Tag Archives: Keynesian Economics

Mar 21 2019

Why Europe is Changing its VISA laws & Calling it Pre-Screening


Armstrong Economics Blog/European Union

Re-Posted Mar 21, 2019 by Martin Armstrong

QUESTION: Hi Mr. Armstrong,

Can you elaborate on the visa to Europe for Americans? The newspaper here say it’s just an electronic registration like ESTA for Europeans who want to travel to the USA and it’s misrepresented as VISA. Where is the fake new this time?

Kind regards,

M

ANSWER: You must apply to even get on the plane and then the “visa” is stamped in your passport upon arrival. You cannot get on the plane without it.

They call it pre-screening, but it is, in reality, a denial of a visa in advance.

ESTA is not a pre-requirement. If you get it, it merely allows fast track.

To require pre-screening in advance rather than an option for fast track means it is a visa by another name.

 

Mar 20 2019

Nigel Farage: the betrayal of Brexit and what to do about it — The Brendan O’Neill Show


Published on Mar 9, 2019

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Nigel Farage joins Brendan O’Neill to discuss democracy, the political class and his new Brexit Party. Support spiked: https://www.spiked-online.com/donate-…
Mar 20 2019

Are Bonds Preferable to Stocks in a Crisis?


Armstrong Economics Blog/America’s Economic History

Re-Posted Mar 20, 2019 by Martin Armstrong

QUESTION: There are a few people coming out claiming the stock market will crash so buy bonds even though you will lose money. How can people keep calling for a mega-crash so long with constantly being wrong since 2010?

Thank you for your reason

NR

ANSWER: These people are still living in a world that is defined by the event of the Great Depression. Even Germany forces austerity upon Europe because they do not understand the events behind their own hyperinflation and stupidly assume it was merely an increase in the supply of money that caused the event. Nobody seems to be bothered to ask which comes first – the chicken or the egg?

Here is a chart of the stock market with the US Long Bond. Andrew Jackson paid off the national debt in 1835. President Jackson also shut down the Second Bank of the United States on Sept. 10th, 1833. Jackson announced that the government would no longer deposit federal funds in the Second Bank of the United States, which was a quasi-governmental national bank. The stock market peaked in 1835 and began its decline without a central bank. Then during July 1836, Jackson issued the Specie Circular. Under this act, the government would only accept gold or silver in payment for federal land.

Jackson’s Bank War closing down the Bank of the United States was personal because they funded his opposition. By shifting deposits to state banks, Jackson set off a major crisis undermining the entire monetary system. He effectively devalued all the circulating currency in the country with one law – the Specie Circular. Suddenly, there was a run on gold. The Panic of 1837 unfolds as New York banks suspended all withdrawals of gold. Jackson created massive austerity, but he had shut down the national debt as well. This was a very complicated financial crisis with an interesting mix of events combining together.

There were NO federal issues of paper money and the first paper dollar to be issued by the government did not unfold until 1860 to fund the Civil War. Therefore, Jackson effectively canceled all paper money by refusing to accept it and this resulted in a gold panic forcing the banks to suspend all payments. People were rushing to banks to exchange their paper currency for gold and banks could not meet the demand and suspended all demands for gold.

When federal bonds resumed in 1842, they had declined in value as interest rates rose. There was no flight to quality, only to gold given there were no federal bonds. This is when several states moved into default permanently upon their debt. Therefore, the Monetary Crisis Cycle that hit then was felt in the state and local levels – not federal. The Monetary Crisis Cycle that hit in 1931 resulted in widespread sovereign defaults outside the USA.

Each cycle that hits is slightly different characters and reasons. I highly warn against buying any sovereign debt whatsoever. Any federal debt to hold must be short-term no more than 90-day paper. In the case of the Hard Times of 1837-1842, the stock market crashed in terms of gold because all money was effectively canceled. Paper money collapsed as notes lost their legal-tender value. Thus, only gold rose in value as the medium of exchange thanks to Jackson refusing to accept anything but gold.

This time around, bonds are legal tender so that is the money that will decline in value far more than anyone expects. Both the Bank of Japan and the ECB in Europe have wiped out their bonds markets for they have been the primary buyer of government debt which they cannot now resell.

 

Mar 20 2019

The Stock Market – Up & Away or Crash & Burn?


Armstrong Economics Blog/Dow Jones

Re-Posted Mar 20, 2019 by Martin Armstrong

QUESTION: Mr. Armstrong,

In your blog you talked about a global recession and hard landing. Does this mean the US stock market will rally because funds will flow from the rest of the world to the US stock market? Or will the US stock market succumb to the global recession and go lower too?

This is very confusing for most of us and a very critical time in the markets. I hope you will guides us with your knowledge and experience.

Thank you for all you do!

KC

ANSWER: The key to pushing capital fleeing into the stock market will be the decline in public confidence within the government. Everything is unfolding on schedule. You see turmoil everywhere from Canada to France and Italy. The level of people distrusting government is climbing. Normally, it will take a 45% level of people turning against the government to set off the spark.

So no, there still does not appear to be a major crash of 50-62% as the majority are calling. The market is testing resistance, but here too we do not see this as breaking out and taking off just yet. We are in a choppy consolidation building a higher base that qualifies as a cycle low. We will be ready to take off soon. Just be patient.

