Tag Archives: ECB

Apr 9 2021

BIDENomics – Weekly Jobless Claims “Unexpectedly” Higher With 744,000 New Claims


Posted originally on the conservative tree house April 8, 2021 | Sundance | 151 Comments

All of JoeBama’s economic policies mirror the Obama-Biden economic issues. Underline it; emphasize it; note the pattern.  The policies that intentionally held down the U.S. economy during the Obama administration are once again being duplicated.  It’s Déjà vu all over again.

JoeBama’s energy policy is crushing jobs in key regions where energy jobs are being lost in dramatic fashion.  Simultaneously the costs of energy, including gas, are skyrocketing.

The longer-term costs have not yet hit the consumer, but they will soon as inflation will jump dramatically while employment will continue to struggle because consumer demand will drop… The issues create a cascading cycle.

The Biden administration is hiding their actual policy impact by blaming COVID, but that’s not the issue that will hurt blue-collar workers in the longest term.  We are going back into the intentional disconnect I have talked about where the stock market (multinationals) will gain, but the U.S. worker economy will suffer lost jobs and lower wages. This dichotomy is by design and the corporate media economists never discuss it.

This reality is a big part of the reason why Pelosi and JoeBama needed to quickly pump money into the working class in order to avoid the pitchforks.  However, that $2,000 injection will not last and will be eaten up quickly by the larger and longer term Biden economic policy.

The U.S. economy, which is 70% dependent on consumer spending, is going to contract.  This contraction will be “unexpected” by the professional pundit class who check their stock holdings and smile.  However, this contraction will not be unexpected by the blue-collar workers who watch their paychecks shrink and their costs to live (electricity, fuel, food prices) increase beyond their earnings.

If you are a blue-collar or white-collar worker in a BLUE region or state, you will feel the impact first.  It is going to get very ugly, as noted by the disparity in the unemployment claims this week.  Weekly unemployment claims [Dept of Labor pdf here] tell the story.

(CNBC) – […] First-time claims for unemployment insurance rose more than expected last week despite other signs of healing in the jobs market, the Labor Department reported Thursday.

First-time claims for the week ended April 3 totaled 744,000, well above the expectation for 694,000 from economists surveyed by Dow Jones. The total represented an increase of 16,000 from the previous week’s upwardly revised 728,000. The four-week moving average edged higher to 723,750. (link)

The negative results are continuing on a ‘Red State’ -vs- ‘Blue State’ dynamic as noted in the Bureau of Labor Statistics (BLS) reporting: “In February, the highest unemployment rates among the divisions were in Los Angeles-Long Beach-Glendale, CA, 10.9 percent, and New York-Jersey City-White Plains, NY-NJ, 10.8 percent.”

For the weekly jobless claims, here’s the breakdown by state:

(Source pdf)

Do not dismiss these results as just bad policy.  There is also a strong ideological component as the Chicago Crew is driving the granular issues on a day-to-day basis.  The Obama team intentionally work to diminish the economy of the United States because their “fundamental change” requires it.   Joe Biden is an idiot and has no clue about what is structurally behind all the moves…. That’s why Obama installed Kamala Harris.

The professional republican class are corporatists; do not expect them to oppose any of these policies that undermine the U.S. economy and expand globalism.  The GOP is paid by the corporations to act stupid and go along.

The road to serfdom is paved with fraudulent intentions….

Apr 7 2021

Archegos Capital Management Crisis


Armstrong Economics Blog/Corruption Re-Posted Apr 7, 2021 by Martin Armstrong

The Archegos Capital was founded by the former Tiger Management equity analyst, Bill Hwang. Archegos Capital, the “home office” hedge fund owned by Bill Hwang, lost an unbelievable $110 billion in just five days. The strategy was the classic leverage using SWAPS. They never purchased shares of stocks in companies like ViacomCBS. Archegos Capital was entering into equity swaps with numerous different banks and investment banks in a similar manner to what would be called money laundering where we borrow from one bank to pay off another.

By engaging SWAPS, Archegos Capital never actually owned shares of the underlying stock. What they did was effectively leveraged themselves by as much as 500%, which would prove to be their undoing. The problem with such hedge funds is that they really take a personal view of the performance of the market going forward. This is ALWAYS the undoing of these hedge funds going back to Long-Term Capital Management which took a fundamental view that they would make a guaranteed fortune on the high interest of Russian debt and that bribes were being paid in the IMF that they thought would keep the loans going to Russia without end.

I cannot stress enough that ANY fund which is dominated by fundamental expectations that override quantitative models, should be AVOIDED like the plague. We are into a whole new world of finance which is moving in a counter-reaction to the Great Reset. There is NO QUESTION that the March 2020 crash was not only UNIQUE in history, it was clearly an assault that attempted to create another 2007-2009 economic contraction which would have made facilitated the Great Reset by the intentional destruction of the economy. They have had to rely upon the virus scare to accomplished what they had hoped would have be a far easier road.

Apr 7 2021

What Gives Value to a Currency?


Armstrong Economics Blog/Economics Re-Posted Apr 7, 2021 by Martin Armstrong

QUESTION: Hello Martin, can you explain to me how a currency would sustain value for international trade if a country, like Canada (where I live), did what you suggested and stopped issuing debt and just printed money to level that was 5% – 10% of national GDP? would it depend on the attractiveness of what a country exports eg: Canada exports oil, lumber, crops like wheat/soy/canola, minerals – both precious and functional? What would happen to a country that didn’t have exports as a significant portion of it’s GDP? I am curious about how currencies would react to your restructuring plan that eliminated the need for a country to issue debt. Thanks for all your insights and theories. Very helpful.

