Armstrong Economics Blog/Australia & Oceania Re-Posted Oct 19, 2021 by Martin Armstrong
If there was ever a politician who will be dragged from his chamber in a revolution, history would point to Daniel Andrews. Now he is throwing anyone who opposes his authoritarian measures out of Parliament. The Western powers invaded Iraq and wanted to invade Syria on the premise that they were abusing their people as dictators. None of the actions of Saddam Hussein come close to what Andrews has done to those who live in Victoria. He has now imposed an absolute mandate for vaccines, all for a disease that Scandinavia has downgraded to the equivalent of the flu.
Real GDP at Constant National Prices for Australia peaked in 2018. If people like Andrews remain in power, then this three-year decline, which is a reaction so far, will turn into a trend, meaning that Australia’s economy will decline further into 2023. The damage to the economy will become permanent if this declines beyond 2023. Indeed, Australia became independent only in 1931. Thus, the high in 2018 was on target for an important high on our Economic Confidence Model. This warns that as long as the 2018 high stands, then the decline could unfold over a 19-year period into 2037.
Tim Quilty has objected to being removed from Parliament simply because he is the opposition to Andrews.
Meanwhile, Daniel Andrews will be remembered by history as the man who destroyed Australians’ freedom and their economy. It is shocking how economists are not screaming from the rooftops (since they cannot leave their homes) that the damage to the economy is so stark, it could take decades ever to recover. More on this at the World Economic Conference.
Armstrong Economics Blog/Italy Re-Posted Oct 19, 2021 by Martin Armstrong
Italians are taking to the streets to protest the country’s “Green Pass” mandate that requires public and private sector workers to present a vaccine passport or risk facing a suspension and a $1,730 (€1,500) fine. Workers also have the ability to prevent a 48-hour negative test, but that is meant to be an inconvenience for workers and is completely unsustainable.
Thousands of protestors have gathered across the entire country to demand “NO GREEN PASS!” Notably, workers at the port in Trieste, Italy, have gone on strike and have refused to deliver goods into the port city, causing massive disruptions in supply chain operations. Locals brought protesters food and joined in on the protest. There is a common enemy – government.
A few days after the protests in Trieste began, the government turned the peaceful protest into a police sweep. “Scenes from the port of Trieste that make you shiver. The police with fire hydrants against the demonstrators. Things from [a] full authoritarian regime. Meanwhile, the unions are hugging their boss Mario Draghi – accusation – a former Goldman Sachs banker. And they sound the alarm of fascism in the very act with which they do not support workers on the ground,” Italian author Diego Fusaro wrote online (translated to English). Mario Draghi threw his people to the wolves after joining the euro while working for the ECB. The bank’s failure to consolidate debts left Italy in a worse financial situation than when they were on the lira. As prime minister, Draghi extended lockdowns in a country widely dependent on tourism. Once again, Draghi proves that he is against the Italian people and should be removed from office.
Armstrong Economics Blog/Inflation Re-Posted Oct 18, 2021 by Martin Armstrong
Once “we get the pandemic under control, the global economy comes back, these pressures will mitigate and I believe will go back to normal levels,” Treasury Secretary Janet Yellen stated, echoing “transitory” sentiments by Fed Chairman Jerome Powell. Powell believes supply chain bottlenecks are the main culprit for inflation. Well, the Biden Administration appointed the secretaries of Commerce, Agriculture and Transportation to create a supply chain task force to fix the influx issues.
Sameera Fazili, a deputy director of the White House National Economic Council, stated, “Our approach to supply chain resilience needs to look forward to emerging threats from cybersecurity to climate issues.” Is climate change the issue here? Is this an indication of where the government will misdirect resources once again? Fazili further displayed how out of touch the government is with the current crisis by saying inflation due to supply shortages is “kind of [a] good problem to be having,” as it indicates demand. The countless number of businesses and consumers currently paying for basic living expenses at up to 30-year highs may not see the glass half full at the moment.
Then, the Biden Administration met with the workers at the Port of Los Angeles this week, where it was agreed upon that the port would operate 24/7 to address issues. Ports in Los Angeles and Long Beach, California, account for 40% of all shipments into the US, which seems to be a good start. Even Walmart, FedEx, and UPS have agreed to unload their shipments at non-peak hours to help the process. Oh, wait, the ongoing worker shortage. Companies are begging people to apply, and it remains to be seen whether the ports will be able to maintain proper staffing to run at full capacity around the clock. Then the need for a sufficient number of truck drivers becomes an issue as well. Even if the ports do reach full capacity, what about the spike in fuel prices? Energy prices have caused the price of transportation to skyrocket, which is then passed on to the consumer. The US government is approaching this issue from a domestic standpoint as well and not factoring in the reason why inflation and supply shortages are not limited to the US.
