Tag Archives: Central Planning

Oct 3 2017

Do States in USA Have a Right to Leave?


Armstrong Economics Blog/Politics

Re-Posted Oct 3, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong,

I agree with your blog post about sharing the Declaration of Independence, and how a people have the right to declare independence.
Hypothetically, what would your thoughts be if a State decided to leave our Federal Republic… would you believe that a State has the right to declare independence?
Thank you for your thoughts.

ANSWER: I have to be consistent that what stands as a principle for one must stand for all. I greatly admired former Justice Scalia. However, in a letter he once said that there was no right to separate and that was decided by the Civil War. War never settles any issue morally or ethically. Both Lenin and Mao won their wars. So did the Mongols. I do not believe those wars establish morality or ethics – only the principle that he who has the the power wins the battle field.

I personally believe that the removal of monuments and suddenly saying Jefferson was a slave owner to tarnish his reputation, is all an effort supported to really target the rise of separatism. It is too coincidental and the Civil War was not exclusively about slavery – it was about State’s rights. The bulk of the soldiers were not slave owners. This was really to suppress the rising trend of separatism in the USA. Even Texas included that in their platform and Hawaii will most likely move to separate by 2031. I wrote back in September 2015 about the rising separatist movement in Catalonia and Texas.

Oct 3 2017

Will China take over US as the top Superpower


Armstrong Economics Blog/China

Re-Posted Oct 3, 2017 by Martin Armstrong

QUESTION: I read a credible theory recently about China taking over US as the top superpower via economic pressures. Namely by replacing the US dollar with the Yuan as the standard currency for international trade. This shift is (supposedly) being enacted through 1) increased control over Developing countries through international lending from the New Development Bank, 2) increasing control over global oil via financial ties to Saudi Aramco and Russia’s Rosneft, 3) trying to denominate global oil transactions in Yuan through the Shanghai oil futures market & backing up the Yuan value with the massive gold reserves China has been accumulating.

My question is whether you see this strategy unfolding as a credible threat to usurping United States’ global domination by China and if so – what might the investment world look like during such a massive upheaval?
Thanks – love your blogs & insights!!

WM

ANSWER: China is on the rise and it will become the financial capital of the world after 2032. However, it has a long way to go. China can price every commodity in yuan and demand all trade deals are in yuan. That still will not displace the dollar. The center core issue behind the dollar ironically in the US National Debt. For now, this is the place institutions can park their money. You can trade in any currency, but where do you park you profits?

China will displace the USA as the financial capital of the world when (1) people begin to trust China as a place to park money. Bitcoin exploded because the Chinese were using it to get money out of China, which had reach 98% of trading. China has been steeping in against BitCoin to stop the capital outflow.

It’s the capital flows that are the key – not trade. The daily trading volume in FOREX alone has exceeded $5 trillion. Most investors are familiar with the stock market, yet they are unaware how small in volume share trading is compared to foreign exchange. The Forex market dwarfs the trading in equities and futures markets.

FOREX trade and investment capital flows DWARF trade flows. Absolutely nothing compares to the Foreign Exchange Markets.

Anyone can write a contract in dollars. You cannot do that in Japanese yen. If you issue a bond in yen you have to apply for permission back in Tokyo. All these argument are made up by the dollar-haters who are so desperate to find an excuse that the dollar will crash. It’s time will come. Just not yet.

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Oct 3 2017

Italy’s Experience With Pre-Pay VAT Was Devastating


Armstrong Economics Blog/Sovereign Debt Crisis

Re-Posted Oct 3, 2017 by Martin Armstrong

COMMENT: Re:  Germany To Tax VAT Just Billing People Before they Pay

Please note in Italy we had the same = pay VAT to the government before collecting it from client for decades, until a couple of years ago (approx), when Italian government changed the rules (first you collect VAT from clients, then you send VAT to the Government).
They changed rules because Italian companies had a collapse (in sales, payments, orders,… nearly almost 50% were bankrupt) and nonetheless they have to pay the VAT to the Government  before to collect it from customers, and they were using cash or credit resources or even open bank loans to pay VAT (not yet cashed from customers). The largest and the smallest companies were in serious trouble; a lot of them forced to close or to go bankrupt.
Then this change in law just to give some …relief …to the remaining economic structure…
Thanks for your attention and for sharing with us your knowledge.
All the best
D

REPLY: Yes I am aware of the change in Italy. You are correct. This will stop companies from contracting installment payments and it will complete alter how you enter into employment contracts. Politicians are just incapable of understanding how the real world works which is self-evident from how they pass laws like this.

This will seriously hurt the German economy and further add to the deflation and economic decline ahead.

Oct 2 2017

Spanish & Italian Bonds Hit


Armstrong Economics Blog/European Union

Re-Posted Oct 2, 2017 by Martin Armstrong

COMMENT: Mr. Armstrong; the Spanish and Italian bonds are getting hit. You were spot on again.