Trapped in Canada with an egoistic misguided Prime Minister who doesn’t appear to like Canada (he keeps telling us how awful we are) or Canadians, he prefers spending time with global elites and is following their plan even though it damages Canada pretty significantly.
MB

ANSWER: Right now, every country spends more than it takes in. The deficits are funded by selling debt, which then competes against the private sector. The interest rates rise and fall on sovereign debt based upon the confidence from one week to the next. If they stopped borrowing, then the capital investment would turn to the private sector, creating more economic growth. If income taxes were eliminated, the economy would grow based upon innovation which is what it should be driven by.

The confidence in the currency would simply depend upon the strength of the economy, as was the case for Athens and Rome in ancient times. Their coinage was imitated because they were the dominant economies of their time. The value of a currency is the strength of its economy. It has NEVER been about its backing, which is purely a theory that arrived with paper money. Rome had no national debt. The value of the currency was more than its metal content. Here we have a gold aureus of Septimus Severus (193-211 AD) and the imitation in gold made in India. The imitation weighed more than the original. Imitations were made in the same quality of metal, so it proves that it was not a counterfeit but that a coin from the core economy possessed a greater value than the raw metal.

Just compare Russia, which has tremendous resources, against China, Japan, and Germany that had really no gold reserves. Russia did not expand its economy while the others boomed because of its people. The value of a currency is the TOTAL productive capacity of its economy — the work ethic of its people. Russia has not been able to rise substantially because it never fully embraced the idea of capitalism. They moved from communism to an oligarchy.

Apr 7 2021

Understanding the Persecution of John Law


Armstrong Economics Blog/Corruption Re-Posted Apr 7, 2021 by Martin Armstrong

COMMENT: Hi Mr. Armstrong…..this is a surprising (to me) summary, on John Law. Every piece I ever read about him, cast him as a complete scoundrel, yet you obviously write with admiration. Just another example of history depending on someone’s perspective. You never cease to surprise. And that’s good.

HS

REPLY: John Law was actually a brilliant man. His legacy is not so different from John Maynard Keynes. He advocated deficit spending ONLY in times of recession, but governments have spent relentlessly with deficits that never end. We call this “Keynesian economics” when in fact he never advocated such a system. Likewise, John Law never advocated what the French government did in creating the Mississippi Bubble.

It is true that John Law fled to Amsterdam, but this is when he studied real banking operations and saw that money was actually virtual. Because coins were counterfeited or their edges shaved, bank money was more valuable than coins. Once the coins were deposited, each had to be inspected. So the bank became a sort of guarantor of the validity of the coins. Here is an ancient coin from Lydia with numerous banking marks applied, verifying that the coin had been inspected by them before for the same reasons.

It was this first-hand observation that led John Law to see that money was actually virtual, whereby people preferred bank money to actual coins. John then returned to Scotland, where he published in 1705 his Money and Trade Considered, with a Proposal for Supplying the Nation with Money. Law would later publish a second edition in 1720. He attempted to use his writing to convince the Scottish Parliament to adopt his ideas about money, but they declined, giving rise to the adage that a genius is never acknowledged in his native land (i.e. Columbus, Einstein to just mention two). Law had captured a glimpse of the virtual money supply as he was fascinated with the development of “bank money” that was displacing bullion in circulation.

Therefore, John Law has been hated by hard money people because they fail to understand that coins became second-best to actual paper money, for it relieved the problem of having to test every coin in a large transaction. Where Scotland refused to listen to John Law, France took him up on his observations. In 1716, John Law was invited by France to give it a shot. King Louis XIV (1643-1715) had squandered France’s resources on numerous wars and the construction of the Palace at Versailles. The idea of borrowing to fund wars and expansion had ruined the governments of men. Louis XIV had also adopted the theory that it was a divine right of kings to act as a dictator. This idea has persisted behind the curtain for centuries and dominates even American politics where you cannot sue the government without its permission.

For 54 years, Louis XIV worked daily for 8 hours, where he concerned himself with the very smallest of all details of state. He controlled everything from troop movements, infrastructure construction, court etiquette, and even theological disputes. He subordinated the nobles who had often instigated civil wars. Over the previous 40 years, there had been about 11 such civil wars.

The cost of this construction of his Palace at Versailles was far beyond the imagination. He effectively ran the country from Versailles and distanced himself from the people and Paris. Yet for all his extravagance, through the assistance of Jean-Baptiste Colbert (1619-1683), he was responsible more than anyone else for forging France into a more modern country.

John Law has been blamed for the Mississippi Bubble when, in fact, France was on the brink of its third bankruptcy when it contacted him. The government entered a partial default by consolidating its debt and changing its terms. Its new issue of billets d’etat was still required for more funding. The shortage of gold and silver coinage was plunging the economy into a depression. Law’s first proposal for a national bank issuing bank money was rejected. The second proposal to create a private bank was accepted and thus Banque Generale was established in May 1716.

The bank began to lend on its own shares, and the government intervened to support the price of its share by decree. Like the US government ordering the Federal Reserve to provide a floor to US bonds during World War II, likewise, the French government tried to maintain the value of the shares at 9,000 liver. Law begged the government to reduce the floor to 5,000, but they refused. They ended up blaming Law and arresting him no so unlike how the Democrats charged owners of S&Ls which failed when it was Congress who was changing the laws and creating a one-way market where everyone tried to sell.