by

If the news from the first round of Mexican election polling was any better we’d have to be twins to enjoy it.   Andres Obrado, a well-known Marxist who intends a government take-over of the Mexican energy sector, is holding a commanding 18-point lead.

This is excellent news for border wall enthusiasts and those who want the Trump administration to pull out of NAFTA.

Mr Obrador is the modern Mexican version of Hugo Chávez (or Nicolàs Maduro/Bernie Sanders) with a similar ideological outlook.  His resulting territorial economic policies are certain to deliver the Venezuela outcome to the Mexican people.

For American companies doing business in Mexico, an Obrador win would be the worst possible outcome.  They will lose hundreds of billions from their current Mexican investments, as President Obrador swoops in to skim (tax) corporate profits for his state-run enterprises and care for ‘his people’. However, the good news is – those U.S. multinationals will likely all return to the U.S. asap.  Lucky day, lucky day.

Funnily enough, U.S. Commerce Secretary Wilbur Ross must have held some insider information about this likelihood when he sheepishly hinted toward this possibility a few weeks ago.  Oh, the poor multinational critters in Wall Street are gonna have a heart attack when they see this.  Wait, wha… they did already?

MONTERREY (Reuters) – Mexican left-wing presidential candidate Andres Manuel Lopez Obrador has an 18-point lead ahead of the July 1 election, according to a poll published on Monday that showed him with a growing advantage at the start of formal campaigning.

Lopez Obrador, who launched his campaign on Sunday, holds 38 percent of the vote, according to the poll by Parametria, published by Reuters on Monday ahead of wider distribution. That compared to 35 percent in its previous poll.

A Lopez Obrador victory could usher in a Mexican government less accommodating toward the United States, where President Donald Trump has stoked trade tensions with Mexico and aggressively moved to curb immigration.

Lopez Obrador has backed the North American Free Trade Agreement, but his plan to review newly issued oil contracts sparked worries he will deter foreign investment. (read more)

Too funny…  The “smart set” (pundits) are reading it wrong:

                                                                                                      Oh dear…

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.

                                                                                        Oh, noes …

.

.

                                                                                                   Oh, my.

Apr 2 2018

China Announces $3b Tariffs on U.S. Imports – Pork, Scrap Aluminum, Wine and Fruits…


Re-Posted From The Conservative Tree House on April 2, 2018 by

In retaliation for $50 billion in U.S. trade tariffs against Chinese imports, China laughably hits back with $3 their own billion tariffs against the U.S.  According to most reporting Beijing has selected U.S. pork and scrap aluminum as targets for a 25% tariff, along with wine and fruit tariffs around 15%.

It should be emphasized the approach by China is rather ridiculous considering the Chinese government purchased the largest U.S. pork manufacturer Smithfield in 2013 for $5 billion; at the time the purchase price was 30% more than the company was worth.  Smithfield, now a Chinese company, represents 25% of all U.S. pork products.

Do you really think China is going to not import it’s own pork products… or subject them to a domestic tax?  Think about it.  It’s ridiculous.  China knows they have ZERO leverage in a trade-dispute with the U.S., they cannot afford to lose access to the U.S. market.

The example of Smithfield foods is exactly what we have outlined in how China cannot sustain itself and needs to control the assets of foreign countries.  Hence, their one-road/one-belt program for securing products and raw materials.  China is a dependent economy, they need to exploit global trade to survive.  China cannot feed itself. This is the inherent flaw within their short-sighted authoritarian government-controlled economic model.

Again, for emphasis, the Chinese government underwrote the purchase of Smithfield foods in 2013.  They paid 30% more than the company was worth because they were securing access to food just like they would any other raw material (uranium, minerals, etc).  China also purchases U.S. politicians to retain their ability in this regard.

Now look at the cartoon from the unofficial Chinese state-run media today:

Remember THIS is the position of the Chinese Government:

[…]  China’s latest countermeasures target fruit, pork and other US goods totaling some $3 billion, the equivalent of China’s losses caused by US tariffs. The list indicates China will never compromise and will always retaliate against unreasonable tariffs.

