Who is the Fool? Trump or Woodward?


According to CNBC, Bob Woodward reported that Trump told Gary Cohn, the former Goldman Sachs/director of the National Economic Council to just print more money to reduce the national debt. Woodward reports this discussion:

Trump: “Just run the presses—print money.”

Cohn: “You don’t get to do it that way. We have huge deficits and they matter. The government doesn’t keep a balance sheet like that.”

Here is a chart of the US CPI not seasonally adjusted. It has begun its sharp advance since the Floating Rate System was adopted in 1971 with the fall of Bretton Woods. In spite of borrowing, inflation over time has actually advanced more aggressively than if we had just printed instead of borrowed.  Cohn has said the book “does not accurately portray” his experience of the White House. This claimed quote demonstrates that someone is seriously out of touch with economics.  Actually, Trump is correct. Now we have Quartz joining the media calling Trump an idiot confirming they too are clueless about debt and printing. In fact, if you did just print the money and retired the debt, it would be DEFLATIONARY and not INFLATIONARY from the budget perspective because these people are clueless themselves about how the national debt works.

 

Before 1971, the debt could not be used as collateral for loans such as Savings Bonds. If you needed the money, you were forced to cash them in.  Under this system, it was logically less inflationary to borrow than to print. However, post-1971, you buy T-Bills and post them as collateral to trade futures. The distinction between borrowing and printing has been turned upside down. A national debt is now worse than printing because itis money that now pays interest forever. Then there is no intention of ever paying off the national debt.

 

 

The truth is had we printed since 1971 instead of borrowing, there would be far less of an economic crisis compared to what we face today. If we simply printed to pay off the national debt, Social Security would suddenly become a Wealth Fund that actually made money instead of a Slush Fund for politicians. Now, Social Security can only invest 100% in US government debt and then the Fed lowers the interest rate to “stimulate” the economy and Social Security goes broke forcing higher taxes. Up to 70% of the national debt at times has been purely accumulated interest which never benefited anyone.  It competes with the private sector in what we call the “flight to quality” and it forms the bank reserves. What is never discussed is the fact that US debt is also the reserve currency of nations – not paper dollars. That means that the interest we pay is exported and it stimulates foreign economies – not domestic.

So who is crazy here? Trump or Woodward? To keep borrowing year after year is insane. To monetize the debt will be DEFLATIONARY from the perspective of government expenditure. In 2019, interest expenditures even at this low level of interest rates will EXCEED military expenditure.

Woodward is by no means qualified to criticize Trump on such an issue he clearly does not even understand. Trump should really address the nation and explain this problem very simply. I will be glad to supply the charts.

Hoard of Roman Gold Found from the Last Days of Rome


There were more than 100 gold Roman coins discovered in a buried hoard in the Cressoni theatre in Como, north of Milan. What I have examined from the photographs supplied to me, is that this is a hoard from the virtual fall of Rome. The coins I identified were from the Puppet Emperor of Ricimer, a Germanic general who ruled Rome through puppet emperors going into the end of the Western Empire. His power emerged in 461AD until his death in 472AD. The official fall of Rome took place in 466AD. After Ricimer’s death, the Germanic King of Italy, Odoacer deposed the last Western Emperor Romulus Augustus in 476AD, which is considered to mark the fall of the Western Roman Empire.

The photographs of the coins I reviewed clearly show the puppet Emperor Libius Severus III (461-465AD) was rather common in the hoard. This established that the hoard is from this period forward meaning it was a stash place for someone during the fall of Rome. Obviously, the person did not live to come back to retrieve his coins. These coins are worth probably $1 million+ depending upon the emperors in this entire batch which might be discovered. It could possibly rise to at least the $2 million valuations.

Who was the Richest Man in Ancient History


QUESTION: Mr. Armstrong; You are a history buff. Who was the richest person in ancient times? Has there ever been a trillionaire?

PD

ANSWER: The Roman Emperor August. He is believed to have been worth in current dollar terms nearly $5 trillion. The only other person to have reached the trillion dollars net worth status was King Solomon of Judaea. After Octavian/Augustus defeated Marc Antony and Cleopatra, he then possessed the entire wealth of Egypt. In this respect, the wealth really did belong to him. Some have attributed the entire wealth of nations conquered and argued that Genghis Khan was worth probably 100 trillion dollars. However, the Roman system was rather different. Even taxation for a governor of a province would be owed by the governor to the state so whatever he would collect fell to him personally.

