Tag Archives: De-Banking

Jul 10 2023

Gold Back Currency Reality


Armstrong Economics Blog/Gold Re-Posted Jul 8, 2023 by Martin Armstrong

QUESTION: Do you think the BRICS would create a gold-back currency as proposed by Russia?

SJ

ANSWER: The Neocon has directed the Biden administration to remove Russia from SWIFT. Their single-minded goal is destroying the world economy, but they do not care. They think they will conquer Russia and China and dominate the world so they will worry about the monetary system afterward.

You have to understand that if the BRICS followed that directive and created a single gold-back currency, they would have to end any idea of international trade. This proposal is understandable given the hostility of the United States from the Neocons, who are now in charge. Congress is oblivious to what is happening, and the American public is arguing over Transgender destroying the family unit.

This is not some simple one-dimensional idea that we create a limited-backed currency. That will be DEFLATIONARY and, at the same time, promote civil war in the United States. Politicians cannot run for office, promising endless gifts, forgiving student loans, etc. You cannot have deficits. This would NECESSITATE the end of Marxism once and for all.

This idea of a gold-back currency requires political change on a grand scale.  That is coming. Post-2032 will be a new monetary and political system. Before then, they are pushing CBDC, and they will restrict what you can buy or sell, and this is all to retain power because they KNOW they are losing it. But in the process, they are destroying everything. The people who voted for Biden had no clue that they were voting for a coup and the ultimate destruction of Western civilization as we have known it.

I buy gold, but I also understand the game. I do not want gold-back currency; I prefer gold to remain as a hedge against the government. If they back the currency with gold, this time, they will be knocking down every door to confiscate it all.

These Neocons have already divided the world economy in two. They think they will conquer the world. The enemy is within.

Jul 4 2023

Reinsurance Rates for Catastrophic Coverage Jump as High as 50% to Insurance Companies Effective July 1st


Posted originally on the CTH on July 3, 2023 | Sundance 

As if carrying Homeowners insurance in California and Florida wasn’t already subject to ridiculous increases in premiums, things are about to get a lot worse.

Effective with the July 1st notification, Reinsurance rates, these are companies who insure the insurance companies, are telling their clients there will be up to a 50% increase in cost for underwriting catastrophic coverage.  Perhaps claims in the past few years have been higher; however, I suspect the issue amid the reinsurers is partly connected to the issue that surrounds banks and bond rates.

Back when interest rates were near zero, banks and reinsurers likely scooped up lots of Treasuries and bonds. As the Federal Reserve hikes rates those bonds have declined in value. When interest rates rise, newly issued bonds start paying higher returns to investors, which makes the older bonds with lower rates less attractive/valuable. The result is that most banks, and I suspect big reinsurance houses, have some amount of unrealized losses on their books.

Whatever the reason, the big reinsurance companies are now telling the insurance carriers their catastrophe rates are going up as high as 50%.  Those insurance companies will then pass those rate hikes to the individual policy holders for commercial buildings, residential homes, cars, RV’s etc.  Bottom line, homeowner insurance rates are about to go up again with policy renewals, especially in Florida and California.

LONDON, July 3 (Reuters) – U.S. property catastrophe reinsurance rates rose by as much as 50% at a key July 1 renewal date, broker Gallagher Re said in a report on Monday, with states such as California and Florida increasingly hit by wildfires and hurricanes.

Reinsurers insure insurance companies, and have been raising rates in recent years because of steepening losses, which industry players put down in part to the impact of climate change. Higher reinsurance rates can affect the premiums which insurers charge to their customers.

U.S. reinsurance rates for policies which previously faced claims for natural catastrophes rose 30-50%, Gallagher Re said.

Reinsurance rates for similar policies in Florida rose 30-40%, the broker added.

Some insurance firms have pulled out because of the risk of heavy losses. State Farm said in May it would stop selling new insurance policies to homeowners in California.

In Florida, “all the major carriers (insurers) left and so you ended up with this market which is populated by a large number of very small, very thinly capitalised insurers which is exactly what you don’t want,” James Vickers, chairman international, reinsurance, at Gallagher Re told Reuters. (keep reading)

In Florida specifically, homeowners insurance costs have now generally risen higher than the mortgage payment for a middle-class family.  This is not sustainable.

Not Good !

Jun 12 2023

The True Story of Hyperinflation


Amstrong Economics Blog/Cryptocurrency Re-Posted Jun 12, 2023 by Martin Armstrong

QUESTION: Dear Mr. Armstrong,
could you please explain what happens in technical terms from a capital flow perspective, when confidence is lost and hyperinflation starts to begin?
For example Turkey. When Erdogan was elected i think you wrote that ever since the lira started dropping. So confidence in politics is key. Do you think one day we will see hyperinflation in Turkey?
And another example, is Yugoslavia: what caused the hyperinflation (in technical terms/capital flow perspective)? Are foreign investors getting rid of the dinars? Too many dinars than suddenly rushed back into Yugoslavia causing hyperinflation?
Regards,
Magdalena Š.

ANSWER: The misnomer about hyperinflation is that it is caused by printing money. It is a RESPONSE to the collapse in the confidence of the government.  If we look at the 3rd century, this is where we find the greatest number of hoards of ancient coins. What began this was the capture of Valerian I by the Persians in 260AD.