For every single move against Chinese interests, the US can expect retaliation. It is time for Washington to bid farewell to the delusional, make-believe world whereby it imagines China an unresponsive, over-tolerant nation.

China does not want a trade war, but it will not retreat should one emerge. Monday’s announcement is hardly a subtle hint. China will show its strength through action.

Recent White House statements have revealed a tough stance on Sino-US trade disparities while some have even shown a level of optimism at resolving trade conflicts through negotiation. But it is not hard to realize that such self-contradictory behavior reveals that the US knows its actions are unjustifiable. China’s attitude toward a trade conflict has been consistent and Beijing will carefully handle all challenges from the US.

There are always a few Western politicians who think China might step back and concede. But they are wrong. The Chinese government only cares about what is in the best interest of its people rather than elections.

Washington must be reasonable dealing with China. Threats will fail as China is not afraid of the US, plus the Chinese have zero tolerance for political weakness.  (read more)

Nuance and subtlety is everything in China. Culturally harsh tones are seen as a sign of weakness and considered intensely impolite in public displays between officials; especially within approved and released statements by officials representing the government.

There is no doubt in my mind that President Trump has a very well thought out long-term strategy regarding China. President Trump takes strategic messaging toward the people of china very importantly. President Trump has, very publicly, complimented the friendship he feels toward President Xi Jinping; and praises Chairman Xi for his character, strength and purposeful leadership.

To build upon that projected and strategic message – President Trump seeded the background by appointing Ambassador Terry Branstad, a 30-year personal friend of President Xi Jinping.

To enhance and amplify the message – and broadcast cultural respect – U.S. President Trump used Mar-a-Lago as the venue for their visit, not the White House. And President Trump’s beautiful granddaughter, Arabella, sweetly serenaded the Chinese First Family twice in Mandarin Chinese song showing the utmost respect for the guests and later for the hosts.

Why the constant warm messaging?

What is the purpose?

What does all this have to do with a trade confrontation?

Historic Chinese geopolitical policy, vis-a-vis their totalitarian control over political sentiment (action) and diplomacy through silence, is evident in the strategic use of the space between carefully chosen words, not just the words themselves.

Each time China takes aggressive action (red dragon) China projects a panda face through silence and non-response to opinion of that action;…. and the action continues. The red dragon has a tendency to say one necessary thing publicly, while manipulating another necessary thing privately. The Art of War.

President Trump is the first U.S. President to understand how the red dragon hides behind the panda mask.

It is specifically because he understands that Panda is a mask that President Trump messages warmth toward the Chinese people, and pours vociferous praise upon Xi Jinping, while simultaneously confronting the geopolitical doctrine of the Xi regime.

In essence Trump is mirroring the behavior of China while confronting their economic duplicity.

China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity. They see peace and war as coexisting with each other.

China accepts and believes opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another. Flowing between these polar states is a natural dynamic to be used -with serious contemplation- in advancing objectives as needed.

Peace or war. Win or lose. Yin and Yang. Culturally there is no middle position in dealings with China; they are not constitutionally capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome. If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war. In politics or economics the same perspective is true. It is a zero-sum outlook.

Therefore, when you see China publicly use strong language – it indicates a level of internal disposition beyond the defined western angst. Big Panda becomes Red Dragon; there is no mid-status or evolutionary phase. Every American associated with investment, economics and China would be well advised to put their business affairs in order accordingly.

President Trump will not back down from his position; the U.S. holds all of the leverage and the issue must be addressed. President Trump has waiting three decades for this moment. This President and his team are entirely prepared for this.

We are finally confronting the geopolitical Red Dragon, China!

The Olive branch and arrows denote the power of peace and war. The symbol in any figure’s right hand has more significance than one in its left hand. Also important is the direction faced by the symbols central figure. The emphasis on the eagles stare signifies the preferred disposition. An eagle holding an arrow also symbolizes the war for freedom, and its use is commonly referred to the liberation fight of righteous people from abusive influence. The eagle on the original seal created for the Office of the President showed the gaze upon the arrows.