Marcus Licinius Crassus was perhaps one of the richest private men in Roman history. He amassed an enormous fortune through real estate speculation buying confiscated property seized by Marius from the supporters of Sulla. Crassus’s wealth is estimated by Pliny at approximately 200 million sestertii. Plutarch says the wealth of Crassus increased from less than 300 talents at first to 7,100 talents. An Attic (Greek, Athens) talent was the equivalent of 60 minae or 6,000 drachmae. A silver Drachm was generally 15mm in diameter with a weight of 4.20 grams. In Roman terms, this was about 26 kilograms (57 lb). If we take Plutarch’s measurement of wealth, that would be 42.6 million denarii.

A Roman soldier earned 225 denarii a year. Today, the average soldier in the US army earns $48,538 per year. That would approximately be $9.189 billion. If we take Jeff Bezos who is reported to be worth $164 billion based upon his stock in Amazon, that works out to the annual salary of 3.4 million soldiers compared to Crassus’ worth being 189,333 soldiers. However, the real difference is that Crassus’ wealth is cash whereas Bezos’ wealth is the current value of a stock. If he tried to sell it for cash, the value would be significantly less.

Crassus’ son, Publius Licinius Crassus (c 86BC – 53 BC), served under Julius Caesar. He did issue coins during the Republic as a “moneyer” who was a person authorized to issue the coins during the Roman Republic. The Senate actually controlled the quantity of money to be produced. There would be a “State of the Union” type of address to the Senate where they would be given the account of money on hand and what they expected the annual expenses would be. The Senate would then authorize the number of coins to be issued that fiscal year. The Quaestors handed the raw bullion and they would turn that over to the official who was the “moneyer” for that year. The moneyers would decide on the design to be issued which often celebrated his ancestors. The coinage would be struck and then handed back to the Quaestors for the expenditure of the government. The office of a moneyer continued into the Imperial period.

Hailstone not Snow


The report of a reader saying it snowed in Rome was an incorrect translation. It was HailstonesThe same thing took place in Calgary. Although strange, they are not unknown even in summer. Hailstones are large, layered ice particles, often spherical in shape. They are produced by thunderstorms having strong, tilted updrafts. Hailstorms form within an unusually unstable air mass. In the case of Calgary, it could have been set off by the wildfires combining with Volcanic particle

Influence & Ranks


COMMENT: Marty; Did you know that your site is listed in the top 20 economic sites in the world? You are in the top 20 with Wall Street Journal, Bloomberg, London FT, and even  Brookings Ben Bernanke’s Blog. The rest of the list includes the Economic Policy Institute, Economics & Statistics Administration, and The Berkeley Blog Business & Economics. You may be a lot more influential than you portray.

JS

REPLY: Perhaps. But keep in mind that your enemies always read you because they need to know what you are saying now to feed their hatred. Aside from that, every intelligence service reads our work. They understand there is a cycle to everything and ever since the London FT reported I warned Russia would collapse just before the 1998 Long-Term Capital Management collapse on Russian bonds, they all pay close attention.

New Study Islands are Growing not Sinking with Global Warming Conspiracy


This theory of Global Warming and the oceans will rise and places like New York City and Miami will sink beneath the waves is just so childish it is beyond contemplation that anyone coming up with such a theory would ever understand a complex system. They must have cut class during Physic probably because it was too far above their head. I have written before that the real experts on the oceans and how they function were at the Lamont-Doherty Earth Observatory at Columbia University. It was in 1956 when they published A theory of ice ages by Maurice Ewing and William Donn, which these Global Conspiracy theorists obviously never read.  The stupid assumption that if the ice all melted the oceans would rise demonstrates they are incapable of understanding the planetary forces or are too corrupt to come up with a theory that is sufficient to convince weak-minded politicians.