Socrates indicated that inflation could rally into 2034, and based on the current solutions, the computer will likely be correct once again. Perhaps we should all view inflation through rose-colored glasses and view the 5.4% YoY spike in September as “kind of a good problem to be having.”
Armstrong Economics Blog/Behavioral Economics Re-Posted Oct 18, 2021 by Martin Armstrong
Consumer debt in the US reached $14.88 trillion in 2020, according to Experian’s consumer debt study. That is a $3 trillion increase in the past decade, and spending in 2021 has only amplified. Nearly 42% of US adults have reported falling deeper into debt since March 2020, and according to a survey by BankRate.com, 2,400 of 1,297 adults had credit card debt of which 47% contributed that debt to the pandemic. Credit card debt is difficult to crawl out from, with the average APR well above 16%. Even more alarming is that 54% of adults hold on to their credit card debt for at least a year, and with that rising interest, it will take years to pay it off (if ever).
Inflation is not deterring retail sales in the US. I have stated that other countries line up to sell their exports to America, making the US the top consumer economy, and the top economy overall as consumer spending accounts for two-thirds of GDP. Even with inflation up 5.4% YoY in September, retail sales spiked 0.7% despite analysts’ at the Dow predicting a -0.2% decline. Why?
Of course, people must spend to meet their basic living expenses, and those expenses have spiked in every area from food, energy, to real estate. However, there is additional spending occurring post-pandemic as optimism rises. People hoard when they fear the future. Without taking into account other factors, people are beginning to spend again because the easing restrictions and vaccinations has led them to believe that their future financial situations will brighten.
A study on the psychology of consumer spending points to interesting aspects of human nature (Carter T.J. (2014) The Psychological Science of Spending Money). “There is obviously the direct monetary cost, but also the opportunity cost: all of the other ways that one could have spent this money must now be foregone. Thus, a more psychological deﬁnition of the psychological act of spending money would be a simultaneous loss (of money and opportunity) and gain (of some good or service) for oneself and/or someone else that one chooses to undertake based on some beliefs about future hedonic states,” as noted by a 2014 study on consumer behavior (Bijleveld E., Aarts H. (eds) The Psychological Science of Money. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-0959-9_10). The study found that the act of spending itself is “hedonically neutral,” and they used the analogy that “dropping $20 down a storm sewer would feel worse than ﬁnding $20 on the street would feel good.”
However, anticipated v anticipatory emotions come into play before acquiring new physical possession, be it a stock in your portfolio or a new iPhone in your pocket. On anticipation, we may feel a natural high as “we decide whether and how to spend money based on how we anticipate the various courses of action will make us feel.” (Mellers et al., 1999 ; Shiv & Huber, 2000). Anticipatory emotions are what we experience when we actually acquire the purchase (e.g., we may feel happiness after purchasing equity that we expect to profit on or guilty after buying a candy bar).
The study dissects consumers into different categories, but for the sake of keeping the blog post a reasonable length, let’s go right to the source – hedonic adaptation (e.g., after positive (or negative) events (i.e., something good or bad happening to someone), and a subsequent increase in positive (or negative) feelings, people return to a relatively stable, baseline level of affect (Diener, Lucas, & Scollon, 2006). “Focusing only on the immediate spike in happiness and ignoring the subse-quent [sic] decline means that the anticipated experience—the one on which people base their expectations, and thus, their decisions—may be quite different from the actual experience, increasing the chances of disappointment.” So, we may experience a short spike in dopamine after a purchase, but that high may wear off. The pain of payment affects all consumers, but interestingly, paying with a credit card temporarily mitigates the negative feelings associated with a payment:
“Cash payments are immediate and visceral—the money literally leaves your hands and becomes some-one [sic] else’s possession. Credit cards, on the other hand, are abstract and distant; they allow you to put off the pain of paying until next month, often while enjoying the beneﬁt immediately. Spending money this way may seem painless, and almost certainly does reduce the negative anticipatory emotions that might prevent one from making a purchase, but it only forestalls the inevitable. When the end of the month rolls around and the credit card bill comes due, that pain may actually be magniﬁed because the pleasure you experienced is already in the past.”
Cash transactions are becoming an ancient relic, and if the government had its way, we likely wouldn’t pay in cash at all. As online buying rises in popularity and people opt to pull out their plastic cards rather than physical paper, the initial cost of the purchase may not resonate. Retail therapy is in itself a hedonic act that may provide short-term happiness but often leads to buyers’ remorse when the purchase cost outweighs the benefits. It is important to note the risks associated with this move into a cashless society. The immediate impact of a purchase may not be felt for some time, at which it may be too late. As they say, when you’re in a (debt) hole, stop digging.
