The North Koreans have been allowed to do what ever they want for at least the past 26 years so does anyone think their are going to stop now.
Tag Archives: Government run Ponzi Schemes
SUSAN RICE Helped Obama Illegally UNMASK Trump Transition Team[NEW DETAILS]!!!
It would be nice if some of the Obama team did time in federal prison but be know that like Hillary got away with what she did so will the rest of the Obama minions.
LIMBAUGH: Do Democrats REALLY Believe They Can FORCE Trump Out Of Office?
Do the Demorats really think they can remove Trump — wow there as crazy as the Muslims thinking they can rule the world.
Debt Burden v Equities
Armstrong Economics Blog/Bonds
Re-Posted Apr 3, 2017 by Martin Armstrong
QUESTION: Hey Marty,
If the US debt bubble bursts, how does this not affect the banks and insurance companies, as they hold over $1 trillion worth of US debt? Wouldn’t these instances falter also? If they falter, wouldn’t that bring down the entire stock market as well? If this is the case, then how can the stock market rally as you have been stating?
Thanks
J
ANSWER: Everyone focuses constantly on the US, and they tout how $20 trillion will all default. This is just first, NONSENSE, and secondly a gross exaggeration without looking at total global sovereign debt. Total global debt stands at $230 trillion which is more than 300% of total annual Gross Domestic Product (GDP) of the entire world. The United States recorded a government debt equivalent to 104.17 percent of the country’s GDP. If we look at the US debt and narrow the focus to just government debt, then we find that the US accounts for $20 trillion out of nearly $59 trillion or about 1/3rd. Those who keep ranting about the US debt level, have said the same thing at every milestone. First it was $1 trillion back in 1980, Then, $5 trillion, $10 trillion and now its is $20 trillion. The whole reason big money buys blue-chip equities is because stock survive such events as they did during the German Hyperinflation. If a government goes bust, it is the private assets that survive.
The banks and insurance companies hold far less than you may think. The banks sold their Treasuries and are parking cash at the Fed who pays them interest in Excess Reserves. A default on the debt, EXTREMELY UNLIKELY IF NOT IMPOSSIBLE, would hurt the Fed, but far less the banks directly. These people who constantly say the dollar will crash because of the US debt are blind. They never look outside the USA for a single second. They have a very myopic view of the world and this is why big money would never listen to them. They could never answer a single question about what’s taking place outside the USA when it comes to real capital net movements. If you do not comprehend even that capital is moving constantly around the globe, how can you possibly forecast anything no less answer questions of international investors? Historically government ONLY defaults when people no longer buy debt. It’s always just a Ponzi Scheme. All governments issue new debt to retire the old. They do not pay off the debt. So the USA will NEVER default on its debt by itself. Historically the default comes only when they cannot sell the new debt to pay off the old. That’s just insane and impossible historically.
Intra-governmental Holdings of US Federal debt are rarely ever talked about, which includes 230 other federal agencies holding US debt totaling $5.554 trillion, or almost 28% of the entire federal debt. This includes the Social Security Trust Fund, which can only invest in government debt. As of December 31, 2016, here is the breakdown of who owns what:
- Social Security Trust Fund & Federal Disability Insurance Trust Fund = $2.801 trillion
- Office of Personnel Management Retirement = $888 billion
- Military Retirement Fund = $670 billion
- Medicare Trust Fund = $294 billion
- Misc. Government retirement funds = $304 billion
This is what we would call the asset balance sheet. If this were a business, we would then look to see how much cash it has on hand as well. That amounted to $580 billion as of December 31st, 2016. (Source: Treasury Bulletin, Monthly Treasury Statement, Table 6. Schedule D-Investments of Federal Government Accounts in Federal Securities, U.S. Department of the Treasury, December 2016.)
