Posted originally on May 2, 2024 By Martin Armstrong
“I don’t see the ‘stag’ or the ‘-flation’,” Fed Chairman Jerome Powell said during his Wednesday address.
Powell believed inflation would be “transitory.” He believed that the economy would come down for a “soft landing.” He believed we would enter the year and see numerous cuts due to waning inflation coming closer to the fictional 2% target. Yet again, Chairman Jerome Powell has missed the mark on stagflation.
If you really look at it, objectively, interest rates always rise during boom periods, and they decline during recessions and depressions. We will see increased inflation, probably into 2028 caused by shortages and war. But you’re looking at a declining economic growth, so that ends up being more like the economy of the 1970s, and you’re looking at what we call “Stagflation” where the inflation rate will be higher than economic growth.
Chair Jerome Powell said officials are prepared to hike again if price pressures return. He indicated that they were now considering when to cut rates as inflation subsides to their fictional and arbitrary 2% goal. Rate cuts are only sustainable once you see the economy decline. The events that unfold around May 7, primarily regarding war, will highlight what we need to know.
Inflation rising above economic growth is STAGFLATION, which is precisely what the economy experiences during war. Inflation will rise faster than GDP, causing the purchasing power of the USD to decline.
One major factor that is never included in the inflation numbers is TAXATION. Their theory is that taxes are the citizens’ obligation and not part of our cost of living. Yet, those at the top are seeing half or more of their wealth siphoned by Washington. We already know that the jobs reports are grossly distorted. To calculate GDP, they include total personal income and government spending. In March, we saw the public sector multiply, which only causes more of a burden on the taxpayer. The ADP that was released today indicated a spike in hospitality among the private sector, but we tend to see that before the summer months in the US. The public sector contributes absolutely nothing to GDP.
WAR WILL LEAD TO STAGFLATION. Of course, the Fed cannot come out and say that they see a looming escalation of war on the horizon, and Washington certainly would not come out and say to prepare for war. Socrates is impartial to bias and was correct about this inflationary trend into 2024. We are poised for a directional change in Q3 of 2025, implying an escalation in the war cycle post-2024.
A word to individuals who mock those looking for safe havens. We do not realize how lucky we are to live in America, Canada, or elsewhere during this current time period. Those who write in desperately seeking a safe haven are NOT simply greedy people looking to evade taxation. People are looking to evade government oppression.
Take a look at Russia and Ukraine. I know a woman with family in Russia. She can visit Russia, but her son cannot. Her son was born in Russia but has lived in America since he was a child. If he were to step foot on Russian soil, he would be required to serve in the war. There are countless Ukrainian men hiding out with their families, praying that Zelensky fails so that the war will come to an end. Families with young boys do not want to see their sons go to war when they reach a certain age. Young men in these nations simply do not have a future other than acting as cannon fodder in a senseless war that in no way benefits their people. Ukraine is asking older men to join the war effort now too as the replenishment rate is unsustainable. People may flee overseas, but the government will seek them out and punish them if they dare to return. The place they once called home no longer exists.
The government owns them.
We are witnessing all governments diving deeper into tyranny amid this wave of private confidence where all hope in government is lost. Many western governments are now attempting to impose ridiculous taxes that ensure the people are financially owned by the state.
The West is already talking about requiring women to serve as well amid this woke ideology where we live in a genderless society where a “birthing person” has no role in caring for future generations as it is the government’s job. Hence why governments are eliminating parents’ rights to choose what their children learn in schools or believe because, as Joe Biden said, your child is “everyone’s kid.”
This goes far beyond merely evading taxation. Militaries are continually failing to meet their annual recruitment standards. Younger readers do not recall the last US draft for Vietnam. Families gathered around the TV and anxiously awaited the government’s lottery drawing. If your birthday was selected by the lottery drawing, you were required to serve in the military and leave your life behind.
The drums of war are beating loudly. The West may only be supplying financial aid and extorting its people for financial aid—for now. Our politicians have control over our lives and our futures, or lack thereof.
Posted originally on Apr 18, 2024 By Martin Armstrong
The Consumer Price Index (CPI) released on April 10 by the US Bureau of Labor Statistics reported that inflation rose by 0.4% on a monthly basis and by 3.5% on the yearly. One must only look at their bills, items in the store, or open their eyes to see that the cost of living in every area has far surpassed this figure. Federal Reserve Chairman Jerome Powell released some disparaging comments regarding the data, and we should not expect any rate declines in the near-term. The Fed’s 2% target is simply not possible due to excessive government spending. Inflation was never transitory and we have not had a soft landing. Yet, the Biden Administration insists the “economy is going in the right direction.”
