May 1 2019

National Security Adviser John Bolton Gives Press Briefing on Venezuela…

Re-Posted from The Conservative Tree House on April 30, 2019 by sundance

National Security Adviser John Bolton holds a press availability to discuss the crisis in Venezuela following a briefing with President Trump. Mr. Bolton said “we are seeing the Venezuelan people strive to get a government that they control, not an authoritarian military regime”, adding “this is a very serious situation. The president has been monitoring it minute-by-minute throughout the day.”

Bolton emphasized “this is clearly not a coup. We recognize Juan Guaido as the legitimate president of Venezuela.” He called it a “potentially dispositive moment” for Venezuelans to regain their freedom”, later referencing “a very delicate moment.” If this effort fails, they will sink into a dictatorship from which there are very few possible alternatives.”

May 1 2019

Venezuela Crisis Possibly Reaching Apex…

Re-Posted from The Conservative Tree House on April 30, 2019 by sundance

U.S. Secretary of State calls it “Operation Liberty” and supports opposition leader Juan Guaido. The Venezuela regime of Nicolas Maduro calls it a “coup attempt” and has help from Russia and Cuba to put down the uprising. The regular Venezuelan military, and the ordinary people of the country appear to be caught in the middle.

Perhaps this is the last effort of Venezuelan opposition leader Juan Guaido to shift the balance of power. The White House is supportive but cautious. Everything is tenuous as Venezuela appears to be on the brink of extreme political violence.

CARACAS (Reuters) – Venezuelan opposition leader Juan Guaido on Tuesday made his strongest call yet to the military to help him oust President Nicolas Maduro, and violence broke out at anti-government protests as the country hit a new crisis point after years of political and economic chaos.

Several dozen armed troops accompanying Guaido clashed with soldiers supporting Maduro at a rally outside the La Carlota air base in Caracas, but the incident fizzled out and did not appear to be part of an immediate attempt by the opposition to take power through military force.

Guaido, in Twitter posts, wrote that he had begun the “final phase” of his campaign to topple Maduro, calling on Venezuelans and the armed forces to back him ahead of May Day mass street protests planned for Wednesday.

“The moment is now!” he wrote. “The future is ours: the people and Armed Forces united to put an end” to Maduro’s time in office.

Tens of thousands of people were marching in Caracas in support of Guaido on Tuesday, clashing with riot police along the main Francisco Fajardo thoroughfare. A National Guard armored car slammed into protesters who were throwing stones and hitting the vehicle.

Defense Minister Vladimir Padrino called the latest instability a “coup movement” but several hours after Guaido’s announcement there was no sign of any other anti-Maduro military activity. Guaido later left a rally he was holding with military supporters at the air base. (read more)

This looks like a no-retreat proposition. Those in the military who make a decision to support Juan Guaido can never return to life before the inflection point and will be targets of the Maduro regime. A terrible crisis with few good options.

Our prayers for the Venezuelan people who are caught up in this political nightmare.

Secretary Pompeo

✔@SecPompeo

· 16h

#OperacionLibertad is underway in #Venezuela & the world is watching. @jguaido’s safety must be guaranteed. The Venezuelan people are demanding change, a peaceful democratic transition, & return to prosperity. It’s time for the illegitimate regime to step aside. #EstamosUnidosVE

Secretary Pompeo

✔@SecPompeo

What we are seeing today in #Venezuela is the will of the people to peacefully change the course of their country from one of despair to one of freedom and democracy. The U.S. stands with them and @jguaido now and always. #EstamosUnidosVE

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May 1 2019

What Will the Fed do in a Contagion?

Armstrong Economics Blog/Central Banks

Re-Posted May 1, 2019 by Martin Armstrong

QUESTION: I have been following your blog for a number of years, public and private. I read the blog concerning “European Politics.” In it you state the capital flight will be a contagion. I understand what the influx of European capital will have on the DOW and S&P, but much less certain of the duration of the impact and contagion. My question is two part; 1) what impact will the contagion have on the US Dollar and how do you expect the US Fed to react interest rate wise and 2) duration of equities move up – short-lived or longer-term trend is your friend.

Thanks

ANSWER: The contagion will last probably 2 years at best. There was such a contagion during the Great Depression. That is what Milton Friedman used to criticize the Fed. All this gold came to the USA pushing the dollar higher, but the Fed refused to monetize it. The backing of gold behind the dollar doubled between 1929 and 1931.

