QUESTION: Hi, I’ve read your blog for a couple of months now and it clearly opened my eyes. But I’m wondering if I’m getting crazy now.. I can see a pattern between rising Chinese yields (despite weaker growth), parked Chinese money in the Canadian & Australian housing bubble, plunging commodities (very bad for Australian and Canadian people who have to pay of their massive mortgages) and why all this will lead to a rising dollar. Am I looking in the right direction?
A.S.
ANSWER: Yes. The only way to reach the economic crisis that forces political change is to put on the maximum amount of pressure. It does not even require that what people BELIEVE will happen, happens. Human nature is such that we all act in anticipation of events. Sure the Euro has bounced on belief that BREXIT is a passing phase. But the election of Macron was the worst possible outcome as it should have been for it now seals the fate of Europe. The Euro that will crumble as Brussels now tries to federalize everything to secure its own survival against the people of Europe to defeat this populist movement by political decree.
The dollar rose between 1980 and 1985 on the fears that the USA would default creating a two-tier monetary system with red dollars externally and green dollars internally. The US national debt hit $907.7 billion in 1980 and the Eurodollar market was about the same. The Europeans were convinced that the US would default by adopting a two-tier dollar. Consequently, between 1980 and 1985, Eurodollar deposits fell by about 50% and the Europeans moved their accounts to the USA where they thought they would get green dollars. That was the number one question I would get at seminars and conferences in Europe between 1980 and 1985. It never happened. Yet the “belief” it might moved capital to USA and that sent even the British pound to $1.03 in 1985.
Only the dollar moving to all time record highs in 1985 sparked the Plaza Accord. However, that is where the whole idea of the Euro was born. Jim Baker saw THE PROBLEM AS THERE WAS NO CURRENCY TO COMPLETE AGAINST THE DOLLAR. Baker urged Europe to create a single currency to prevent the dollar from rising, which then reduced US exports.
The national debt continued to rise reaching $2.125 trillion by 1986 and $3.2 trillion by 1990 and now we are at $20 trillion by 2017. The Dow Jones Industrial average was 1,000 in 1980. So exactly how is 21,000 on the Dow today out of like from just the expansion in debt?
You can see the correlation below. Our number remains 23,000 on the Dow where things begin to get interesting. So far, it is just keeping pace with international value. The first opportunity for a major dollar high is 2018 and after that comes 2020/2021.
QUESTION: Mr. Armstrong; Why is the Swiss Central Bank buying American equities? On the one hand you would think it is manipulation, but on the other, why manipulate the US share market?
Any clue since you have met with them directly?
LW
ANSWER: I wrote about that explaining that the central banks have been buying equities since 2014. The Swiss National Bank posted its latest 13-F holdings showing it has been buying equities at a stepped up pace during the first quarter 2017. Their total equity holdings have now reached $80.4 billion, up $17 billion from the $63.4 billion at the end of 2016.
The central banks are trapped. Lowering interest rates to virtually zero reduced their yield on reserves and they cannot sell off government securities. The only viable hedge is US treasuries in the bond world against the chaos of the Eurozone. That offers no diversification just more government debt. The ECB owns 40% of European government debt. The Swiss are buying US equities as a hedge against the Euro and political unrest. This is not manipulation. They lost a fortune trying to maintain the peg the franc with the Euro. They cannot use pegs, so the only alternative to just buying US Treasuries is private equities.
The central bankers understand what our model is warning about. As confidence continues to decline in governments, the central banks can go bankrupt UNLESS they too diversify out of government bonds.
Granted, nobody wants to talk about this yet in public. This is NOT manipulation – this is cover your ass time. We have been recommending this trade to institutions for the past 5 years
Macron won about 65% to Le Pen 35%. Even Obama came out in support of Macron which obviously confirms Macron is the supporter of the establishment – not change. The bias of the global press is clear in their labels. They label Emmanuel Macron as the “independent centrist” and Marine Le Pen as the “far-right” as applied by CNN – and we all know they are always for the establishment and against the people. Indeed, CNN seems to play the roll of Marie Antoinette who journalists reported she said “Let them eat cake” or in French “Qu’ils mangent de la brioche” upon learning that the peasants had no bread to eat, which back then was enriched with eggs and butter. Mainstream media has no regard for the people and only attempt to manipulate the people to maintain the status quo. Mainstream media do not want to rock the boat any more than the bankers. They want to keep everything as is and are distinctly part of the problem why we are in this economic mess. The mere fact Le Pen beat all the mainstream parties since World War II distinctly illustrates that all is not well in the land of Oz these people live in. Le Pen’s showing that about one-third of the population are fed-up with the status quo forewarns this is not over yet.
