Tag Archives: Illinois credit now “Junk”

Aug 27 2017

Understanding the Global Economy


Armstrong Economics Blog/Uncategorized

RE-Posted Aug 27, 2017 by Martin Armstrong

It is becoming painfully obvious that the amount of sheer theft of our forecasts right down to names of publications is escalating unbelievably. I personally fear that these charlatans are only looking to exploit people and could care less what is really at stake. From outright just stealing our track record and claiming they called markets to the day of the 1987 Crash to taking the title of the Great Bull Market in History and calling it their own, are confirmations that they really cannot stand on their own.

None of these forecasts we have made for the past near 40 years was  possible without the largest database ever assembled covering the entire world. Our initial Socrates launch covers about 500 instruments around the world. No individual analyst is capable of forecasting the world without such a database and computer systems designed to do so. There is just far too much for any analyst to watch every single day. And as for forecasting things to the precise day, only the Economic Confidence Model has accomplished that and I myself remain in awe of how the world is so precise. The complexity simply masks the hidden order. This was never my theory that I set out to prove, it is something that I bumped into along the way of just trying to forecast markets for my own trading.

I have advised more governments and been called into more crisis events than anyone I know of. That does not happen out of thin air. Such levels are achieved only with long standing track records that are know to be true over the course of decades.

Anyone taking our targets to stealing our track record claiming they accomplished the same, I warn that such conduct is not that of anyone you should trust. They are simply  charlatans  looking to exploit you for money and when crisis does come, they will be clueless what to advise. This not a game. This is reality. Such people are parasites looking simply to mislead you for profit.

Aug 27 2017

Yellen Reveals She Also Does Not Understand What it all Crashed in 2007-2010


Armstrong Economics Blog/Banking Crisis

Re-Posted Aug 27, 2017 by Martin Armstrong

The head of the Federal Reserve, Janet Yellen, has warned politicians against turning back financial market regulation. She has warned that any adjustments to the framework should be discreet. The Jackson Hole gathering turned out to be financially tense. Yellen admonished politicians stating bluntly that this is a question of preserving the “increased resilience of the financial system” through the course of reforms. Some were expecting Yellen to point the finger at lower interest rate monetary policy of past Chairmen, but she did not. She was addressing the issues of regulation reform being suggested by Trump’s people. Indeed, Trump has ordered that the Wall Street reforms of 2010 be reviewed.

Many suspect that Yellen’s speech will be her last. She essentially disagreed with the position of Trump and Congressional Republicans that the regulatory burden is strangling lending and has hamstrung the economy under Dodd-Frank, which gave the financial supervision far greater power, yet remain bewildered and in the dark concerning the causes of the 2007-2010 crash. Trump is absolutely correct that Dodd-Frank cannot truly function properly and it is so far off the mark, it is simply slowing down the economy. Yellen also said in Jackson Hole that some people were obviously forgetting how expensive the crisis had been.

 

The entire regulation took aim at only the results and not the cause of the crash. Nobody seems to really understand just how significant the entire economy was altered when Clinton who was in the pocket of the bakers. By the time Clinton signed the Financial Services Modernization Act, commonly known as Gramm-Leach-Bliley, repealing the key components of Glass–Steagall in 1999, nobody on Capitol Hill not even understood Larry Summers, the father of negative interest rates, really understood what he was supporting.

I wrote a full report on how they altered the economy forever changing our banking system from Relationship Banking to Transactional Banking. The arguments how this would reduce risk for banks overturning the regulation of the Great Depression, Glass-Steagall, have gone over the heads of everyone on Capitol Hill and I suspect Donald Trump as well.

There is precious little that anyone seems to comprehend about the core structural changes the Clinton put in place. Even Yellen is operating from an assumption that Dodd-Frank  is good regulation. What it did was put the burden on the people once again and never addressed the structural changes of the Clintons.

There are no mirrors in Washington. If Congress ever dared to look into a mirror they would see what they really are – a bunch of idiots and fools seeking to regulate the economy over which they never comprehend and they lack personal experience to even understand the subject matter.

