Senate Passes Debt Ceiling on Schedule

Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted Jun 1, 2023 by Martin Armstrong

COMMENT: Marty, the Senate passed the Debt Ceiling. It is amazing how Socrates shows there was no debt crisis. As you wrote “When we look at the Array, we do not see a crisis with the debt ceiling.”  I do not know how it does this, but what you have created is truly a gift to humankind.


REPLY: I never expected that linking everything together would predict wars, civil unrest, or financial crises. There is a lot we can learn from Socrates.

The Debt Ceiling = Pi $31.4 Trillion

Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted May 24, 2023 by Martin Armstrong

COMMENT: Hello Martin,
The debt ceiling is pi!! = 31.4 trillion $
Coincidence? 😜
Best regards from Vienna and thanks for what you are doing.

REPLY:  Yes, very interesting. This is no doubt the major turning point on debt and this is on a global scale. It is not the collapse of the debt just yet nor the dollar.

The GOP’s Debt Ceiling Demands

Armstrong Economics Blog/Politics Re-Posted May 24, 2023 by Martin Armstrong

The Republicans and Democrats are refusing to agree on the debt ceiling crisis. The government will be unable to pay its bills and the US will default if an agreement is not reached. Yellen has reached out to every media outlet and large corporation in the US to warn of the “catastrophic” consequences. Of course, they’ve always managed to increase the limit in the past as America cannot afford to default on its debt obligations. The Democrats insist on spending with no end in sight, while the Republicans are demanding some sort of budget. Biden and McCarthy met on Monday to discuss, but neither side will budge.

Biden said the GOP is taking an “extreme position,” but what are they demanding? The GOP wants to set discretionary federal spending at $1.47 trillion for the next fiscal year, with an increase of only 1% in future years. The Congressional Budget Office (CBO) said this would reduce the deficit by $4.8 trillion in the next decade.

The promise Biden made to students must be repealed for the Republicans to accept the ceiling. Biden implemented this policy to buy young votes and had no fiscal plan in place to finance such a lofty goal. The GOP believes student loan payments are being unfairly subsidized by millions of American taxpayers, many who already paid off their own student debt. Biden’s plan also does nothing to address continually rising tuition costs. The CBO believes this cut will save taxpayers about $460 billion over the next decade.

Biden’s IRS Army must also be defunded. The GOP wants to rescind the $71 billion that the Biden Administration used to hire 87,000 new IRS agents. We never had a need for so many agents in the past, and it is unlikely that they will shakedown $71 billion from average American families.

The Republicans also want to take back unobligated COVID relief money. Six separate bills were passed between 2020 and 2022 and the government is still shelling out money for a pandemic that has ended. The CBO stated this would save the US $30 billion in spending over the next 10 years.

The climate change agenda is costly. Republicans are demanding that Biden eliminate some of the tax breaks his administration provides to green-friendly companies. They’re negotiating exactly how to position some of the perks for biofuel. In general, the CBO believes this will save the US $570 billion over the next 10 years.

Increasing America’s ability to become energy dependent is crucial. Biden ripped away America’s ability to function without energy exports on his first day in office. The country needs coal, natural gas, and oil to function and energy inflation remains a serious problem. The energy bill, labeled HR1 as it is of top importance, would also boost production of lithium, cobalt, nickel, and other minerals.

The Republicans would also like to limit social programs and government handouts. Able-bodied adults under the age of 50, without dependents, must work a minimum of 20 hours a week or they may lose their SNAP and food stamp benefits. Those who are unemployed but on Medicaid and able-bodied will also be required to work a part-time job. The CBO stated 15 million Medicaid recipients would be required to work part-time, and 1.5 million could risk losing federal funding.

Unsurprising since the neocons are on both sides, no one has asked Biden to end the blank checks to Ukraine. America has sent hundreds of millions to Ukraine and is receiving nothing in return. Our own border is overrun and yet we just pledged another $300 million of American taxpayers’ money to secure Ukraine’s border. The funding for this war will create unprecedented inflation and cripple our economy.

Africa’s First Test Run for a CBDC has Failed

Armstrong Economics Blog/Great Reset Re-Posted May 22, 2023 by Martin Armstrong

The transition to CBDC in Nigeria did not go as planned. The elites always seek out African nations to use as their test subjects. Nigeria attempted to slowly roll out the program dubbed eNaria built on the Hyperleger Fabric blockchain. The Central Bank of Nigeria (CBN) is solely responsible for running the nodes of this digital currency. Beginning stress tests stated this currency could execute 2,000 transactions per section.  In October 2021, the government began offering incentives to citizens who chose to CBN.