 

Mar 20 2019

The Rally Beyond 2015 in the Dow Has Proven We are in a Cycle Inversion


Armstrong Economics Blog/Dow Jones

Re-Posted Mar 20, 2019 by Martin Armstrong

QUESTION: There are many people who are now saying we are headed into a recession. Your model shows we are coming to the end. Yet you have been the only analyst who has been correct. There are bankers warning the stock market will collapse by 50% because it always goes down in a recession. I watched the market rally to new high as you forecast back in 2010 going into 2015. Then you warned the market would invert and continue the rally after 2015. The market rallied into nearly your Pi Target in 2018. You said at the last WEC there would be a correction back to retest the monthly bearish reversal.

You have been correct at every turn. Back in 2014, you posted: “What will not go down when the cycles shift, inverts and rises even further.” It seems that this has been a cycle inversion where the market has just been rising through the upside and downside of your model. My question is this. You still forecast that this is just the staging ground and we are about to see a different pattern altogether. Is this all part of the cycle inversion you have been stating is underway?

NM

ANSWER: Yes. I also wrote in that post: “This is why I have been warning a cycle inversion is coming. We may be in that process now starting from November 19th/20th.” With all the craziness on the horizon economically, the government was the one in trouble, not the private sector. That meant we had to undergo a cycle inversion. That is what is underway. A normal cycle would have seen the market peak in October 2015 and then decline. The fact that the market has continued to rally past 2015 proves this is a cycle inversion. We will be addressing this at the Rome WEC. We are about to make a major play that will be critical to understanding for the future.

Mar 19 2019

Financial Collapse – Brexit Is The EU’s Flu But Italexit Is ItsTerminal Cancer


Published on Mar 16, 2019

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The bad news keeps coming out of the EU concerning Italy . Not only is Italy in recession but Germany and France are teetering there as well. Italy’s sovereign debt crisis and its Non Performing Loan fiasco is going to blow the whole house down. I’d hate to think of all the credit default swaps out there … Hmmm could be like all those ‘bad’ MBS’s that brought the whole house down (figuratively speaking)in 2007/8. Italy’s politics is exacerbating the situation. The politicians might want all the ‘benefits’ of being in the Euro BUT if Italian debt crashes and the ECB can’t foot the bill (i.e. Germany), it’s arriva derci, sayonara and bye bye to the Euro and Italy will Italexit!
Mar 19 2019

Macron Cracks Down on Yellow Vest Protests – Blocks Champs-Elysees Avenue, Replaces Police Chief…


Re-Posted from The Conservative Tree House on March 18, 2019 by 

Following a weekend of clashes, violence and stores burned in the city of Paris, French President Emmanuel Macron has replaced the police chief and announced blockades to keep yellow vest protesters away from key tourist destinations.

PARIS (AP) — France’s prime minister announced a ban Monday on yellow vest protests along the Champs-Elysees Avenue in Paris and in two other cities following riots on Saturday that left luxury stores ransacked and charred from arson fires.

Prime Minister Edouard Philippe said the ban will apply for an unspecified period in the neighborhoods that have been “the most impacted” in the cities of Paris, Bordeaux and Toulouse, where repeated destruction has occurred since the yellow vest protest movement began in November.

He also said Paris police chief Michel Delpuech will be replaced this week by prefect Didier Lallement.  Philippe announced the measures following a meeting with French President Emmanuel Macron and top security officials that sought to avoid a repeat of Saturday’s violence, in which rioters set life-threatening fires, ransacked luxury stores and attacked police around the Champs-Elysees. Many of those high-end boutiques remained closed on Monday, some of them charred from arson fires set.

He acknowledged “dysfunction” in French police operations on Saturday, rejecting “inappropriate” orders given to security forces to use fewer rubber bullets following a controversy about the numerous injuries they’ve caused at previous protests. (read more)

Recent National approval ratings amid G7 members:  Justin Trudeau, Canada; Emmanuel Macron, France; Angela Merkel, Germany; Theresa May, U.K.; Giuseppe Conte, Italy; and Shinzo Abe, Japan.

Mar 19 2019

Paris Riots Take Over the Champs-Elysees


Armstrong Economics Blog/Capital Flow

Re-Posted Mar 19, 2019 by Martin Armstrong

Paris on Saturday saw a second major uprising of Yellow Vest protests. Many are now arguing that the rioting on the Champs-Elysees has been instigated by extreme elements that have infiltrated the movement to further a second French Revolution. Some 20 stores were looted or set on fire as well as one bank. Needless to say, the Yellow Vest movement has now accepted violence as a legitimate tool to achieve their goals. In this regard, the Yellow Vests have indeed crossed the line and moved into a revolutionary posture. They are fed up with the diminishing standard of living in the name of endless socialism that justifies ever increasing taxation.

The government continues to ignore the Yellow Vests and believe they will just fade away. On the other hand, they argue that after 18 weeks of protests, the government still refuses to listen to anything. This refusal to even listen appears to be instilling more and more violence. Macron has no intention of surrendering the dream of the EU and he maintains that he is in charge and these protesters do not represent the whole of France.