Tag Archives: Marxism

Feb 17 2023

NATO Preparing for World War III


Armstrong Economics Blog/War Re-Posted Feb 17, 2023 by Martin Armstrong

Perhaps NATO is starting to wake up. They now realize that they may have to wage war on two fronts simultaneously. NATO is considering what they call a defensive move which is an “Article 5 conflict” but also an “out-of-area” battle. This is showing that NATO is no longer what it was supposed to have been – the defense of Europe against a Soviet invasion that never took place. The “out-of-area” is none other than China invading Taiwan. NATO is simply usurping power that it was never authorized to carry out. This, Article 5 event is an attack on a NATO member, whereas the “out-of-area” is a non-NATO member.

Clearly, we are witnessing how once power is taken, it is always abused. NATO has always billed itself as a “defensive alliance” but it has embarked on an offensive posture with Ukraine and now even Taiwan. Don’t forget, NATO joined the hostilities in Yugoslavia during the 1990s and again with Libya in 2011. Many have viewed that NATO has been usurped by the American Neocons to further their agenda of manipulating US foreign policy. That is becoming self-evident by even considering war with China and Russia.

All our sources confirm that the US has demanded that Brussels increase its defense expenditures. Everyone is expected to chip in 2% of GDP – ASAP. The US is now also expecting that it will have to fight on two fronts against both China and Russia. The Neocons are demanding higher Pentagon budgets now. They simply want war and we have no right to vote on any of this confirming once again, we do not live in a democracy, but in a dictatorship masquerading as a republic.

You NEVER go to war without weight the gains against the losses. What is taking place is the very same bankers that tried to take over Russia I wrote about in the 2000 Plot to Seize Russia, are back after 23 years and they are pleading to wage war and are licking their lips once again at seizing all the natural resources of Russia from gold and diamonds, to energy and uranium.

Feb 17 2023

What is Really the Foundation of Money?


Armstrong Economics Blog/America’s Economic History Re-Posted Feb 17, 2023 by Martin Armstrong

COMMENT: Martin,
After several years of reading your blog, I have concluded that Socrates’ prognostications appear to be spot on. I also share your assertion that a study of history supplies an insight into future events due to the constancy of “human nature.” Where we appear to part ways is in the definition of “money.”

In the early 20th century J. P. Morgan said: “Gold is money; everything else [used as currency] is credit.” Hence, paper money, (and digital entries in an electronic ledger) when issued by a monopolist i.e. government, inevitably descends to its intrinsic value: zero.

AN

ANSWER: Human society has recorded our monetary history and you should not confuse irresponsible government with what is really money. I have a great deal of Respect for J.P. Morgan. If you asked the question of what is money in a Babylonian, it would be a silver shekel. Even the Bible spoke of weighing the silver and how Judas sold out Christ for a handful of silver coins. To a Greek from Anatolya (Turkey), he would have said it is a stater. To an Athenian, he would say a drachma. A Roman would have replied a denarius. But when Rome was first forming, money had been cattle which became thereafter bronze. Indeed, if you had asked before all of them, a Minoan, would have it was bronze. Money has been many things including sea shells, and cattle.

A Spanish during the 15th century would have said it was a one-ounce silver reale. The German would have said no – it’s the silver thaler. The British would disagree and said it was the pound sterling (.925 silver). The Americans, not wanting to be subservient to England, adopted the dollar, which was a version of the German thaler. In Asia, it was the cash, then the yen.

Saint Patrick in the 5th Century AD upon his arrival in Ireland, found that MONEY was expressed in human slave girls. He wrote in his Confession, “I think that I have given away to them no less than the price of fifteen humans.” This passage shows something very important. First, MONEY is not defined as the Medium of Exchange exclusively. It also serves the purpose of a Unit of Account. In fact, this becomes the true function of MONEY even more so than what it is. MONEY is a language of value.

Many of the major bankers, kings, and heads of companies were ancient coin collectors including President Teddy Roosevelt. JP Morgan understood banking and credit – but not money. This was a Syracuse Dekadrachm of Dionysios I (405-367BC) was one of the coins from his collection that was eventually sold by the coin firm Stacks of New York in September 1983.  You can download that catalog. People like Josiah K. Lilly Jr. and Paul A. Straub donated their collections to the Smithsonian.

