Armstrong Economic Blog/Euro €
Re-Posted Dec 4, 2019 by Martin Armstrong
QUESTION: Dear Mr Armstrong,
When will the Euro begin the final drop against the USD?
My second question is property in Italy seems to be rising. Is this what you referred to a currency inflation?
ANSWER: The decline in the euro since 2008 has been steady, but gradual to some extent. The EU government has been warning banks not to accept short positions and they have done their best to try to hold the currency. The final blow comes ONLY when the general public realizes that there is a problem with all central banks. They cannot support the economy while the fiscal side makes no effort at reform. That is more likely in the 2021-2022 time period.
As far as property in Italy is concerned, Italians have a cultural attachment to property. Many have more than one place. They have traditionally sought to park money in property because the Italian lira was in a perpetual decline.
Pension funds on a global scale will become a major crisis. Japan has the worst aging population. However, the same problem exists in Europe and America. This is a long-term issue rather than instantly, right now
German Politics
Armstrong Economics Blog/Germany
Re-Posted Dec 4, 2019 by Martin Armstrong
QUESTION:
Hi Martin,
It can not be said enough: thank you for everything that you do.
I have a question that has been bothering me for some time now. I haven’t had the time to compose it until now.
You often talk of the fact that Hitler was elected with only 30% of the vote, and was allowed to propagate because of it. This changed the face of Europe and the world.
Was this the same for Merkel? Was she allowed, with only 30% of the vote, to open the borders and so change the face of Europe for decades to come?
If so, then Germany, with all its preoccupation about hyperinflation, has misread history and so should have focused on electoral reform rather than austerity.
Thanks, from a dedicated daily reader,
D
ANSWER: Yes, political reform in Germany is really essential. At the very least, it should adopt the French system where the first round of voting reduces the multi-party factions to two. Then the people have to vote between them. In the case of Germany, they form governments from groups to form coalitions. This means there must be compromises in what the people voted for. It is wrong that those compromises are then decided by politicians rather than the people. The next result, someone with only 30% can change the face of Germany and Europe
2020 Elections to be the Most Violent
Armstrong Economics Blog/Politics
Re-Posted Dec 3, 2019 by Martin Armstrong
QUESTION: The more I read that Trump’s opponents will resort to violence, I am amazed at your computer and how it has been putting all this together years in advance. Are we just pre-programmed somehow?
KF
ANSWER: I do not think it is the people who are pre-programmed. It seems to me that government inevitably turns to corruption. I believe the term limits are the only way to stop this and I am not sure if even that will be enough. What I do see is that given the same set of facts, the people will respond in an identical manner no matter what century we look at. To me, history repeats because the same set of patterns unfold and in the same precise order.
The Democrats are simply moving to extreme measures for socialism. They are turning to violence BECAUSE they have been losing ground. Our model shows that 2020 will be the most violent political election since the 1960s. It really does not matter who wins. Both sides will take to the streets and refuse to accept the victor. This nonsense that Trump is #NotMyPresident has simply invoked the exact opposite position where the Republicans will not accept a Democrat as president. This is what I mean when I say that civilization is collapsing and this leads to separatism.
Cheering Up Progressives as They Fail at Everything They Try
The Democrat Ticket That Scares Trump Most: Mayor Pete and Tulsi Gabbard
Venezuela & Guyana
Armstrong Economics Blog/South America
Re-Posted Nov 25, 2019 by Martin Armstrong
COMMENT: Mr. Armstrong; I am from Venezuela and became an American citizen 20 years ago. I have brought my father here to live for his pension in Venezuela will not even buy him a cup of coffee as you have mentioned. I can only wish that the democrats would visit Venezuela and witness first hand what their ideas would do to America. You have a country with the largest oil reserves in the world and even gold reserves yet its people are starving. Qatar has the highest net worth per capita which shows that capitalism is so much better than socialism. You are correct. Venezuela proves governments are incapable of managing a bubblegum machine.
HD
ANSWER: It is truly an example to the entire world. The proven oil reserves in Venezuela are recognized as the largest in the world, totaling 297 billion barrels (4.72×1010 m3). For example, a crude oil contract on the futures market is 1,000 barrels of oil. At $55 per barrel, the notional value of the contract is $55,000. That is 297 million contracts of $16 trillion in reserves. The main coalfields are located in the western Zulia State, on the border with Colombia, and they have known proven reserves of natural bitumen (42 billion tons). On top of all that, they have gold reserves which are estimated to be 10,000 tons (29,166.7 ounces per ton). That is about $40 million per ton or $4 billion. From a resource perspective, Venezuela has more than $20 trillion in reserve values equal to almost the entire US national debt. If they really want socialism, privatize the resources, let professionals manage it, and hand out profits equally to all the people. But no, the government has to control everything.
There is a tiny little country most people have never heard of and assume it is in Africa. In Guyana, they have just discovered oil. This economy is going to explode next year and it will probably be the highest growth in the world. You will quickly see the difference between capitalism and socialism.
