Posted originally on Mar 7, 2024 By Martin Armstrong
Those who follow this blog already knew that the Federal Reserve would not drop rates in the future due to unsustainable fiscal policies paired with America’s increasing involvement in foreign wars. All of the talking heads were preaching that rates would significantly decline to pandemic levels, as if that were the historical norm. Every fiscal policy in recent years has exacerbated inflation and the Fed cannot keep up with government spending. QE FAILED. The artificially low interest rates of the recent past were completely unsustainable and relied on outdated theories.
The outdated understanding based on Keynesian Economics remains to increase the supply of money and it MUST be inflationary. The Fed raises rates to reduce consumption and lower rates to stimulate consumption. It’s a very nice theory, but when actually tested, it utterly fails. Lower rates will NEVER cause people to invest UNTIL they believe that there is an opportunity to invest. We are watching the big players withdraw from equities, let alone government debt. We are in a private wave where money is running off the grid at a rapid pace.
The peak in interest rates took place in 1899 at virtually 200%. Yet, 1929 was the real bubble top and it peaked with 20% interest rates in call money on the NYSE. In theory, the biggest boom should have been met with the highest interest rate. In truth, the “real interest rate” as I have defined it is when the interest rates exceed expectations. If you think the stock market will double, you will pay 25% interest.
As you can see, while interest rates hit nearly 200% in 1899, the share market did NOT crash percentage-wise anything as it did following 1929. Look, there is a lot more to this than meets the eye. Everything must be addressed on a global scale for it all depends also on the direction of capital flows. There is just a lot more to this than simply the money supply and interest rates.
Now, Powell continues to explain to the public that VOLATILITY and economic conditions are beyond the control of the Fed. “We believe that our policy rate is likely at its peak for this tightening cycle,” Powell said. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured.”
All the news ofinflation waning, including recent data, is inaccurate propaganda intended to calm recessionary fears. Even by the government’s data, inflation is up 3.1% compared to last year. It was an unprecedented moment when Powell broke with Washington and criticized the government for their unsustainable spending. The Fed NEVER criticizes the government, despite the two being separate.
Hence, I say to stop blaming the Fed. They are not the ones creating all the money but are working to match monetary policy with unsustainable fiscal policies. We are looking at trillions in deficits per year. There is no restraint when creating new massive spending packages. Then people blame the central bank with no concept that it’s only a fraction of “money;” the real issue is CONGRESS.
Listen, interest rates cannot decline in the face of war. The 2020 yearly array showed a turning point for a high in 2022 and a possible correction into 2024. I explain this in more detail on the Socrates private blog but buckle up for the year ahead.
Posted originally on the CTH on March 7, 2024 | Sundance
I visited Warsaw twice last month and can provide some ‘boots on the ground’ background context for what is taking place as the Polish farmers begin protesting against the regime of Prime Minister Donald Tusk.
The first thing to understand is that Warsaw is to Poland almost exactly as Washington DC is to the United States – which is to say, a capitol subculture of leftists and WEF minded globalists totally disconnected from the social mindset of the rest of the country. The Warsaw of the 80’s and 90’s Solidarity Movement no longer exists, which explains the installation of Tusk in opposition to the generally lulled to complacency Polish people. Sound familiar?
“European agriculture policies and Ukrainian cheap grain, burning tires outside of Prime Minister Tusk’s office, as up to 100 THOUSAND more protestors expected to flood streets of Warsaw.”
The protests are not about Ukraine farm products (Western narrative); they are protesting the Build Back Better (Green New Deal) climate change nonsense regulations that will put them out of business and hurt the Polish people.
The German farmers and middle class workers organized their logistics brilliantly. The farmers approached Berlin from every angle, using all the arterial roads as points of entrance to surround the city. The German farmers came into each artery in two columns: column A at the front and column B in the back.
Column A drove into the city; column B remained outside the city blocking the streets. It was a smart way logistically to protest, and German officials could not respond because they were blocked. German truckers and transportation workers assisted the protest with non-compliance highlighting their support. The German government acquiesced to the farmers.
