US National Debt to Surpass 185% of GDP


Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted Aug 2, 2022 by Martin Armstrong

The Congressional Budget Office warned that US federal debt is expected to rise 185% within the next 30 years. Total debt holdings could double the size of US GDP by 2051. No politician or spender of this debt cares as they have no intention of paying it off. The Congressional Budget Office is calling this an optimistic forecast, given the previous estimate of debt soaring to 202% of GDP by 2051. The fact of the matter is that no one can foresee how much money politicians will continue to spend. Servicing the debt will become more expensive over time, expected to reach 10% of GDP by 2051, 7.4% in 2042, and 5.1% in 2032.

Most do not realize that the national debt is already at monumental levels. US gross federal debt to GDP reached 100% by 2012. The ratio remained somewhat stagnant until capitalism became sick with COVID in 2020, and the GDP to debt ratio rose to 128.1%. The figure stood at 137.2% by December of 2021 and has continued to increase.

China no longer wants US debt and has begun to sell off its holdings. As other currencies decline relative to the dollar, US debt, and all government debt in general, no longer seems like a smart investment. We have reached a point where Congress can continue to pass bills and bribe voters with socialistic promises from their latest puppets because no one cares about the future of America. The US will be the last to fold but expect the inevitable as countries, city-states, and governments are all temporary in the eyes of father time.

Capital Controls in Europe Have Arrived


Armstrong Economics Blog/Tyranny Re-Posted Aug 1, 2022 by Martin Armstrong

COMMENT: Dear Marty,

I was trying to wire money from my bank account in Italy to the one in the UK, just to realise that I can no longer transfer more than 6,000EUR per month.

The Soviet EUSSR is in full capital controls mode. I am missing the beauty of Italy every day, but I am so glad to live in Brexit UK.  Good luck to the old continent.

SB

REPLY: I warned that all my sources were confirming, three very high up, that Europe would quietly impose capital controls on June 30, 2020. That has now taken shape. Europeans and not allowed to send more than 6,000 euros per month to another account outside the EU. Capital has been pouring out of Europe, and they beat not just the war drums but also the Green drums that forewarn of a severe economic decline for Europe.

Even in the United States, we have capital controls in place for a different reason — taxation. You will find it limited to try to wire more than $3,000 to an individual outside the United States. As I reported before, a friend in Singapore found me a service apartment and put down the first month’s rent for me. I sent him a wire, but when I got there, he said he never got it. I called my bank to put a trace on it, and HSBC returned it, saying they would not credit it to that account because they could not verify it was not secretly for me. I had to write him a check. You can wire to a business without a problem, but not to an individual. The hunt for taxes lives.

People have argued with me that I am wrong and it is capitalism that is collapsing. Sorry – socialism has brought us to the very sad end. Politicians can only run bribing voters, saying they will rob the rich to hand it to them. They can no longer borrow endlessly with no intention of paying anything back. That said, they know they will have to default. The question has been HOW?

This is what Schwab’s entire WEF is about. His Great Reset is because socialism is collapsing. I did our Solution Conference in 2015 because I knew what he was advising to world governments. The problem was that his way is that they become dictators, and he is even ending your right to vote. While they call Putin authoritarian, the head of the EU also does not stand for election. They are appointed by EU member politicians. This is what they want — ZERO right of the people to vote. They intend to control what we buy, where we live, and what we are allowed to say. So you can see, in my Solution, we retained democracy, so they were not handed ultimate power. Capital controls are part of this plot to end our freedom.

Global Recession, South Korea Manufacturing Output Shrinks in July, First Time in Two Years


Posted originally on the conservative house on August 1, 2022 | Sundance

We are seeing the cascading impacts of the energy-driven inflation starting to ripple throughout the globe, specifically worsening economies who are dependent on the export of non-essential durable goods.  South Korea manufacturing is the latest example.

The first quarter of 2022 started with a drop in U.S. consumer spending on non-essential durable goods like electronics.  The net result of contracted consumer spending was a 1.6% negative GDP.

Inventories of goods started to build and by April/May of 2022 the Consumer Price Index (CPI) showed negative inflation in those sectors as discounts to move inventory were offered.

In June major manufacturer Samsung, headquartered in South Korea, announced they had told suppliers to stop sending component manufacturing parts for finished goods. (link)

By the end of July, the second quarter GDP in the U.S. again showed a contraction of 0.9%. Energy inflation was now creating a consumer spending recession, demand for non-essential goods dropped fast over the first half of the year.