Press Secretary Karine Jean-Pierre has insisted that greedy corporations are to blame for price gouging. He’s repeatedly called on large corporations, more specifically, to pass along their savings on to their customers. We’ve said that. We’ve been very consistent about that. And that includes rip-offs such as shrinkflation,” she insists.
Treasury Secretary Janet Yellen also voices positive sentiments on inflations, citing how inflation is down two-thirds from its peak in June 2022 when it reached 9.1%. Yellen fails to voice that inflation had peaked due to the entire global economy shutting down due to the pandemic that created the most significant supply chain shortage I have witnessed in my lifetime. This is also why we see “strong” jobs reports in contrast to the lockdown that decimated small businesses and caused thousands to lose their ability to provide for their families.
Remember, inflation was only 1.4% when Joe Biden took office – far beneath the Fed’s target. Inflation has risen as a direct result of fiscal policies under Bidenomics.
Joe Biden mistakenly believes he has helped to tame inflation, and the private sector is solely responsible for the high cost of living. “Today’s report shows inflation has fallen more than 60% from its peak, but we have more to do to lower costs for hardworking families. Prices are still too high for housing and groceries, even as prices for key household items like milk and eggs are lower than a year ago,” according to a statement on the White House website.
Yellen and all those in line with the current administration want the public to believe that Russia and a slow-to-recover supply chain crisis caused inflation. “And I also want to remind you what caused inflation. We know that inflation was caused by supply chains that broke down because of the pandemic. Russia’s war in Ukraine — we know that caused oil prices to skyrocket. Our economy was disrupted by so many ways because of the pandemic. That’s what caused inflation,” Yellen stated in March.
Russia’s war in Ukraine would have had minimal effect on America. In fact, America could have profited on the issue by exporting energy and agricultural goods to Europe. The issue is that the US government has been sending blank checks to Ukraine and digging itself deeper into debt. The national debt has never been higher and shows no signs of stopping. The war shows no sign of stopping and Biden has ignored any calls to curtail funding Ukraine. Then, Biden’s largest spending packages have gone to climate change initiatives such as the Inflation Reduction Act, which Yellen herself said was intended to combat climate change.
As for the supply chain crisis, primarily energy, those who read this blog understand what happened with Nordstream. Biden’s first act as president was to eliminate the Keystone Pipeline plans and place countless regulations on the energy sector that caused America to become an energy-dependent nation. The Strategic Petroleum Reserve has been used as a political tool to play with gas prices and removed America’s energy safety net.
Jerome Powell stated that the jobs report was unimpressive in comparison to rising inflation. “More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal,” the Fed chief said during a panel discussion this Tuesday. What Powell cannot voice out loud is that government policy has made the Fed’s job impossible. There is absolutely nothing that the central bank can do to curb government spending. “The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said. The economy is heading in the wrong direction, yet Washington is continually gas lighting the public into believing the economy has recovered. The economy fell with COVID, but the pandemic is no longer the reason that rates are rising.
Are companies price gouging? Some certainly have been. The price of business has also drastically risen in every area. TAXES are through the roof and everyone is forced to raise prices, landlords included, to meet Biden’s tax hikes that are simply unconstitutional. Why are we paying for foreign wars and foreign nationals to live within the US?
It is ridiculous to believe that the private sector is to blame for inflation. Even the Federal Reserve has said that they are at the mercy of the government’s fiscal policy and cannot do anything to prevent excessive, dangerous government spending. Inflation will not go down so long as the government is funding wars, which produce nothing, and thoughtless non-issues such as climate change that are rooted in America Last policies.
Biden is destroying the financial future of generations with his reckless spending in an attempt to buy votes. Fed Chair Powell nearly admitted it in his interview with 60 Minutes in which he urged the government to show restraint when plunging the nation deeper into debt. Biden and the Democrats are cheering that he will “cancel” debt for an additional 277,000 under the SAVE plan. Do people not realize by now that the taxpayer is paying for this debt cancelation?
Biden already “forgave” the debts of 4.3 million borrowers, but the banks have not, and neither have the universities. The liberals believe the Big Guy is magically opening his wallet or waving a magic wand and making the debt disappear. NO – the lenders will receive a repayment, but now WE, the people, must pay for the debts of a few. This would be akin to the president saying that federal funds would be used to forgive personal mortgage loans – people simply cannot afford them at the moment, and it is the socially just thing to do. Forget about the people who chose not to buy a home because it did not fit within their budgets. Perhaps we should forgive all EV car payments, t00, and hey, that money we owe to foreign nations? Well, that will be a discussion for another time since we simply won’t have the money to repay.
