Tag Archives: GREXIT

Oct 29 2018

Europe & Risk of Revolution


Armstrong Economics Blog/Civil Unrest

Re-Posted Oct 29, 2018 by Martin Armstrong

QUESTION: Thank you, Mr Armstrong, for your lifetime work. mindblowing as always.
I picture Europe now as Greece during the Roman Republic (before its conquest). isolated, corrupted to the core. And the US as the new Roman Republic. Will it become an empire after 2032?
Marius was the man of the people and in the end, he was defeated by Sylla (Senate if I m correct). But Marius’ idea was carried on by Cesar. Was he a socialist before the hour?
as a European, which side is the safest to pick when we will be dragged in the conflict???
thanks again!

best regards from France

ANSWER: Ironically, people may think history is just the past. The next time you watch Star Wars, look closer. It is about this very struggle of the people versus the Empire. Instead of swords, they fight with laser swords. If you look at the royal guard, they had cloaks and helmets much as the Romans were dressed. This is actually a saga that is repeated time and again throughout history. Pericles in Athens was charged and put on trial as they are trying to do with Trump. Today, we call it the Deep States. In Roman times, Caesar fought against the corrupt Senate who was the political party known as the Optimates.

You are correct, Marius lost. His coins refected the anti-establishment. You can see the female head of Italia, for which he was fighting. Caesar’s reputation has been distorted by the corrupt Optimates such as Cato and Cicero. Caesar was a man of the people, not a socialist, just an anti-establishment from the perspective of corruption. He too had to flee Rome under the dictatorship of Sulla who would have killed him much as Stalin killed anyone who might oppose him.

The aspect of Europe is the total failure to really integrate the 28 member states. It is effectively a dictatorship without accepting the responsibilities. The EU dictates what the budgets should be of each member under the pretense of maintaining the Euro. The USA does not have that structure. The Feds, nor the Federal Reserve, care about the budgets of each 50 state. This is what I mean that the failure to consolidate the debts from the outset has created a dictatorship. The good news is that the EU has no central power as of yet to militarily invade a member who refuses to comply. In the case of Europe, it is extremely vulnerable to a complete collapse because the member states still retained even their own central banks. The EU could call upon some states to provide it with troops to invade another. But that is tenuous at best as the lack of confidence in the central EU government is gradually collapsing.

Oct 29 2018

Hesse German Election – Merkel’s CDU Loses Significantly


Armstrong Economics Blog/Germany

Re-Posted Oct 29, 2018 by Martin Armstrong

 

Both the SPD and the CDU have suffered serious major losses in the state elections in Hesse. The CDU and SPD have accepted the expected clear defeat where they lost some 10% of the votes compared to the last election and it is really all about the Refugee issue. The Greens have won sharply as many people also were afraid of the AfD. But they had to vote for someone and they turned to the Greens. The AfD, meanwhile, gained 12.6% of the votes in Hesse, which is a state that is home to six million people and the German capital of finance, Frankfurt am Main. The polls look to be as follows:

  • CDU: 27.8%  down from  38.3% (2013)
  • SPD: 19.9% down from 30.7% (2013)
  • Green: 19.8% up from 11.1% (2013)
  • AfD: 12.6% up from 4% (2013)
  • FDP: 7.6% up from 5.0% (2013)
  • Left Party: 6.6% up from  5.2% (2013)

This is confirming that the Trump Revolution is still in play. That does not mean others are supporting Trump. It simply means that whoever is in power is being thrown out of office. Unfortunately, the way German politics works, they can form a coalition to rule despite the fact that what they stand for are completely opposite positions. So a coalition of the black-green coalition and an alliance with the CDU is possible, but this would be extremely vulnerable and narrow. A CDU and Greens coalition would produce 56 seats out of 110. They really need a coalition of the Greens with both the CDU and SPD making it a black-green-red government with 63 seats out of 125.