Today, South Korea announces July manufacturing output contracted for the first time in two years, matching the prior announcement by Samsung:

SEOUL, Aug 1 (Reuters) – South Korea’s factory activity shrank in July for the first time in nearly two years, as output and new orders weakened amid continued inflation and supply chain woes, a private-sector survey showed on Monday.

The S&P Global purchasing managers’ index (PMI) fell to a seasonally-adjusted 49.8 in July from 51.3 in June, falling below 50 for the first time since September 2020. The 50-mark separates expansion from contraction in factory activity from a previous month.

Output fell for a fourth straight month and by the sharpest rate since October 2021, as new orders decreased for the first time in 22 months and those from overseas for the fifth month in a row. (read more)

All economies that are dependent on the manufacturing and export of durable goods are likely now seeing reduced factory outputs as fewer customers exist to purchase the final product.  This will lead to a predictable rise in unemployment amid those same nations.

This situation is the reason why the Bank of Japan did not raise their central bank interest rates.  They are attempting to offset the drop in global economic activity by keeping their currency value low as compared to the rest of the western countries.  This will help move their exported goods at a discount.

Inside countries with large imports, the definition of “non-essential” purchases within each household now starts to shift. Upgrading electronics, jewelry purchasing, and other non-essential goods become the first to feel the impact.  That contraction is then followed by appliances, furniture, clothing and eventually vehicles and high-cost durable goods.

As less and less disposable income is available, consumer spending gets increasingly prioritized.  The service sector is likely starting to feel the consumer belt tightening, particularly those consumer goods and services that are dependent on middle class families.

Inflation in general is a corrosive issue that eats away at the ability of consumers to purchase products and services.  Energy inflation is particularly damaging as it hits every sector of the economy with higher supply-side costs.  Food prices, fuel, transportation costs, electricity rates etc. take a larger portion of the paycheck, leaving less room (if any) for non-essential purchases.

A shrinking global economy is the outcome of an intentionally managed decline to support the Build Back Better, climate change, agenda.

Secretary Yellen Reminds Good Citizens Their “Household Finances are Strong”, We are Experiencing Abundance and Not Being Happy is Disinformation


Posted originally on the conservative tree house on July 28, 2022 | Sundance

July 28, 2022 | Sundance | 134 Comments

Comrades, Secretary Janet Yellen reminds everyone how important it is to smile and support the policies of Dear Leader as they manage our overwhelming happiness through this period of exceptionally wonderful abundance.

The secretary reminds us that our “household finances are strong” and we have good employment to keep ourselves industrious and valuable on behalf of the state.  WATCH:

The beet and potato harvest will provide soup for everyone, but only if we continue to do our best.  All of the best comrade citizens are cheerful and happy.

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“I’m told that’s what it looks like… but we just don’t see it”…

Straight Economic Data from Bartiromo


Posted originally on the conservative tree house on July 28, 2022 | Sundance

There is less pretending in this segment, but the core of intent is still missing.   As soon as Ms. Bartiromo can admit the monetary policy is specifically designed to create lower economic activity, she will be able to reconcile the policy conflicts which she still views as hypocrisies.

While not outlining the motive, in the segment beginning at 1:07 Ms Bartiromo does a good job outlining the current state of the economy. WATCH:

Comrades, prior to the Joe Biden economy the average American worker was earning 29 onions per hour.  After, the Biden economic policies were put into place, the average American worker is now earning 11 onions per hour.

Former Obama Economic Advisor Says Best Way to Deal with Inflation is to Raise Taxes and Plunge Main Street into a Recession


Posted originally on the conservative tree house on July 17, 2022 | Sundance 

Jason Furman is the former Chairman of the National Economic Council under Barack Obama; he is currently a professor at Harvard teaching economics.   If you ever wondered why the economy under Obama included the weakest economic recovery in history, the advice of Furman might explain it.

In an interview with CBS this morning, Jason Furman says the best way to get inflation under control is to raise taxes and stop people from spending money.  This approach will impact the demand side of the economy and as a result, with no one purchasing stuff, it will lower prices.   Seriously, no joke, he said this. WATCH:

Jason Furm: …”Congress should be trying to do their part and helping out if they can cut the deficit, including raising taxes on high income households, that would reduce a bit of spending in the economy, it would cool the economy down a little bit, and actually take some pressure off the Fed.”…

Create a deeper recession to control inflation, brilliant!