Still in France, that status quo is an economic storm of giant proportions that the Socialist Hollande has created destroying the French economy with every decree he introduced. France is a country that is bitterly divided and at great risk itself of yet another French Revolution. France is suffering from tremendous high unemployment, little to zero potential job growth, cursed by stagflation, and security worries that are the greatest among the European states. The unilateral act of Merkel accepting refugees supposedly from Syria that ended up being a wholesale invitation for anyone from all Islamic countries has devastated France who was never asked by Merkel in advance to accept these refugees. But Merkel’s unilateral act to save her own polls during her hardline position against Greece, demonstrated why the EU is a total failure. You have heads of states who can make independent decisions and the whole of Europe must suffer.
The French government has struggled to cope with immigration and integration crisis set in motion by Merkel, which is undermining both the French economy and French security. France has suffered terrorist attacks from the very people embraced by Merkel’s policy It is only a question of when will the next French Revolution unfold. Civil Unrest is also rising in France and this may lead to a much broader revolutionary movement. The terrorists who attacked Paris were then linked to the terrorist attack in Brussels.
History repeats because the passion of man never change. We are looking at France in the same strange position as when Louis XVI ascended to the throne. Then too the country was in the middle of a financial crisis and France was on the verge of bankruptcy. This was due in part to France’s costly involvements in the Seven Years’ War. In May 1776, finance minister Turgot was dismissed, after failing to enact reforms to correct the crisis.
On August 8th, 1788, the royal treasury was declared empty, and the Parlement of Paris, which was an assembly of nobles, refused to reform the tax system or loan the Crown any more money. To win their support for fiscal reforms, the Minister of Finance, Étienne Charles de Loménie de Brienne (1727 – 1794) , declared May 5th, 1789 for a meeting of the Estates General, which was an assembly of the nobility, clergy and commoners (called The third Estate), which had not met since 1614. Then on August 16th, 1788, the treasury suspended all payments on government debts going into default. Finally, on August 25th, Brienne resigned as Minister of Finance. He was replaced by Jacques Necker, a foreigner who was a Swiss banker. Necker was appointed Comptroller-General of Finance but could not be made an “official minister” because he was a Protestant. Nevertheless, Necker was very popular with the common people.
On September 23rd, 1788, Necker reassured French bankers and businessmen should agree to loan the state 75 million livers, on the condition that the Estates General will have full powers to reform the system. The political turmoil was unleashed. On December 27th, 1788, over the opposition of the nobles, Necker announced that the representation of the Third Estate will be doubled, and that nobles and clergymen will be eligible to sit with the Third Estate.
The financial crisis was astute. Necker realized that the country’s tax system subjected the lower classes to a heavy burden and was extremely regressive, simultaneously, numerous exemptions existed for the nobility and clergy. Necker warned that the country could not be taxed higher. He further argued that the tax exemptions for the nobility and clergy had to be reduced. He also proposed that the government borrow more money to solve the country’s fiscal shortages.
Necker actually published his report to support this claim showing the accounting of the crisis. He actually underestimated the deficit by more than 36 million livres or 6 million silver Ecu. Necker proposed restricting the power of the Parlement to protect the nobility. Necker also argued to be made a minister giving him the power to push through reforms. The King refused and Necker was dismissed.
We have reached that crossroads of economics/civil unrest that runs throughout history. We are on the verge of a serious Sovereign Debt Crisis once again. Here too we have governments seeking to track every penny and to eliminate cash to begin to just seize money from people’s accounts while cancelling passports to prevent anyone from leaving a country if the government believe you have money they can tax.
Mix in the same factors, regardless of the century, and you end up with the same result. Only a fool ignores the past and says this is the 21st century. That is how history repeats because those people never look back and ask – if we do this, what will happen? There have been 21+ civil uprisings in France since 1229. That is in line with the 8.6 year frequency (8.615 * 4.307) = 37.104. This does not bode well for the future as suspected.
With Obama’s endorsement, Macron appears to be in line with out model that forewarns of a real economic crisis in Euro as we head into 2018.
