Tag Archives: Cycle of Civilization

Dec 17 2019

Italian Bank Still in Trouble


Armstrong Economics Blog/Banking Crisis

Posted Dec 17, 2019 by Martin Armstrong

Italy is again helping a troubled bank. The government approved an emergency ordinance to support the Volksbank Popolare di Bari on Sunday and provided grants of up to 900 million euros. Volksbank Popolare di Bari was founded in 1960 as a cooperative bank. However, funds from the Ministry of Finance will not go directly to the bank because of the no-bailout policy in Europe. Instead, the capital of the state development bank Banca del Mezzogiorno-Mediocredito Centrale (MCC) is to be increased and this combined with the deposit guarantee fund FITD. This new scheme is indirectly restructuring of the Volksbank Popolare di Bari.

In recent years, the Italian state has repeatedly had to bailout banks, including the Monte dei Paschi di Siena (MPS), which is the oldest bank in the world. Because of the long-standing economic downturn, the banks in Italy still have bad loans on the books because Europe refused to engage in a bailout as was the case in the United States. Instead, the ECB kept lowering rates in the hope that the banks would make up the losses. But the economy has never recovered beyond just superficial images. The bank’s losses have reached one billion euros. Prime Minister Giuseppe Conte reiterated on Sunday that everything will be done to protect savers and hold those responsible accountable, but those responsible are running the ECB.

Within the European Union, bank deposits up to 100,000 euros per customer are legally protected. In the case of Bari, however, according to press reports, there are around 70,000 small savers who have not invested their money in savings accounts but have invested in share certificates in the bank. These small shareholders could face total loss if the bank collapsed. This would also have serious social impacts in the Mezzogiorno region.

Obviously, our European readers should NOT own ANY bank stocks in Europe. Get out before you lose 100% in these bail-in actions.

Dec 17 2019

Central Banks Buying More Equities than Gold? Why?


Armstrong Economics Blog/Gold

Re-Posted Dec 17, 2019 by Martin Armstrong

QUESTION: Marty; It seems when Goldman Sachs makes a recommendation, it tends to be the kiss of death. They came out and said the stock market was going to crash at the end of 2017 just before it broke out. Now they are pitching gold but they have been the ones who controlled the warehouses. They are claiming the central banks are the buyers so that is an indication of a bull market. Any comments on Goldman’s analysis?

HC

ANSWER: Yes, it often seems to be the old trick that was played by the Salomon Brothers. Their analysts would be quoted widely touting to buy some bond and they were inevitably the sellers. Goldman said cash was king in November 2018, not stocks. Five of the top investors in 2018 all said the stock market would crash as reported in Money Magazine. Goldman was bearish if Trump won, as reported by the New York Times on October 31, 2016. Even Goldman Sachs told everyone to sell in 2019. This is the problem when you put out forecasts based upon fundamentals. They are just sophistry, for you can spin them any way you like. How many times have we heard a stock declines on positive news and the excuse is that the street was looking for better numbers.

Goldman Sachs’ new claim saying “gold’s strategic case still strong” pointing to central bank buying is highly questionable. It is a statement that seems to be a half-truth. Because the euro is paying a negative interest rate, the only way for central banks to diversify has been to buy gold and equities. Otherwise, all they have are dollars. There are people on the board at the European Central Bank proposing that they too begin to buy equities in Europe.

The amount of gold added to central bank portfolios was tiny in comparison to equities. They bought more than $1 trillion of equities in 2018. The central banks bought only about $57 billion of gold in the past 3 years. This story is very misleading. It makes it sound like gold is being bought because the banks know the dollar will crash. The truth is so far from the implications.

If you are going to pretend to make a forecast based upon fundamentals, then tell the FULL story and do not leave out the other parts

Dec 12 2019

Republics & the Death of Democracy Drowning in Corruption


Armstrong Economics Blog/Politics

Re-Posted Dec 12, 2019 by Martin Armstrong

COMMENT: Martin, The Death of Democracy is alive and well here in Seattle. A statewide initiative I-976 to limit Washington car tabs to $30 has just passed with a large majority. In less than 24 hours Seattle’s mayor Jenny Durkan has already announced a lawsuit against it with support from King County Executive Dow Constantine. Washington governor and former presidential candidate Jay Inslee has also chimed in and halted all statewide transportation projects not underway. Amazing how an initiative that limits the government’s tax revenue is resisted by the government in full force within 24 hours.

The impetus of this initiative was the discovery that our local transportation agency Sound Transit has been illegally collecting excessive taxes through a vehicle valuation depreciation schedule that was more conservative than the one that was listed on the initiative which passed in 1996. In other words, they have been collecting “extra” taxes for more than 20 years and a recent lawsuit against the agency finally brought this fact to light.