The Eagle and the Arrow – An Aesop’s Fable

An Eagle was soaring through the air. Suddenly it heard the whizz of an Arrow, and felt the dart pierce its breast. Slowly it fluttered down to earth. Its lifeblood pouring out. Looking at the Arrow with which it had been shot, the Eagle realized that the deadly shaft had been feathered with one of its own plumes.

Moral: We often give our enemies the means for our own destruction.

RELATED:

Leverage… We have it, China doesn’t.

China is no longer hiding their alignment with their proxy province of North Korea.  Meanwhile President Trump has cultivated a very close relationship with Shinzo Abe of Japan, and to a lesser extent Prime Minister Modi of India.

Two teams preparing for the economic conflict:

China/North-Korea/Russia and Pakistan.

-VS-

U.S./South-Korea/Japan and India.

.

That’s the big picture.  The rest is chaff and countermeasures.

Apr 2 2018

Greco-Turkish War – Is it Inevitable?


Armstrong Economics Blog/War

Re-Posted Apr 2, 2018 by Martin Armstrong

QUESTION: Message: Hi, huge respect for your eye-opening work. You mention that war is more likely to erupt in the middle east than Korea. Since middle east seems to be in a state of perpetual combat in different areas, do you think war could expand as Turkey is more & more openly hostile to Greece? The average Greek is no longer considering if it happens, more like when it will happen. Does Socrates provide a forecast on this?

Regards,

S, Athens.

ANSWER: Actually, the primary target for a peak in any Greco-Turkish war will arrive in 2022. What we must understand is we have a major convergence between the Cycle of War and the Economic Confidence Model (ECM). What this means is the increased risk of geopolitical tensions are enhanced by economic downturns. This is what I have been warning about with the collapse of Socialism. As the endless promises of governments crumble to dust, politicians are faced with (1) the overthrow of their governments, or (2) create an external enemy to shift the blame from themselves. Therefore, as the economy turns down, interest rates will invert and rise when people no longer trust a government, and the fabric of the political-economy will be torn apart at the seams. This is historically the most dangerous point for at that moment, the government will turn to create external enemies.

When communism fell in 1989, the military establishment was no longer really needed. They needed to create external enemies to justify maintaining their position, status, and funding. Therefore, Russia continued to be the enemy of the USA simply because they needed one. When I would ask WHY was Russia our enemy if they were no longer Communist, the reply was dumbfounding: “Well they are Russian!” Even Ukraine was a power-play. The Eastern part of the country was ethnically Russian. The country should have simply been split north to south down the language border. Crimea was always a strategic port of Russia. If Japan told America to get out of Okinawa, the US response would be no different than Russia’s – America would occupy Okinawa. So why put sanctions on Russia for doing what the Americans or British have always done throughout history? The answer was just the military establishment needs an enemy – not peace. World peace means they are out of a job. They like those gold stars on their shoulders.

Therefore, as we head down into the economic abyss, the political necessity for war will be on the rise. Ergodan needs an external enemy. He is desperate for war and it will take two fronts – Kurds and the Greeks. He can easily stir the old pot of hate to retain power. This is what any politician does. Even Hillary during the election, as well as all the Democrats, stir the economic pot of class warfare to divide the nation just to get power. They also need that hatred of people who have more to win power. The people cheer and will one day storm the houses of the rich and will set them ablaze or drag them out and hang them. This is traditional and it is one primary reason class warfare is highly dangerous and undermines the foundation of any state. So this is what we face. Look at everything in that context and you will begin to see the conflicts deliberately created by the political class to retain power in ALL societies.

The first modern Greco-Turkish War following the fall of the Ottoman Empire is called the Thirty Days’ War, which took place against a rising Greek concern over conditions in Crete. This centered on the Turkish domination and where relations between the Christians and their Muslim rulers had been deteriorating rapidly. 1896 saw a rebellion on Crete instigated to a large extent by the secret Greek nationalistic society called Ethniki Etairia. They sought to fuel the historic resentment between the Christians and Muslims and they sought to create an opportunity to annex the island for the Greeks. Therefore, by the beginning of 1897, Greece sent arms to Crete to support a rebellion and revolution. On January 21, 1897, the Greek fleet was mobilized and in February Greek troops actually landed on the island proclaiming the annexation of Crete to Greece. The following month, the European powers imposed a blockade upon Greece to stop the arms shipments. The European powers feared that the whole of the Balkans would see vengeance upon the Turks.