This time we are on a floating exchange rates system so the Fed cannot sterilize the capital inflows as it did during the Great Depression imposing austerity as Germany demand today. Today, the capital inflows are targeting the equities because the interest rates are artificially low. If the stock market explodes, the Fed will be criticized by Congress for creating asset inflation and creating a bubble with low-interest rates.

Unlike the Bank of Japan and the European Central Bank, the US bond market is the only thing trading. The Fed is not trapped as are the other central banks. At some point, the Fed will be obligated to raise rates to fight against the asset bubble, but that will then attract even more capital and push the BoJ and ECB over the edge.

Keep in mind that ONLY a rising dollar compel monetary reform in the USA. During 1934 Roosevelt devalued the dollar and in 1985 they created the G5 to stage an organized group to manipulate the dollar lower. All those people touting gold will rally and the dollar will crumble are clueless. A lower dollar will increase corporate profits and reduce trade deficits. ONLY a higher dollar will break the monetary system.

Categories: Ce

May 1 2019

Modern Monetary Theory & Why Central Banks are lost in the Wilderness without a Map

Armstrong Economics Blog/Economics

Re-Posted May 1, 2019 by Martin Armstrong

QUESTION: Dear Martin,
Would you like to enlighten me on your stance on the Modern Market Theory that is being touted by some in finance and politics please?

ANSWER: The basis upon which MMT has emerged is actually logical for those who lack the understanding of how to conduct research. Since QE has lasted in Europe for 10 years+ without success in creating inflation, they take this as proof that the government can just print without concern of inflation. Money has value only because it is legal tender. I have written about this subject before – MMT.

I will address this in a detailed report because all economic models have now failed. This is part of the Great Unknown we have entered in Economic Theory. Central Banks are without a map and are now lost in the wilderness.

Categories: Economic

May 1 2019

British Pound v BREXIT

Armstrong Economics Blog/Pound

Re-Posted May 1, 2019 by Martin Armstrong

QUESTION: Martin you appear to be very bearish on the British pound when comparing with the Us Dollar. Does the outcome of Brexit make any difference to your view.?

ANSWER: The British Parliament under the direction of Prime Minister May has been a disaster. She was a “Remainer” in her heart and the performance of the negotiations reflects that reluctance to leave the EU. The forecast our system has been making on the pound is based upon the performance of the market – not fundamentals.

Still, the fundamentals are reflected through confidence which then shows up in the price action of markets. The decline in the pound has reflected May’s inability to make a deal. Her strategy appears to be one who is on the payroll of Brussels – not the British people. It appears she refuses to negotiate and hopes that it will come down to a hard exit of her deal. This is what she is counting on and there can be a no-confidence vote until December to boot her out.

It is beside me why British politicians do not simply look at their own data and the facts. The UK has experience lower economic growth ever since it joined the EU. It loses just about every argument in the European court. Here is a clip from the Guardian on December 30, 1998, which showed even back then that 58.5% of trade in Britain was outside the EU. Britain cannot enter any trade deals with anyone without the approval of all 28 members of the EU. If just one objects, the deal is dead.

Perhaps PM May sings Frank Sinatra’s song My Way in the shower every morning to boost her spirits. BREXIT has been turned into a joke.

Apr 30 2019

Indian Elections – Also to be Concluded May 23rd, 2019

Armstrong Economics Blog/India

Re-Posted Apr 30, 2019 by Martin Armstrong

In India, the Indian Railways posted 90,000 job vacancies. 28 million candidates applied, which was about the entire equivalent of the British workforce. India’s general elections for the lower house of the Parliament started on April 11 and will conclude on May 23. The political party or the coalition of parties that wins a majority of the 545 seats will form the next government. The counting of votes will be conducted on 23 May, and on the same day the results will be declared. Under Indian law, the Election Commission criteria requires that the government must provide a polling station for every person within a two-kilometer radius of where they live. They had to set up a polling booth for just one man regardless of the cost.

Apr 30 2019

The Great Unknown

Armstrong Economics Blog/Economics

Re-Posted Apr 30, 2019 by Martin Armstrong

QUESTION: Martin, if Europe and Japan have destroyed their bond markets, would it be a good idea for them to get the government out of the bond market and have short term rates be floating in the free market? The free market would probably help since they don’t know how to move rates correctly.