The French farmer protests learned from the Germans, and they too were successful in their logistical protest against the French government. The French government acquiesced to the French farmer’s demands.
However, the Polish government saw the effective strategy as it began spreading around the EU. Tusk brought into Warsaw an advanced police group. As the Polish farmers moved into the center of Warsaw, they encountered a heavily fortified Polish security force. Tempers flared and physical confrontation was the outcome.
WARSAW, Poland (AP) — Poland saw its most violent protest by farmers and supporters yet Wednesday as some participants threw stones at police and tried to push through barriers around parliament, injuring several officers, police said.
Police used tear gas and said they detained over a dozen people and prevented the protesters from getting through to the Sejm, the Polish parliament.
Farmers are angry over European Union climate policies and food imports from Ukraine that they say threaten their livelihoods. Such protests have occurred across the 27-member EU in recent weeks, but this one was decidedly angrier than earlier demonstrations in the central European nation.
Police noted on the social media platform X that its officers “are not a party to the ongoing dispute” and warned that behavior threatening their safety “cannot be taken lightly and requires a firm and decisive response.”
The deputy agriculture minister, Michał Kołodziejczak, said he didn’t believe that “real, normal farmers caused a riot in front of the Sejm today,” and that it was necessary to isolate “provocateurs and troublemakers.”
He did not say who he thought was behind the violence.
Farmers on tractors blocked highways leading into Warsaw while thousands of their supporters gathered in front of the prime minister’s office before marching to the parliament. Some trampled a European Union flag and burned a mock coffin bearing the word “farmer.”
Farmers were joined by miners, foresters, hunters and other supporters. They blew horns and set off firecrackers and smoke bombs, despite police warnings that the use of pyrotechnics was banned. Some protesters burned tires.
The protesters are demanding a withdrawal from the EU’s Green Deal, a plan meant to fight climate change and protect biodiversity, including with plans requiring farmers to reduce the excessive use of polluting chemicals to boost their crops. The protests have led politicians to water down some provisions. (read more)
The area around the U.S Embassy in Warsaw is no longer a place of well-kept landscape honoring Ronald Reagan and the Polish Solidarity Movement. All of those pesky vestiges of freedom are in disrepair or being removed.
That said, let us hope () the American resistance movement is watching the logistical success of the truckers and farmers in Germany and France.
Let the people enter the capitol for protest marches, while the support system infrastructure disrupts the arteries that encircle the core.
Posted originally on Mar 6, 2024 By Martin Armstrong
Everyone knows I became friends with Milton Friedman. Back in 1970, Milton exposed how Stakeholder Economics was inefficient and stupid long before Schwab claimed he invented it. Milton stated that such a role was that of government, not corporations, whose #1 fiduciary obligation was to its shareholders. Under Schwab, I could say, “OK, I will go public; everyone sends in money. I will give you shares in return and then say — OMG, there are people starving in Africa!” So, I decided to give 50% of all the profits to them and not my investors. This is Stakeholder Economics.
The New York Times wrote on September 13th, 1970:
“WHEN I hear businessmen speak eloquently about the “social responsibilities of business in a free‐enterprise system,” I am reminded of the wonderful line about the Frenchman who discovered at, the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are—or would be if they or any one else took them seriously— preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”
Posted originally on Mar 6, 2024 By Martin Armstrong
The Biden Administration implemented a new rule that will cap credit card late fees at $8. The Consumer Financial Protection Bureau has praised the measure, estimating it will save Americans over $10 billion annually in late fees, or around $220 annually per person as 45 million Americans have experienced these fees within the last year, but this measure may be more harmful than helpful.
Credit card debt in America is at an all-time high of nearly $1.13 trillion and continues to rise as around 56 million Americans carry credit card debt. The typical late fee payment is around $32, but this is merely the fee for missing a payment and does not account for compounded interest. It seems like common sense, but one must realize that the average person is not financially literate. The concept of basic finance is not a mandatory requirement for the public education system, leading many people to live off debt, well beyond their means, with no chance of recuperating. America has the leading median level of credit card debt among all developed nations. There is a widespread belief that one can afford certain goods if they are approved for a line of credit, which only benefits the banks.