Le Pen conceded but will lead her Party in the Parliamentary elections next month. Macron paid a token gesture saying he understand the anger of 35% of the people who voted for Le Pen. Nevertheless, while the mainstream parties collapsed in France warning that the entire population really voted against the establishment, the sad part comes when the French people wake up and realize that Macron will not save France and if anything Brussels will now move aggressively to lock-down Europe to prevent another BREXIT. Brussels, based upon reliable sources, will seek to secure their own survival and move to federalize Europe to protect their own jobs.
To those who has asked if I would consult with Macron’s government, let me put it mildly. First, he will never call me and two, it would be a huge waste of time. This simply has to play out now. Brussels will NEVER reform or asking if there is something they are doing wrong. Europe will have to crash and burn politically before change will ever come.
The computer was correct back in 2015 when it projected Le Pen would beat both the Socialist and Conservatives. Now the second part of that forecast was just set in motion. There will be no reform for Europe so we are looking at a very hard landing.
Obama Intervenes in French Election Proving Macron is Establishment and represents no change for France thereby sealing its doom. Of course, Obama is doing exactly what they he and his mainstream media backers say Putin is doing – trying to influence the French election.
Obama intervened in the British Referendum telling the Brits they would have to get at the back of the queue and would be ignored if they left the EU. Macron will send France and the EU down really hard. He represents no change for France and will commit the country to go down with the EURO Ship.
Turnout is low so far and Le Pen ballots are torn in many places around the country to invalidate them in the count. The ESTABLISHMENT will do what it takes to rig the game as alway
This 2017 edition of the Cycle of War is the third in a series. This one is focused upon the Civil Unrest and how this is the source of Revolution. This turning point in the Cycle of War we have warned was the convergence of both International War and Civil Unrest. This edition will be available by the end of the week for download. The price of this report is $75.
The first in the series focused upon international events and tracing the cycle. The second in this series focused on the Middle East and the rise of religious confrontations. Here in the third installment, this focuses upon the civil unrest trends that emerge into revolutions. These are economically driven and have a direct correlation to rising taxation that pushes the people to the point of no return.
Those attending the Hong Kong and Orlando Conferences will receive this report complementary.
Canadian Prime Minister Justin Trudeau appears to be cowering to the demands of British Columbia Provincial Premier Christy Clark who asked for retaliatory trade action against Oregon and the Pacific Northwest after Commerce Secretary Wilbur Ross announced a tariff on Canadian soft-wood imports.
Yesterday (Friday) Prime Weasel Trudeau threatened to ban shipments of U.S. thermal coal from Pacific ports and suggesting sanctions against additional trade products from Oregon due to the support for the soft-wood tariff by Democrat Senator Ron Wyden.
ENERGY ECON […] Trudeau said Ottawa would study whether to stop U.S. firms from shipping thermal coal via the Pacific province of British Columbia. Provincial Premier Christy Clark asked for the ban in response to the U.S. tariffs.
Canada is also considering duties on exports from Oregon such as wine, flooring and plywood, said a source close to the matter, citing Oregon Democratic Senator Ron Wyden’s prominent role in pressing for the lumber tariffs.
Analysts said Cloud Peak Energy Inc would be the biggest coal producer affected by a British Columbia ban or levy. Coal is railed to those ports by Burlington Northern Santa Fe Corp, owned by Berkshire Hathaway Inc. (read more)
I wonder if Prime Weasel Trudeau is aware most of the Cloud Peak transported U.S. Coal only flows to British Columbia as an outcome of using the BC port for export to Asia. Economic analysts don’t even measure how much coal actually stays Canada, so the threat of a Canadian ban on U.S. coal is political gnat-banter for domestic chest-thumping purposes. {{{eyeroll}}}
And you can bet it would only take one tweet from President Trump and a nation of U.S. patriotic consumers could easily cover for any Oregon wine export losses. I know tens-of-thousands of patriots not generally predisposed to support the insufferable Wyden but would rally to fill Oregon’s economic trade void if needed – HINT: “America First“, eh?
The U.S is the worlds biggest consumer of stuff. We are the worlds biggest market. One of the advantages of being the biggest customer, is the leverage our status provides in negotiations with suppliers. That leverage has gone unused for decades, if President Trump calls upon it – it’s there.
$18-20 trillion worth of bigly leverage, the best most magnificent of all leverages, available with a tweet. Believe it.