ANSWER: What will happen is that there is already unfolding a bifurcation in interest rates with a widening spread between real rates (Private Sector) and government. If they allow government rates to float, that means they must abandon QE.

Neither the BoJ nor the ECB is ready to admit total failure. This means that the entire Keynesian-Monetarist tools have failed and they have no economic theory upon which to manage the economy. That means the government cannot control the economy and therein lies the denial of power.

Welcome to the Great Unknown

Apr 30 2019

The Death of Socialism

Armstrong Economic Blog/Corruption

Re-Posted Apr 30, 2019 by Martin Armstrong

Socialism is dying because governments have made promises they cannot keep. Now when people expect that they will be there, they suddenly find the promises have been constantly revised. They always point to the rich and how they will make them pay. Everything who thinks they cannot possibly be the rich cheer, but at the end of the day, their taxes never decline and the promised-land seems further and further away. While economically, all parties on the left, always offer crumbs to the poor, they are busy stealing from the public treasury and handing out favors to lobbyists who donate to their campaigns. Then they pretend there is also a considerable religious divide with the greedy rich and the warm and caring politicians who feels your pain. No matter what they say, somehow raising the taxes on the rich miraculously always somehow ends up raising everyone else’s taxes as well.

Socialism is dying and in the process this will only inspire violence. People believed in this system. They really believed those in power had their best interests at heart. Unfortunately, we are moving into this darkness where more and more people are beginning to realize that government is the number one problem – not Global Warming.

Apr 29 2019

The Great Unknown – The Bond Contagion

Armstrong Economics Blog/Banking Crisis

Re-Posted Apr 29, 2019 by Martin Armstrong

We are facing a very interesting financial crisis that has never before been witnessed because this is how the Socialist Utopian Society will crash and burn. We are beyond all economic theories for nobody from Keynes back to Adam Smith ever contemplated what would happen with the deadly theory of Quantitative Easing constructed upon the Quantity Theory of Money. This is the backdrop as to why there has been no hyperinflation and why gold has floundered in the wake of what everyone was touting as hyperinflation.

We are simply off the charts, as they say, in terms of markets and economics. We are entering one of the most challenging periods perhaps in the history of financial and economic forecasting. So bring your thinking caps to this year’s 2019 WEC in Rome.

Categories: Banking Crisis, Central Banks, So

Apr 29 2019

Tax Scheming

Armstrong Economics Blog/The Hunt for Taxes

Posted Apr 29, 2019 by Martin Armstrong

QUESTION: Martin,
Washington State DOT is planning to bond against toll revenue generated by express toll lanes on or highways here in Western Washington. These express toll lanes were created by our DOT by stealing a general purpose lane and turning it into a toll lane.

The pricing strategy is to keep the roads moving at 45 mph most of the time, so the toll raises as more people use the lane. Sometimes the toll gets as high as $10.

Is bonding against tolls something that governments do? It sounds like our DOT is borrowing money on congestion, aka our misery. So, if their job is to keep our vehicles moving, what incentive do they have now that they depend on tolling express lanes which people take to avoid congestion in the general purpose lanes? Don’t they now have an incentive to keep traffic bad?
Thanks,
A

ANSWER: This is a scheme to raise money. Originally, there were lanes people used to encourage car-pooling. This has given way to the idea that they can charge a toll. Then to raise money, they issue bonds backed by future expectations of tolls. Once again, this is a new scheme to get more money using the future right now. The problem is they do not think about the future. It is always whatever they can grab for the immediate budget. Next year becomes another scheme they come up with until they have borrowed against everything possible.

They are already confiscating property for taxes and then they bundle the tax-liens as selling them to investors who can then confiscate people’s homes based upon the back taxes owed. This has been taking place in New Jersey and Florida. The bonds are backed by tax-liens on private property.

Centinel2012

De Oppresso Liber

Tag Archives: ECB

Re-Posted from The Conservative Tree House on April 30, 2019 by sundance

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Armstrong Economics Blog/Central Banks

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Re-Posted Apr 30, 2019 by Martin Armstrong

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Re-Posted Apr 30, 2019 by Martin Armstrong

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Posted Apr 29, 2019 by Martin Armstrong

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