Now, the remaining debt as of December 31st, 2016 held outside the government amounted to $14.403 trillion. Foreign governments and investors hold nearly half of that figure and 25% is held by yet other governmental entities non-federal, which are state and local governments, but legally also includes the Federal Reserve since it is technically not an agency. Now, looking to the private sector, about 15% is held by mutual funds, private pension funds, savings bonds or individual Treasury notes. Businesses own only about 10% of the national debt, which includes the banks and insurance companies. This also would include various trusts and investors holding T-Bills on deposit for trading. Then we have about 30% of the debt that is held by foreign holders, which includes governments around the globe as part of their foreign reserves. So here is what this looks like:
- Foreign – $6.281 trillion
- Federal Reserve – $2.463 trillion
- Mutual funds – $1.379 trillion
- State and local government, including their pension funds – $874 billion
- Private pension funds – $544 billion
- Banks – $570 billion
- Insurance companies – $304 billion
- U.S. savings bonds – $169 billion
- All Others = $1.349 trillion*
Now, a close review of this balance sheet shows that Social Security and all retirement/pension funds, hold almost 50% of the national debt. Let’s get to the bottom line. In the proposition that the United States actually defaulted on its debt, yes about 30% is held by foreign reserves and that would mean that the world monetary system would collapse. It is highly unlikely that such an event would ever take place and it most certainly is even less than the total debt owed by emerging market which stands at about 50% greater than that figure.
Emerging Market corporate debt share of the global credit market has been increasing and now accounts for about 18% of all U.S. dollar-denominated corporate debt in the world. Emerging Market debt has increased 300% since 2005 alone. The USA has the biggest economy and the most viable. Yes, if USA defaulted on its debt it would be lights out for the entire world. However, current and future retirees would be hurt the most and that would provoke civil unrest like you have never seen.
The risk is by no means that the USA defaults. The risk is that the defaults start not in the core economy, but it ALWAYS begins from the outside and spreads inward to attack the core. The foreign bond defaults in 1931 is what created the Great Depression and it did not NOT because the US defaulted, but because the USA adopted AUSTERITY and allowed deflation to dominate – the same mistake made in Europe today.
I have previously warned that when dealing with government, he you has the guns makes the rules. When Italy could not pay 1919–1922 and was at risk of defaulting on their debt, they simply issued a law that the short-term paper you may have bought was now converted by government to 10 year bonds. Government can extend short-term debt into long-term without asking first. That will never happen with corporate debt. So what is a default touted by these people preaching the end of the world is nonsense. These people have the guns and can write any law at any given moment to pretend they did not default. India just cancelled its currency overnight with no notice.
The real default will come by masking it with war, they will extend debt, call a moratorium on debt payments, and most likely alter the world monetary system swapping all currency for something new that is electronic. Kiss cash good bye. Re-Constructing the FUTURE is already in motion. The door is open and how government crosses that threshold is not going to happen how these people are preaching to see their books.
If you have never worked behind the curtain, I seriously doubt you will ever truly comprehend what takes place. Being asked for your opinion by some agency is not working behind the curtain. They ask a lot of people. They do not listen. They are simply looking at what is going on outside their tower. They are not interested in OPINION. When a crisis hits, I get the call not for my opinion, but (1) what does the computer say and (2) what are your clients going to do. Everyone has an opinion, but it is only as good as your experience. A man cannot write a book on how it feels to give birth. Not going to happen.
So these people speculate about unrealistic events. NOTHING ever takes place until it is forced upon the actors.
- * Individuals, brokers, dealers, bank personal trusts and estates, corporate/non-corporate businesses, various government-sponsored enterprises, and other misc investors. (Sources: “Factors Affecting Reserve Balance,” Federal Reserve, January 18, 2017. “Treasury Bulletin,” Table OFS-2, Ownership of Federal Securities, U.S. Department of the Treasury, June 2016.)
Politicians – Courts – The Corruption of the Rule of Law in 1760s
Armstrong Economics Blog/Corruption
Re-Posted Apr 3, 2017 by Martin Armstrong
William Tryon (1729-1788) was the Governor of North Carolina from 1765 to 1771 and the Province of New York from 1771 to 1780. He is best known in North Carolina for his suppression of the Regulator Movement, which some see as a precursor of the American Revolution. The Regulators were rebelling against increased taxes by Tryon as well as corrupt activities by tax collectors in the Piedmont and western part of the colony.
The War of Regulation sprung from a dramatic population increase in North and South Carolina during the 1760s, caused by a migration from the larger eastern cities to the rural west pressured by an economic decline. The rural section of the colonies were predominantly an agricultural economy. As merchants and lawyers began to move west, this began to alter the agricultural economy. This internal migration within the colonies was augmented by a new Scots-Irish migration to America who also sought to move into the rural region.