The bankers argued that Glass-Steagall was holding them back. They were like a child who was asking their parent can they only eat cookies for dinner. The politicians had no idea they were altering the banking system for thousands of years ending Relationship Banking where a bank lent you money for a small business and then they reviewed you quarterly and you handed in your financial statements. The banker kept an eye on you because your loan was on his books.

Clinton changes 5,000 years of banks and gave birth of Transactional Banking where the bank suddenly didn’t care if you would repay your loan because they were selling it to someone else. They should show the movie the Big Short on Capitol Hill and then do a slide show geared for the 3 grade and force ALL politicians, and Yellen, to watch it. Maybe then they might understand what they have really done to the world economy and why economic growth today at 2% is considered a wild boom compared to 8% during the 1980s

Aug 25 2017

Extreme Left & Extreme Right Believe in the Same Thing – Oppress all Opposition


Armstrong Economics Blog/Politics

Re-Posted Aug 25, 2017 by Martin Armstrong

 

paradox-morepowerI have written before that if you go extreme right and extreme left, you reach the same political position with two different thought processes – more state power. With all the press of the Alt-Right since CNN can then attribute that to Trump and call him indirectly a fascist, they will not put the spotlight on the extreme left.

Antifa is a extreme or far-left militant political movement that self-describes itself as anti-fascist groups in the United States. The term “fascist” has been completely redefined and seems to have lost all true meaning to what a fascist used to be. Today, the term seems to refer very loosely to anti-racist, anti-sexist, anti-homophobia, as well as anarchist and anti-capitalist groups. They are definitely closer to Marx than to fascists. Fascism is an authoritarian nationalism, that is characterized by dictatorial power, forced suppression of opposition, and control of industry and commerce. It is not focused on anti-racist, anti-sexist, anti-homophobia. It is focused on military power.

Such systems have always placed the “good” of the state before the worth of an individual. The right to property is subject to constant search and seizure and courts only rule in favor of the state.

Fascism-1

The extreme or far-left militant Anifa groups are often also anti-capitalist, because they are truly closet-Communists. Their methodologies and tactics are far more aggressively violent and anarchistic than those of associated groups in the far right. The interesting distinction between the Alt-Right and this Alt-Left is the former seeks to be left alone individually which they see as freedom whereas the latter seeks to force their dictates upon society and are willing to surrender all rights as long as those they hate are stopped.

Back in is a 1933, Wilhelm Reich wrote a book, The Mass Psychology of Fascism, in which he explores how fascists come into power, and explains their rise as a symptom of sexual repression. I certainly do not agree with his conclusion. Nevertheless, it is a very strange development why such people join fascist organization that on the surface would appear that such groups are against their own self-interest while calling everyone else fascist by redefining the term. It seems to be the same as a rapist who denies he raped a girl saying she really secretly wanted it.

I look at this from an economic approach rather than sexual repression. These are people who blame all their failures upon others and will never take responsibility themselves. This is far more common and it is in fact the core fundamental of how government functions. They will never investigate themselves as a cause of a crash, it must always lie among the capitalists.

Unfortunately, government today is a reflection of the Anifa group’s thinking process but not yet to that extreme. You can see this in the effort to eliminate cash, because we are the problem. There is FATCA, threatening to confiscate the assets of any foreign entity if they do not report what Americans are doing overseas. Again, they do not trust the people. The list is endless of laws more and more designed directly against the people because government has no self-control and always spends more than it has and the problems it runs into is always blamed on the people because we cheat them out of their “fair share” that fills their coffers. They present themselves as if they were a charity there to help the poor. The problem is, their hand is in the cookie jar before anyone else. All that is left is always just the crumbs.

Aug 25 2017

The Overlooked Cost of Electric Cars by EU Gov’t


Armstrong Economics Blog/Energy

Re-Posted Aug 25, 2017 by Martin Armstrong

Government first imposed taxes on alcohol and cigarettes under the claim that they were trying to make people stop for their own good. But as always, as the governments became addicted themselves to the tax revenue, then they looked to tax soft drinks in Philadelphia to prevent people from drink too much sugar, and New York tried to them impose a tax on  electronic cigarettes.  In New York, the Democratic Governor Andrew Cuomo lived up to the Democratic motto – tax everything. Only the fact that the GOP-controlled Senate in New York, the Republicans rejected Cuomo’s plan to tax the liquid used in  electronic cigarettes. Government always pretends to be raising taxes to help people, but it is always a huge lie.