These pretend scientists have been surprised by the recent findings, which show that some islands in the Pacific have actually grown by almost one-third in size over the past 60 years and have not sunk beneath the waves as predicted by the Global Warming conspiracy crowd. Indeed, the island chains to have increased in land mass such as Tuvalu and neighboring Kiribati. Both islands have attracted attention at last year’s Copenhagen climate summit. In this new study, researchers compared aerial photographs and high-resolution satellite images of 27 islands taken since the 1950s. There were only four islands which had decreased in size despite the local sea level rises of almost five inches in that time. These were mostly uninhabited. On the contrary, 23 islands remained the same or grew in mass. There were seven islands in Tuvalu group which actually grew as much as 30%. Melting ice will never result in the water rising for they simply do not understand how ice ages are even created. You need the ice to melt to create the evaporation that then comes down as snow and builds the glaciers.

Society was reborn from the Dark Ages BECAUSE of climate. This was the Medieval Warming period. However, the cycle of climate change turned downward and by the end of the 17th century, the climate turned bitterly cold. These Global Warming conspiracy crowd or con artists, also fail to correlate (or deliberately ignore) the impact of volcanoes as the one during the 17th century that created one of the greatest Russian famines in its history between 1601–1603. The weather began to turn against society again going into the end of the 17th century. The years 1693 and 1694 resulted in a major famine in France. The harvest of 1693 had been more than mediocre. The winter of 1694 was very hard, followed by a spring without rain. As of June, grain reserves were exhausted in most French cities and the registers of that period record a death toll of up to 35%.

1709 Deep FreezeEurope was rapidly turning colder much faster than expected during the 17th century. That sharp decline was a real global cooling period for Europe that culminated in what became known as the Deep Freeze of 1709. In the first few months of 1709 remained in a deep freeze that again wiped out food supplies. People were ice-skating on the canals of Venice, which again was highly unusual to see such cold that far south on the water. People could cross the Baltic Sea on horseback because it was completely frozen! You could not ring a church bell because it would shatter it was that cold.

We need to pay attention and at least prepare. We are in climate change, but it is not going to get warmer. The extreme volatility will produce draoughts with hot summers and extremely cold winters.

 

Winter Arrived Snowing in Rome – Climatic Change events result Historically in an increase in Violence


COMMENT #1: Mr. Armstrong; It is snowing here in Rome already. This looks like a bitterly cold winter this year as you said.

Roberto

COMMENT #2: Marty; I live just down the street from your old place in Kensington. It is snowing already. I have never seen it turn so cold so fast.

Cheers from the new Winter Wonderland.

PG

REPLY: It does not look good for weather again. Well, it was so hot during the summer creating a drought the Hunger Stones appeared, and now we have snow already. This is the same patterns historically that ended up resulting in the defeat of Napoleon. The crazy thing is this was easily predictable. I warned about the solar minimum back in 2015. This has been the fastest plunge into solar minimum that anyone has seen to date. Last year in 2017, there was extreme cold down all the way into Spain where food is grown for winter in Europe killing the crops.

The Atlantic current is slowing down dramatically. A team of scientists says it is the weakest in 1600 years. Naturally, they attribute it to humans who are driving their cars and heating their homes which is melting the ice in Greenland and that is fresh water which is lighter than seawater. They are predicting, of course, it could stop altogether in a few decades. The only problem is the classic one. They ignore cycles and assume whatever trend is in motion will stay in motion to the point it will stop completely. If that were the case, then we would probably go into a White Earth Effect and we should be all dead anyhow so perhaps the planet will heal itself when we are all gone. So they are predicting something that has no historical foundation since it has never happened before.

Here is a chart from an important study derived from the ice core samples in Greenland. A research team from Japan, France, Denmark, and the USA reconstructed the temperature history of the last 4,000 years in the center of Greenland with the help of ice cores and found that we are by no means creating any global warming that has never happened before in history. The basis of this chart was created from the air bubbles trapped in the ice. They were able to calculate the temperature at the snow surface by analyzing argon and nitrogen isotope ratios. This temperature has averaged -30.7 ° C over the past 4,000 years.

