Armstrong Economics Blog/Italy Re-Posted Oct 29, 2020 by Martin Armstrong
The Italian press is keeping the theme that anyone who dares to protest and complain about lockdowns is a worthless far-right person who does not deserve even to live. They have turned the police against the people by claiming anyone who resists is really a criminal. This is how tyranny unfolds. They demonize anyone who resists, and we are all just to lay down all our rights. All tyrannical governments in history have routinely turned anyone in opposition is a criminal — e.g., Stalin. This is what becomes the “new norm” and why revolutions will follow. It is just standard throughout history. Only when the police refuse to follow the decrees of the government will there is a bloodless revolution.
Armstrong Economics Blog/Civil Unrest Re-Posted Oct 28, 2020 by Martin Armstrong
19Today we had another demonstration in Berlin. This time, people remained in their cars, busses, and trucks again along the Kurfürstendamm, Berlin’s most known shopping street. All people from the event as well as the tourism industry have joined. This is the response to the officially confirmed second lockdown starting from November, 2nd. Instead of people walking and they are banning such gatherings, this time they are driving vehicles down the street.Under the new lockdown, all restaurants, bars need to close. All entertainment such as cinemas, concert halls, theatres, operas, events will be closed. The swimming centers and gyms need to close. All sport team activities are banned and any private traveling is prohibited. Hotel stays are only allowed for business trips exclusively.German Lockdown 10-28-2020Attached is the official Lockdown Order of MerkelWith so many members of the German government coming out against Merkel, such as the German Minister of Health who admitted that the lockdowns were a mistake, one must question if Merkel has not been bribed. Now the data on the COVID situation and mortality in Germany has surfaced showing that there has “apparently never been an epidemiological emergency.” Nevertheless, we have to come to the realization that this has nothing to do with protecting people.
This appears to be intended to try to crush the economy so that the people will accept the crumbs being offered and sign on to this new world of totalitarianism promoted by the World Economic Forum and funded by Bill Gates. Big Tech are all lining up with Gates from Twitter, Facebook, and Google censoring any anti-comments about COVID-19. Destroying businesses on a wholesale basis seems to be intended to create this new world where you own nothing. They then seem to be looking at nationalizing the big ones that they also push against the wall. This is becoming one giant step forward to push Western Society into the waiting arms of Klaus Schwab. They overestimate their power and underestimate that it only takes 40% of the population to disagree and become active to overthrow a government – i.e. American and French Revolutions.At some point, the police and/or army will divide and wake up and realize that by oppressing the people just following orders as they claim at the Nuremberg Trials, they are also acting against their own families and destroying their future. That will be the tipping point.
Armstrong Economics Blog/Civil Unrest Re-Posted Oct 25, 2020 by Martin Armstrong
Protest breakout in Naples after the government claimed that 2,000 have COVID-19 so they may lock down the region for 40 days and have imposed a curfew. These lockdowns have not stopped the virus but instead, prolong it. We see civil unrest rising around the world and this may lead to even overthrowing governments in many places.
Armstrong Economics Blog/Australia & Oceania Re-Posted Oct 25, 2020 by Martin Armstrong
Melbourne is defining the Madman of Australia who is a disgrace to the very idea of a free society. Andrews stands as a symbol of tyranny gone completely mad. In the name of protecting people, it has destroyed their jobs, their future, and Australia is already saying that international travel will be blocked for perhaps another year. Indeed, international travel is quickly becoming a fantasy perhaps even into 2022.
Armstrong Economics Blog/BRITAIN Re-Posted Oct 25, 2020 by Martin Armstrong
Armstrong Economics Blog/Civil Unrest re-Posted Oct 27, 2020 by Martin Armstrong
Posted Oct 27, 2020 by Martin Armstrong
The riots in Rome have become intense. You would reason that any elected politician would think twice about imposing lockdowns after destroying an unbelievable number of jobs and small businesses that are vital in Italy and also counted on tourism which is non-existent anymore. Something is just not right. This is not the way elected governments have acted in the past.
A word from inside sources in Rome suggests that the governments in Europe are concerned about what happens if Trump wins. They are concerned that he is being viewed as a man of the people in contrast to the extreme draconian actions in Europe. A Trump victory, they fear, may inspire Europeans to demand freedom.
Armstrong Economics Blog/Politics re-Posted Oct 23, 2020 by Martin Armstrong
Business confidence in Europe is in crash mode. Over half of Europe’s small firms fear for survival, survey finds. They seem to be correct. This Great Reset is designed to crush the economy and rebuilding it if “green” from the bottom. They label anything that dares to say the obvious as a “conspiracy theory” so they need not answer any of this. A “conspiracy theory” was something that was not remotely possible and was way out there beyond even alien abductions. Here, we need only take what they are saying and ask are politicians this stupid that they cannot see what they are doing to the average person?
The authoritative actions of politicians and the forced denial of human rights are far worse than if we were invaded by a foreign power. Khrushchev was correct, but it is not the lower classes doing this, it is the academics in league with the Big Tech companies offering technology to track every person to prevent any possible uprising in the future.