Now all the fuss over the environment and the push to electric cars has a tremendous problem in cities such as how does someone pug in their car when they live in a tall apartment building? But the other side of this coin is the same problem governments have faced with declining revenues from cigarettes.

It seems that nobody publishes a simple statistic to reflect how much taxes on fuel represents in the total budget of the European Union. There is plenty of information on how much tax on fuel countries charge. But when it come to how addicted government is on those fuel taxes seems to be something nobody wants to reveal.

Average price of oil for the last 20 years is 0.98 Euro per litre. In the EU average consumption of petroleum is 12,530,000 barrels a day in 2016. Therefore, taking this very low average price we arrive at the following:

1 BBL = 158.99L

Therefore multiplying this together we get the amount of litres of consumption of petroleum products per day.

1,992,144,700

Multiply this by 365 to give the yearly total

727,132,815,500

Multiplying this by 0.98 (conservative figure of the average price of oil for the last 20 yrs)

712,590,159,190 Euros of sales of Petroleum.

Multiplying this by the average tax rate of approximately 60% of the pump price is taxation, we then arrive at EU countries recoup approximately 427,554,095,514 per year in TAX revenues from fuel. Now let is take that as a percentage of total tax revenue in the EU and we arrive at 427,554,095,514 TAX on petroleum products within 5,877,506,000,000 in total 2015 Tax revenues of all 28 member states, and we finally arrive at 7.27% of total TAX revenues.
The cost of going Green to the state budgets is going to be huge. This will lead to tax hikes in other areas to make up the shortfall. Then add the rise in interest rates and we are looking at the next 4 to 5 years of a true crisis in funding government. We can expect electricity to rise in taxation dramatically and this will impact people in their apartments in cities who do not even own a car.

Aug 24 2017

Gold


Armstrong Economics Blog/Gold

Re-Posted Aug 24, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong, looking at the analysis of Socrates on gold we see that the Momentum is bullish, trend is bullish, cycle trend is bullish, but Long term is bearish, how does that square with your call that Gold is going up to $5,000.00 when the long term is bearish.

Thank you.

ANSWER: Looking very long-term is different from the relevant time frame. Gold has not broken out and I have given the number where that becomes a possibility. We are not yet there. Events on the horizon are the critical issue. The world is not ready yet and the stock market also reflects this pending threshold. Socrates comment is thus concerned with the immediate outlook and until gold gets through key points, there is no breakout. The extreme target is not due on this cycle but the next.

Aug 24 2017

It is Always a Matter of Capital Flows


Armstrong Economics Blog/Basic Concepts

Re-Posted Aug 24, 2017 by Martin Armstrong

QUESTION: Do you use astrology as one of your inputs as to cycles? There are, as you most likely know, financial astrologers who have tracked the patterns of planets that co-incide with market movements.

ANSWER: No. I am fully aware that some people use that and I have been told sometimes it lines up with our targets once in a while. Our model is strictly correlating hard data – nothing subjective. Following the movement of capital is the breadcrumbs through the forest.

My personal goal is to step back and let the computer write the reports and forecast the world.

Aug 22 2017

The Dow To Be or Not to Be


Armstrong Economics Blog/Products and Services

Re-Posted Aug 22, 2017 by Martin Armstrong

The Dow has bounced slightly as to be expected, but we are now in a consolidation pattern for the balance of the month. Just pay attention to the Global Market Watch for it has been doing an excellent job at calling the turning points so far.

DJIND GMW 8-22-2017

Private the Global Market Watch and the blog posts are exclusively available to Socrates subscribers. To sign-up for Socrates or to learn more, please visit Ask-Socrates.com.

Categories: Products and Services
Aug 22 2017

Will the Eclipse of 2017 Be the Omen of What Our Model is Forecasting?