One thing to understand is that the peak in the Roman economy is regarded to have taken place with the Roman Emperor Marcus Aurelius (161-180AD). We see a huge spike down in temperature which corresponds to the peak in the Roman Empire which Edward Gibbons drew the line for the beginning of the Decline & Fall. It is clear from contemporary sources that the climate in Europe was turning extremely cold. By 170AD, Marcus Aurelius was battling the Germanic attempts to invade the south most likely due to this climate change. He wrote his Mediataions that he desperately needed to keep his mind distracted from the bitter cold at night. He even sent his children home to Rome to live with their great-great-aunt Matidia because Marcus thought the evening air was far too cold for them. He even asked his friend for “some particularly eloquent reading matter, something of your own, or Cato, or Cicero, or Sallust or Gracchus—or some poet, for I need distraction, especially in this kind of way, by reading something that will uplift and diffuse my pressing anxieties.” id/ Ad Antoninum Imperator 4.1 (= Haines 1.300ff), qtd. and tr. Birley, Marcus Aurelius, 120.

We know that from about 160 to 290 there was a period of climate cooling which dramatically impacted the northwestern provinces of the Empire and most likely inspired the initial invasions of the Germanic tribes. There was clearly dramatic swings in the climate. We have an extreme cold reported by Marcus Aurelius and this is accompanied by a drought, which is also like the patterns we are witnessing today. We also know that the Roman Emperor Elagabalus (218-222AD) during the third century just 50 years later ordered that snow was to be brought down from the mountains via donkey trains and placed in the garden next to his villa to keep cool during the summer. We have this period of extreme cold and extreme heat.

We also know from contemporary accounts that the ancient Egyptians hung damp reeds over windows and placed water-filled pots in hallways. As the water evaporated, it would cool the air. They also figured out that channeling air through stones resulted in the stones absorbing the heat and the air was cooled. I felt this myself when I climbed into the Great Pyramid and made it to the King’s Chamber. I thought it was air-conditioned at first and then realized it was an ancient system that still worked.

Dendrochronology, the science of dating events, environmental change, and archaeological artifacts by using the characteristic patterns of annual growth rings in timber and tree trunks, indicates that there was a severe drought which began in 338AD and persisted until 377AD. This event contributed to the fall of Rome after the recovery of the period of Constantine I (309-337AD) who died in 337AD.

 

Pope Leo in 452AD meets Attila the Hun

It was this severe drought that forced the nomadic pastoral federation of Huns to seek pastures and began to invade Europe to the west and south. Their attacks north of the Black Sea drove the Goths to flee into the Roman Empire and ultimately to attack Rome itself. Increased climate variability from coincided with the decline of the Western Roman Empire and its ultimate collapse in 476AD. For the Eastern Roman Empir,e there is an evidence for a regional prolonged drought in modern central Turkey also began in during the 5th century.

Hopefully, one day our approach to history will start a major exploration to understand history in a new way. What our computer has accomplished on correlating all of these trends is really unsurpassed. Looking at the global picture of climate and economic change provides a much greater precision in identifying some of the causal relationships underlying societal change that many did not quite understand. The issue of how climatic change cycles contribute to the disruptions affecting human societies and ultimately causing changes in the political system structures is something that has always attracted a great deal of attention in our research. What jumps out from the correlation is that climatic change events have resulted in an increase in violence over contested resources sparking great migrations and invasions

Trump Threatens to Cancel NAFTA If Congress Interferes


QUESTION: Mr. Armstrong; Do you agree with Trump that if he canceled NAFTA, the United States would be better off?

SN

ANSWER: Ironically – YES from a jobs perspective, not the consumer. What you have to understand is that these trade deals are all nonsense. They are NOT Free Trade in the least. They are compromises so politicians can pretend they have accomplished something.

Take the deal with Europe. France’s position was that nothing can be called “Champagne” unless it comes from that region in France. Every trade negotiation is a compromise that maintains protectionism. In that regard, if Trump actually canceled NAFTA, his boast that the US would be better off is meant that all products would then be subjected to tariffs and all of the American industry would be protected.

Now, that said, this view is that of the worker – not the consumer. All of these trade negotiations are one-sided. They are always focused only on jobs and not producing the best price for the consumer which in turn raises our standard of living. I have never encountered even one politician who has EVER defended the consumer in trade deals. This violates the principle of Comparative Advantage put forth by David Ricardo. It’s true that Saudi Arabia could grow lettuce but the cost of irrigation in the desert would make the cost 10 times more than simply buying it from Europe or North America. It would cost the consumer far more to simply grow that product in the desert than importing so it is best to buy it elsewhere and focus on your productive capacity in which you have some comparative advantage over others.