Newsflash – the youth do not approve of Joe Biden. They are afraid to fight in a war overseas in which they see no patriotic cause to go. His supporters on the far-left support HAMAS. Not Palestine, but Hamas. A Harvard-Harris poll conducted in October asked, “In general in this conflict, do you side more with Israel or Hamas?” Among Gen Z voters, 48% said they supported the terrorist organization. Those with clarity do not support any war and certainly do not support sending countless aid to Ukraine and Israel.
Tax season caused some of the woke young Americans to question their financial identities, and I reported that one poll found that nearly a quarter of first-time filers actually planned to seek psychological help upon filing taxes. No one explained to them how this sinister system actually works.
We do not live in a Democracy. We did not vote on whether we wanted to spend over $7 billion to dismiss the financial obligations of others. Furthermore, this is a clear and deliberate attempt to BUY VOTES ahead of the election. Biden is simply polling so low that he is desperate to do anything to garner support, be it ushering in a new population of migrants or gaslighting the public into believing they are better off today.
WE the people have spent $153,000,0000,000 on buying votes through student loan bailouts. On June 30, 2023, the Supreme Court declared Biden’s forgiveness programs unconstitutional. The Biden regime has never followed the Constitution and has actively sought ways to dismiss the very documents this nation was founded on. “I believe the Court’s decision to strike down my student debt relief program was a mistake, was wrong. So, we need to find a new way and we’re moving as fast as we can,” Biden was scripted to say after the ruling. Is there an amendment that this man has not dismissed?
The national debt crisis should scare you. Biden-Harris and the neocons are borrowing against future generations of Americans. The government believes it can shake down the citizens for additional taxes, but even if they confiscated all of our assets, it would not be enough to cover their continual spending.
Again, I want to state the importance of Jerome Powell’s words. It is unusual for the central bank to break with the government for any reason.
“In the long run, the US is on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path and that just means that the debt is growing faster than the economy,” Powell finally warned, later adding, “effectively, we are borrowing from future generations.” He warned that we must begin to prioritize fiscal policy immediately to fix this unending crisis.
Forget rate cuts. Forget a balanced budget or even seeing anything remotely in the green. Not only are we funding 2.5 wars and millions of unemployed migrants, but we are also funding the climate change hysteria that demands we implode our economy. The Inflational Reduction Act was merely the beginning. These spending packages are the greatest threat to our nation’s economy as we simply CANNOT REPAY OUR DEBT. Worse — we have turned our main buyers into enemies and will soon be left holding the bag as no one will come to rescue America.
Posted originally on Apr 10, 2024 By Martin Armstrong
I have already criticized the March jobs report released by the Bureau of Labor and Statistics. The mainstream media is cheering the 303,000 position boost as proof that the American economy is on the right path. I noted in an earlier blog post that the number of part-time workers rose by 691,000 while the number of full-time workers decreased by 6,000. The Bureau of Labor and Statistics admitted that the number of Americans holding multiple jobs increased by 217,000 or 5.2%, as Americans cannot afford the current cost of living even with wages rising 4.1% YoY.
One additional aspect—not a single manufacturing job was added to the US economy in March. The BLS claims that manufacturing jobs held steady at 12,956,000 from February, although 10,000 manufacturing positions were cut in January.
The Inflation Reduction Act promised to fund the Infrastructure Investment and Jobs Act that was intended to expand American manufacturing. As Yellen and others have openly stated, the Inflation Reduction Act, America’s most expensive spending package, was intended to promote the climate change agenda.
Clean energy manufacturing is not profitable and, therefore, not expanding. “According to third-party estimates, the Inflation Reduction Act’s climate and clean energy tax incentives have the potential to drive investment that will support more than 1 million jobs in energy and related manufacturing sectors over the coming decade,” the US Department of Treasury stated in October 2023.
“To receive increased credit and deduction amounts under the Inflation Reduction Act, taxpayers must:
Pay workers the local prevailing wage, defined in accordance with Department of Labor standards, for work on facility construction, as well as for alterations and repairs in a five-to-twelve-year period, depending on the credit, after a facility is placed in service.