I guess if the government steals money from us that’s ok, but when the people pass an initiative to simply stop the crime it is resisted with every resource government has available

Thank You,

Alex

REPLY: This is the problem with career politicians. This is what has to change. We really need term limits, for ONLY then will we achieve a true government for and by the people. Virtually every Republic has mired and drowned to death in their own corruption. The only form of a republic that seemed to work for a while was that of the Republic of Genoa,which was one of the Italian Maritime Republics. The Doge (President) rotated among the top rich families for a period of one year following the ancient Roman tradition of an annual consul. There was no class warfare and they ran the government more like a corporation to compete with Venice and Florence as well as the Republic of Pisa and Amalfi  in the south. During the late Middle Ages, Genoa was one of the major commercial powers of the time and it became a center for merchant banking during the 16th and 17th centuries, which also made it a major financial center in Europe until the Spanish defaults. Christopher Columbus was from Genoa. He donated one-tenth of his income from the discovery of the Americas to Spain to the Bank of Saint George in Genoa for the relief of taxation on foods. There is a splendid monument to Columbus in Genoa even though they refused to fund his voyage.

When the presidency rotated annually, nobody would ever pass a law that would punish themselves when they left the office and returned to private life the following year. This is what we so desperately need to restore. Only because the Doge rotated annually did Genoa truly prosper. Venice also had a Doge but he was appointed for life and the city owned all the ships.

Dec 11 2019

Guyana & the Future


Armstrong Economics Blog/Latin America

Re-Posted Dec 11, 2019 by Martin Armstrong

QUESTION: Hi Martin, thanks for including little Guyana in your blog today. I was born in Canada, but my parents emigrated from Guyana decades ago. I haven’t been back yet. Nevertheless, I am eager to see great things become of the country, have been tracking the oil industry developments there, and am invested in it as well. I want to see this country elevate out of poverty as a result of all of this but I am concerned about lack of strong and moral leadership and corruption. If you don’t mind me asking, what makes you so confident that democracy will rule out? Growth is growth, but all we have to do is look across the pond to Africa to see the mix of growth and corruption!
Thanks as always sir – your teachings and insights have reshaped me many times over.
Regards, D

ANSWER: I am not certain that Guyana will be the perfect democracy. South America has historically had a problem with corruption in government. The US sanctions against Venezuela are really stupid. The economy was turning down dramatically and the government has done everything possible against the people. The US sanctions merely give people an excuse to point to the US as the cause of the economic decline despite the fact that the sanctions were put on in response to the events and not before them. I am opposed to sanctions anyhow because they never seem to work. They boosted the support for Putin instead of causing the people to blame Putin. This is really brain dead.

Nevertheless, simply because you can invest in Guyana is a major difference in comparison to Venezuela. There will be corruption. That seems to be systemic in South/Latin America, but it is also a rising problem globally. Hopefully, they will still keep the free market as long as they get their fair share under the table unlike Venezuela. We have added the currency to Socrates.

Dec 11 2019

Manipulating the World Economy – COMING SOON


Armstrong Economics Blog/Reports and DVDs

Re-Posted Dec 10, 2019 by Martin Armstrong

“Manipulating the World Economy” has been printed and shipped to Amazon. We are hoping to have the links up for Christmas. I have tried to make this an interesting textbook on the world economy and how it functions. Every page of this hardcover book is printed in full color. I have illustrated everything I could get my hands on, including old newspaper articles from contemporary events, so you can read what I read. This illustrates the problems we have with governments and how they have lost control of events going forward.

  

I have tried to cover all the important subjects such as economic theories, Philips’ curve, supply & demand, random walks, defining what is really money, banks and their role in the creation of money, capital flows that overpower domestic policy objectives, taxation, a history of contagions, Modern Monetary Theory, and class warfare – among many more subjects.

These hardbound, full color books will make great Christmas gifts. They will be priced under $100.

(Click on any image above to enlarge)

We will let everyone know the moment they go on sale in Amazon.

Dec 10 2019

The Mother of all Financial Crises


Armstrong Economics Blog/Reports and DVDs

Re-Posted Dec 9, 2019 by Martin Armstrong

COMMENT: Sir,

While taking a break from reading the Repo Report, I came across these words written by Albert Einstein before he passed away

“Not one statesman in a position of responsibility has dared to pursue the only course that holds out any promise of peace…” he wrote. “For a statesman to follow such a course would be tantamount to political suicide. Political passions, once they have been fanned into flame, exact their victims.”

I fear we are going to crash and burn as you have said

Keep up the good work

DK

REPLY: That is a very good quote. It is so true. All the disinformation circulating around about this Repo Crisis one must question can they really be that stupid? This is really the Mother of all Financial Crises which will impact everything it touches. This will make the 2007-2009 financial crisis look like a trial run.There is no politician who will stand up and talk about this crisis nor will they dare to even ask pertinent questions for fear what will be revealed.

This is why this report does not end with this report alone. We will update it next year as everything unfolds. So it is more like a subscription to this catastrophe.