RW

REPLY:  Yes the peripheral spreads on the Spanish government bonds (at 10yrs) are 8bp wider than Friday close. Italy is also widening – out by 6bp but still early in the trading day just yet. The Spanish IBEX is off -1.45% (Banks down between 2.5% and 5%).

The Italian election will come May 20th, 2018. That is the end of this year from Political Hell. We will see the anti-EU sentiment now rise in Italy and in Eastern Europe. The EU made a very serious mistake. They did not support the people and democracy, but sided with the fascist government because it was in their own self-interest to crush Catalonia. This confirms that the EU is tyranny and cares nothing about the people.

Oct 2 2017

The Death of Socialism – the Rise of Tyranny


Armstrong Economics Blog/Understanding Cycles

Re-Posted Oct 2, 2017 by Martin Armstrong

QUESTION: Hi,

I tend to agree with your view about the decline in socialism.  However, I fear it will be replaced with the other extreme. Doesn’t the pendulum usually swing from one extreme to another?

Regards,

Jack

ANSWER: Absolutely. This is the ONLY reason I am doing what I do. The risk is that we turn more authoritarian and lose all our rights. This is the trend in motion. “Socialism” as far as benefiting the people has been a mere fraud and this is what people are rising up about without identifying in this exact manner.

Socialism gave government extraordinary power. They love that power. What you are witnessing in Spain is the real essence of this thirst for power and they will never hesitate for one second about killing the people. Marx handed government this whip of power. Millions have died ever since. When Shakespeare wrote “The first thing we do is kill all the lawyers” he was really speaking about government prosecutors. They care nothing about honor, dignity, morality, or ethics. Their job is to trash the constitution and maintain their 98.5%+ conviction rate. If the parents of these people knew the evil they inflict upon society, they would NEVER be proud of their children. I have NEVER met a prosecutor who has EVER been ethical. They are far worse than the people they prosecute and the court appointed lawyers who manage to lose every case are just as worthless individuals at the end of the day. This is all a symptom of the decline and fall of civilization.

We will have a brief shining moment to push the pendulum back in the opposite direction. My fear is what what comes after 2032 is another PUBLIC WAVE. We must be very careful that this battle for power does not extinguish everything worth living for.

People are writing in and asking why am I always right. All I have done is put the pieces together and it is not that hard to understand what makes everything move and shake when the computer monitors the world. God does not speak to me in the middle of the night. If he did, I would ask, can I go home now?

I have a family and if I were selfish, I would care less about them and only myself. I would not be writing this right now and I would be on some island waiting for the mushroom cloud on the horizon to signal it is all clear. But I have a family. Trust me, not even they want to look at what I see so I just do what I need to do and do not preach to them. They will see it when it smacks them in the face.

There are those of us who see. Just remember, you cannot force others to see what you see. The best you can do is soft-peddle and simply point out the trend and let the light go on in their own mind. So enjoy this gift of life while you can. Just keep one eye open fixed on the horizon. When it is time – you will know it.

So until it is time for Scotty to beam me up, I am trapped here, compelled to watch what I do not want to see and I cannot change the channel. History repeats because human motivation remains the same throughout all time and circumstance.

Oct 2 2017

Puerto Rican Engineering CEO: Local Government “Corrupt” Cannot Handle Emergencies – Ground Report Video…


Re-Posted from The Conservative Tree House on October 1, 2017 by

“I’m really tired of Puerto Rican government officials blaming the federal government for their woes and for not acting fast enough to help people on the island. Last week I had three federal agents in my office and I was so embarrassed; I went out of my way to apologize to them for the attitude of my government and what they have been saying about the U.S. response.”

~Jorge Rodriguez, CEO of PACIV, Puerto Rico-based engineering firm

PUERTO RICO – The head of an international engineering firm in Puerto Rico said in an editorial Saturday that when the time came to send 50 of his engineers to help in the aftermath of Hurricane Maria, he bypassed local officials and went straight to FEMA.

The reason, said Jorge Rodriguez, the CEO of PACIV, in an editorial in the New York Post, is that “for the last 30 years, the Puerto Rican government has been completely inept at handling regular societal needs, so I just don’t see it functioning in a crisis like this one.”

“Even before the hurricane hit, water and power systems were already broken. And our $118 billion debt crisis is a result of government corruption and mismanagement.” (read more)

Apparently a great deal of Puerto Rico citizens feel the same way. WATCH VIDEOS:

 

Oct 2 2017

Diversification – Smart or Dumb?


Armstrong Economics Blog/Understanding Cycles

Re-Posted Oct 2, 2017 by Martin Armstrong

 

WorldIntRates-2012

QUESTION: Mr. Armstrong; Do you believe in portfolio diversification?

ANSWER: No not really. I see no point in putting money in something you know will be a loss. Diversification within a sector is one thing. But buying government bonds when rates are at a 5,000 year low and governments are in trouble around the world, I just see as really stupid.