Now, the banks are certainly profiting on late fees, which account for about 15% of credit card profits based on the CFPB’s 2021 Consumer Credit Card Market Report. Do these fees deter reckless spending? A 2022 ABA-led survey found that 46% of respondents said they made it a priority to pay off their credit cards on time to avoid late fees. That particular study found that a fee of $10 was enough to redirect one’s attention to their financial obligations. Another study by the Harris Poll and NerdWallet found that Americans were more likely to make a payment of their cards if a $30 fee was implemented.
Again, one must understand that the average person cannot compute the cost of compounding interest. Borrowing money is not a legal right and should be done with the utmost caution. Simply forgetting or dismissing financial obligations has consequences.
The banks will find a way to profit off the people in other ways. It is the nature of banking. Rob Nichols, the president and CEO of the American Bankers Association, explained that other measures could be implemented that will hurt everyone. “The Bureau’s misguided decision to cap credit card late fees at a level far below banks’ actual costs willforce card issuers to reduce credit lines, tighten standards for new accounts and raise APRs for all consumers – even those who pay on time,” Nichols said. This is yet another Biden Admin policy favoring the financially irresponsible at the expense of others.
So, what is the CFPB recommending as an alternative? CBDC. The agency is first suggesting digitizing banking so that consumers have instant access to their credit scores and spending habits. Again, these numbers are disregarded by a portion of the population. The agency is patronizing all Americans by stating we are not intelligent enough to know when to pay off our monthly debts without digital notifications and reminders.
Financial literacy is desperately needed in America. So, while the Biden Administration is breaking its arm patting itself on the back for this surface-level win for the everyday man, the ruling does nothing to combat the growing personal debt crisis.
Posted originally on Feb 23, 2024 By Martin Armstrong
Once upon a time, in the United States, we, the people, began our classroom day with the Pledge of Allegiance:
“I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible,
with liberty and justice for all,”
Those days are gone, and we can no longer depend on the Courts and the legal systems for Truth, Fairness, and Justice for all, which we were told was the American Way! How many millions went off to war and died to defend that principle they have torn to shreds in New York City? The American Way of Life is dead. The Democrats have allowed our nation to be flooded with people who do not share our culture, our philosophies, or our history solely to ensure they win at all costs.
This is no longer any difference we have with Russia and China and how they treat the people. The United States now has more people in prison than China, which has 1.5 billion people compared to our 300 million. You have a 500% greater chance of going to prison because there is no more liberty and justice for all.
The Courts have turned into Totalitarian Dictatorships devoid of any accountability, and the proof of that is the mere conviction rate proving that we are the enemy of those in power. Data published by the Pew Research Center in 2019 highlighted how federal prosecutors have a 99.6% conviction rate. To put those numbers in perspective, U.S. Attorneys filed 79,704 cases in 2018. Of those, only 320 resulted in acquittals. As Pew Research wrote: “Nearly 80,000 people were defendants in federal criminal cases in fiscal 2018, but just 2% of them went to trial. “ Any criminal lawyer in New York will tell you to plead and take a deal because you CANNOT win in New York.
The system is so bad that Judge Rakoof was thoroughly disgusted and wrote a book on his experience on the bench in New York. The title is “Why the innocent plead guilty and the guilty of free.” I cannot express strongly enough that you have virtually no chance of a fair trial EVER in the United States. And if they cannot put you on trial, they will kill you and swear it was suicide. Nothing but nothing someone is charged with should EVER be taken as truth. Even Madoff quickly pled guilty to save his family, yet his son still committed suicide. There, too, the banks claimed they had no idea. That was a lie and ABSOLUTELY impossible.