Valerian was the first Roman Emperor to be captured and Rome was unable to recuse him. That shook the confidence of the Roman people, but it also was a signal to the barbarian tribes in the North that if the Persians could do it, they could as well. Within 10 years, Emperor Aurelian constructed the great wall around Rome. Never before did Romans have such a defensive wall. That had a powerful army.

There was a trend toward debasing the silver coinage which began with Nero to try to fund the rebuilding of Rome after the Great Fire. But that did not undermine the confidence in the Roman Monetary System any more than our perpetual deficit spending since World War II.

However, a spark is ignited and suddenly that trend turns into what I have called a Waterfall event in the purchasing power of the currency. Such an event has taken various forms. However, the end result is the collapse in the confidence of the government and as a result, that is when you get that waterfall event.

In the case of Germany, Yugoslavia, Hungary, etc, there was a 1918 Revolution where communists seized power and the emperor of Germany lost power. In that case, they actually asked Russia to take Germany after their revolution in 1917. This was the beginning of the Weimar Republic.

Germany was saddled with reparation payments demanded by France. First, you had a communist revolution and people with capital began to flee to other places in Europe or certainly move their money out of German banks. It was this drain of wealth that forced the Weimar Republic to print money to try to make their reparation payments. Then in December 1922, they seized 10% of everyone’s assets and handed them a bond.

Here you can see that after that December 1922 confiscation, hyperinflation simply took over. It was NOT the printing of money that caused the hyperinflation it was the collapse of confidence FIRST which then compels the government to expand the money supply lacking taxation revenues etc.

I suspect the spark this time may be the Digital Currency and the proposed cancellation of paper currency. This is why people are moving to anything tangible from real estate, gold, silver, ancient coins, and even equities. With DIGITAL CURRENCY they will have capital controls and prevent you from even moving money outside of your country.

The precise day of the ECM was the announcement of the IMF Digital Currency which they intend to replace the US dollar as the reserve currency. This may be timed with the turning point in 2024. It is unlikely that they would cancel paper currencies before the 2024 election. This is all being

Jun 8 2023

Gold & the Future


Armstrong Economics Blog/Gold Re-Posted Jun 7, 2023 by Martin Armstrong

QUESTION: Mr. Armstrong, first I want to thank you for your independent analysis. In gold, all they ever say is buy – buy – buy. It seems if you ever say anything else, they ridicule you. Gold to them is a religion, not an investment.

My question is that you have always said that the fourth challenge to a high is when it breaks out. Do you expect that this year?

Thank you ever so much

WK

PS: Was that you at the Premier of Pandemic3?

ANSWER: We still have a barrier of overhead resistance at the 2160-2180 level and some at 2200. After that, the next resistance is around 2600. Keep in mind that Ukraine is the MOST untrustworthy country on the planet. Already arms provided to Ukraine have been used in the attacks inside Russia. The F16s will be used to attack Crimea. All they will do is spread their hatred and they are deliberately trying to create World War III. They will create a false flag to attack a NATO country and claim it was Russia. They have been desperately trying to capture a Russian missile so they can fire it at Poland.

Our computer shows NOTHING but war ahead, especially from 2025 onward. But for now, expect the volatility to begin to rise again from June into next January. INFLATION will NOT subside. It cannot when we are at war. Biden will spend whatever he is instructed by the Neocons.

Yes, I was at the Premier in Austin, Texas. That is me in the background.

Jun 5 2023

Sunday Talks, Kevin McCarthy Defends His Budget Ceiling Bill – Focused Heavily on a Return to Regular Budgetary Order


Posted originally on June 4, 2023 | Sundance 

House Speaker Kevin McCarthy appears with Maria Bartiromo to address criticism about details within his debt ceiling bill.  The criticism is very valid, and is being made by many people who are unhappy with the deal to raise the debt ceiling.  However, the primary defense point of McCarthy surrounds a return to regular budgetary order.

As noted by McCarthy, the 12 house appropriations bill that form the traditional federal budget, are due in Aug/Sept for fiscal year 2025 which begins October 1st.  That is where substantive spending will be reduced, well below current spending levels.  However, Bartiromo confronts that outlook by asking ‘what if’ the Senate doesn’t take up the federal budget bill, preferring instead to use the funding mechanism provided within the debt ceiling bill.  {Direct Rumble Link}

The budget debate may sound somewhat parliamentarian, because the nuance of federal budgets is exactly that.  The mechanism to force congress to create a regular order budget is the debt ceiling. Essentially the national credit limit. If you take away the mechanism to force the budget, there is no force mechanism to require the budget.  WATCH:

Speaker McCarthy gets offensive when Maria ask him about what’s in the debt ceiling bill.

The amount of debt carried in your own household budget is only a problem if you have a limit on your credit. If you have unlimited credit, meaning you can borrow endless amounts of money, then you can spend as much as you want. This willy-nilly raising of the national debt ceiling is the issue at the core of why federal budgets are not passed.

Jun 2 2023

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.

CLB

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.

May 25 2023

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.
Ralf

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.

May 25 2023

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.

May 23 2023

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.

May 17 2023

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.