Wells Fargo – Banking Crisis?


Armstrong Economics Blog/Banking Crisis Re-Posted Jul 12, 2021 by Martin Armstrong

It has begun. Wells Fargo has told all its customers that it is shuttering down ALL personal lines of credit. The bank has made it clear that it is shutting down ALL existing personal lines of credit and it will no longer offer such products. That includes revolving credit lines, which typically let users borrow $3,000 to $100,000. The bank used to sell these products as a way to consolidate higher-interest credit card debt or to pay for home renovations. This also included avoiding overdraft fees on linked checking accounts.

Customers have been given a 60-day notice that their accounts will be shut down. Wells Fargo has declined to comment when asked by Reuters. Previously, Wells Fargo suspended home equity loans, claiming it was due to the economic uncertainty with COVID. Wells Fargo has been struggling with a tarnished reputation following a series of consumer financial scandals. In 2016, the Wells Fargo account fraud scandal led to the resignation of CEO John Stumpf and resulted in fines of $185 million by the Consumer Financial Protection Bureau.

Despite the fact that Wells Fargo Bank likes to portray it was formed on March 18, 1852, the truth is that it was simply a freight company back then. It was in New York City where Henry Wells and William G. Fargo joined with several other investors to launch their idea of a freight company to cover the trade between the East and West Coasts. What sparked the idea was the discovery of gold in California in 1849. They recognized that there would be a demand for cross-country shipping. Wells Fargo & Company was formed to take advantage of this great opportunity.

In July 1852, Wells Fargo & Co began its first loads of freight from the East Coast to mining camps scattered throughout northern California. The company contracted with independent stagecoach companies to provide the fastest possible transportation and delivery of gold dust, mail, and other various valuable freight. Wells Fargo began buying gold dust, selling paper bank drafts, and providing loans to help fuel California’s growing economy.

In 1857, the business was so profitable that Wells, Fargo & Co. formed the Overland Mail Company, known as the “Butterfield Line,” which provided regular mail and passenger service. The company earned a reputation as a trustworthy and reliable business. It adopted as its logo the classic stagecoach which became famous even in later movies. Wells Fargo & Co. would also send an employee on horseback to deliver or pick up a message or package which became known as the Pony Express.

There were other competitors. John Bamber first advertised July 12, 1858, as the only authorized for daily and weekly newspapers. On September 9, 1870, Bamber incorporated as “Bamber Express Co.” with four other trustees.  Then on January 1, 1874, a change in ownership was announced. On July 6, 1874, it was announced that Whitney & Co. Express had purchased the company.

Wells Fargo & Co. began a merger and acquisition taking over other Pony Express and stagecoach lines. Wells Fargo took over the Overland Mail Company in 1860. Six years later, Holladay Express was added. By this time,  Wells Fargo & Co emerged and the leader in transportation in the West. When the transcontinental railroad was completed three years later, the company began using the railroad to transport its freight. In 1905, the company split whereas the freight business stood separately and they embarked on banking. Wells Fargo took over the Nevada National Bank and established new headquarters in San Francisco. By 1910, the freight company was covering 6,000 locations from the Eastern urban centers connecting them to the Midwest farmers and then ranchers and miners from Texas to California as well as the Pacific Northwest where the lumber mills operated.

During World War I, the U.S. government nationalized Wells Fargo’s shipping routes and combined them with the railroads into the American Railway Express. This actually terminated Wells, Fargo & Co. as a transportation and delivery business. The banking side was hit by the 1906 San Francisco Earthquake, but the vaults held up while the building collapsed. After World War II, the Wells Fargo Bank American Trust Company reduced its name to just Wells Fargo Bank in 1962.

Wells Fargo from its split which was decided in 1904, peaked on the 112-year cycle in 2016. While it elected two of the near-term Yearly sell signals, the first long-term resides at $28.80. A year-end closing below that will be the kiss of death for Wells Fargo.

Soros is NOT Targeting the Dollar


Armstrong Economics Blog/Corruption Re-Posted Jul 9, 2021 by Martin Armstrong

QUESTION: I believe there is a guy on YouTube ripping you off and claiming Soros is now targeting the dollar which he will destroy just as he did to the pound. Is Soros even capable of that? You said he was just the lead guy on that for the club. Care to comment?

DH

ANSWER: Anyone claiming Soros is now targeting the dollar is absolute garbage. The entire pound issue was that it was a FIXED rate in the European Rate Mechanism. It was a cheap play. If you were wrong, you lost nothing because it was a fixed exchange rate. Soros would NEVER go against a floating currency. He would be wiped off the face of the Earth. This is total nonsense. If this is their sales pitch to buy Bitcoin or something, they could face 20 years in jail. It is totally FALSE advertising — PERIOD!

When Inflation is really Deflation


Armstrong Economics Blog/Interest Rates Re-Posted Jul 9, 2021 by Martin Armstrong

QUESTION: Why is the Fed doing so much Reverse Repo? Do you think it will hit $2 trillion?

JE

ANSWER: I understand that people seem to be talking up the reverse repo activity as doom and gloom. The Federal Reserve has been raising interest rates and boosted the return to fight inflation. The reverse repo facility takes in cash primarily from money-market funds, as well as government-sponsored companies and banks. This facility offered a return of zero percent to eligible users previously, and then the Fed moved it up to 0.05%, while at the same time lifting another rate, called the interest on excess reserves rate to 0.15% from 0.10%. The Fed is actually competing against the US Treasury in taking in cash, which is diverting it from government debt.