What is very clear is that the rising discontent with the entire refugee crisis may yet bring Merkel down and the entire EU, if they do not wake up and admit a serious mistake, has been made

Oct 28 2018

Can Merkel Survive the Hesse Election?


Armstrong Economics Blog/Uncategorized

Re-Posted Oct 28, 2018 by Martin Armstrong

Merkel remains the face of Europe outside of the continent and the risk of Merkel losing the Chancellorship will be a serious crack in the confidence of the Euro. The Hesse election is now taking place and what is at risk here is Chancellor Angela Merkel and her grand coalition. The voters will decide Sunday whether Merkel’s supporters will survive politically. What is at stake is the future of the CDU itself and possibly also her SPD colleague. With the rise of the Alternative for Germany (AfD) and the socialistic ideas of the SPD, the SPD is coming to the conclusion that they see no future in maintaining the coalition with Merkel’s CDU. Following the Bavarian election two weeks ago, the rise of the AfD has placed Markel at risk. The Bavarian election turned out to be truly a referendum on the CSU’s anti-Merkel position in Germany. Under pressure from the nativist AfD, the CSU chose to imitate the far-right party’s anti-immigrant and anti-European rhetoric to win with whatever lies it would take. The coalition is breaking apart and a loss in Hesse may see political change in Germany before the end of November.

There is a rising view that Merkel has to go because of her immigrate/refugee policy that has undermined not just Germany, but the entire EU as a whole. A loss for the CDU in Hesse will most likely put pressure on Merkel to step down. In the CDU talk is that the Secretary-General Annegret Kramp-Karrenbauer has the best chances for succession. Ironically, Kramp-Karrenbauer does not want to be endorsed by Merkel as the talk behind the curtain goes. The fear is that Merkel has perhaps less the 20% support among Germans in general and that can be toxic for anyone she would endorse as her heir. Some are claiming that Merkel can still prevail. Other say she would have to be dragged out by her hair before she would relinquish he political position. Meanwhile, the Euro hangs in the balance

Oct 27 2018

Is it the Elections or Interest Rates?


Armstrong Economics Blog/Interest Rates

Re-Posted Oct 27, 2018 by Martin Armstrong

QUESTION: Dear Marty,
Thanks for the continuous enlightening blogs about increasing interest rates and its effects on EM’s and others.
Today on Bloomberg , they were discussing that the earlier 60:40 Equity bond correlation is breaking down and now it’s 100:0 i.e. both go up and down together.
If I understand your view correctly , the increasing interest rates is a death knell for the Bond trade/Sovereign Debt but totally opposite for the Equity mkt which might surge as capital flees to Private assets i.e Equity.
Would you care to comment please ?
Thanks again for all that you do and the fresh perspective you provide.
Best Regards,
US
ANSWER: They are misreading the impact of interest rates. It is really a political impact at this time and as we head into the week of 11/05, there is a rising concern because the Gallup Poll shows that the Democrats may take back the House and them everyone assumed they will do everything in their power to overturn everything Trump has done. So international capital is deeply concerned about the Democrats right now.

We are still in this consolidation transition period. Capital is trying to figure out the future and it is very confusing. This analysis you refer to is myopic at best. They ignore worldwide concerns and focus only on domestic issues. Interest rates have been rising since the 4th quarter of 2015. The decline has NOTHING to do with interest rates. They just have to blame something.

Oct 26 2018

Pension Crisis hits Russia


Armstrong Economics Blog/Pension Crisis

Re-Posted Oct 26, 2018 by Martin Armstrong

Vladimir Putin tried to reform Russia’s pensions system which is crumbling as is the case in the West. This giant Ponzi Scheme is collapsing and it has been the heart of Socialism. Putin’s approval rating plummeted this year in the aftermath dropping from 82% in April 2018, dropping to 66% here in October 2018. His decision to reform Russia’s pensions was met with tens of thousands of Russians taking to the streets to protest. This is what we are to expect over the course of the next two years. It is also why the Federal Reserve is desperately trying to gradually raise interest rates in hopes of stabilizing the Pension Crisis.