Teddy Roosevelt (1858-1919) loved the high relief of ancient Greek coins. When Teddy Roosevelt became president on September 14, 1901 – March 4, 1909, he commissioned the artist Augustus Saint-Gaudens (1848 –1907)  to redesign the $20 gold coin and made it high relief as the ancient coins had been struck. The machines could not handle the high relief for the dies would break and they lacked the power of an individual stamping out coins. Thus, the new $20 gold coins had to be reduced in their relief. Nevertheless, we have ancient coins to thank for the limitation on the confiscation of gold in 1934. It was that very reason that his cousin FDR exempted ancient gold coins from confiscation when FDR was himself a stamp collector instead.

I would say the problem here is the definition of money and what predates coinage was the development of a weight standard to enable trade. That invention of weighing technology appears to emerge around 3100 to 3000 BC. This was the most significant turning point in monetary history for it marked the beginning of economic history itself.

It was private merchants during the Bronze Age that created the weight systems. Trade took place through informal networks, but it was clearly Mesopotamian merchants who established a standardized system of weights that later spread across the Western region and into Europe. This innovation enabled international trade across the continent. By the second millennium BC, merchants could potentially trade anywhere in Western Eurasia simply by knowing the conversion factors of a multitude of local weight units. What was emerging was the formation of weight systems that was the foundation for the booming commercial interaction of the Bronze Age world.

From the very beginning, MONEY has been a commodity – nothing more. It simply began a barter. I will give you these carrots for potatoes.  When the Lydian King Kroisos (561-546BC) created the first bimetal monetary system, a gold stater was about 10.71 grams and the silver-gold ratio was 13.33:1 because gold was common in the Turkey. The inflation caused by war led to a gold weight reduction to 8.71 grams.  Fiscal mismanagement existed from the very beginning. This would have been no different than FDR revaluing gold in 1934 from $20.67 to $35 per ounce.

There were competing standards from the very beginning. The Lydian/ Milesian standard began with an electrum stater at 14.2 grams. The stater as minted under the Euboic Standard was 17.2 grams of electrum. There was the Phokaic Standard placing the electrum stater at 16.1 grams. Obviously, foreign exchange dealers became necessary for international trade among the city states.

I can find no evidence of a single standard that dominates the nations at this time. By 530BC, the invention of coins spreads to Greece and now the first city state begins to strike a silver stater at 12.6 grams – the Isle of Aigina. In Greece, silver was common and gold was rare.

In Athens they established the Attic Standard based on a silver didrachm (2 drachms) of 8.6 grams, but as inflation emerged, the standard coin became the tetradrachms (4 drachms) at 17.2 grams. So you can see there may have been gold and silver used as MONEY, but by no means was there a unified standard agreement as to weight. In Corinth, they set their stater at 8.5 grams and divided it into three drachms. Standardization comes only with conquest as was the case with Napoleon. Athens dominated many city states and in 449BC issued its famous enigmatic “Coinage Decree” promulgated by Perikles that restricted other city states from striking coins making their coins a single currency. Perhaps it was just a power play. On the other hand, it was most likely just the profit earned over the raw metal cost known as seigniorage. In other words, the coins once minted purchased more in goods than the raw metal.

China did not use gold. They had a silver standard. The West had to create silver trade dollars set to their weight standard, which was heavier than the standard United States silver dollar. There have been different monetary systems throughout world history. They have not all been based on precious metals. What it always boils down to is the capacity of the people to produce. There are plenty of places with natural resources and the countries are barely even 3rd world. China, German, and Japan rose from the ashes without gold. Their people produced and they rose to the top of the list of economies despite others having gold.

The bottom line has always been that the wealth of a nation is nothing more than they total productivity of its people.

Feb 17 2023

The Republican Big Club Are All In to Have Culture War and Anti-Woke Efforts Dominate 2024 GOP Primary


Posted originally on the CTH on February 16, 2023 | Sundance

Prior to the 2012 election and the rise of the Sandra Fluke free birth control narrative, we used to call them social issues; however, the usefulness of cultural wars has morphed into the larger war of wokeism.

In the big picture, keeping the base GOPe voter distracted from the economic expansion of multinational globalism, the corporate ‘masters of the universe’ (ie. the Big Club), need to keep pushing anti-wokeism as a political strategy.  The cultural issues are useful tools to keep control of an alignment of voters.  It has always been thus, and even more important now that people are starting to realize the expansion of the rust belt.

