Armstrong Economics Blog/Understanding Cycles
Re-Posted Jan 25, 2020 by Martin Armstrong
COMMENT: Marty, The last few days I’ve been remotely attending the 2019 WEC Orlando. Lo and behold, now? three months hence and six days into the new wave?I am simply astounded at hearing how you describe your own amazement with the global confluence of events occurring absolutely everywhere while also curious whether there is merely one event telltale to the Jan. 18/19 hand-off. Then, the Wuhan coronavirus breaks out big today and market graphs everywhere all hop on the toboggan to end the week. How did you ever do it?! You’re truly a man of a thousand graces and I, for one, could not be more grateful.
Breaking the WEC to stay current with the latest today, it has been conspicuously absent for me to have yet encountered the term “Black Swan” regarding this Wuhan event. Then, it occurred to me: The term itself is a bit Johnny-come-lately and would not surprise me one bit it has flown the coop over maybe most could be seeking an oil of veracity through Socrates to throw on all these choppy waters.
It would be most interesting to see the traffic stats for AE and Socrates when such events as these take off.
In Gratitude!
D. D.
REPLY: What you have to understand and why I am often so critical of analysis, is that real analysis does NOT begin with a predetermined conclusion. What I am trying to reveal and why I put the very sources of what I have read into books like the Manipulating the World Economy, is because the proper way of analysis is exploration. I have sought perhaps like Leonardo DaVinci to figure out how things actually work without some predetermined agenda. DaVinci dug up dead bodies to try to discover how we function.
All the research I have done is in that vein. So it is me trying to show the world, hey look at this! My opinions and beliefs have been shaped by what I have encountered. I have never looked at research to prove a predetermined idea. That is where everyone goes wrong. Adam Smith’s Invisible Hand was hated by Keynes and so many others BECAUSE they do not like the way the world economy functions, and they seek to manipulate it to perform as they desire. That is why economics is no longer a science but has degenerated into a political propaganda machine.
People judge me by everyone else. This turn in the Economic Confidence Model is not about me being right, wrong, smarter than everyone else, or any other personal critique. This is about how the world truly functions and everything from weather to disease plays a role right down to this coronavirus which I am running our models to try to ascertain will this be a cyclical pandemic, or an epidemic – a big difference!
All of my research has been a quest to understand how the world truly functions. It has always been:
Hey, take a look at this! Here is order hidden behind the mask of chaos!
Every single action has an equal and opposite reaction. This is why I taught Socrates how to look for patterns and how to analyze those patterns. I have warned that the 2020 election will be notorious and will mark a rise in violence. People are unwilling to accept the vote of the people. If they lose, they blamed Russia for everything. Democracy is dying along with civility. I am not interested in being right, I wish I was wrong.
We are faced with the collapse in Democracy our model forecast back in 1985 would begin 2015.75. Politicians like Adam Schiff are the poster child for absolute corruption and dishonesty. This type of behavior has never been seen and is merely an attempt to put a Democrat in the White House who will raise taxes and devastate the business community in the spirit of “progressiveness” which is the new politically correct label for Marxism.
This is all part of the decline and fall of the West and the shift in the Financial Capital of the World back to Asia. It does not matter who wins in 2020, the other side will never accept the winner.
The Future & Analysis
Armstrong Economics Blog/Armstrong in the Media
Re-Posted Jan 25, 2020 by Martin Armstrong
QUESTION: Hello Mr. Armstrong,
I just saw your interview on BNN, too bad you only had about 7 minutes to explain something that big, guess that’s the Limitation of TV Media I’m glad I bought the Repo Crisis Report. You would not have such limitations on your own platform like youtube. Can you see yourself doing a compilation of blog articles or updates in a video format like once or week or a month? You used to do this in 2015 for many Markets and also explained your reading on the arrays and reversals. I guess many people think of it as highly as I myself do.
all the best
ES
ANSWER: That is why the special reports are so important. You really have to support what you are saying or end up with just “I think” opinions that plague the analysis field. What I am doing is coding right now something to highlight everything that is taking place on a global scale with the ECM etc. I am trying to create systems that replace me and will keep going long after I am gone. We all do have expiration dates. I am trying to replace me. We even laugh internally for some have proposed we create a hologram of myself that could still appear long after I am gone
Armstrong on Bloomberg in Canada on the ECM Turn
Armstrong Economics Blog/Armstrong in the Media
Re-Posted Jan 25, 2020 by Martin Armstrong
I will do mainstream media interviews outside the USA. I have just done yesterday a TV appearance on BNN Bloomberg in Canada. These are typically very short interviews so it is hard to get a lot into two 7 minute segments. Nevertheless, I gave it my best sho
Australia – The Most Aggressive Tax Authority in the World?