I have warned that allowing migration during a period of economic decline as has been taking place in Europe, is a highly dangerous mix. Here during the 1760s, the rural agricultural community was suffering from a deep economic depression caused by severe droughts throughout the previous decade. The farmers lost not merely their livelihood, but also their own direct food source. As income was cut off due to the crop failures, the farmers fell into debt. The merchants turned to the lawyers using the court to settle disputes. The debt defaults and the influx of lawyers increased the legal prosecutions more than 15 times. Where there had been just seven debt cases annually, this jumped to 111 in Orange County, North Carolina, alone.
Many court cases were being used to seize property. Farmers lost their homes and property to the lawyers and merchants and this fueled the animosity toward the migrants. The lawyers used the law to create an unjust advantage. The politicians were involved and this created the image of what people saw as a ‘courthouse ring’, with corrupt officials benefiting from the foreclosures.
The resentment built continuously and finally the framers rebelled and took up arms. This armed conflict erupted at the Battle of Alamance in 1771, where Tryon’s soldiers slaughtered the farmers. Tryon even executed the leader and some were pardoned. Then, Governor Tryon raised taxes once again to pay for the conflict.
This resentment remained in the minds of the people. This is often considered to be a precursor to the American Revolution. Such lessons are important to understand. It is not history, it is a road map as to how human nature responds. Just change the names and the dates and what has taken place before unfolds once again.
Civil Unrest Engulfing the World
Armstrong Economics Blog/Politics
Re-Posted Apr 3, 2017 by Martin Armstrong
Everywhere we turn, politicians are abusing their power relentlessly because the global economy is moving against their best plans. In Paraguay, the nation’s constitution prohibited the re-election of a president since 1992 after a brutal dictatorship of General Alfredo Stroessner’s 35-year hold on power, which made him South America’s most enduring dictator during the cold war. He eventually died in exile in Brazil after he fell from power in 1989.
Paraguay’s politicians voted after the Senate secretly voted for a constitutional amendment that would allow President Horacio Cartes to run for re-election opening the door to dictatorship once again. Protesters stormed the government building last week and set it on fire.
We are looking at the total chaos of politics engulfing the entire world. Yet, this is not doom and gloom. This is an opportunity to reconstruct a world the correct way for once. We see this storm of political-change in the USA with the continued protest against Trump, which will eventually turn very violent. There simply has to be that flash point to invoke change historically. In Europe, if Le Pen loses in France, Brussels will NEVER change direction, believing they are correct and will continue down the path that cannot work. We can expect Europe to come to a head in 2018. The future is dictated by the corruption and collapse of government. Trump and BREXIT were merely the effect of symptoms of the decay in government. We are past the point of no return. There is no going back. The storm of political-change is upon us. The cards have been dealt. It’s time to turn them over one at a time. No one will be able to fix or stop this trend. Since World War II, politicians have ruled only for their self-interest. They have made promises that will never be kept and far too many people have believed in them. The system is just not sustainable. Revision is coming. It’s up to us to understand what this even is and do what we can to push the coming change in the right direction. Your friend will listen, but only when they see the collapse smack them square in the face.
Senate Judiciary Committee Advances Supreme Court Nominee Neil Gorsuch Along Party Vote…
Source: Senate Judiciary Committee Advances Supreme Court Nominee Neil Gorsuch Along Party Vote…
Trump is putting America back on the right track
Connecticut Set To Become First State To Allow Deadly Police Drones
by Tyler Durden
Connecticut could become the first US state to allow police to use drones equipped with deadly weapons if a bill opposed by civil libertarians becomes law. The bill, which was approved overwhelmingly by the state legislature’s judiciary committee on Wednesday, would ban so-called weaponized drones in the state but exempts police and other agencies involved in law enforcement, the AP reported. The legislation was introduced as a complete ban on weaponized drones but just before the committee vote it was amended to exclude police from the restriction. Connecticut Governor Dannel Malloy, a Democrat, was reviewing the proposal, “however in previous years he has not supported this concept,” spokesman Chris Collibee wrote in an email.