The rust belt, the diminishment of the U.S. economic manufacturing base, was an outcome of corporate control over politics.  Corporations and banks seek profit, those profits are inflated by a U.S. service driven economic model.  Skilled jobs require higher wages.

If the skilled jobs can be outsourced to lower cost labor nations, the subsequent lowered labor costs drive bigger margins.  Again, it has always been thus.

At the core of the U.S. political issue, you discover that both wings of the DC UniParty agree with this basic economic model.  Republicans and Democrats now use the catchphrase ‘service driven economy‘ with bipartisan frequency.  Many voters no longer have any reference to an economic system that is anything except a ‘service driven economy’, yet nothing about that system provides long-term value for U.S. voters or workers.

Within this very specific dynamic, you find the root of the support for Donald J. Trump.  A larger, formerly considered silent majority who comprise the baseline middle class workforce, find common understanding with President Trump because he sees the flaws in the economic model.

Not coincidentally, it is only Donald Trump who has ever discussed these economic issues. Factually, no national politician in the modern era prior to Donald Trump ever dared broach the subject of economic globalism, and the negative consequences therein, because they would find themselves in the target field of the corporations who fund the political system.  A general platform more akin to a code of omerta covered the entire subject of republican economic policy.

As the pandemic years have shown, economic security is deeply tied to national security.  As an outcome, economic policy ultimately drives foreign policy.  When combined, the economic and foreign policy outlooks form the structural alignment of the UniParty platform.

Following the downstream effect of multinational corporate influence, modern Democrats support expansionist and interventionist foreign policy.  Meanwhile, modern Republicans, previously called “neocons” have always supported expansionist and interventionist foreign policy.  Leadership of both parties now align in a singular foreign policy outlook; thus, we see support for the Ukraine spending and intervention by both Democrats and Republicans.

However, outside the DC bubble of multinational corporate influence, the support for the interventionist foreign policy doesn’t exist in the same scale and scope.  Voters inside both the Democrat and Republican base do not support the intervention at the same level as the political leadership of both parties.  There is a structural breakdown between the priorities of voters and the priorities of the elected officials.  None of this is new discussion, we all accept this basic reality.

With political leadership of both parties supporting the same economic outlook, and both parties supporting the same foreign policy outlook, we find the source of opposition against U.S. presidential candidate Donald Trump.

Economic policy and foreign policy form the uniting bond that drives both parties to oppose Trump’s America First ideological outlook.

As long as Donald J Trump singularly represents the only counterforce against this UniParty globalist construct, he will continue to be targeted by the system of financial controllers who fund the political system.  For the sake of brevity this alignment of multinational corporate and financial economic interests is called “the big club.”

As part of the strategic political effort, the Republican wing of the Big Club needs to carve up the supporters of Donald Trump into smaller, easier to target, pieces.  This is where the value of the culture war, what is now considered as ‘wokeism’, plays into the strategy of those who seek to control political outcomes and remove the threat that Trump represents to their financial interests.

In many ways, this is why we are seeing prominent Republican officeholders pushing the culture war as a tool for their own political advancement.  The same Big Club members who are directly fighting against the America-First economic agenda, are the same Big Club members who are funding the Republican politicians to push the culture war.

The corporations, billionaires and multinationals who are funding the Republican candidates do not have any vested interest in the culture war. For them the social issues are a tool, technique or insurance policy to guarantee security of the interest that does matter, their financial status.

There are trillions at stake, literally trillions.  Additionally, decades of their prior investment interests are contingent upon the ‘service driven economy’ being maintained.

Dollars drive the U.S. global trade and financial exchanges.  The multinationals, both corporations and banks, have pre-deployed investments all around the globe.  However, many of those investments are entirely contingent upon the retention of the U.S. economic system they pre-established before the investment was made.  President Donald J. Trump represents the threat to that entire financial system.

Once you understand this, then a great deal of the more nuanced and granular U.S. political moves, almost all of which are funded by the corporations and billionaires who are attached to the global investment process, begin to make sense.

Every non-Trump candidate, funded to create the opposition to America First, is part of this process to use anti-wokeism as a strategy.