Armstrong Economics Blog/The Hunt for Taxes
Re-Posted Jan 24, 2020 by Martin Armstrong
Australia has been perhaps the most aggressive tax authority in the world. They are certainly competing to be #1. Besides stalking children to see where they go to school, and then demanded the school reveal how the parents pay the tuition, now they are going after insurance companies demanding to know what assets people are insuring.
The Australian Taxation Office’s new scheme is hunting money and assets to seize and tax. They are demanding the last five years’ worth of insurance policy information from more than 30 insurance companies. They are searching for “lifestyle assets” of the rich who they clearly hate with a passion. They are demanding details on clients who own yachts, any boats, fine art, thoroughbred horses, high-value cars and aircraft. They have targeted around 350,000 taxpayers.
This is the world we live in — “1984” has just been late to arrive. It makes you really understand the entire principle behind Atlas Shrugged.
Edmonton & the 7th Century
Armstrong Economics Blog/Europe’s Economic History
Re-Posted Jan 24, 2020 by Martin Armstrong
QUESTION: Mr. Armstrong…HOW DARE YOU!!!!!????
My brother lives in Edmonton, AB where the surface air temperature is a refreshing -23F as of 6:30 pm MST this evening. I am in the coastal northeast where if that temperature were to occur, there would probably be a societal breakdown with tens of thousands frozen to death overnight along with power outage, looting, and rioting. But in Edmonton, things just roll along like another day.
In the case of medieval Europe, would you say that the Huns may have been motivated in the 5th century AD to move east out of the steppe lands into western Europe due to the colder climate? Also, in the 6th century during the intensified cold, the Gothic wars erupted which led to a major depopulation of the Italian peninsula. Then in the 7th century, there seems to have been so little history documented that the misery taking place there may have been at an extreme degree at that time. Were there any coins minted during the 7th century in western Europe? The ones you showed of Peppin the Short and Charles the Great from the 8th century are fascinating! Also, did Charles Martel have any minted for him in the early 8th century?
JD
REPLY: I have been to Edmonton. Gave a lecture there back in the ’90s. Hundreds of people showed up, and I assumed it was just to get together to huddle for warmth. It was -40F. Not sure anyone was really listening to what I said. They were looking for hot air if I recall. The next day was only -20F and there were people in short-sleeve shirts calling it a beautiful spring day. All I remember is I could not open my mouth outside it was so cold my teeth would hurt. I also remember it was so cold they couldn’t even turn off their cars. They would never start again.
Yes, Charles Martel and Peppin the Short issued silver deniers. It was Charlemagne who was the first to apply his portrait to the coinage. So there was coinage during this 7th century, but something changed dramatically at that time. Peppin the Short was the son of Charles Martel who halted the Arab invasion of Europe in 732. The Carolingians, therefore, take their name from Peppin’s father Charles Martel.
Martel was really the last of the Merovingian dynasty which ruled the Franks from the middle of the 5th century until 751 AD. They first appear as “Kings of the Franks” in the Roman army of northern Gaul. By 509 AD, they had united all the Franks and northern Gaulish Romans under their rule as the Roman Empire which had broken apart in 476 AD. The coinage of the Merovingians was gold, not silver.
The Merovingian rulers began imitating the gold solidus issued by the Eastern surviving portion of the Roman Empire, which we call the Byzantine Empire. They issued gold tremissis from about 473 AD under Gundobald and then imitated the Byzantine coinage from about 500 AD forward.
Therefore, it was the 8th century when we find gold vanish from coinage in the Western portion of the old Roman Empire which appears to be coinciding with the rise of the Arab world and their attempt to invade Europe.