“Obviously this is for very limited circumstances,” said Republican state Sen. John Kissel, of Enfield, co-chairman of the Judiciary Committee that approved the measure Wednesday and sent it to the House of Representatives. “We can certainly envision some incident on some campus or someplace where someone is a rogue shooter or someone was kidnapped and you try to blow out a tire.”
The bill now goes to the House of Representatives for consideration. Details on how law enforcement could use drones with weapons would be spelled out in new rules to be developed by the state Police Officer Standards and Training Council. Officers also would have to receive training before being allowed to use drones with weapons.
North Dakota is the only state that allows police to use weaponized drones, but limits the use to “less lethal” weapons, including stun guns, rubber bullets and tear gas.
Currently five states – Nevada, North Carolina, Oregon, Vermont and Wisconsin – prohibit anyone from using a weaponized drone, while Maine and Virginia ban police from using armed drones, according to the National Conference of State Legislatures. Several other states have restricted drone use in general. So far, 36 states have enacted laws restricting drones and an additional four states have adopted drone limits, according to the National Conference of State Legislatures.
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Meanwhile, concerns are growing about potential unchecked police brutality and death raining from the robotic skies: civil libertarians and civil rights activists are lobbying to restore the bill to its original language before the full House vote Reuters adds.
“Data shows police force is disproportionately used on minority communities, and we believe that armed drones would be used in urban centers and on minority communities,” said David McGuire, executive director of the American Civil Liberties Union in Connecticut. “We would be setting a dangerous precedent,” McGuire added. “It is really concerning and outrageous that that’s being considered in our state legislature. Lethal force raises this to a level of real heightened concern.”
“That’s not the kind of precedent we want to set here,” McGuire said of the prospect that Connecticut would become the first state to allow police to use lethally armed drones.
Others echoed McGuire’s concerns: “We have huge concerns that they would use this new technology to abuse our communities,” said Scot X. Esdaile, president of state chapter of the NAACP. Esdaile said he has received calls from around the country from NAACP officials and others concerned about the Connecticut legislation.
Three police departments in the state – Hartford, Plainfield and Woodbury – began using drones within the past year, according to the American Civil Liberties Union of Connecticut.
For now, however, the proposal is unlikely to unleash scenes out of some Robocop spinoff: The bill includes restrictions on drone use and reporting requirements that are supported by the ACLU.
It would require police to get a warrant before using a drone, unless there are emergency circumstances or the person who is the subject of the drone use gives permission. It also would require police to report yearly on how often they use drones and why, and create new crimes and penalties for criminal use of drones, including voyeurism.
Furthermore, final passage is not assured: although the bill overwhelmingly passed the Judiciary Committee, several members said they just wanted to see the proposal get to the House floor for debate. They said they had concerns about police using deadly force with drones. If Connecticut’s Democratic-controlled House passes the bill it will move to the Senate, which is split evenly between Democrats and Republicans.
“I think that police are taught one thing,” said Democratic Bridgeport Sen. Edwin Gomes. “You put a weapon in their hand, they shoot center mass, they shoot to kill. If it’s going to be used, you’re going to use it to kill somebody.”
Finally, for those wondering how a drone could possibly shoot, the following video of a drone shooting a gun – appropriately enough in Connecticut – should answer that question.
Greece & Turkey – Is War in the Future?
Armstrong Economics Blog/Politics
Re-Posted Apr 2, 2017 by Martin Armstrong
They say there is nothing more dangerous than a wounded animal. Perhaps. But there is something far worse for society – a wounded politician. When power begins to slip through their grasp, they ALWAYS turn to seek an external enemy. This is exactly what the Turkish president, Recep Tayyip Erdoğan is doing. There are many within Turkey who fear he is trying to be a dictator. He has sought to gain total power and that has many people deeply concerned.
Erdoğan is at risk of being overthrown and he knows it. The worse the economy becomes, the greater the probability he will be driven from power. Consequently, the fear factor is rising with tensions mounting in the Aegean and eastern Mediterranean Seas. Erdoğan knows the historical animosity between Greece and Turkey. He is deliberately attempting to reignite those deep resentments by raising the prospect of a referendum on accession talks with the EU. The Greek defense minister came out and said that Greece was ready for any provocation.