The Greeks sent a force to launch an attack on the Turks in Thessaly (April). By the end of April, Greeks were overwhelmed by the Turkish army. The Greeks yielded to pressure from the European powers and withdrew their troops from Crete accepting an armistice on the mainland on May 20th, 1897. On December 4, 1897, a treaty was signed compelling Greece to pay the Turks an indemnity, to accept an international financial commission that would control Greek finances, and to yield some territory in Thessaly back to Turkey. Subsequently, the Turkish troops also left Crete, which had been made an international protectorate in 1898. Crete was finally ceded to Greece by the Treaty of London (1913), which ended the First Balkan War.

The second Greco-Turkish War occurred after World War I, when the Greeks attempted to extend their territory beyond eastern Thrace and the district of Smyrna. These territories had been given to Greece by the Treaty of Sèvres, August 10th, 1920. In January 1921 the Greek army launched an offensive in Anatolia against the nationalist Turks, who had defied the Ottoman government and would not recognize its treaty. In Greece, the war was followed by a successful military coup against the monarchy.

The Treaty of Lausanne concluded on July 24th, 1923, obliged Greece to return eastern Thrace and the islands of Imbros and Tenedos to Turkey, as well as to give up its claim to Smyrna. The two belligerents also agreed to exchange their Greek and Turkish minority populations. To this day, Turkey retains designs on regions it yielded to Greece.

As the economy and hyperinflation continue in Turkey, the government desperately needs an external enemy. So yes. The tensions will continue to rise and this is seen as inevitable in Athens and the resentment goes back to the Persian invasion of Greece in ancient times. Even the culture of the Minoans were the origins of the Greeks. Anatolia was all Greek cities that filled modern Turkey. The fall of Constantinople in 1453 was the invasion of the Turks who were Muslim. So the traditional ethnic origin was Greek and the language of the Eastern Roman Empire ruled from Constantinople was Greek – not Latin.

The last Emperor, Constantine XI (1448-1453), died in battle fighting the Turkish invasion. Beware November 2018. Things seem to begin picking up about then.

Apr 2 2018

Wheat & the Drought Cycle


Armstrong Economics Blog/Agriculture

Re-Posted Apr 2, 2018 by Martin Armstrong

QUESTION: Interesting that $1.3T US spending bill was enacted on March 23, 2018, exactly 31.459 years after passage of US Tax Reform Act of 1986:

Also, the 86 year cycle in drought conditions in the midwest US seems to approach – is this why Marty thinks wheat will bottom this year?

The below Wikipedia link mentions a “short drought” in 1890 in the US Great Plains, and then a dust storm on November 11, 1933, in South Dakota (43 years later). Wikipedia also mentions that the US Great Plains entered an unusually dry era in the summer of 1930 (a little more than 86 years ago), with droughts coming in 1934, 1936 and 1939-1940.

Kansas is having drought conditions currently:

Poor winter wheat condition worrying Kansas farmers

I wonder if this is the year to go long wheat, especially since Marty forecast a bottom for this year?

Best,
J

ANSWER: Here is a chart of Wheat from 1259 to 2017 with the currency converted to dollars from British pounds using the conversion rate at the beginning of the US dollar extending it back in time. Here we can see the overall trend. Yes, there is an influence with respect to weather. However, the Dust Bowl was a local event.

What our computer is warning about begins next year with a Directional Change in Wheat. This cycle appears to be impacted by (1) significant climate change, and (2) the War Cycle. The combination of both is pointing to a bull market in nominal dollar terms.

Apr 2 2018

Monetary Policy is a Complete Failure? Will Shutting Down the Fed Solve All the Problems?


Armstrong Economics Blog/Central Banks

Re-Posted Apr 2, 2018 by Martin Armstrong

I recently did an interview and was asked about the Federal Reserve. There is so much absolute nonsense sophistry that circulates where people think that ending the central bank will somehow cure everything. I really just laid it out plain and simple. The Fed’s balance sheet is a tiny fraction of the economy or the real money supply. Everyone blames the Fed for everything and they NEVER bother to look at (1) the fiscal policy of Congress, and (2) the banking system as a whole.