Germany to Separate North v South by 2030
Armstrong Economics Blog/ECM
Re-Posted Nov 18, 2019 by Martin Armstrong
QUESTION:
Martin,
Following the recent State elections in Saxony, Brandenburg and Thuringia which reflected voter disillusionment and discontent with the CDU and SPD how do you view the German political scene to the 2021 Federal election?
JR
REPLY: Bavaria came into existence in 1806 when Napoleon abolished the Holy Roman Empire. It was at this time that Bavaria’s land area was greatly expanded. Our cyclical model on Bavaria suggests that it will separate from northern Germany by 2030. This will be inspired by the austerity policies that have devastated the local economy. However, this will only be augmented by the difference in religion between Protestant v Catholic. That was also a factor in why Bavaria joined with Austria, which was also Catholic, in the Austro-Prussian War that resulted in Bavaria’s defeat in 1866. Bavaria had to cede several Lower Franconian districts to Prussia.
The Bavarian conservative party, the CSU, lost its absolute majority once the Economic Confidence Model turned in 2017 during the subsequent election in 2018. Meanwhile, the Greens emerged as the second-largest political force in southern Germany. Additionally, the Eurozone sovereign debt crisis is impacting the municipal level and the austerity policies imposed by the north continue to brew civil discontent. The loss of the CSU in Germany undermined the survivability of Merkel which instigated her demise.
The civil unrest will turn upward sharply when this current wave concludes 2021.32. The eventual separation of Germany will most likely unfold by 2030 at the earliest.
The Coming British Elections
Armstrong Economics Blog/BRITAIN
Re-Posted Nov 15, 2019 by Martin Armstrong
QUESTION: I know you were rather close to Sir Alan and Prime Minister Thatcher. I also know you are close to a number of politicians here in Britain. I was at your Edinburgh conference where they introduced you as a seventh-generation Edinburgh Scotsman I found very interesting rather than an American. You are famous here in political circles for many forecasts with the latest being the BREXIT victory. Do you have any insight into the December election? It is getting crazy here with two former Labour MPs declaring that they planned to vote for the Conservative Party because they said Labour’s leader, Jeremy Corbyn, was unfit to be prime minister. Then Tom Watson quit because of Corbyn’s policies over Brexit and his anti-Semitism. But the Conservatives seem to be less reliable as well. I think Nigel Farage may surprise a lot of people in this election. What does Socrates say?
GB
ANSWER: That is an interesting question. It is hard to map because of such a diverse breakdown in the “other” category. There is no question that Nigel’s party came out on top in the EU general elections. As we can see from the chart at the top, both Labour and the Conservatives are declining and there is a rise in both the Liberal Dems and “other” against the establishment so to speak. This is part of the global trend many outside the USA call the Trump Revolution. They are not referring to something that Trump did himself. Instead, this is a global trend against established political parties everywhere.
My advice to Johnson would be to cut a deal with Nigel’s Brexit Party. There is a trend underway that is bigger than most suspect. I know Nigel has no designs on being Prime Minister. However, fate will determine the roll of the dice. Nigel may end up in a position he did not wish to be in.
We will try to refine the models to do a proper forecast. Keep in mind that the “other” category is due for a strong showing and this will most likely be Nigel’s party. Also keep in mind that his Brexit Party does not hold any seats in Parliament at this time. That will change.
Bolivia’s Ex-President Flees to Mexico
Armstrong Economics Blog/South America
Re-Posted Nov 15, 2019 by Martin Armstrong
Our model has been accurately forecasting the rise in civil unrest against governmental corruption on a worldwide basis. In Bolivia, ex-President Morales has fled to exile in Mexico. Previously, he was overthrown by the military under the pretext of electoral fraud. The country is drifting into political chaos. Bolivia happens to be home to the state-owned lithium industry, which is critical to driving electrical power by the global warming crowd. Bolivia has had a history of revolutions since 1781. The previous was 1949.
British Labour Party – The Greatest Threat to Britain
Armstrong Economics Blog/BRITAIN
Re-Posted Nov 13, 2019 by Martin Armstrong
There is absolutely no question that Jeremy Corbyn and the Labour Party poses a greatest threat to Britain than Brexit. Corbyn said, “Nurses, teachers, shop workers, builders, just about everyone is finding it harder to get by, while Morgan Stanley’s CEO paid himself £21.5m last year and UK banks paid out £15bn in bonuses.” What he fails to consider is that the solution is not to raise taxes on CEOs, the solution is to reduce government. Even if they seized 100% of CEO salaries, it would not pay the expenses for a single day. But they love to point to some individual rich person and make it sound like all will be well if they just seize his money.
Socialism is dead. Before income taxes pre-World War II, the wife could stay home and raise the children. Today, that is not a possibility for most people. It takes two salaries to pay for the very same living standard pre-World War II. The more government pretends to do something, the greater the cost of government becomes. Every time they introduce some new tax, they hire more people and create more regulations for that specific tax. It is simply an endless process where now about 40% of the civil workforce is dependent upon government, which means they do not produce anything that contributes to the GDP of a nation.
Corbyn has boasted that the Labour Party is a threat to the rich. All he will do is send a massive migration from Britain. We have already been getting questions about moving companies and their domicile to the USA, as has been taking place even with major public companies in Canada
Centinel2012 