What the Fed does not understand because it is beyond their control are the international capital flows. Raising rates to fight domestic inflation is attracting capital from Europe, where banks are charged negative interest rates if they have excess cash. They open a branch in the USA and then send the excess cash to the state, and then they put it at the Fed. In this manner, the Fed has no idea how much money they are actually attracting globally.

I helped the Japanese lower their trade surplus by simply buying gold in New York, taking delivery, shipping it to London, and then selling it and starting all over again constantly. The trade statistics only measure dollars — not goods. You can buy a hot dog and have it delivered in London, and that too would reduce the trade surplus. It’s all a numbers game, and those in government have no ability to figure out the real world.

The statistics they created with Bretton Woods were all based on the currency which was fixed. So if you created more dollars, that was inflationary. But in a floating exchange rate system, if you create 10% more dollars but the dollar declines by 20%, guess what? It ain’t inflation but deflation!

People’s thinking has been compromised by the very way the government sets up everything. We would allocate trade at our firm according to the flag the company flew. That showed the US never had a trade deficit. It eas US companies setting up offshore and importing their own goods. I testified before Congress on all of this in 1996. So much for trade wars of misguided ideas of the world we live in.

The Fed is raising rates trying to soak up excess cash in the system BECAUSE that cash is not going into long-term bonds. Instead, we see even mortgage rates have declined under 2% because capital is shifting from PUBLIC to PRIVATE. Major capital has been turning to the mortgage market for there they have collateral wherewith government debt they have nothing but a political promise.

Yes, there will be others now claiming this is their idea. But unless you actually made the trades and really consulted with governments to solve problems, you will never come up with the answer without experience. Thank you to all the people who point out those who plagiarize what I write like clockwork. All I can say is that reveals people who are just not trustworthy. So, let’s see how long it takes others to claim they thought this up in the shower.

White House Brags July 4th Groceries Cheaper This Year, We Will Save 16 Cents on Our Cookouts


Posted originally o the conservative tree house on July 2, 2021 | Sundance | 479 Comments

This is not a spoof.   This is an actual broadcast from the White House Twitter account.  Apparently the Biden administration has hired the same public relations firm used by North Korea to manage their messaging:

Yes comrades, pay no attention to the actual receipts you receive from the local grocery store. Please ignore massive price increases in food you might be experiencing at the supermarket.  These things are simply illusions.  Despite the official inflation records on food pricing provided by the U.S. government, Bureau of Labor and Statistics [SEE HERE, Table 7], according to those who control the oval office our food is actually cheaper this year.

Comrades, we must appreciate the efforts of the Democrat People’s Republic of Krazy (DPRK) and congratulate the Biden administration for achieving a record-breaking new level of absurdity in the distribution of propaganda.  Smiles everyone, smiles…. you saved 16 cents.

On a serious note, this extreme level of gaslighting only highlights how the White House must be very concerned about what is about to happen to them in the next election cycle.  Even the most devout leftists are calling out the Biden administration in response to this tweet.  [Go Look At The Comments]

Even Baghdad Blitzer cannot pull this con off….

Biden for President – Indefinitely!


Armstrong Economics Blog/Technology Re-Post ed Jun 30, 2021 by Martin Armstrong

Biden for President – Indefinitely!

Rarest Roman Coin of All Time


Armstrong Economics Blog/Collectibles Re-Posted Jun 29, 2021 by Martin Armstrong

QUESTION: Marty; What is the rarest Roman coin? I figure nobody really knows that answer better than you.

PH

ANSWER: There are there major coins of which only one exists in private hands. They are the champion of all Roman coins – Saturninus. There is one other in existence, and that is in the Louvre. Then there is a gold coin of Leontius, the Isaurian Usurper (484-488 AD). Only four coins exist, but three are in museums.

The third rarest coin of which only one is known is that of a denarius with the portrait of Caracalla on one side and Plautilla on the other. Caracalla was a deranged and hateful emperor. As soon as his father died, he had a brother who killed him while in his mother’s arms. He then had portraits of Geta removed.

Plautilla was the daughter of the powerful Praetorian Prefect Plautianus, a close friend of Septimus Severus. Plautilla was married to Caracalla in 202 AD against his will. Caracalla literally hated his wife and vowed to have her killed when he became emperor, a promise which he would most certainly keep. In 205 AD, Caracalla first had to remove her father on the grounds of treason, which Caracalla arranged.

Caracalla then sent Plautilla to be banished to the Lipari Islands. Later, Plautilla was murdered on the orders of Caracalla in 212 AD during the purge which followed the murder of his brother Geta.

We can see surviving portraits of his family where he erased the image of his brother. Likewise, his hatred for Plautilla was so renowned that the extreme rarity of this lone surviving coin stands as a testament to Caracalla was also eradicating existing coins that show him with his most hated wife.

Therefore, while individual coins of Plautilla are fairly common, Caracalla appears to have recalled those showing him with his wife on the same coin. Other dynastic coin issues showed his brother was not recalled with as much fervor. Even the coinage of Geta is also fairly common. The number of individual coins of Geta and Plautilla most likely made such a recall impossible.

Therefore, each of these coins is unique. However, that does not mean they are of equal value. The Plautilla issue is probably worth $50,000 to $100,000. The Leontius aureus would bring probably $500,000 to $1 million. The Saturninus is far more important for this is the coin that changed history. Academic declared the book Historia Augusta was a fraud because it listed over 20 emperors during the short span of the early years of the 3rd century, which they never heard of. When the two gold coins of Saturninus were discovered in a dig in Egypt, that proved that Historica Augusta was real.

This coin today would most likely bring even $5 million. If ancient coins reach the level of American, then we should be looking at $18.8 million for this coin by comparison to the 1933 $20 gold coin, which is also unique.