However, as an outcome of his public statements, Prime Weasel Trudeau has also put himself back on the trade radar of Wilburine Ross.
U.S. Commerce Secretary Wilbur Ross said on Saturday that threats of retaliatory trade actions from Canadian officials “are inappropriate” and will not influence final U.S. import duty determinations on Canadian softwood lumber.
“We continue to believe that a negotiated settlement is in the best interests of all parties and we are prepared to work toward that end,” Ross said in a statement issued by the Commerce Department.
[…] Ross said in his statement on Saturday that the Commerce Department’s decision “was based on the facts presented, not on political considerations.”
“Threats of retaliatory action are inappropriate and will not influence any final determinations,” Ross added. (link)
There’s been a global trade war against America’s best interests for three decades; Americans’ just haven’t been positioned to fight in it…. until now, eh.
Are people beginning to catch on? Are people beginning to identify the long-ball strategy of a non-traditional approach toward geo-political alliances?
Apparently, some are – because North Korea is not happy with the heavy pressure coming from Big Panda, China. As identified within this radio interview between Dr. Gorka and Brian Kilmeade…
Perhaps it’s because the complexity is difficult to distill; maybe it’s because some just can’t give President Trump any credit; or perhaps it’s because the scope is too challenging to comprehend against the constant belittlement meme du jour. Regardless of reason, President Trump is fundamentally realigning international geo-political alliances and almost no-one is connecting the dots.
President Trump obviously held a long-ball strategy with the Chinese; he’s described the approach in his books and lived the approach in his business life:
At the outset, position yourself at the furthest oppositional point when it costs you nothing; then leverage inward toward your opponent as they expend their resources to meet your stance.
Almost no-one is noting the scope of what President Trump has accomplished simply by positioning himself at the furthest extreme from the best interests of China, and then working his leverage back toward dual-interests as the Chinese expend capital to meet the point of mutual benefit.
President Trump has expended nothing other than his sheer will, and yet he has leveraged gains that are jaw-droppingly consequential.
♦ What’s the goal of identifying China as a currency manipulator? To stop China from manipulating currency, right? Well, arm-chair opposition says President Trump has reversed his position simply by ‘not doing something’. However, that opposition doesn’t seem to acknowledge the end-goal of the labeling has been achieved without expending an effort. The doing is unnecessary when merely the threat of the doing changes the behavior of the doer.
In two days, April 6th and April 7th, President Trump met with Chinese President Xi Jinping. What actions has President Trump taken, other than ‘not’ doing something, and what actions has President Xi Jinping taken?
At the outset, position yourself at the furthest oppositional point when it costs you nothing, and leverage inward toward your opponent as they expend their resources to meet your stance.
Think about this when considering the consequences:
♦ China agrees to the framework of a 100 day outline to assemble the trade way-points for renegotiated bi-lateral trade deals.
What did that action cost Trump?
♦ For the first time ever, China did not support Russia in a U.N. Security Council veto vote surrounding Syria. China abstained.
What did that action cost Trump?
♦ China turned around 12 fully loaded cargo ships laden with imported coal from North Korea. 400,000 metric tonnes refused unloading. China begins an embargo against North Korean coal. China begins importing coking coal for steel-making from the U.S. coal mines.
What did that action cost Trump?
♦ Additionally, in furtherance of economic sanctions – China halts oil exports to North Korea.
What did that action cost Trump?
♦ Additionally, in furtherance of political isolation – China halts direct flights between Beijing, China and Pyongyang, North Korea.
What did that action cost Trump?
♦ And in the most stunning seismic shift of geo-political alliances, China says it is now open to discussions of a denuclearized North Korea, meaning getting rid of N-Korean nukes, WITHOUT N-Korea being included in the talks. Hello? China, the United States, Japan, Russia and South Korea discussing how to de-nuke North Korea. (A new Marshal Plan of sorts)
What did that action cost Trump?
See how this works? What affirmative action did President Trump have to take in order to get China to move toward the position of mutual benefit?
Answer: None!
Foolish people think President Trump doesn’t know what he’s doing. Again:
…Position yourself at the furthest oppositional point when it costs you nothing, and leverage inward toward your opponent as they expend their resources to meet the position of mutual benefit…
To gain all of the aforementioned action, massive benefits in U.S. interests, President Trump has done what?