Like I have been pointing out for months, these ideologues believe inflation is being driven by the demand side, by consumers purchasing too much.  They pretend not to know it is the supply-side issue of energy policy that is driving the CORE inflation they seek to reduce.

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Harvard Economics Professor Jason Furman reminds me of this:

Bank of Canada Raises Interest Rates 1 Percent Claiming Excess Demand in Economy is Driving Inflation


Posted originally on the Conservative tree House on July 13, 2022 | Sundance

Folks, the Build Back Better western alliance are fully vested in the pretending game.  It is just one big insufferable game of pretending, and the citizens of the western government powers, You and Me, are the victims.

Seriously, it’s stunning, yet oddly not surprising, that the same multinational forces who created the global inflation crisis as a result of following the World Economic Forum spending agenda, are now claiming the global economy is simply too hot, too successful, there is just too much demand, and that justifies their raising of interest rates:

OTTAWA, July 13 (Reuters)– The Bank of Canada surprised on Wednesday with a full-percentage-point increase to its policy rate, a super-sized hike last seen in 1998, citing “higher and more persistent” inflation and the increased risk of those price gains becoming entrenched.

The central bank, in a regular rate decision, raised its policy rate to 2.5% from 1.5%, and said more hikes would be needed. The move was more forceful than the 75-basis point increase economists and money markets had forecast.

….”With the economy clearly in excess demand, inflation high and broadening, and more businesses and consumers expecting high inflation to persist for longer, the Governing Council decided to front-load the path to higher interest rates,” the bank said. [LINK]

This is the actual justification from the Bank of Canada.

Read it carefully: “With the economy clearly in excess demand.”

Yes folks, I have always said that in order to retain their ideological positions, the leftists in control of policy have to pretend not to know things.  That right there is the Bank of Canada pretending not to know the Canadian economy is contracting.  Exactly the same as Treasury Secretary Yellen and Fed Chairman Powell pretending not to know the U.S. economy is contracting.

Do you see what happened, and what they are doing?

The Build Back Better energy policy of the collective western governments’ is driving supply side inflation.  It’s the new climate change energy policy, all being implemented by the same institutional elements, that is creating the massive increases in overall prices.

It’s the energy policy driving inflation, NOT consumer DEMAND.

The western multinationals, government and multinational/central banks, all carry the same ideological mindset.  All of them are collectively supporting the Build Back Better agenda from execution of infrastructure shifts to their direct control over ESG investment in only “sustainable energy” projects.

The fascist assembly of western government and western banks working together to create this great international game of pretending. All of it so they do not have to admit their ideological climate agenda is destroying economies.   Thus, to keep up the pretense, they raise interest rates into a contracting economy.  This is why I keep saying the pretense is what’s going to end up starving people, creating desperation and ultimately killing people.

Energy demand is no different today than it was pre-pandemic 2018 and 2019.  It’s the energy supply, and all of the downstream industrial energy processes that are being blocked, that has created the supply-side issue.

The post-pandemic Build Back Better agenda has shifted the entire energy sector and created all of these inflationary outcomes.

The World Economic Forum, the Bank of Canada, central banks in Europe and Secretary Janet Yellen and Chairman Jerome Powell are all pretending not to know these issues are outcomes of energy policy.  The collective western nations all took the same path.  All of the outcomes are identical, and now all of their denials and pretenses are being maintained in a collective justification filled with bullshit.

June Inflation Jumps 1.3 Percent, Annual Inflation Rate Increases to 9.1 Percent


Posted originally on the conservative tree house on July 13, 2022 | Sundance

The Bureau of Labor Statistics (BLS) has released the June Consumer Price Index (CPI) [DATA HERE] showing yet another “surprising” increase in overall inflation.  For the month of June overall inflation increased 1.3% bringing the annual rate of inflation to 9.1% as calculated.

Economists and financial pundits are “shocked”, “surprised” and the proverbial “unexpected” is running amok again amid the typeset.  The reality of Joe Biden energy policy being the origin of our current inflation crisis is being avoided at all costs by the pretenders.  The federal reserve raising interest rates can only impact the demand side, but it’s the supply side (total energy policy) creating the problem.  Table-A shows the overview.