I was interviewed by a journalist when they saw the bank was illegally trading in my accounts, like MF Global. They asked me if they were laundering money for the Russian Mafia “AS THEY WERE DOING IN MADOFF!” I said I had no idea. I only saw all the bogus trades that were then backed out as errors when I assumed they were parking things in my accounts. Yet, of course, if the “error” came from one account and was taken out to another, then it was money laundering. The newspaper would not allow her to publish it. The forensic accountant told the court they never shall so many “canceled trades,” but the court also covered that up. I believe I refused to invest $10 billion in their Russia scheme, so they were using my accounts for money laundering involving the oligarchs and the attempt to seize Russia.
The Elections are rigged, the Courts are corrupt, and the government is rapidly becoming the enemy of the people. All of these male illegal immigrants of military age will be compelled to sign up for the military to get citizenship and be sent off to fight in World War III.
Trump’s civil fraud trial in New York will expose just how corrupt this whole prosecution has been. In a 92-page decision, this morally void Judge Arthur Engoron ordered Trump to pay a massive $355 million fine, plus more than $98 million in prejudgment interest no less. Engoron’s extraordinary ruling strategically prohibited Trump from serving as an officer or director of any business in the state for three years, giving the judge the power to appoint a prosecutor to run his company and destroy it in no time. Even George Washington University Law School professor Jonathan Turley took issue with this, saying that “[e]ven the New York Times agreed that it could not find a single case in history where this statute was used against an individual or a company that did not commit a criminal offense, go bankrupt, or leave financial victims.”
Engoron found Trump was found liable for overstating the values of his assets on bank loan applications. That is a common negotiating practice, like haggling in a biazare in Iran. It’s expected and an insult if you do not. Considering that New York City is the world’s financial capital, the city’s bankers walk on water and are among the most sophisticated on the planet. Developers always inflate property valuations, and banks have their own appraisers who simply adjust them down. According to Turley, during the trial, “witnesses [loan officers] testified that they wanted to do more business with Trump, who was described as a ‘whale’ client with high yield business opportunities.”
It is the same when trading. The banks try to guess if you will buy or sell and will move the quotes in the direction they anticipate you will trade. It is always a negotiation. That is how high-stakes finance deals are done.
The reason I recommend that Trump file for bankruptcy IMMEDIATELY in Florida is because NY law is also rigged, and this is why the Judge did what he did. Under New York law, Trump is not allowed to even appeal his ruling without depositing the full amount in a court account, and he has only 30 days to raise that, which is CASH! If he cannot, then they will seize his property and sell it for pennies on the dollar to their best friends, who are already licking their lips and rubbing their hands. Judge Engoron has just denied former Trump’s request for a 30-day stay of judgment after defense attorneys protested the attorney general’s “rush” for enforcement. Now, they want to prevent Trump from leaving NYCso they can imprison him to stop the election.
If Congress does not intervene – we are screwed as a nation.
New York State Attorney General Letitia James is an elected Democrat. She made it clear from the outset that her goal was to destroy Trump. She actually said:
“This illegitimate president [Trump] — I look forward to going into the office of the attorney general every day, suing him, and then going home.”
This has been a biased prosecution with the sole intent of prosecuting Trump to interfere in the 2024 election – plain and simple. Because BViden controls the Justice Department, they will never prosecute anyone for doing this.
She has turned this law upside down. It was intended to protect consumers. In fact, no one was defrauded. All of the loans were fully repaid. Still, this judge and prosecutor conspired to violate everyone’s right to vote in the 2024 election. Any business can now be torn apart using this. They claim that you overvalued your assets on a loan the bank never used in its decision anyway.
I have not heard from one institutional client inside or outside the United States who thought this was reasonable. The overwhelming view is that this was a deliberate political hit job, just the latest blow in the Democrats’ relentless campaign against Trump to ensure their insane agenda continues, and the Republicans on Capitol Hill are not defending the Constitution or the people.
This judgment sent a shock wave around the world, and the rigged system that allows them to seize Trump’s assets in 30 days is a warning you better get the HELL OUT OF NYC ASAP! This was the last straw. Get out of all stocks with a New York address and sell NY state and city bonds ASAP. This judgment is so outrageous, and they intend to confiscate Trump’s properties NOW just to destroy him completely to interfere in the 2024 election.