Clearly, the relations between Turkey and European capitals have worsened before the April 16th vote on expanding the powers of the president. Erdoğan is attempting to create an external threat to Turkey in order to ensure he gains total new powers. Erdoğan is using the recent ban on visiting Turkish officials to rally a “yes” vote for more power. He has now even raised the spectre of a public vote on EU membership at the weekend.
Erdoğan is clearly a tyrant and he is seeking authoritarian rule that is incompatible with any pretended democracy or republic. Why does he see such power? Obviously, he fears being overthrown. The greatest danger is that as his support continues to decline within Turkey, his need to start a war and the animosity with Greece, goes back a very long time.
Why Less than 10% Make Change Happen
Armstrong Economics Blog/Education
Re-Posted Apr 2, 2017 by Martin Armstrong
COMMENT: Good day Martin I thoroughly enjoyed your video on the solution and took you up on creating a debate. Thank you for your work. I live in Canada. I have a small investment group; only five of us ….however, I invited collectively through the members another 10 people for a Friday night get together which I provided all the goodies. I’ll be frank and short we have a long way to go for any solution. Three of the people invited were lawyers and another 2 were CAs, an oil financier, architect, welder, health care worker and so forth. It did not matter. “Brain-dead ” is a pandemic that filters through every occupation and perhaps every person in society. Ignorance is a virus and worse. Yet it prevents the opening of any part of the brain to new ideas and possibilities. Yes of course until S@$& hits the fan.
It was shocking to hear how many people believe that government is necessary and that government only works for the benefit of the people. That your explanation on payroll taxes was unrealistic. Absolutely shocking.
I wasted my time and my money and even original members of my small group were persuaded to the left. In fact, several [all the lawyers] incited that the riots from the youth should continue if any real change were to occur in this world. I’m done trying.
Ignorance is the disease here Martin and a larger platform to educate is what is really needed.
JB
RESPONSE: Canada is especially hard because the general population have really been indoctrinated with socialism. Your government even calls it a new “sharing economy” and overall Canadians have tolerated higher taxation than Americans without complaint. The confidence in government use to be even higher in Japan going into the 1990s.
Critical thinking that leads a person to question his immediate surroundings takes place in less than 10% of the population. It has long been recognized that education today seems more about indoctrination. Schools do not teach people how to create mega companies. This is why the popular saying is why “A” Students work for “C” students and “B” students work for government. To be an A student you need to just memorize what the correct answer will be – not understand it. “C” students are the dreamers like Albert Einstein, whose elementary school teachers thought that he was a foolish dreamer, and one teacher had even asked him to drop out of his class. “C” students put up with the teachers but reject indoctrination retaining their own objectivity, which teachers reject.
Contrary to this indoctrination belief that you must have a degree, you will discover that those who have created some of the biggest companies are all dropouts with no degrees so they did not even make “C” students which include; Amadeo Peter Giannini, who was the multimillionaire founder of Bank of America who did not even graduate high school, Thomas Edison, inventor of the light bulb, phonograph who was homeschooled until the age of 12, Andrew Carnegie who dropped out of elementary school and became an industrialist, philanthropist, and one of the first mega-billionaires in the US history, and Henry Ford, billionaire founder of Ford Motors, to Bill Gates founder of Microsoft, Michael Dell of Dell Computer, Barry Diller the billionaire, Hollywood mogul, Internet maven, and founder of Fox Broadcasting Company to yes, even John D. Rockefeller, Sr. the real billionaire founder of Standard Oil. Politicians include Ben Franklin, Abraham Lincoln, and Andrew Jackson who also did not graduate school.
We are a species who will never change because human nature remains the same since the dawn of time. There are Stone Age graves with people buried with dignity. The most amazing find so far of a Stone Age grave was a grave with a female and two children hugging each other. They were carefully arranged in this position. This strongly indicated they had spiritual beliefs and cared for their dead.
Human Nature endures. We travel through time and technology progresses with our knowledge. However, emotionally we remain very much the same. Society MUST move through these crash and burn periods. It is how we progress through history. The majority will NOT believe until they reach the precipice. Only then will change ever come.
Therefore, the one person out of 10 who sees, is all you need. They are the few who are truly the movers and shakers throughout history. They may be the ones others laughed at or ignored and may have even been the unpopular kid in school who just did not fit into the crowd. They are the dreamers who see the future when the time comes and make dreams come true.
Centinel2012 