(CNBC) – […] The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.

[…] “U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve.” said James Knightley, ING’s chief international economist. “With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising.” (read more)

If you dig into the details, the inflation picture shows just how deep the energy policy is hitting.  Everything is impacted by Joe Biden’s radical energy policy.  Table-1 breaks down the data a bit more specifically.  However, even this data is skewed by the BLS putting a weighting factor on the importance.

♦ The rate of annualized inflation for natural gas is now running at almost 100%.  Meaning if things continue, the current price will double again by this time next year.

♦ The rate of annualized inflation for gasoline is running at 134%.

♦ The annualized rate of energy inflation overall is running at 90%.

These are the results of the people behind Joe Biden implementing the Green New Deal program by executive fiat.

Also, keep in mind the current increases in farming costs at the field have yet to reach wholesale and retail.  The fertilizer, oil, diesel, packaging, transportation and energy costs at the field will not arrive to the fork until later this fall.  That is when food inflation will surpass energy inflation.

Current cattlemen and ranchers are finding it more cost-effective, due to drought and high feed costs, to take their cattle to slaughter.  There is a temporary drop in beef prices for the next several weeks before the supply roller coaster sets up a scenario for massive increases in beef costs this winter.  Consider buying and freezing now for use later this year and into the winter. Try to buy directly from cattle ranchers.

Later this year the next wave (#3) of food inflation will surpass the last two waves.  Things will get ugly because there are also predictably shortages of food coming.  Higher farm costs and global food supply shortages equals much, much higher U.S. prices.   Prepare.

U.S. Homebuyer Contract Cancellations Surge to 15 Percent in June, Highest Ever Recorded Sans Pandemic


Posted originally on the conservative tree house on July 12, 2022 | Sundance

A slowdown in the housing market is being identified as the primary cause of a significant increase in cancelled homebuyer contracts in the month of June.  Bloomberg Report Here and Redfin Report Here.  It would appear the inflated housing bubble has popped.

According to the data 60,000 home sales were cancelled while under contract in June, that represents 14.9% of all contracts cancelled by the buyer before the transaction closed.  If you take out the forced cancellations due to the pandemic, a 15% cancellation rate equals the highest monthly cancellation rate ever recorded.

The economy is contracting, economic activity and consumer purchases have stopped, and the contraction is now fast and sudden.

(Redfin) – Nationwide, roughly 60,000 home-purchase agreements fell through in June, equal to 14.9% of homes that went under contract that month. That’s the highest percentage on record with the exception of March and April 2020, when the housing market all but ground to a halt due to the onset of the coronavirus pandemic. It compares with 12.7% a month earlier and 11.2% a year earlier.

This is according to a Redfin analysis of MLS data going back through 2017. Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in June could have gone under contract in May.

“The slowdown in housing-market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” said Redfin Deputy Chief Economist Taylor Marr. “Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process.”

Marr continued: “Rising mortgage rates are also forcing some buyers to cancel home purchases. If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for a loan.” (read more)

Now, keep in mind that contract cancellations can also be attributed to a hot housing market, where purchasing hysteria and bidding wars end up being factors in the contracts.  Some anxious buyers make out-of-town offers without even seeing the house, then use contract exits -contingencies- to cancel the purchase if the home is ultimately not up to their standard.

In my opinion the spike in cancellations is a blend of the two aspects which indicate the apex of home purchasing is behind us.  The bubble popped.

Home values are now declining as more available inventory starts to fill up the real estate market.  Again, everything is local and regional depending on a myriad of issues; however, if we are looking at it from a macro level, the booming housing market is now over.

City and county tax rates will now benefit from the overinflated real estate sales data.  Real estate tax bills (a backward-looking metric) will go up as the curve on home valuation actually starts to drop and drop quickly.

If you did not purchase a home this year, you have not lost money.  If you did purchase a home this year, the dropping market will erase tangible wealth.

Redfin also has the top metro-markets for cancellations:

(Source, with Expanded List)

CBS says the best way to survive the Biden economy is not to buy stuff, and young adults should stay living with mom and dad. WATCH:

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I Feel Like I’m On A Debt Treadmill And It’s Never Ending!


The Ramsey Show – Highlights  Published originally on Rumble on  July 8, 2022

I Feel Like I’m On A Debt Treadmill And It’s Never Ending!
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