With this level of money at stake, do not be surprised when you look at how much is being spent to construct the system that guarantees the continuation of globalism. The money spent in funding the Republican candidates to advance the distracting cultural war pales in comparison to the amount of money at risk in the 2024 election outcome.

That’s the baseline for this:

…“GOP leaders and candidates should take from this poll one important lesson: voters expect them to fight wokeness,” American Principles Project President Terry Schilling said. “Support for policies protecting families from gender ideology is off the charts, with the majority of the base showing a strong preference for tackling these issues. Meanwhile, approval of Republican establishment priorities was much more muted, with most of those surveyed even agreeing that GOP elected officials have given up too much ground in the culture war.”  

…“Any candidate who expects to win a Republican primary next year for any office needs to lead on cultural issues in order to win over voters,” Schilling said. “Perhaps the two most prominent leaders on these issues so far have been Donald Trump and Ron DeSantis, so it should be no surprise they are far and away the favorites in the presidential field. It’s time for the rest of the party to pay heed and set their priorities accordingly.” (more)

On the very significant upside… Relax, President Trump understands this.

Candidate Donald Trump also understands the real priorities of the Big Club extend beyond this useful cultural war, deep into the world of economics and foreign policy.

As each of the corporate funded Republican candidates hits the cultural war (wokeism) effort as part of the distracting political strategy, watch President Trump generally agree with the ‘social issues’, but then counter the distraction with arguments specifically targeting economic and foreign policy.

The entire field of Republican candidates will hold the same economic and foreign policy outlook (Ukraine example), with only Donald Trump representing an alternative.

Feb 16 2023

What if Russia Nukes Kyiv?


Armstrong Economics Blog/Ukraine Re-Posted Feb 16, 2023 by Martin Armstrong

QUESTION: Dear Mr. Armstrong,
In the event that Russia does employ nuclear weaponry in/over Ukraine, does Socrates offer any insight as to what effect that might have on Ukrainian food/energy/commodities -production in general (…. let alone their capabilities, or likely lack thereof, to transport, said items from fields/mines/etc. to harbors/rail-lines/etc.); and what type of effect will (potentially, severely) reduced outputs like that (from the “bread basket of Europe”) have on shortages, inflationary cost-pressures, disease-cycles, population migration, and so forth and so on? Having traveled through Ukraine in my youth (around the time of your Israel sojourn; and yes, I had a whole lot more hair than too still), I remember marveling at arable topsoil some 8 to 10 feet deep; what (long-term?) effect would nuclear fallout have on such valuable planting-media, one wonders?

All my very best to you, Mr. Armstrong, believe me; I admire your bravery a great deal. You, Sir, are a Prince & a true gift to humanity!
Sincerely, …. tlk

ANSWER: Everything to the East of the river was the Russian Empire from the days of the Tzar. Ukraine was NEVER a country – period! That is why they joined Hitler who promised to carve out territory so they could be a nation. I get hate mail from Ukraine calling me a Putin lover. They will not respond when I ask do you really think you can destroy Russia and survive? Is it worth losing the country you finally won in 1991 all for the Donbas where the majority of people are Russian? They will not respond to any such questions. They are blinded by the hatred of Russians and cannot see that they are risking it all. They had a country. That was their dream. They are throwing that all away with nothing to gain even if they won – they will never survive the conflict. It just makes no sense.

100 Kiloton

That said, Russia could nuke Kyiv. It would all depend upon the size of the bomb. This would be the destruction of Kyiv with 100 kilotons. The argument inside Russia is that Putin has been too “soft” and he should have gone all in for the kill. The military believes they have been held back and could have won had they not had their hands tied.

This would be 100 metric tons. So you can see, they can nuke Kyiv and “win” the war without destroying all of Ukraine. This is what some are pushing for because they see this as a war against NATO and not just a war now to defend the Donbas. Ukraine has been the fool on the hill. They have listened to the West, and gone head-to-head against Russia which has more nukes than the United States, which cannot defend itself against a hypersonic nuclear missile.

Everyone has gone just mad. There is NOTHING to gain from this and the Ukrainian people will only wake up when it is too late. Zelensky is the Adolf Hitler who has brought death and destruction to their dream of a nation-state. Russia could take out Kyiv without harming Crimea or the Donbas.