Armstrong Economics Blog/Economics Re-Posted Oct 18, 2021 by Martin Armstrong
QUESTION: When do we talk about stagflation?
ANSWER: We are already experiencing it. Normally, the standard definition of “stagflation” has been explained as slow economic growth with relatively high unemployment/or economic stagnation that takes place with rising prices. Some have also defined it as a period of inflation combined with a decline in the gross domestic product (GDP).
Stagflation became a term that defined the 1970s because economic growth was still positive, but the rate of inflation was far greater due to the price shock of the OPEC embargo. Because of the Democrats constantly pushing to raise taxes, they sent corporations fleeing offshore, and it was NOT merely because of the tax rate. I testified before the House Ways & Means Committee on taxation and they wanted to know why NO American company got a contract from China like constructing the Yellow River Dam. I explained that German companies were NOT taxed on worldwide income, and as such, they were already 40% less than an American company because Americans pay taxes on worldwide income, and the ONLY other country to that was Japan. Thus, American companies moved offshore, NOT because labor was cheaper, but so they could complete.
As a result, I provided our analysis that showed when we allocated trade according to the flag of the company instead of where something was manufactured, then the US had a trade surplus instead of a trade deficit. Trump understood that and offered a one-time tax deal to bring their profits home. The Democrats screamed because they wanted 40% in taxes. But they would not bring the money home and so they got 0%.
Currently, as we move into 2024, this entire COVID scam has seriously disrupted the supply chain. Companies shifted to Just-In-Time inventory systems to save on financing an inventory. But then COVID lockdowns came and this resulted in chronic shortages.
So your answer is we are already in a STAGFLATION mode because inflation will surpass economic growth. With the dramatic tax increases the Democrats want to shove down the economy’s throat, all we will see is a decline in economic growth with rising prices thanks to chronic shortages. So we get the worst of two worlds.
The Democrats are deliberately pushing the World Economic Forum agenda and are actively trying to confiscate wealth while simultaneously crushing the economy to Build Back Better. Just like George Bush Jr took the blame for the Iraq war, which was all Cheney, Biden will go down in history as the patsy for this foreign infiltration of the United States to change our economy into a Marxist wonderland.
Posted originally on the conservative tree house on October 17, 2021 | Sundance | 82 Comments
Lee Smith is the one American journalist who really understands the dynamics at the heart of the issues we face. In my opinion he is likely the best thinking journalist and writer in the nation at this moment in time. Lee doesn’t spend time waxing philosophically about the significant challenges being faced by ordinary Americans, instead he cuts right to the heart of the subject and frames his arguments and insight in terms that appeal to logic and commonsense; a no BS approach.
In this interview Smith gives his perspective on China and a host of topics. Smith smartly contrasts the typical views toward China against the backdrop of an autocratic government that is currently operating at the top of the executive branch and in many states across the nation. Scrutiny is rightfully deserved right here in the U.S, “If we’re looking abroad to resist or push back against autocratic measures, we should be looking much more closely here at home.”
When the discussion moves into the conversation around the vaccine, Lee Smith nails all the points. Fantastic points raised about the U.S. social fabric, legal structures and the need for a connective tissue to bind the members of the Rebel Alliance. This interview is well worth 22 minutes of your time. WATCH:
Posted originally on the conservative tree house on October 17, 2021 | Sundance | 141 Comments
There’s a funny irony in the Canadian government putting the forbidden phrase “Let’s Go Brandon” into a formal notification letter to government employees telling them not to use the phrase “Let’s Go Brandon“, or they will face “immediate termination without recourse”.
Ridicule is an important weapon…
Posted originally on the conservative tree house on October 17, 2021 | Sundance | 295 Comments
No politician in history -sans Carly Fiorina- is as intellectually deficient on any policy yet resoundingly skilled at parseltongue sentence structures as Alfred E. Newman, aka Transportation Secretary Pete Buttigieg.
The ability to speak in structured sentence soundbites, that mean absolutely nothing, was and is his forte.
When Barack Obama and James Clyburn were organizing the pathway for Joe Biden in the 2020 election, they reached out in March to the remaining candidates and told each of them they were going to withdraw. Each candidate was given an offer they could not refuse along with a question of what terms it would take to get them out of the race and support the avatar that was/is Joe Biden.
Having watched the Buttigieg snap-n-pop candidacy, it was obvious his terms involved getting an innocuous job that would provide him and his husband enough graft to facilitate their lifestyle. Obama and Clyburn offered Alfred E. Newman the job of Secretary of Transportation. Pete Buttigieg’s curriculum vitae included that he held a drivers license, so he gleefully exclaimed his qualifications and accepted the job.