A year later, the country was still hesitant to make the switch so the central bank began implementing forceful measures. In October 2022, the CBN decided to cancel and resign the currency in a “move aimed at restoring the control of the Central Bank of Nigeria (CBN) over currency in circulation.” They stated that the original paper notes would only be legal tender until January 31, 2023, leaving the people with no alternative but to convert their cash. Nigerians were no stranger to the concept of currency cancellation as it is something the government has routinely done. The CBN openly announced that the end goal was to target a 100% cashless society replaced with eNaria. Fewer than 0.5% of Nigerians adopted the eNaria and protests erupted across the nation.

By December 2, 2022, the Central Bank of Nigeria issued a letter to all banking institutes implementing a strict ban on physical cash. The central bank set a cash withdrawal limit of ₦100,000 ($225) per week for individuals and ₦500,000 ($1,123) for businesses. Citizens wishing to take out larger sums were subject to a processing fee between 5% and 10%. ATMs were limited to ₦20,000 ($45) per day, and only ₦200 ($0.45) notes or lower denominations were available in the machines.

Bloomberg reported that 90% of the country previously used cash for transactions. They did not want to convert to CBDC but were provided with no alternative. Demonetizing the currency reduced available cash from 3.2 trillion narias to 1 trillion narias. This led to the central bank creating over 10 billion eNarias. The people are continually protesting these measures as their society which was largely dependent on cash interactions has been destabilized.

This is how it all begins. They are using Nigeria and other countries as test subjects before rolling out these programs in the West. It is hard for Americans to fathom currency cancelation, as it has never occurred here. Yet, the Federal Reserve has made it clear that they are looking into this option. Per usual, they market it as a “convenience” for the people. In truth, it is a way to ensure money stays on the grid under the thumb of government. They will not allow one cent to go untaxed, and as the program expands, they can remove individuals and organizations from participating in society entirely.

Supply Chain Crisis and Inflation

Armstrong Economics Blog/Inflation Re-Posted May 17, 2023 by Martin Armstrong

COMMENT: Hello Mr. Armstrong. Thank you for my daily dose of reality. Your blog is one of the last sources of untainted news. I would like to show these pictures my daughter sent me last week. We live in an affluent neighborhood in New Jersey where petty theft does not occur. The news outlets have not mentioned baby formula shortages. I do not believe they are locking up the baby formula to prevent crime. What is going on here?

Thanks — C.G.

REPLY: The supply chain issue has never been resolved. It improved from the days of bare shelves in the grocery stores, but many essentials are stuck in the pipeline. Products that expire will see additional shortages naturally. The supply shortage is fueling inflation and raising rates will not solve the problem.

The Fed thinks that raising rates will curb inflation by raising the cost of borrowing. That is not the problem here. Part of the inflationary crisis we are witnessing is due to demand outweighing available supply across industries. The Fed cannot control government spending nor the money supply. People are viewing the crisis today from the perspective of the ‘60s when it was NOT possible to borrow on T bills. After the collapse of Bretton Woods in ’71, you COULD trade off government debt and that eliminated the idea that it was less inflationary to borrow rather than spend. Artificially low rates that created a borrowing addiction among institutions who believed it was safe to do so.

Powell cannot come out and criticize Congress for their spending. These rate hikes are not good for the supply chain shortages. Inflation went up two years before the Fed even addressed rates due to the supply chain crisis. The central bank only began to hike rates after the war in Ukraine began. Notice how at the last meeting, the FOMC incorporated that they will monitor “international events.” WAR is the primary driver of inflation and there is nothing that the central bank can do to prevent the destruction caused by government and years of poor monetary policy.

Powell on Bank Acquisitions

Armstrong Economics Blog/Banking Crisis Re-Posted May 9, 2023 by Martin Armstrong

After the FOMC decision, Jerome Powell stated during his Q&A that the Federal Reserve does not have a plan to consolidate banks. “I personally felt that having small, medium, and large were a great part of our banking system,” Powell stated, noting that they all serve different customers. Powell said it could have been a good outcome had one of the regional banks bought failed First Republic instead of JPMorgan Chase. However, the chairman noted that the FDIC mandates that banks be acquired using the least costly resolution option.

The FDIC says it does not give preference to bidders. How can a bank qualify? According to the FDIC website: “Bid lists are created for each acquisition opportunity based on potential acquirer’s qualifications and interests and characteristics of the failing bank such as capital ratios, regulatory ratings, assets and core deposits as reported on the most recent Call Report and geographic location of the bank. Each bid list is developed using several criteria sets to identify approved potential bidders for an acquisition opportunity, while considering factors that match likely approved bidders to an acquisition opportunity.”