Governor Hochul was so stupid during an interview on a radio talk show with John Catsimatidis on “The Cats Roundtable” on WABC 770 AM that she tried to reassure business owners that it’s safe to do business in the state. Her remarks made the case that this was political and that Trump was targeted because he was the Republican candidate. She said :
“I think that this is really an extraordinary, unusual circumstance that the law-abiding and rule-following New Yorkers who are business people have nothing to worry about because they’re very different than Donald Trump and his behavior.”
Hochul admits that this was political, or every New York developer who has ever overstated the value of a property on a loan application is now at risk of being bankrupted and all their assets seized by making the fine so large it cannot be paid in 30 days.
The Democrats have weaponized the legal system everywhere against Trump, and their idiot base is cheering for the demise of the nation. The New York Post said it best:
“Democratic elites will chuckle into their martinis this weekend at the verdict, but your victory is pyrrhic. You’ve made Donald Trump a political martyr.”
My family has fought in every war since the American Revolution. Everything they fought for has been torn to shreds. I am surprised that anyone would now fight and die for a country that no longer respects the rule of law, the Constitution, or civilization. The clock is ticking. It will be time to turn out the lights by 2032.
I can now see why the computer is projecting a landslide for Trump. The Democrats have gone way too far. They are no longer supporters of the American Way of Life, and the computer projections for 2028 look even worse.
A study by Truth in Accounting (TIA) revealed that 70% of America’s largest cities fell into a deficit in fiscal year 2022. Out of the 75 cities studied, 53 simply did not have the funds to pay their bills. The study found that the total debt among the 75 cities had reached $288 billion, and despite the $307.4 billion of assets shared among them, the cities held $595.3 billion in unfunded pension plans.
US law requires cities to maintain a balanced budget, yet no one is holding the representative accountable. Mind you, this data was collected BEFORE the migrant crisis toppled city budgets. Cities have been overreporting their revenue and incorporating borrowed funds into their total revenue calculations. These cities push off bills until the beginning of the next fiscal year to alter calculations.
Pensions and health care were the major issues burdening American cities long before Washington required taxpayers to bankroll the 7+ million new illegal residents. As the report notes: “The most common accounting trick cities use to understate government costs is not including true compensation costs. Cities provide employees with salaries and employee benefits, such as healthcare, life insurance, and pensions. While pension and other post-employment costs, such as health care, will not be paid until the employees retire, they still represent current compensation costs earned and incurred throughout their tenure.”
I have been warned for many years that the government pension plans operate like a Ponzi scheme and have been waiting to implode. Government employees have the defined-benefit (DB) while we get the defined-contribution (DC) plans. Most state and local government employees, actually 87% of those working full time, participate in a defined benefit (DB) pension plan. They contribute NOTHING but are guaranteed a pension on top of what they earned, plus free healthcare for life. Under these promises, these employees have never been required to save for the future and will demand that the public be taxed on anything and everything to keep to this Ponzi scheme on life support.
UNDER NO CIRCUMSTANCE should you allow your pension fund to be managed by any government-related entity. They cannot pay government employees so they have sought to suck in everybody else to cover up their losses. Before 2032, there will be more people on retirement from government than actual employed workers. The government must continue to raise our taxes because they are incapable of creating reform.
The reason I highlight the migrant crisis is that we are now shelling out billions of dollars every month to support a new influx of people who have also never contributed to the system. They are providing them with “free” shelter, food, debit cards, and more. Then, they decided to prevent these very people from obtaining working permits to ensure the select few with good intentions cannot ween off government/taxpayers.
Look at history to see how this situation plays out—warning: the pension crisis will not end nicely. When the government could no longer afford to pay the army, it began sacking Roman cities that opposed their general. They turned inward and cannibalized their own cities, weakening the entire empire, thereby allowing the barbarians to come through the gates. We have followed the very same mistakes as Rome. This is just how empires always end. We are no different.