Categories: Reports and DVDs
Dec 6 2019

The Rising Tide of Civil Unrest Globally


Armstrong Economic Blog/Civil Unrest

Re-Posted Dec 6, 2019 by Martin Armstrong

QUESTION:

Dear Marty , what do you’re models say about the unrest in South America (Chili, Peru, Bolivia, Colombia, Venezuela, Argentinia) .

It looks like the whole continent is on flames.

All the best,

ciao G

ANSWER: I will update the Cycle of War in 2020. As I have stated many times, the computer has correlated both the international war among nations as well as the civil unrest which leads to revolutions. Normally, these two separate models move at different times. When they align, we get the most dramatic changes. This is what is taking place right now on a global scale. We have rising civil unrest around the globe. There is no place that is exempt.

We will see even the US 2020 elections become much more violent. It will be similar to the 1960s, but this is not over race. This time economics is driving the cycle which is being articulated in the battle between socialism v capitalism. Never before in history do we see the losing side simply refuse to accept their loss and move on. This nonsense that Trump is “#NotMyPresident” reflects the rising discontent which will turn to violence next year.

Then the socialists are out to destroy capitalism using climate change. This is also a cleverly orchestrated movement that is political beneath the surface. Shutting down fuel, ending cars and air travel — people have no idea that the agenda is to send society back to the Stone Age and end, not just industrialization, but capitalism.

This is not going to end well. The stupidity of people to ascribe to climate change without looking closely at the proposals is just an illustration of how easily the mob can be fooled. They are being convinced to surrender all their freedoms on the pretense that we face extinction in 12 years.

Categories: Civil Unrest, War
Dec 5 2019

The Big Bang and the Process Unfolding into 2025


Armstrong Economics Blog/Civil Unrest

Re-Posted Dec 5, 2019 by Martin Armstrong

QUESTION:  Hi Martin, I am a long time follower and devoted to your blogs. It’s something that goes well with that first cup of coffee in the morning. In your responses to some people regarding an alternate place to escape from government tyranny, I would suggest that it is not easy for many who have a spouse, family or grandchildren (if if you have the means to do so). Another aspect is how does one assess whether the place they are moving to will have a stable government five years from now or longer, because there is always the threat from another country wanting your resources, workers, strategic land, etc. I don’t think it is easy for anyone to up and move away from family and friends whom they would leave behind – and contact via social media, well, that’s doesn’t work for me.

Thank you.

PP

ANSWER: The cracks in the system will begin to appear next year. This is part of the Big Bang that began 2015.75, and was the PEAK in government confidence. As this unfolds, it will become clearer as to where to go. Keep in mind that the collapse in governments is predominantly in the West. There will be rising separatist movements, so we will see varying pockets of political unrest. We are just too far away from that for me to speak without guessing. It does appear that Asia will be the better place in general. They are not embracing socialism or this insane climate change agenda

Dec 3 2019

Premiere of The Forum (Davos)


Armstrong Economics Blog/Opinion

Re-Posted Dec 3, 2019 by Martin Armstrong

I attended the premiere of The Forum last night and got to meet those “elite” they spin such conspiracy theories about. Putin will be the keynote speaker at the next session in 2020. Interestingly, the film will be released to the general public on the turning point of the ECM – January 18th, 2020.

Most people have no idea that the World Economic Forum, which Nigel Farage said our World Economic Conference is the alternative, is more like a convention. They employ 800 people and they try to stand politically in between. It was founded by Klaus (Charles) Schwab.

Klaus’ vision was to create a forum where world leaders can meet each other and create a bond. The conspiracy theories that paint these meetings as the place where they decide what the world will do for the next year is really nonsense. These people are not in control of anything and as the world turned nuts in 2019, the leaders of Germany, France, and the US all declined to attend.

It began with the model being the Chamber of Commerce meeting in the United States. Klaus took it one step further and tried to bring business and government together. As events unfolded, it grew into an annual meeting which then people wanted to be seen as being apart of it.

The film is the first to show the behind the scenes of Davos.

 

Categories: Opinion
Nov 29 2019

Repo Crisis – Best Kept Secret Ever!


Armstrong Economics Blog/Interest Rates

Re-Posted Nov 29, 2019 by Martin Armstrong

COMMENT: Marty; I want to thank you for a great conference. It is clear you are the only true institutional adviser. Our board is very impressed. The FT reported that there is still no  single factor that caused the dislocations in the repo market in mid-September. You are the only one who explains the event authoritative.

Thanks

JG

ANSWER: Nobody will talk publicly. Everyone is scared to death of starting a panic. This is the BEST kept secret I have ever seen in my career. The real test comes at year-end when banks typically step back from the repo market so that their balance sheets are smaller for December 31 regulatory calculations. We will see what really happens then on the chaos scale of 1 to 10. I find it really funny how there are articles calling it the new QE to where the Fed is clandestinely buying T-Bills through repo. This really seems to be an orchestrated effort at disinformation. It is hard to say if the people who make this up are deliberate agents of the government hired to keep people looking in the wrong direction.