Even if you want to scream from the top of every hill that $4 trillion worth of Fed’s Quantitative Easing was pure evil and should have created hyperinflation (which it did not), the deficits created by Obama topped $1 trillion per year and those never die whereas the Fed’s QE evaporates as they do let the debt they bought mature and expire without rebuying it again, whereas Draghi and the ECB have conceded they will reinvest their holdings. Look at 2009-2012. Obama created $5.4 trillion that will never expire but will be rolled until there are no more buyers.

So let’s do the math. The entire Federal Reserve QE program was equal to 1/5th of the national debt. The ECB bought 40% of all public debt and the Bank of Japan bought 75% of new debt coming to the market. Yet all we get is dollar bashing and people actually have called the yen the safe-haven play. I really do not know if I am arguing is drunks, people with dementia, or just con-artists. All these people pushing the end of central banks because they are clueless about how the real world functions.

I have been trying to explain to the world that monetary policy using interest rates to impact the balance of payments is really voodo economics. The Australian even wrote an article back in 1989 about the advice I was given to governments. No matter how long I have been at this, trying to overcoming manipulating interest rates to try to control the economy is just totally insane. It reminds me of the skit in Blazing Saddles where the Black guy puts a gun to his own head and say if anybody moves, the black guy gets it. How can a central bank raise interest rates to fight inflation when the government is the biggest borrower in the system? The government deficits will rise because their interest expenditure will rise perpetually because they continuously roll their national debts and never pay anything off. The central banks have lost all control and the press is just too stupid to even understand the problem.

The Australian wrote about our recommendation: “He firmly believes the worldwide obsession with monetary policy, namely the use of interest rates to regulate inflation and demand, is misguided, and in a recent circular to clients described it as “voodoo” economics.”

 

We are hopelessly lost and the idiots who bash the Fed are doing so much harm to society it is not even funny. The bulk of the real world money supply is created by lending on a leveraged basis. It is not money created by the Fed and it goes well beyond that even created by the Congress.

AT the end of 2017, total household debt exceeded $13 trillion. Total non-financial business debt stood at $6.1 trillion at the end of 2017. The Fed’s balance sheet was $4.4 trillion of which $2.4 is US Treasuries. The national debt stood at $20.5 trillion at the end of 2017. If we look at this perspective, that means the money supply is $41.6 trillion just using the debt. If we then add M2 (all accounts _ money market accounts) which stood at $13.8 trillion at the end of 2017, this brings us to a liquid money supply of $55.4 trillion. The Fed’s balance sheet does not even reach 10% of that figure. Now let us add the stock market, which is liquid. That reached $30 trillion by the end of 2017. Therefore, the liquid assets/cash position stood at $85.4 trillion at the end of 2017. Now let us add total personal real estate (homes) in the United States which stood at $31.8 trillion. If we include illiquid real estate, now we are up to  $117.2 trillion. So how will shutting down the Fed and theoretically eliminate $4.4 trillion solve all the problems?

Apr 1 2018

President Trump Makes Brief Remarks Prior to Attending Easter Service…


Re-Posted from The Conservative Tree House on April 1, 2018 by

Earlier today President Trump tweeted concern about the politicization of border security and the unwillingness of Mexico to confront their side of the equation.  [the three tweets from POTUS Trump follow the video snippet]

Before attending Easter Mass today, President Donald Trump briefly paused and responded to a question about his calling out Mexico for not helping the U.S. secure the border. WATCH:

It is against Mexico’s interests to stop the outflow of illegal aliens into the United States.  Much of the Mexican economy is dependent on the exfiltration of U.S. wealth through Mexican nationals sending money back to Mexico from the U.S.

The amount of money services (Western Union) used by Mexican Nationals to transfer dollars to their friends and family in Mexico exceeds the entire energy sector of the Mexican economy.  Hopefully President Trump will follow through on plans to exit NAFTA.