Posted originally on Feb 22, 2024 By Martin Armstrong
COMMENT: Hi Martin.
Thanks for the “astute lawyer” compliment. That was very nice, and coming from you, it is very meaningful to me.
The Epoch Times headline in your “NYC Out of Control” post calls the dollar part of the verdict against the Trumps a “penalty.” It has also been called a “fine,” but I haven’t yet seen it called “damages” in a headline. I think Hochul, Engoron, and James know that the amount was based on a damage assessment and calculation that may not hold up. New York Executive Law § 63(12) clearly reads that the attorney general “may apply…for an order…directing restitution and damages…”. [Emphasis mine.]
New York proved math calculations, not actual damages, where the damaged party had to be made whole. Had the statute recited a list of fines, they’d probably be in a more sound position, but their position now is what I would call “too dicey for comfort.” I would seize nothing in this situation because there are too many cases of improper seizures to worry about. The verdicts against those who seize property in error or improperly or hastily in a flawed or tainted case are many times larger than the amount of the money judgment used to seize and sell the property of the defendant.
Furthermore, if New York has someone running the Trump businesses, and should he or she destroy or damage the businesses, the state could be liable for many, many times the amount of the verdict/judgment against the Trump family. Trump could wind up seizing the state capitol, the governor’s residence, etc., plus having his property returned to him. I’ve seen this happen. Once, the State of Louisiana overreached, and once, the U.S. government was a litigant against a billionaire oil man, banker, and friend who could not get the IRS to return his multi-million dollar overpayment of taxes. He finally had enough, and he seized the Hale Boggs Federal Court Building. He got his money a day later.
Perhaps by dancing around exactly what legal principle the amount of the money verdict/judgment is based on (i.e., damages, fines, penalties [i.e., a payment imposed as punishment], whatever), the Hochul, Engoron, James enterprise has walked into a trap. The Eighth Amendment prohibits excessive fines. If they maintain the amount is absolutely based on the principle of damages, how can they show a diminution of the state being “whole” (or “wholeness” if you will) owing to Trump’s actions with third parties. If they maintain the amount of the verdict/judgment is based on a properly enacted and published fine or penalty, then they must face the Eighth Amendment.
In my opinion, Hochul, Engoron, and James are whistling past the graveyard. They have put their careers on the line, and the dice are tumbling.
Best regards, and thanks again.
EGM
REPLY: This is so political it smells, and just because this Judge, who is not qualified to judge a turtle race, simply decrees, they think they are God, and everyone must bow down to them and kiss their ring. It is so rare to find a decent judge in New York. Judge Lawrence McKenna saw what they were doing and tried to protect me. The government went to the Chief Judge to remove him and then sealed the record.
The DA belongs in prison with the governor and this disgusting judge. This DA is bragging that she will now seize Trump Tower. When the computer projected that the 2024 election would be intermixed with serious civil unrest and that neither side would ever accept the outcome, as we draw closer and closer to this date with destiny, it is looking very, very dark indeed.
The computer is projecting a panic cycle in September, rising volatility in October, and October will be a critical turning point heading into the 2024 election. We should no longer have the motto – Gold Bless America – it should be changed to – God Save America. These LEFTIST are destroying the very foundation of law; without that, civilization can no longer exist. That is the testimony of history – not my opinion.
NEW YORK IS DOOMED
Bond investors have piled into New York City’s tax-exempt bonds, lured by their relatively high yields. However, with a $7 billion budget deficit spiraling costs of sheltering asylum seekers and other migrants that have sought refuge in New York on top of this collapse in the rule of law, NYC is a sell – not a buy. Wall Street profits are declining, and with them, there are looming job cuts at major investment banks. Many are migrating to Florida, which puts pressure on city tax revenue. New York’s fiscal outlook is a disaster. That suggests the city’s general obligation bonds aren’t particularly attractive at current valuations – they are a sell.
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This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
) the American resistance movement is watching the logistical success of the truckers and farmers in Germany and France.
Centinel2012 