There is no doubt that the migrations were driven by climate change. Climate change has always caused massive migrations which have historically been movements from North to South. Even the Mayans of Mexico appear to have DNA links to Asia and were migrants perhaps 15,000 years ago who crossed the Beringia land bridge, which had formed between northeastern Siberia and western Alaska due to the lowering of sea level during the Last Glacial Maximum. It turned warmer back then without CO2 from fossil fuels and then the Ice Age change the sea leve
Will Governments Respond Globally or Just Act Independently?
Armstrong Economivs Blog/Banking Crisis
Re-Posted Jan 24, 2020 by Martin Armstrong
QUESTION: Is there any comparison to be made between the current suppression of interest rates by the Fed and its suppression of interest rates in the 1920s? With sovereign defaults on the horizon, it seems that history could be repeating itself.
RK
ANSWER: The Fed’s attempt to lower rates in 1927 to help Europe backfired. It sent capital rushing out of Europe and into the US share market as well as real estate. The Fed had to then abandon its international policy and focus on domestic policy objectives. That will most likely take place again. Despite this crisis becoming a global contagion, each country will defend itself and adopt its own measures independently. That is where the risk will truly lie because politicians are used to running on promises of power. They are not ready to surrender domestic policy objectives for international ones. I suspect we will need such a crisis before we can understand we are all connected
The ECM & Who to Blame
Armstrong Economics Blog/ECM
Re-Posted Jan 22, 2020 by Martin Armstrong
COMMENT: You are dangerous. The stock market peaked on your model again but nobody’s models work like that so it is just more proof you don’t advertise because you are way too influential. So what are you up to now? You are against the progressive movement and you will undermine what we work for to unseat people like you.
SB
REPLY: Well I was in contempt when the 2007 target hit. They called it Armstrong’s Revenge. Granted, it was even the very day that Goldman Sachs sold their notorious portfolio right at the top for which they were charged with fraud. Did they use the model or did the model forecast when they would sell?
Sure, people like you can always blame me, but just perhaps this is a model that exposes the hidden order in the appearance of chaos. You can choose to dismiss it and claim it is all just me and my influence. No matter what they have done to me, the model still worked even when I never said a word.
That’s your loss. Your closed mind prevents you from ever seeing the real world. Keep believing you can suppress the rest of us because you want a life where everything comes free. Sorry, the government is not your parent. I have no problem moving to Asia and let you and your friends tax each other until death.
Don’t worry, when I am dead, the model will keep going. Even Athens fell in 404BC to Sparta right on time. I don’t think I was around then to influence that, or the climates changes, or the rise and fall of just about every empire throughout history.
So blame me if that really makes you feel better. But there is something much more important influencing everything besides me
Interest Rates and the Great Global Crisis
Armstrong Economics Blog/Interest Rates
Re-Posted Jan 22, 2020 by Martin Armstrong
COMMENT: I attended your 2016 WEC and I thought you would be wrong that interest rates would rise and the whole big bang thing. Rates have risen only in the US, the pension crisis is clearly unfolding, and states have been going bust. Now there is the Repo Crisis and I did buy the report. I will return to the WEC this year. I realize that you are able to forecast long-term trends that nobody else can even see. Here in Australia, my God, it seems like the government has become occupied by Nazis who were also hunting money.
Good on ya!
PD
REPLY: Yes, most people have no idea that Hitler had passed similar laws that made it illegal to have a bank account outside the country. That prompted Switzerland to adopt its secrecy laws. Western governments are doing exactly as Hitler did. Oh yes, he killed a lot of Jews and others. But make no mistake about it, that was not just hatred. It was profitable. Hitler confiscated all their assets and then harvested even the gold in their teeth.
Just scan history and you will see a pattern. Henry VIII created the Church of England but confiscated all the assets of the Catholic Church. Constantine the Great adopted Christianity as the major religion and then confiscated the assets of the pagan temples. The only leader who confiscated assets of the Church without pretending he was adopting another religion was Napoleon. The Spanish Inquisition persecuted people, including the Jews and Arabs. However, that was also profitable for they confiscated their assets.