Hire a sufficient proportion of workers from registered apprenticeship programs, including hiring these qualified apprentices for at least 10% of the labor hours spent on facility construction, alteration, or repair work (rising to 12.5% for facilities where construction begins in 2023 and 15% in 2024 and later years)
The prevailing wage and apprenticeship provisions apply to:
the Alternative Fuel Refueling Property Credit (30C)
the Production Tax Credit (45, 45Y)
the Credit for Carbon Oxide Sequestration (45Q)
the Credit for Production of Clean Hydrogen (45V)
the Clean Fuel Production Credit (45Z)
the Investment Tax Credit (48, 48E)
the Advanced Energy Project Credit (48C)
the Energy Efficient Commercial Buildings Deduction (179D)
In addition, the prevailing wage provision will apply to:
the New Energy Efficient Home Credit (45L)
the Zero-Emission Nuclear Power Production Credit (45U)”
The private sector does not wish to invest in alternative or renewable energy projects. The tax credits are not enough of an incentive. The US Department of the Treasury mistakenly believed that the act would provide “taxpayers with a strong incentive to meet high labor standards as they build projects” and “expand well-paying union jobs and support proven pathways into the industry that allow workers to earn while they learn.”
Manufacturing is in fact not expanding. The regulations in place have made it difficult for existing factories to expand or bring on more workers.
Posted originally on Mar 8, 2024 By Martin Armstrong
QUESTION: Hello Martin, been reading your passages for a few months now. I had a question for you.
What currency do you think BRICS will use to settle trades in the future and if that he bitcoin could be a viable option? Since you don’t see the USD being the world currency by 2035.
Thanks for the wisdom.
ANSWER: The only benefit of Bitcoin is that it is neutral. But it is insufficient for world commerce because it cannot be used for lending or credit, or you end up in the same situation where it is just leveraged – the very complaints about fractional banking. You deposit $100 in a bank, and they lend out $92, and then two accounts show the same cash. The money supply can be multiplied many times through credit. The nonsense that Bitcoin would replace the dollar as the reserve currency only shows that those people do not understand the world financial system. To accomplish that, you will destroy everything – mortgages can no longer be made, and the entire world is plunged into a truly monumental depression, sending us back to the Dark Ages.
The primary argument against the dollar is that the Neocons have turned it into a political weapon by sanctioning Russia and removing it from SWIFT. That woke up many countries, who then realized that the dollar had become a weapon and no longer an impartial currency in world commerce.
The de-dollarization is NOT economic-based but POLITICAL. Wake up! This is not the standard fiat money nonsense. This is about political power to force countries to do the bidding of American Neocons or else!
The more practical neutral element would be gold. But there cannot be a “GOLD STANDARD” whereby you fix the price. With time, such a system will collapse, as did Bretton Woods. A monetary system MUST float, as does the economy and everything else. During a depression or recession, people sell assets and run to cash. In inflationary booms, you buy assets and get rid of the cash. LOOK – I am NOT an academic! I advise on trillions of dollars and have watched how capital responds for about 50 years. It is always self-interest – not theories of equality.
400 oz Central Bank Gold Reserves
I have been called in by central banks worldwide BECAUSE we have been the largest institutional adviser since we have focused on capital flows and currency markets. I can tell you that central banks are NOT buying gold because they think it will go up. That has absolutely NOTHING to do with such decisions. They are buying gold because it is NEUTRAL, and you can no longer trust the dollar, British pound, or the Euro, no less the Yen, etc. All Western currencies are now subject to political intervention as we enter the mere risk of war and Neocon intervention.
The only way to create a neutral, NON-POLITICAL world currency would be one where international transactions are carried out in gold – BUT on a FLOATING RATE – not fixed. During the 14th century, even Florence had a two-tier system where gold was used for international transactions and silver for domestic transactions. The more practical monetary system would be for each country to maintain its own currency for domestic use, and the international settlements would be in NON-POLITICAL gold.
This is the problem with the Euro. They eliminated the currencies to end the fluctuations between the member states. Still, the refusal to consolidate the debts meant that the volatility that once existed in the currencies was merely shifted to the bond market where each member’s debt trades according to their credit rating, as is the case among the 50 states in the USA.
Posted originally on Mar 8, 2024 By Martin Armstrong
Liberal California lawmakers are proposing new legislation that would grant illegal migrants zero-down, zero payment home loans. Assemblyman Joaquin Arambula, D-Fresno, who penned the bill, states, “The social and economic benefits of homeownership should be available to everyone.” This completely insolent maneuver is a slap in the face to all taxpaying citizens who can barely afford homes of their own.
The program would expand the California Dream for All Shared Appreciation Loans that began in 2023 with a $300 million budget intended to house 2,300 applicants. This fund failed in 11 days as the people who pass these laws have absolutely no concept of basic finance. This time around, they’re ensuring that only people who do not work full-time will be qualified as the new qualifications are that someone must earn under 120% of the median county income, and be the first GENERATION in their family to own a home on US soil.