Due to the recent banking failures, the FDIC has also created guidelines specifically for failed bank acquisitions:

“The FDIC markets troubled institutions to healthy insured depository institutions. The FDIC is statutorily required to resolve failed institutions using the least costly resolution option minimizing losses to the Deposit Insurance Fund. The FDIC's primary objective is to maintain financial system stability and public confidence. Returning assets to the private sector in an orderly manner at the best price is another key objective. The FDIC also tries to reduce the impact on the community.

Recapitalization before failure is the preferred method to resolve open troubled financial institutions. FDIC markets institutions in case a failing institution is not able to resolve its issues on its own. If an insured depository institution is unable to resolve its issues, the FDIC will implement its resolution process by which qualified bidders may seek to acquire the assets and assume the liabilities of the failing institution.”

Obviously, smaller banks will not have the ability to compete. All banks are struggling with liquidity issues, and mid-sized institutions will likely be unable to offer the “least costly resolution option.” Ideally, they want failing banks to be attained prior to failure, and only large institutions can provide that cushion. Nothing in the FDIC guidelines at the time of this writing currently limits what a large institution could acquire. The computer states that we will see more banking failures across the globe. Based on these guidelines in the US, it is reasonable to assume that large banks like JPMorgan Chase will benefit from future acquisitions and continue to grow. It is unclear whether banking monopolies are permitted under the 1890 Sherman Antitrust Act, but it remains to be seen what alternatives the system will have as more banks go under.

CBDC – The Real Target

Armstrong Economics Blog/Central Banks Re-Posted May 8, 2023 by Martin Armstrong

A lot of people somehow think that the move to Digital Currency is a completely new monetary system, It is targeted to eliminate cash transactions so everything is taxable and nothing can be hidden from our overlords. If we look at commerce in the United States during 2022, 82% of all transactions were digital – Debit cards (20 percent), credit cards (30 percent), and digital wallets 32 percent. That was e-commerce.

They are hunting down what they believe is 30% of all commerce and cash and lick their lips at the thought of having their hand in your pocket. Make no mistake about it. They know major upheaval threatens their power. Like Trudeau seizing accounts of anyone who donated to the Truckers, that is the agenda. Control all transactions and turn off anyone who they see as a threat.

The Insanity of Bitcoin & CBDC

Armstrong Economics Blog/Cryptocurrency Re-Posted May 8, 2023 by Martin Armstrong

QUESTION: Just about every Bitcoin advocate says you are wrong and Bitcoin cannot be stopped. Yet, it seems they are dreaming. Here in Europe, we are already restrained by the maximum cash transaction is €1000. Do you maintain that cryptocurrency will be outlawed or seized?


ANSWER: Yes. Here is  Lagarde on digital currency. She states this object is “control” everything you do. Europe is a Marxist Paradise. Everyone is an economic slave and whatever they earn belongs to the state – not them. The state will decide how much you are allowed to keep. I really do not understand these Bitcoin people. They put out all of these theories as if Bitcoin is the savior. These people are out to control EVERYTHING. Do you really think they will allow any cryptocurrency to survive?

I don’t think these people read the memo. Government is broke. They will default on all their debts. And the new monetary system they are planning is total control. LaGarde says they are “considered” no controls on 300-400 euros. “CONSIDERING” means as it stands now, there is 100% proposed control – period! They will be able to restrict what you are allowed to spend money on or even donate if donations will even be allowed.

These people would NEVER be hedge fund managers. The first question you must ask yourself is: What if I am wrong?

They have made up their mind, refuse to consider any other scenario, and in the process, they will have a very rude awakening. We are entering a period of COMPLETE TOTALITARIANISM as we move toward 2032. Governments are losing control in this Private Wave and they then fight back to survive like a cornered animal that will fight to the death.

That is the agenda! What do they not understand? They will impose capital controls. They always do. That will mean that they will have no intention of allowing people to buy and sell cryptocurrencies. They will most likely do that as well when it comes to gold.

The entire purpose of the CBDC is to impose COMPLETE capital controls. So how will you buy and sell anything that they deem to be a threat to their totalitarian world? That is what is coming. All the fools who voted for Biden and will again deserve the world these people are creating. They intend to make RESISTANCE IS FUTILE. In the process, the right to vote will vanish.

Trump won in 2016 and John Kerry called it “populism” not Democracy. They WILL terminate our right to vote in the years ahead because it will no longer be defined as democracy – but populism, which is any movement against the establishment.