The guy is an absolute doofus; a soy version of Greta Thunberg, who is incapable of speaking about anything that makes any sense. He is a caricature of the person who thinks they know something, so they speak in weird sentences that amount to total gibberish. WATCH:
“What I can tell you is that we are doing everything for the short term and the long term and we will work through the factors that present themselves as challenges in the terms that we encounter on everything. … The significant problems are not problem of insignificance because they are not important problems, they are significant challenges because of the importance of their significance and we are addressing them in both long and short term solutions. … This is important, not just morally but also economically, because the challenges are what we need to recognize as important maintenance issue challenges.”
Posted originally on the conservative tree house on October 17, 2021 | Sundance | 391 Comments
Often on Sundays, we take snippets of media political discussion and deconstruct the false premise while overlaying the reality ignored by the propaganda. This is not that.
In this short Sunday talk, we share the voice of a nurse who is very centered in the issues we face and share her wisdom, advice and encouragement. “Patriot Nurse discusses the nature of compliance and human servitude. When you’re looking around and everyone else seems to be complying, don’t feel bad for being the lone man standing.” WATCH:
Expanding on the outlook to overlay the issues surrounding forced vaccines in the workplace and all the propaganda therein. Allow me to share some insight about YOUR value and YOUR worth from the perspective of a person who spent a lifetime engaged in complex systems with large numbers of people.
It may be an uncomfortable or politically incorrect thing to say in modern times; however, twenty percent of the workers in your system of employment deliver eighty percent of the productivity. Yes, 20% of the workforce around you delivers 80% of the result. This natural truth has been consistent for decades, and within that truism is the nature of man.
What you need to remember is.. If you are reading this, YOU are almost certain to be part of that twenty percentile that your employer or system operator depends on. You are a doer.
You are likely one of the top performers at your job.
You are the person they rely upon.
YOU are the most critical worker in a system that is mostly comprised of less productive people – and that fundamental truth is the important part to remember when you consider the impact of non compliance with the vaccine mandate.
If doers do not perform their function, it is not the same as the generic Sally Smith not showing up to work. The twenty percent of the workforce that are doers produce eighty percent of the result. Ask any leader within any large organization or operation and they will affirm this basic truth.
Doers are smart, they are beyond average in intelligence, and once they understand the mission objective they will solve problems independently. Doers are not sheep. They are smart enough to do independent research and become well skilled and knowledgeable on any issue that is elevated in importance.
Doers don’t just dive into a project without thinking. They control their enthusiasm long enough to formulate wise objectives and figure out a production plan in order to succeed in whatever they’re set to do. Doers give themselves enough time to think and plan, but they don’t stand around debating, they SOLVE.
Doers challenge the status quo, looking for ways to improve their task efficiency. Doers do not skimp on quality despite their drive to accomplish tasks. Though they thrive on increased productivity, and enjoy seeing improvements quantified, doers make sure to retain and improve standards for quality.
Doers are self-motivated. They look forward to working hard and they keep an internal score on their own accomplishments. Doers are proficient at their tasks, and they have an exceptional work ethic. They fuel their internal drive by setting more and more challenging goals for themselves and seek continuous improvement.
Doers don’t sit around waiting for someone to tell them what to do. Doers accomplish goals and objectives with a speed and efficiency that is often annoying for those who do need to be told what to do. Doers tend to move on quickly to the next task at hand right after they finish their last one. However, doers also appreciate pausing to review their success and they enjoy watching reasonable celebration for achievement – but they don’t dwell on it, they self-motivate to the next goal.
These traits likely sound familiar to you because YOU are a doer. YOU are part of the critical 20 percent of the larger group who accomplish 80 percent of the work. So, when you contemplate that only 20% of the workforce may stand resolute in their independent thoughts for not accepting a forced medical intervention as a condition for employment; remember, that twenty percent are the most critical of critical workers.
That 20% of independent, self-motivated, exceptionally productive – perhaps to a fault at times, workforce are the backbone of any operation, institution, system or workplace. Those who own or manage the workplace know exactly who that 20% are; and they will not want to lose the doers.
The employers and managers will not want to lose the doers, because they know the doers are the ones who can keep hundreds of plates spinning on sticks without being told which plate is wobbling; and which plate needs attention. Those who are in charge of keeping the plates spinning know the system will collapse if they are only left with plate spinners who need to be told which stick needs attention. The bosses know they will exhaust themselves having to give constant direction to the non-doers.
You are not crazy.
You are a doer.
YOU are critical.
Now, it is time for you to leverage your work ethic by reminding the system operator that you are not participating in the madness of the forced vaccinations. Believe me, if the bosses (writ large) know the doers are not going to comply, they will radically modify their own perspectives on any mandate. The system cannot lose the doers.
THAT my friends is how critical you are….