Once you understand how our global model works, you can see the trend unfolding in a numerous instruments that therefore confirms the trading direction. For example, we warned that gold had made an important high and would crash from 2011 for at least 3 years minimum. At the same time, we warned that the Dow would breakout to new highs. Barrons reported that forecast and did not believe that we would be correct. Both the high in gold and the breakout in the Dow were connected. Each confirmed the other among a host of other relationships.

What is impossible is trying to forecast just gold or the Dow in isolation relying upon fundamentals, which always prove to be worthless. Take the Long-Term Capital Management Crisis of 1998. The problem began in Russia and investments there collapsed but you could not get out at any price. They began selling assets everywhere else in the USA to Japan. This became a liquidity crisis that spread into a contagion. You could look at all of the fundamentals that said nothing should be happening in Japan. That led to massive losses in Japan that were contrary to fundamental analysis.

Everything is interconnected. Diversification is for people who cannot forecast so they just hope to stay ahead of the game. Asset Allocation has to be done smartly. You need some cash and those who will want some bonds v equities simply need to stay short-term and away from issues that will be a problem.

Oct 2 2017

Cryptocurrencies


Armstrong Economics Blog/Armstrong Economics 101

Re-Posted Oct 2, 2017 by Martin Armstrong

QUESTION: Marty, do you think any crypto currency will survive?

ANSWER: No. We are looking at central banks and even the Chinese government is moving to create a Cryptocurrencies. There is no question that we will be looking at this is the next evolutionary step forward.

However, what I have been warning about is the public v private issue. Governments are hunting money everywhere. There is just NO POSSIBLE WAY they will allow private Cryptocurrencies  to circumvent their control and taxation.

Oct 2 2017

Marxism/Socialism Is On the Decline


Armstrong Economics Blog/Politics

RE-Posted Oct 2, 2017 by Martin Armstrong

 

I have warned that we are in a period where SOCIALISM is collapsing – not CAPITALISM. The distinction is manifest in rising retirement ages, reduction in social benefits, and rising taxation. This is also evident in politics. The Democrats really have no face to put forward as their leader. Hillary lost and even Elizabeth Warren is way out of touch for the average American.

Nevertheless, we are seeing this trend where socialists in politics are in a major decline. The Democratic Party in the USA has been declining ever since FDR won the first election in 1932. Each time the Democrats win, it has been with lower highs and the declines are always making lower lows. Looking at the map of Democratic states with governors, it is shocking to say the least. This is why the press is fighting so hard against Trump and the Democrats are desperate to keep the proposition that Hillary should be president and was prevented only by the Russians. Of course, there is no allegation that any of the emails released from the Democrats were forged. So the info was real regardless of who hacked the Democrats.

Looking around the world we see the same trend, In Germany, the SPD is losing seats. Everywhere we look, Socialist parties are on the decline. Der Spiegel published an article highlighting the same same we have been forecasting  that there is a decline of socialist parties in Europe as well. Der Spiegel noted that even a strong socialist candidate in Austria still struggles with the baggage of the “old, sclerotic social democracy.”

We have tagged this past year as the Year from Political Hell. We have witnessed BREXIT, the election of Trump, and the decline of Democrats throughout the USA. In Germany, the socialists were part of the government in 10 out of the 15 countries within the European Union (EU). Der Spiegel suggested that there was a real chance that German Social Democrats will no longer be part of Chancellor Angela Merkel’s coalition following the German vote. The AfD has been rising and soared a major victory winning seats for the first time illustrating the shift to the right.

We are witnessing the same trend in Italy and this too could be an upset in early 2018. If Italy turns away from the socialists, then center-left parties could collapse and hold only 6 EU member states out of 28. That means the socialists would be reduced to the periphery: Malta, Portugal, Romania, Sweden, Slovakia and the Czech Republic. Even the left-wing Syriza alliance in Greece has proved to be a joke failing to do anything for Greece whatsoever.

In the Netherlands, the Labor Party captured only 5.7% of votes in the last election. French Socialist Party candidate won only 6.4% of the vote, and his party went on to receive a miserable 9.5 percent of the vote in parliamentary elections a short time later. In Poland, the Social Democrats lost everything and no long hold even a single seat. In Norway, the Labour Party lost to the conservatives. The only place where the socialists gained was in Britain. There the Marxist/Socialist Jeremy Corbyn won among the youth with promises that could never be kept.

All of this warns that society is turning more to the right because the socialists have reduced economic growth, jobs, and the living standards by raising taxes. The words of King Oscar II of Sweden seem to be coming true.

Oct 1 2017

Google Supporting Tyranny?


Armstrong Economics Blog/Politics

Re-Posted Oct 1, 2017 by Martin Armstrong

Anyone who support the Spanish Madrid government is no different than support the Kings of England and France during the American and French Revolutions. Google picks the wrong side. Does this mean they will side with government every time. Dangerous precedent.