The rule of law in England at the time of the American Revolution had 240 felonies. The penalty was death so there too the king confiscated all your assets and threw your family out on the street. Just follow the money. Now they call it criminal to hide money from the government. It is money laundering to put cash in a safe deposit box — read the fine print — it can be confiscated! The criminal law is far too often used for the financial gain of the state.
As everyone knows, I turned out to be an institutional adviser. Consequently, the model that I developed had to be able to forecast the trend of all time levels. It was critical to be able to provide a reliable forecast out for 10 years when truly planning strategy for multinational corporations. That is why we had over $2.5 trillion under contract when the US national debt was just $6 trillion. We were by far the largest international adviser in the world.
The disparity in the rates between the USA and those in Japan and Europe are all part of the crisis in both liquidity as well as international banking. The vast majority of derivatives out there are interest rate related. Europe has a major, major, major problem. An uptick in interest rates will be devastating in so many ways. It will not only cause major losses for the ECB portfolio of bonds with over $12 trillion in negative-yielding bonds, but then you have the derivatives market.
On top of that, to make derivatives safer, after 2007 the government insisted that all derivatives had to go through a central counterparty clearing house (CCP) agent. As you can see, the 2018 annual report showed that Deutsche Bank also acts as a CCP to which it guarantees another €21.6 trillion Euros of exposure.
This experiment with negative interest rates has created a nightmare from which we are desperately afraid to wake up because it could be very real.
Shanghai
This year we are holding three World Economic Conference events — Shanghai in May, Frankfurt in June, and then Orlando in November. Each will be focused on the local region within the scope of the global context. Many people have indicated they want to go to Shanghai and kick the tires personally. You can apply for a visa and then visit Beijing and the Great Wall as well as the Forbidden City. They are spectacular things to see while you can.
You do not need a visa to visit Shanghai if you have an ongoing ticket to another city, not just a return. So fly to Shanghai, then to Hong Kong, and home. I believe you are allowed to stay for up to 7 days on that basis. Make sure you check yourself because things change. So if you want to see Beijing, just apply for a visa. It’s not a big deal.
The Frankfurt WEC will focus on the crisis in Europe. The Orlando WEC will be naturally focused on the world economy and we will have the results of the 2020 election in the USA by that time.
There will be special tickets for those attending all three events or just two.
Davos Today
Armstrong Economics Blog/Opinion
Re-Posted Jan 21, 2020 by Martin Armstrong
QUESTION: Marty, you are not in Davos?
KS
ANSWER: No, too cold right now. I have people there who provide anything critical from behind the curtain. There is nothing I can say that would be important that anyone would actually do more than listen. I have said many times, there is NOTHING we can do to prevent what is coming. World leaders will ONLY take action when the economy begins to Crash & Burn. The climate activists there will ensure they will destroy the economy and they are socialists who want people to be punished for driving cars and heating their homes.
Here is the face of Global Warming in Newfoundland. Just a small snowstorm.
The Coming Crisis – What to Watch?
Armstrong Economics Blog/Banking Crisis
Re-Posted Jan 20, 2020 by Martin Armstrong
QUESTION: Dear Martin – We owe your respect for what you are doing and I wanna say thanks for educating your followers like me. With the issue of this growing international crisis, are you able to provide ideas on what the triggers maybe when it begins to come out of the surface? What can we observe to identify the beginning, EU Bonds – you mentioned IGOV – the currency, what else? I guess all of your followers are highly interested in that.
Many thanks,
JH
ANSWER: The first was the inverted yield curve which led many to think we were heading into a recession last summer. Then the Repo Crisis hit and despite being touted as just a fluke due to taxes, after more than three months the Fed cannot get out of providing liquidity without stepping back and allowing the free markets to raise short-term rates.
The liquidity crisis has spread even to Japan. Here the Bank of Japan has stood up and announced it would buy government bonds without any limitation trying to also prevent interest rates from rising.
The ECB will have to deal with the whole negative interest rate crisis they have created. They will be forced to allow rates to rise or all member states will have to agree to allow the ECB to adopt the same policies as in Japan — buy all government debt without limit.
Keep an eye on Europe. I do not see any way of avoiding this crisis. Politicians are too busy with other things. The free market will push rates higher and the central banks will be unable to prevent the rise in rates ahead.
Centinel2012 