There is simply NO system that will survive this Pension Crisis because the design was faulty from the outset. The traditional way people took care of their future was to build a family structure. The children took care of the parents. The promises of socialism have relieved the children of such obligations for the government was there. As we begin to witness this crisis unfold, the world financial system will be turned on its head.

Oct 26 2018

Eurozone will Collapse – There is No Other Choice Economically


Armstrong Economics Blog/European Union

Re-Posted Oct 26, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I can see what you have been arguing about the faulty design of the euro. After the EU rejected Italy’s budget, is there any hope left for Italy?

RS, Rome

ANSWER: For those who do not follow Europe closely, the European Union took the unprecedented step Tuesday (23rd of Oct) of rejecting Italy’s draft budget as incompatible with the bloc’s rules on fiscal discipline. This has simply validated the position many take in Italy that they are an occupied country. The Commission Vice-President Valdis Dombrovskis publicly stated that the Italian government was “openly and consciously going against commitments made” to drive down the country’s debt and deficit levels. The decision is escalating a battle between Europe’s establishment and Italians and the sooner you exit the Euro, the better Italy will survive.

From the outset, in designing the Euro they deliberately lied about just about everything. They told everyone that they would be paying the same interest rates because of the single currency. I explained that was absolutely false. They appear to have deliberately used the example of the dollar to pitch the euro but never mentioned that the single interest rate was the Federal level they were referencing. All 50 states issued their debt in the single currency of the dollar but they all paid rates according to their own credit rating.
I warned them that they MUST consolidate all the debts making that a national debt that they would have a single interest rate and that would compete with the dollar. Thereafter, each state would then issue its own debt as deeded and the free markets would price that accordingly. Under the system that I instructed them to adopt, this budget crisis would not exist. Because they FAILED to consolidate the debts from the outset, then the EU interferes with everyone’s budgets and dictates terms to them which in reality does make each state and occupied country.
This system cannot possibly survive. The Euro will collapse. There is no possible way for it to survive under this scheme. Italy should simply announce it is exiting the Eurozone. Those in Britain who want to remain are complete idiots. I cannot express it any more politely. Nobody will talk reality here!
Oct 25 2018

Why Has the USA been “Pinnacle of Global Success”


Armstrong Economics Blog/America’s Economic History

Re-Posted Oct 25, 2018 by Martin Armstrong

To the shock of everyone in politics and economics who can’t get enough socialism and want to bash that the disparity of income is so evil, these Marxists are beside themselves when the World Economic Forum released a study that shows the United States is the most competitive nation on earth. They have, however, concluded that their international economic index which finds America at the “pinnacle of global success”  cannot be attributed to the actions of any one leader or administration. Indeed, people fled Europe to American to get away from bureaucracy. This remains reflected in attitudes.

A majority of Europeans (58%) would prefer to work as an employee rather than risk starting their own business. The promises of pensions and the social state have created a vast economic different picture between Europe and America and in Asia, we see a trend that is beginning to surpass the United States. This contrasts starkly with attitudes in the United States, where a majority (51%) say they would prefer to strike out alone. The United States allowed the property to be owned whereas in Europe the title to the property remains fixed in most of London and is leased out for 100 years where people pay the value as if they had purchased the property, to begin with. Property in London that was “freehold” was rather rare. Many fled to America which was the land of opportunity to actually own property, build wealth, and leave it to your family.

Then rushes in the Marxists. They hate people inheriting wealth and call it unfair. Every generation should start at zero in their mind. Then we have the economists who argue that it is the disparity in income that suppresses the economy in Europe. So what is their solution? Regulate everything excessively and take the wealth away from those who have it and pretend you are handing it to the people if anything is left once they government gets its hands on it for their own lavish pension schemes.

