Tag Archives: ECM

May 17 2019

Decline in Craftsmanship Between the 1st and 3rd Centuries


Armstrong Economics Blog/Understanding Cycles

Re-Posted May 17, 2019 by Martin Armstrong

COMMENT: I took the tour of the Vatican museum and the sculpture collection is unsurpassed. It was great that a pope told the people to bring statues to the Vatican rather than destroy them as some pagan god. The guide also pointed out how the best art was the first century and the quality diminished into the third and fourth century. I remember the mug from the WEC. It was interesting how the quality of art declined following your chart on the collapse of the monetary system.

I can get an extra mug?

KW

ANSWER: Yes, several people took that same tour. The quality of art declined with the collapse of the monetary system as well as the artistic quality of coins. Each die was hand engraved back then, so you can also see the decline in craftsmanship. Sculptures are the same. The details in the face, hair, and clothing during the 1st century is easily distinguishable from the 3rd century as we see in the coinage.

The quality of craftsmanship declines with the economy. Buildings constructed today are far cheaper in construction materials than you see even decades before. Most historians claim that Emperor Augustus’ right-hand man, Agrippa, built the first Pantheon in 27 BC. It burned in the great fire of 80 AD, was rebuilt by Emperor Domitian, and then was struck by lightning and burned again in 110 AD. The Pantheon as we know it today was built in 120 AD by Emperor Hadrian who was passionate about architecture and design. The inscription states that it was attributed to Marcus Agrippa. Nevertheless, this is a building that has stood almost 2,000 years.

As for the mugs, sorry, they are all gone. People have been making collections of them. Even I have only have one myself. I didn’t even have any leftover to give to Nigel.

Categories: Understanding Cycles
May 16 2019

Capital Controls v Protectionism


Armstrong Economic Blog/Regulation

Re-Posted May 16, 2019 by Martin Armstrong

QUESTION: Marty; You mentioned at the cocktail party in Rome, which was spectacular BTW, that your concern would be capital controls emerging when the euro starts to break hard. Do you have a time frame for that?

WJ

ANSWER: Yes, the view from the cocktail party was spectacular. A bit cold; we could have used that global warming.

We saw Turkey move to entertain that which set off the contagion in emerging markets overnight. While the history books tend to put the blame for the Great Depression at the feet of corporation, as did Galbraith, they never mention the Sovereign Defaults of 1931 or the fact that there were capital controls imposed.

The flight of capital to the dollar was met by imposing capital controls. These capital controls may have solved the flight of capital immediately, but at the cost of a complete collapse in confidence in Europe as a whole. The lesson from 1931 was not that of PROTECTIONISM, which killed trade, but it was the imposition of capital controls that brought international trade to a halt. If capital could not be exported, then commerce could not buy any goods. This was far more drastic than protectionism with tariffs. There just seems to be very questionable analysis applied which was either by true idiots, or more likely, the analysis deliberately hid the actions of government to justify the takeover by Marxist Socialism.

The time frame where we may see governments resort to capital controls may arrive in 2021-2022. We MUST be realistic that capital controls are far worse that trade disputes.

May 15 2019

The Rising Anti-EU Sentiment Ahead of the EU Elections


Armstrong Economics Blog/European Union

Re-Posted May 15, 2019 by Martin Armstrong

In Hungary, the anti-EU movement runs intense and links Soros and his funding behind the curtain as the number one problem. There have been protests in Hungary implicating the fact that Soros has been behind everything. The anti-EU sentiment is rising ahead of the May 23rd elections. The main issue that has torn Europe apart is the Refugee Crisis.

May 14 2019

QE & Its Failure


Armstrong Economics Blog/Central Banks

Re-Posted May 14, 2019 by Martin Armstrong

QUESTION: Dear Martin,
During WEC in Rome I came to understand that the issue with QE is that it did not create any inflation in the USA. On the other hand, as you mentioned the inflation is being calculated in a different way that it used to be in the future. How come then the US does not just change the way of calculating the inflation in a way which would show it’s there? Wouldn’t that be an easier way than to do more QEs?
Thank you,

MK

ANSWER: The primary reason QE fails is because the economy is global. Central banks can no longer manage the economy, for the money does not remain in isolation. Additionally, as I pointed out in Rome, they may have negative interest rates, but that does not pass through. You cannot borrow money from a bank at negative rates.

May 13 2019

The Threat of Protectionism


Armstrong Economics Blog/Regulation

Re-Posted May 13, 2019 by Martin Armstrong

QUESTION: Marty:

I read you every day and I am one of the fortunate people to have a financial advisor that attends your Conference every year in the US.

I am wondering how Airbus will be affected in the future as the Euro further declines.

Thanks, RM

ANSWER: This is one of the aspects that caused the protectionism during the 1930s. As the turmoil in Europe unfolded, capital fled to the dollar pushing it higher. This invoked protectionism also propelled by the decline in commodity prices. The protectionism began with the agricultural sector and then spread to other areas.

As the dollar is pushed higher, we will see protectionism rise again probably 2021-2022. European companies that do not have professional hedging departments will suffer greatly.