“Not” labeling China as a currency manipulator is not affirmative action. It is actually the absence of action; POTUS Trump is not doing something. President Trump positioned himself at the furthest oppositional point during the election, and immediately thereafter.
He staked out this position with an intention to leverage action toward his needs.
The affirmative action President Trump is doing, very publicly, is complimenting the friendship he has begun with Xi Jinping; and praising President Xi for his character, warmth and leadership.
To build upon that mutually beneficial friendship – President Trump seeded the background by appointing Ambassador Terry Branstad, a 30-year personal friend of President Xi Jinping.
To enhance and amplify the friendship and personal 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 in Mandarin Chinese song showing the utmost respect for the honored guests.
Unfortunately most people are unfamiliar with the severity of Chinese tradition as it relates to family and respect. However, these gestures are intensely well received. Russia’s Vladimir Putin can deliver nothing even remotely comparable to the charm of the granddaughter of the U.S. President singing for President Xi and his wife in their native tongue.
Do not underestimate the value of these gestures and how it was perceived by the recipients as personal respect – far above the level of traditional political respect which would be customary during such encounters. President Trump made this visit personal, and his words after the meeting were all personal, not positional.
Whether or not people want to give President Trump credit for the approach, no-one should be able to challenge the outcomes all listed above.
Grandfather President Trump has highlighted Grandfather President Xi as a person, not a political figure. Trump sets the relationship as personal, and with mutual human benefit.
One thing is certain, North Korea will NOT make any hostile action toward the U.S. because President Trump has elevated President Xi to a role beyond politics in the words highlighted within Chinese media. The panda fur has not only been stroked perfectly, it has been elevated in its own magnanimity without even so much as a bow.
As a consequence it would now be a matter of personal disrespect for North Korea’s Kim Jung-un to take hostile action toward the U.S. President who has exhibited such personal respect to the regional Goliath.
Three things appear odd:
#1) How no-one amid almost all media can see how effective this approach by President Trump has been; and
#2) Nothing has been expended in order to achieve these remarkable results; and
#3) Accepting all of the above, Donald Trump has planned this out for a long, long time.
No doubt VA Secretary David Shulkin will utilize the newest legislation passed in March which makes it easier to fire VA employees found to be deficient in their responsibility to provide veterans healthcare. President Trump has also enhanced the accountability within the VA system with whistleblower protections and a specific office of accountability.
(Via Washington Free Beacon) More than 100 veterans died while waiting for care at a Veterans Affairs hospital in Los Angeles, Calif., over a nine-month span ending in August 2015, according to a new government report.
The VA Office of Inspector General found in a recent healthcare inspection that 225 veterans at the VA Greater Los Angeles Healthcare System facility died with open or pending consults between Oct. 1, 2015 and Aug. 9, 2015. Nearly half—117—of those patients died while experiencing delays in receiving care.
The inspector general reported that 43 percent of the 371 consults scheduled for patients who ended up dying were not timely because of a failure by VA employees to follow proper procedure. The report was unable to substantiate claims that patients died as a result of the delayed consults. (read more)
Believe it or not, the California Politicians & Regulators just spend all their time trying to figure out how to tax something new for they will never reform, it’s always give me more. California wants to collect taxes from space transportation companies based upon, get this, a formula of how frequent a company launches spacecrafts out of the state, and most absurdly, how far a commercial spacecraft travels from California soil. They want to tax space travel per mile and claim 62 miles above California belongs to the State. Sooner or later, they will want a tax from all satellites that just pass by their state once a day.The space launches are taking place from Vandenberg Air Force Base, in Santa Barbara.
The California Politicians are a special breed. They must have brain damage or they are just so corrupt it is no longer funny. They have claimed that taxing space travel from California “will lead to increased activity in the industry and will foster an atmosphere of growth and prosperity once present during the golden age of California’s aviation industry, thereby creating jobs as the industry thrives in this state.”
Any company should look for prosperity in Texas or Florida and forget California. The State is beyond help at this stage.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
ANSWER: Yes. The only way to reach the economic crisis that forces political change is to put on the maximum amount of pressure. It does not even require that what people BELIEVE will happen, happens. Human nature is such that we all act in anticipation of events. Sure the Euro has bounced on belief that BREXIT is a passing phase. But the election of Macron was the worst possible outcome as it should have been for it now seals the fate of Europe. The Euro that will crumble as Brussels now tries to federalize everything to secure its own survival against the people of Europe to defeat this populist movement by political decree.