Schwab is telling you that Democracy will be terminated. Pay attention. Listen carefully to the report by the FT and how the election of Trump scared the hell out of career politicians. They will never allow Trump to win in 2024. They will assassinate him if there is no other way. The propaganda was that the 2020 vote was real- that was a joke. The Deep State was not going to let Trump win and they control the vote counts.

FED NOW Launch July 2023

Armstrong Economics Blog/USD $ Re-Posted May 7, 2023 by Martin Armstrong

QUESTION #1: why no information on CBDC. Need help fast. Feds are suppose to call in the dollar in July.

COMMENT #1: This whole thing reminds me of the movie The Omen and we will be accepting the number of the beast and without it we will not be allowed to buy or sell. I don’t know about a person being the infamous anti-Christ, but it sure looks like the government is trying hard to fulfill that role.


ANSWER: The FedNow is the system that will be for CBDC and the elimination of all paper money. However, they will not cancel the dollars in July – not just yet. This is why they are rushing 5G before testing to see if the radiation is harmful. This is all about total control and 100% tax collection. They will be able to turn off the ability to buy and sell categories as well as individuals.

I will do a private post on the timing for the end of paper money. That is coming. It is part of their authoritarianism into 2032.

As for the governments of the world being the anti-Christ, who knows? Perhaps they saw that movie and said that’s a great idea! The “eternal sea” has always been used to refer to politics. This is certainly justification for term limits. Once career politicians were created, that ended any hope of an honest government. Those who are not crooks, look down on us as the scum – hence hiring 87,000 IRS agents with guns.

As far as the number everyone knows the “666” of the anti-Christ, but strikingly, most do not know the number of the name the Jews gave to God – “Jehovah.” If we use the old Hebrew system we can find the number of God. Yod =10 , He = 5, and Vau = 6. Therefore, the name of God in Hebrew – He Vau He Yod equals 5 + 6 + 5 + 10 = 26. The number of the name assigned to God by the Jews is 26. Perhaps they should apply this system to entities rather than individuals.

I have been often asked by students of history that the list from which I derived the Economic Confidence Model was 224 years divided by 26 events yielding 8.6153846 which was a derivative of Pi, and was it based on this calculation of 26? It was not. There just so happened to be 26 events in that 224 period. Beyond that, who knows?

Against Backdrop of Inflation Continuing, Fed Set to Raise Rate Again Before Debating Pause

Posted originally on the CTH on May 1, 2023 | Sundance 

Everything about the process of cutting down energy exploitation, then driving supply side inflation, then raising interest rates to shrink demand (stem inflation) created by a desire to lower economic activity to the scale of diminished energy production, is a game of pretending.

The collateral damage from the rate hikes has been the banking destabilization, which shows the priority of the government officials and central banks to support the climate change agenda.  Into the game of pretending comes the second unavoidable consequence with inflation continuing as a result of the energy policy.

They simply cannot cut energy demand enough to meet the diminished scale of production.  There is no alternative ‘green’ energy system in place to make up the difference. That is the reality.  Now, the fed is scheduled to raise rates again, then begin to debate the collateral damage as they continue the pretending game.

(Via Wall Street Journal) – […] Another quarter-percentage point increase would lift the benchmark federal-funds rate to a 16-year high. The Fed began raising rates from near zero in March 2022.

Fed officials increased rates by a quarter point on March 22 to a range between 4.75% and 5%. That increase occurred with officials just beginning to grapple with the potential fallout of two midsize bank failures in March.

The sale of First Republic Bank to JPMorgan Chase & Co. by the Federal Deposit Insurance Corp. announced early Monday is the latest reminder of how banking stress is clouding the economic outlook.

Fed officials are likely to keep an eye on how investors react to that deal ahead of Wednesday’s decision, just as they did before their rate increase six weeks ago when Swiss authorities merged investment banks UBS Group AG and Credit Suisse Group AG. (read more)

There is no other way to look at the combined policy without seeing a Central Bank Digital Currency (CBDC) in the future.  All of these combined policies are creating a self-fulfilling prophecy.

Stop energy production. [Jan 2021]

Supply side inflation begins.

♦Raise interest rates. [April 2022]

Economic activity slows (but not enough).

♦Continue raising interest rates.

Banks destabilize. [Q1 2023]

Inflation continues.

♦Continue raising interest rates.

Economic activity slows (but not enough).

Banks continue destabilizing. [Q2 2023]

♦Continue raising interest rates.

Evaluate banking pressure. [We are Here]

Banks cannot withstand pressure.

Create CBDC