QUESTION: Mr. Armstrong; I believe the next migration out of California is now also impacting Silicon Valley. Do you see elements of this moving to Austin Texas as the rumors are here in California?

HY

ANSWER: Yes, the rumors are correct. Silicon Vally if you ranked it as its own nation, it would be in the top 20 in the world even exceeding Switzerland and Saudi Arabia. Most people have no clue the economic significance of Silicon Valley. The real crisis for California is that the net migration has also manifested in Silicon Valley. There were more people leaving Silicon Valley and moving out of state than there were people arriving. In fact, polls taken in the region say that 46% of the people intend to leave which is up from 34% back in 2016. There are now more start-ups beginning to form outside of Silicon Valley. The costs of just setting things up are estimated to be between 4 to 5 times than of places like Austin Texas. The taxes are insane and the State has relied upon the high taxation from this area to support its grand plans elsewhere. It is just too expensive for innovation to take place in this area anymore.

The Pension Crisis is starting to be noticed in Europe. The German Finance Minister Olaf Scholz is arguing that the federal government has to guarantee the pension level until 2040. He is arguing that the government MUST come up with a plausible financing model which seems actually impossible. The increase in taxes to cover pension that far out would devastate the younger generations. So far, this Grand Coalition in Germany has agreed on stabilization plan by 2025.  We may see the pension issue become a major factor in the next election. There is no solution as long as Germany continues to adhere to austerity. The only way the pension crisis can be addressed is to inflate out so you pay people with a cheaper currency.

The collapse of Socialism is underway because the people rightly expected all governments to do everything they could to live safely and satisfy their promises of bliss for retirement. They are already witnessing that saving for retirement has not worked when central banks use interest rates to manipulate the economy and in Germany, they have had negative interest rates thanks to Draghi and the ECB. Indeed, in Germany, this policy of austerity is in direct conflict with Socialism. The only way the system has held together this long is because of inflation.

The Pension Crisis is one element behind the rise of political unrest, particularly in Italy. In Germany, the Pension Crisis is starting to fuel the AfD and the nationalist populists in their movement. Scholz has warned that without resolving this issue, Germany will see its own version of Donald Trump take command. Political change is coming and the current crop of politicians have no real answers.

The German magazine, Spiegel, reported that according to estimates by the German Pension Fund, the so-called sustainability reserve will reach around €37.3 billion euros by the end of December 2018. The reserve has been increasing of late 4.4% (year/year) because of the strong employment situation in Germany under its export model. Nevertheless, the pension insurance assumes that by 2023, the contribution rate of 18.6% of gross wages must be increased yet again. This is already a hefty percentage of gross income and it is not going to be enough

Erdogan has his boys dressed in suits burning only a handful of US ONE DOLLAR bills as a nice propaganda piece. In truth, the Turkish people have been hoarding Dollars and Euros because they have lost all faith in their own currency. It is nice that Erdogan has a few people burning less than $100 for a video. All it shows is in fact that Erdogan is belligerent and he will put himself before the good of his own people.  He can pretend the people are burning dollars, but they are not cashing them in for lira. He is running around asking for help from France, Germany, Qatar, and anyone else with spare change

QUESTION: It is clear our government seems to be going crazy. I know you use to live here in Sydney. We met many times when you did conferences here. I also know you once said you would like to retire in Australia. Has that changed?

Paul

ANSWER: Well, my dreams of retirement have not been working out. It seems the world is conspiring against me to go quietly into retirement. Yes, I love Australia. I have traveled all over and even went to Kakadu for two weeks and lived off the land fishing for Barramundi. I still keep a painting I love of the gum trees by a local artist. Here is me in the desert in Palm Valley. As always, there is a difference between the government and the people. There are socialists who support the government and others who are upside about stalking their children, creating their  Black Economy Taskforce,  to imposing the burden to collect Australian taxes upon companies mailing things to Australia. These are simply not NORMAL in a free society. No country can order others to collect their taxes and if someone is following your children, they are in plain clothes and readers have expressed concerns about how do you distinguish a pervert from a government agent?

No matter what country we look at, governments are going broke. Consequently, they are all beginning to turn against their people in the hunt for money. Some governments have just completely crossed the line between authoritarian and a free society. This is the confrontation we will face in the years ahead.

The German central bank, the Bundesbank, has significantly expanded its ability to control and access cash transactions in the hunt for taxes. They have required statements and assurances from cash-demanding commercial banks for the purpose of the intended business requiring cash. The Bundesbank has declined to comment on the new policy. The Federal Association of German Banks has also refused to explain. What is clear is that we are witnessing a growing trend to reduce cash and like Australia, just adopt the position that cash is for criminals.