The United States is the venture-capital capital of the world. That will soon be displaced by China. Nevertheless, how to actually measure entrepreneurship is a very distorted view of the economy. One popular approach among economists which overlooks the depth of a nation’s economy is to count how many new businesses with paid employees start up each year, then divide them by the number of companies that are already up and running. The Organization for Economic Cooperation and Development (OECD), calls this percentage the “employer enterprise birth rate.” Others just call it the “start-up rate”.

From this distorted perspective, the United States scores fairly low on that definition coming in second to last when looking at the years 2007 through 2009 during the crash. The glaring flaw in this view is the fact that in the economies which are least developed come out on top, which was Slovakia and Mexico. The United States was predominantly small business also before the Industrial Revolution. Creating criteria of this nature are extremely misleading. Also, the period in question saw many young individuals start out on their own unable to find jobs with their costly degrees. They entered the self-employment segment but were not hiring people. They were breaking out and doing work in various services.

The greatest economic growth follows the LOWEST taxes, developed economies, and lower regulation. When the government attacks all three areas, our computer simply shows that economic growth declines.

Oct 22 2018

Obama Takes Credit for Economic Recovery Saying it is Not Trump but Him


Armstrong Economics Blog/Politics

Re-Posted Oct 22, 2018 by Martin Armstrong

Believe it or not, Obama, who raised taxes dramatically, is claiming the recovery is because of him and not Trump. On September 7th, 2018 Obama at a speech at the University of Illinois sharply criticized Trump and then claimed ownership of the U.S. economic recovery.

Oct 21 2018

The End of Britain with 2nd Referendum on BREXIT?


Armstrong Economics Blog/BRITAIN

Re-Posted Oct 21, 2018 by Martin Armstrong

As many as 670,000 people protested in London to call for a second Brexit referendum. Our computer is showing that a second referendum will vote to remain but this is most likely because they will rig the vote. This is in conflict with our economic model which shows that BREXIT should still win. Keep in mind that we have crossed the Rubicon in politics here in 2018. The chances of any election actually being honest and fair is highly unlikely.

 

 

Of course, these people are just brainwashed. They are completely ignorant of the fact that remaining in the EU will be the death of Britain. They listen to the likes of Tony Blair and other politicians who get huge pensions from the EU. These protesters are really too stupid to understand what they are protesting for and they are just pawns in a game for corrupt politicians. The economic growth of Britain has steadily declined ever since joining the EU. We have provided this chart to the British press and politicians but not a single person has made this chart public. But worse still, Britain is resented in the EU because without Britain Europe would have been lost to both Hitler as well as Napoleon. Without Britain, Europe would never be free. Many resent that they owe everything to Britain.

All the history aside, any trade deal can only be subjected to a veto of 28 member states. Britain cannot reach a trade deal on its own terms with anyone for they can be stopped by the raising of just one hand. Britain will also see its financial market destroyed for Brussels wants to be able to outlaw short-selling to protect the Euro by decree when the free markets go against them. On top of that, the ECB has destroyed the European bond market and that is just starting to bubble to the surface as rates are rising in Southern Europe.

On top of that, Britain loses just about every court ruling in the European Court. And as for migrants, the number one name in Britain among newborns has been Muhammed.

 

 

The British pound had really been just a unit-of-account prior to 1489. It was literally one pound of “sterling” silver .925 fine. The first one-pound coin appeared in gold and was issued in 1489 by Henry VII. The risk that the British pound will no longer exit arrives in 2029

Oct 20 2018

Why British Politicians Argue to Remain in the EU – PENSION!!!!!!!!!


Armstrong Economics Blog/BRITAIN

Re-Posted Oct 20, 2018 by Martin Armstrong

When you look closely at all the people who line their pockets with huge EU pensions for being a representative of Britain, it is stunning to see why they would argue to “remain” when all the evidence is against Britain if it remains inside the EU