Armstrong Economics Blog/Nature

Re-Posted Aug 22, 2017 by Martin Armstrong

The interesting question that will emerge is will this eclipse of 2017 over the United States be what everyone calls and omen in the months ahead? I find it terribly interesting that this shows up at this time when our model is forecasting the beginning of a serious Monetary Crisis ahead. I do not see any real physical influence to cause such an event based upon an eclipse. It merely appears that the eclipse cycle aligns with major events rather than being the cause of action. Nevertheless, what we face was forecast in 1985 and the closer we get the more chaotic the world seems to be.

Aug 22 2017

European Banks – The Next Crisis – The Unseen Cause in Plain View


Armstrong Economics Blog/Banking Crisis

Re-Posted Aug 22, 2017 by Martin Armstrong

The clouds have not lifted from the heart of the financial center within the European Union on the continent. The origin of the next crisis is unseen yet in plain view if your care to look. Ten years since the financial crisis of 2007-2009, the core fundamental problems in the banking sector have not yet been resolved and still fester beneath the surface. Indeed, following the collapse of the investment bank Lehman Brothers, a financial tidal wave swept the world. The collapse of the mortgage backed securities market in the States, set off a contagion where the crisis spread at a rapid pace around the world. European banks tried to compete with New York adopting similar carefree lending. In the end, the Draconian measures from Brussels and constantly adding regulation to all levels of business mixed with tax increases, prevented the economy itself from truly recovering only further preventing a bank recovery.

The Federal Reserve had pumped in $250 billion into its big banks and Hank Paulson, I believe, allowed Lehman and Bear Sterns to collapse to reduce competition for Goldman Sachs eliminating two of the five investment banks. The entire affair was set in motion by the Clinton repeal of Glass-Stegall at the recommendation of the father of negative interest rates, Larry Summers.

In Germany, the second-largest bank, WestLB, and Hypo Real Estate (HRE), which had been the largest real estate finance provider, vanished from the financial landscape as did Lehman and Bear Sterns. “HRE and WestLB were the most difficult cases,” remembers Christopher Pleister, the head of the A bailout fund was created in Germany that ran between 2009 to 2014. The fund involved nearly a dozen banks putting in more than €200 billion of equity, guarantees and protective shields.

They are still “too big to fail” and “too big to jail” so nothing has changed on that score. For until the money pots are full again for a bailout fund, the risks are there for the next crisis to be far worse this time. The interdependence between states and their banks has not changed. Government still need the banks to exist themselves. Consequently, national interests prevent the crisis mechanisms from truly policing the practices and the banks are actually disappearing from the market as regulation destroys liquidity in the financial markets. The back offices have growth to exceed the front office doing the business, raising costs dramatically. When the next financial crisis comes, there is a serious question as to can the system hold again?

While every financial crisis typically emerged from an origin that is overlooked or not anticipated, the fundamentals causes are usually the same. There is no appreciable risk management that comprehend cycles and each crisis is typically set in motion by the solutions applied to solve the previous crisis. This is the true over-arching issue that is never considered because those applying the solution lack any comprehension of the dynamics of the economy as a whole.

The solution of negative interest rates has set in motion a coming crisis in pensions. As banks now anticipate that the ECB will finally reverse its policy and raise rates, they are dumping government bonds by the truck-load. Higher rates simply means a bond crash. Even the portfolio of the ECB will loss countless billions.

So while banks are “too big to fail” and “too big to jail”, government is not “too big to fail” since they depend upon people buying the debt which never ends, yet they may be “too big to jail” since they will never prosecute themselves, but they are not exempt from revolution be it non-violent or violent as history proves.

Aug 19 2017

Rogoff Tell Central Banks More Negative Interest Rates Will Be Needed


Armstrong Economics Blog/Interest Rates

Re-Posted Aug 19, 2017 by Martin Armstrong

Kenneth Rogoff,  the Professor of Economics at Harvard University, is stuck in a time warp where he cannot think out of the box even once. He is telling the central banks that the next recession they will have to resort to negative interest rates and they should prepare now. Despite the fact that negative rates have failed to work in Europe or Japan, seems to be nothing to really consider. So what after almost 10 years of failed policies at the European Central Bank, it will eventually work maybe in 12 or 13 years. It just requires patience.

This is the problem with academics. They don’t get the calls for help. These policies have created a Pension Crisis on the horizon and wiped out so many states. Keynes himself argued that there were times to lower taxes to stimulate. That is just never considered even once.