Armstrong Economics Blog/Economics Re-Posted Oct 21, 2020 by Martin Armstrong
QUESTION: Hi AE….think I finally get your message about money supply vs inflation. But aren’t we just dealing with a difference of semantics? If the gov’t prints endless amounts of currency, that HAS to. at some point, impact prices etc. which in turn, eventually leads to a collapse in confidence. (Savers can’t afford to buy anything.) What am I missing here?
ANSWER: It’s a question of what comes first – the chicken or the egg. First, we have the collapse in tangible assets and people will then hoard their money and spend less fearing the future. The revenue declines for governments which then forces the government to create more which use to be debasement before paper money, and today we have debt which can be posted as collateral to even trade which is now also money that pays interest as it first began during the American Civil War.
The classic definition of hyperinflation is taken from the 1956 work by Phillip Cagan who wrote The Monetary Dynamics of Hyperinflation. Cagan defined a hyperinflationary episode as beginning in the month that the monthly inflation rate exceeds 50%, and ends when it drops below 50% per month. This is the standard definition.
The general population keeps the bulk of their wealth in non-monetary assets primarily real estate which made the 2007-2009 financial crisis far more serious than a stock market crash.
The higher middle-class population outside the USA view monetary amounts, not in terms of the local currency but more so in dollars taking an international perspective. Only Americans tend to be myopic and see the world all in dollars. That’s why you constantly see these people yell the dollar will crash without ever looking outside the USA even once.
The international view of assets in dollars is also a direct result of not just the fact that the USA is the largest core economy, but the dollar is the reserve currency of the world BECAUSE there are also no restrictions on issuing debt in dollars in foreign countries imposed by the USA, and the fact that the US dollar has never been canceled. You can still spend a $5 bill from 1861.
While the analysis by academics has focused on classifying hyperinflation, they seem to lack any understanding of the real causes of all hyperinflations attributing them to have been caused by government budget deficits financed by currency creation. Peter Bernholz analyzed 29 hyperinflations (following Cagan’s definition) and concluded that at least 25 of them took place because of money creation.
These academics have also wrongly assumed that the necessary condition for hyperinflation is the use of paper money. They obviously lack any understanding of the monetary system pre-1700 when coins were gold or silver coins. The idea that hyperinflations in history are confined to paper money has seriously harmed the entire understanding of the mechanism behind hyperinflation. They see to have ZERO understanding of the history of coinage which provides a definitive historical record.
They will typically point to the French hyperinflation of 1789–1796 and claim that it took place after the introduction of a non-convertible paper currency, the assignat. They have for more than 100 years looked at this idea that money has to be commodity-based. They never apply that theory as to how Germany, Japan, and China have all risen to the top without gold and Russia, rich in gold, has languished economically.
Perhaps it simply takes a trader to see how hyperinflation even begins well in advance. Hoover explained how capital acted in 1931 rushing from one currency to the next as nation after nation defaulted, but any professional trader who was on a dealing desk in 2010 when Greece turned to the IMF for help saw exactly the same patterns. When they drew first blood with the collapse of Greece, they turned and asked: Who is next? They started selling Portugal, Spain, Italy and were even moving against France. That is how a REAL financial contagion operates.
Historically, it is NOT that people lose confidence in the money because the government is simply creating more! It is the collapse in the CONFIDENCE in the economy first (absent war), and then this migrates to the CONFIDENCE in government collapsing. This has historically led to hoarding when the money is just coins or converting to other currencies (capital flight) which has been paper (i.e. Germany & France). It is the sequence that then leads to forcing the government to enter a death spiral where they create money to try to maintain their existence. The government will typically then collapse.
This is the same problem with the myth about interest rates. The claim is that rising interest rates are BEARISH. All they remember is the tail-end. The rates rise and the market declines. When you look at it objectively, markets rally with rising interest rates. Just look at this entire rally.
The ECB cut rates to negative in 2014. When we look at the Dax in Price and in dollars, the peak was March 2015. The lower interest rates have completely FAILED to “stimulate” the economy as has been the great expansion of the money supply.
This absurdity that simply increasing the money supply will cause inflation is the typical sales pitch for the last 50 years. If gold truly rallied to keep pace with inflation, then since 1980, it should be trading at the $12,000+ level. OBVIOUSLY, there is something else going on. This is where it takes a global perspective to understand when the breakout will come and precisely when will the CONFIDENCE shift from hoarding cash to spending it because it will be worth even less next month.
Armstrong Economics Blog/Corruption Re-Posted Oct 21, 2020 by Martin Armstrong
QUESTION: Why are bankers never prosecuted? The New York courts are not trustworthy. Can you explain why this is allowed to go one all the time?
ANSWER: It is very simple and the shareholders are the ones who are being defrauded. The banks can routinely engage in fraud all they want. The individuals are NEVER prosecuted because the government knows they will not get huge fines from an individual. The bank is fined and pays vast amounts of money, but the bankers themselves are never prosecuted. It is raw corruption. The very same bankers go on to commit the very next crime. They get bonuses for the money they make, and if caught, they keep the bonus and the shareholders pay the fine.
I personally would NEVER recommend a bank stock for that reason. The bonuses were paid out even during the 2007-2009 crisis. The S&P 500 Financial Index just retest the 2007 high compared to the rest of the market. The corruption between the courts, the government, and the banks is starting to wear very thin.