The changes to the failed legislation is as follows:
LEGISLATIVE COUNSEL’S DIGEST
AB 1840, as amended, Arambula. California Dream for All Program: first-time homebuyers. eligibility.
Existing law establishes the California Housing Finance Agency in the Department of Housing and Community Development, and authorizes the agency to, among other things, make loans to finance affordable housing, including residential structures, housing developments, multifamily rental housing, special needs housing, and other forms of housing, as specified. Existing law establishes the California Dream for All Program to provide shared appreciation loans to qualified first-time homebuyers, as specified. Existing law establishes the California Dream for All Fund, which is continuously appropriated for expenditure pursuant to the program and defraying the administrative costs for the agency. Existing law defines “first-time homebuyer” for these purposes. Existing law authorizes moneys deposited into the fund to include, among other moneys, appropriations from the Legislature from the General Fund or other state fund.
This bill would specify that the definition of “first-time homebuyer” includes, but is not limited to, undocumented persons. an applicant under the program shall not be disqualified solely based on the applicant’s immigration status. By expanding the persons eligible to receive moneys from a continuously appropriated fund, this bill would make an appropriation. The bill would recast the fund so that appropriations from the Legislature from the General Fund or other state fund are deposited into the California Dream for All Subaccount, which the bill would create and make available upon appropriation by the Legislature for specified purposes.
In fact, this is not a “loan,” but another taxpayer-subsidized program, as qualified applicants will receive the funds to put 20% down on a home without making a payment on the loan or to the CHFA. The funds will only need to be repaid if the borrower sells or refinances the home, but the property may be held for an indefinite amount of time.
California has the largest homeless population in the nation who are discarded members of society, even the veterans who served our nation. The average price of a home in California is about $750,709 based on Zillow’s estimates, marking a 4.4% YoY increase, which makes a typical 20% downpayment around $150,141.80. Due to high prices, California boasts the second largest renter-occupied market in the nation behind New York, with 49.7% of the population opting to rent largely out of necessity.
This should receive bipartisan backlash and open the eyes of even the most liberal citizens. The government is using the resources it collects from you via taxation to push a political agenda through the use of illegal unvetted migrants who are toppling state budgets and destroying America from within.
Posted originally on Mar 7, 2024 By Martin Armstrong
A new billboard launched in New York City’s Times Square is sounding the alarm on America’s growing national debt crisis. “Scared of the national debt? You should be.” US national debt spiked past $34 trillion at the top of the year and continues to rise due to massive spending packages. Now that America is committed to funding two largescale wars and 7.2+ million new migrants, America will continue sinking deeper in a hole.
The Committee to Unleash Prosperity (CTUP) funded the billboard and said its aim to inform the voting public on the policies that will destroy this nation. CTUP says that this is a bipartisan problem that must be revealed to average person. Their websitequotes Milton Friedman:
“Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt.”
The average person does not realize that these “free” aid packages to Ukraine, Israel, Taiwan, the migrants, climate change, etc., come at the expense of the US taxpayers. YOU are paying for all of these measures. Government has and will raise taxes in order to fund these fiscal measures but they will NEVER collect enough revenue from the people to cover their spending. Then these measures lead to rising inflation where goods cost significantly more and our dollar is worth significantly less.
The Congressional Budget Office stated that national debt reached 97% of GDP by the end of 2022. I repeatedly point to Jerome Powell’s 60 Minute interview where he breaks with Washington to point out how utterly unsustainable government policy has become. “How do you asses the national debt?” the interviewer questioned the Fed chairman. “We mostly try very hard not to comment on fiscal policy and instruct Congress on how to do their job,” Powell answered, adding that Congress has oversight on the Fed and not the other way around.
“In the long run, the US is on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path and that just means that the debt is growing faster than the economy,” Powell finally warned, later adding, “effectively, we are borrowing from future generations.” He warned that we must begin to prioritize fiscal policy immediately to fix this unending crisis. Again, his comments were unprecedented as his agency is largely unable to criticize Washington. How is the Federal Reserve supposed to regulate price stability when their overlords are doing everything possible to steer the nation’s economy off the deep end?
So what can the public do and what’s the point of this billboard? It begins with your voice and ends with your vote. Stop supporting these endless wars, they are only hurting the nation from within and are NOT meant to attain victory or liberate anyone. We are not helping the people of Ukraine by prolonging their war. We are not saving the world by throwing money at climate change policies. We simply do not have the resources to fund millions of migrants who continue to show up at the border every minute. All of these policies are hurting the economy and, ultimately, the future of America and the American people.
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