Tag Archives: Inflation Reduction Act

Dec 21 2022

Peru Uprising


Armstrong Economics Blog/Civil Unrest Re-Posted Dec 20, 2022 by Martin Armstrong

The rise in inflation is causing riots around the world and people are also fed up with corrupt governments everywhere. As our model has been forecasting, the rise in civil unrest is the precursor to the collapse of governments. This is people chasing the military who was protesting the Peru Government. As in the Russian coup when Yeltsin stood on the tank and told the troops not to shoot their own people, once the troops backed down, the coup collapsed. It all depends on the military and whose side do they defend – the people or the corrupt politicians as they have done in Venezuela. Civil Unrest is what unfolds at times as Revolution.

Dec 20 2022

Russia CAPTURES Marinka, Putin PLANS OFFESNIVE In Belarus w/ HISTORY LEGENDS


The Dive With Jackson Hinkle Published originally on Rumble on December 19, 2022

Current situation in the Ukrainian Russian war.

Dec 18 2022

The Tax of ETFs


Armstrong Economics Blog/The Hunt for Taxes Re-Posted Dec 17, 2022 by Martin Armstrong

Interactive Brokers has published a specific list of what is taxable and what is not. If your brokerage house does not understand that ALL ETFs are not taxable, then you really have to find another broke.

Dec 14 2022

The Central Bank Dilemma


Armstrong Economics Blog/Interest Rates Re-Posted Dec 14, 2022 by Martin Armstrongpread the love

The Central Bank Dilemma has become a major crisis in and of itself. I have been warning these past years that the ONLY tool a central bank has is manipulating the interest rates. Quantitative Easing was primarily to influence long-term rates indirectly since the Fed can only set short-term rates. During the past nine months, Fed Chairman Jerome Powell has raised interest rates at the fastest pace of any Federal Reserve chair since the 1980s. While some complain that this has triggered a stock market rout, and caused the housing market to come to a standstill, others argue that he has increased the fears of an imminent recession.

That was the domestic part. The Fed’s raising of interest rates has impacted the emerging markets including contributing to the chaos in the financial markets in China since many banks and provinces borrowed in dollars to save interest rates – or so they thought. It has forced the European Central Bank to raise interest rates and the net result was to unleash a crisis in long-term debt where life companies and pension funds cannot continue to buy the long-term with rates rising and bonds declining the day after you just bought a traunch.

Janet Yellen, who wants to hunt down everyone who sold a used bike on eBay for $600, understands the crisis we have erupting in debt because of rising interest rates and investors are afraid of the long end. Her proposal to buy in the long-term and swap it for the short-term recognizes the fact that we have a major debt crisis unfolding and she has come up with another scheme to keep kicking the can down the road.

Consequently, with inflation hitting 40-year highs, the warning signs are there that the central banks cannot do anything to address the economic crisis. Hence, initially, Fed officials were unanimous that rates needed to rise aggressively. Now, however, there are cracks in that view. These cracks will become fissures over how this type of inflation is NOT speculative but shortages set in motion by COVID and then accelerated by this drive for war with Russia and the insane sanctions they imposed on even private citizens.

While some expect inflation to cool steadily next year and want to stop raising rates soon, the problem is that inflation driven by shortages will not subside with a reduction in demand. Even real estate replacement costs have risen despite the fact that the market has started to pause. The cost to build a home in many areas is already higher than existing homes, which tends to create a floor before prices. Others worry inflation won’t ease enough next year in the face of a war that is escalating, and they defer to the old standard of raising interest rates to temper inflation.

That leaves Chairman Powell struggling in the eternal seas of politics lost in the middle as the arguments get louder on both sides. Powell will be challenged trying to chart a course through war, stagflations, and complete fiscal mismanagement by our politicians. The next stage of interest-rate policy presents very difficult questions concerning how high to raise rates from here, and how long to hold them at that level in this Pyhric War against Inflation.

Dec 14 2022

Real Estate


Armstrong Economics Blog/Real Estate Re-Posted Dec 13, 2022 by Martin Armstrong

COMMENT: Mr. Armstrong, I just want to congratulate you on creating Socrates. I am a real estate aficionado and Socrates has beaten the Case-Shiller Index which peaked in June of 2022 and even the Redfin Index which peaked in May 2022. Socrates peaked at a high in December 2021 ahead of everyone. Your model has shown a 34% drop into October where everyone is saying a 20% drop by the end of next year is likely. I just wanted to write because you and Socrates have beaten everyone in the real estate forecasting business and you do not even make that a big deal. Socrates is amazing.

I just wanted to share that because you do not even bother pounding your chest about real estate.

Thank you so much

LR

REPLY: Socrates is forecasting so many aspects of the world economy I do not have the time to pound my chest and if I did, I would probably end up in the hospital for it gets so many things right. It covers a fair sampling of real estate around the world and I do know we have many major real estate companies tuning in. Thank you for your comment. I have not had the time to look at either of those two indices as of yet.

Dec 13 2022

What investment would have produced 4,414% Gain since 1932?


Armstrong Economics Blog/Traders Re-Posted Dec 13, 2022 by Martin Armstrong

Imagine if you could have bought a loaf of bread in 1932 for 7 cents. That 7 cents would be $3.09 today would be a gain of 4,414%. Of course, you could not even freeze it that long. That is also the problem with many who sell investments. Gold was $20.67 in 1932 so that has been a gain of 8990%. On the other hand, the Dow Jones Industrials bottomed in 1932 at 40.56. That has been a gain of 83,992%.

In 1955, the Dreyfus Fund was established by a New York stockbroker named Jack J. Dreyfus, Jr. (1913–2009)  It was Dreyfus who acquired the open-end Nesbett Fund, which had $2.3 million in assets.  This ambitious stockbroker renamed the fund bestowing his own family name upon it which would become a household word in the decades ahead.  By year end, the assets grew to $5.6 million as 1955 drew to a close.  The best decision Dreyfus made was to buy 400 shares of an unlisted stock.  That “sleeper” stock was Polaroid which he bought for $31 7/8.  Dreyfus would watch this single purchase rise to $6,372 per share – not counting splits – in the years ahead.  This outstanding performance almost single-handedly led to the mutual fund boom in the 1960s.

Sometimes a new technology paves the way for something that changes the game.