Feb 16 2023

Klaus Schwab Outlines How the Transformation Will Deliver the New “Master of the World”…


Posted originally on the CTH on February 15, 2023 | Sundance

A lot of people are going to cite and replay a part of the remarks by World Economic Forum head Klaus Schwab, where he outlines what attributes are needed in order to beome the new “Master of the World.”

However, the more interesting, buried lead in his remarks was his talking about the new power structures within global government.  He literally says multinational corporations are the power centers for global government in the same way as nations like India.  First, the soundbite everyone will discuss. WATCH:

.

But don’t get too hung up on that one aspect of his remarks.  The full speech is below, I suggest listening to it all, and pay particular attention at 04:50 where he talks about “the political transformation“.

Prompted, just hit play:

…”We are moving from a world more or less dominated by one super-power, into the patchwork of a multi-power world. With one superpower, a competing superpower, aspiring superpower like India, middle powers, but also rogue states, companies who have become global powers, technology companies – social media.”…

Feb 15 2023

War itself is a Crime – it is legalized mass murder Re-


Armstrong Economics Blog/Ukraine Re-Posted Feb 15, 2023 by Martin Armstrong

The Ukrainian people WRONGLY believe that Putin is their enemy. You are looking in the WRONG direction. The Ukrainian people had better overthrow Zelensky fast before they lose their entire country and could come by April 26th. The US Secretary of State, Antony Blinken, just confirmed that he could care less about all the civilian deaths in Ukraine. This is a Proxy War against Russia and nobody actually cares at all for the Ukrainian people. Statistically, twice as many civilians die in wars than soldiers. For God’s sake – OPEN YOUR DAM EYES!

Blinken actually said that any peace deal between Ukraine and Russia that relinquishes the Donbas in exchange for peace will ‘open a Pandora’s box around the world.‘ First of all, this is the standard Neocon propaganda that somehow Russia really wants to conquer all of Europe. That is clearly total nonsense. Those days of occupying foreign lands are all in the base and were part of the old Imperialism Theory – the more land you have the wealthier you will be. The British Empire collapsed and that theory failed.

More importantly, he wants the Ukrainian civilians to die for his political policies against Russia. YOu are to sacrifice your future, your life, and your country. Putin is not your enemy, it is the West that is willing to sacrifice all Ukrainians for their political agenda.

The Russian people no more support such a war than the American people. Harry Patch, the last surviving veteran from World War I who is 11 years old, had the best suggestion for war.

” I felt then, as I feel now, that the politicians who took us to war should have been given the guns and told to settle their differences themselves, instead of organizing nothing better than legalized mass murder.”

The Ukrainian people voted for peace – that was the promise of Zelensky. He has been nothing by the Angel of Death and when Ukraine has finally become its own sovereign state in 1991, Zelensky has thrown that all away and only waged war for the Donbas which is occupied by Russians in a civil war instigated by the American Neocons led by John McCain. I am warning you, our computer is projecting that Ukraine will exist no more. You are throwing it all away for the Donbas. This was not what you voted for and you have no right to vote now to even end it.

Feb 15 2023

JP Morgan to Create Ukraine Fund


Armstrong Economics Blog/Turkey Re-Posted Feb 15, 2023 by Martin Armstrong

QUESTION: Mr. Armstrong, JP Morgan seems to be cutting a deal with Zelensky to create an infrastructure fund to rebuild Ukraine. How can they create such a fund when the war is ongoing? Something does not seem right. Is this another scam like FTX?

WL

ANSWER: Stay away from this fund. Do NOT invest 10 cents. Yes, you are correct, you do not repair the infrastructure when the war is still ongoing. That makes zero sense whatsoever. Worse still, Ukraine will not survive as a nation-state anyway. Zelensky makes sure he has enough stashed offshore to make his getaway when the curtain falls. They can hand them tanks and planes and NATO troops will really be the drivers. The West has ZERO regard for the Ukrainian people. If they cared about what was really going on, they would let Zelensky enter peace talks.

They will keep this war going until every Ukraine is dead. There will be NO Ukraine. Their dream of having their own sovereign state will vanish with the last breath of the last Ukrainian when they fall on the battlefield. This is a pointless war all for a strip of land that has been historically Russian for centuries.

Whatever money you invest in such a fund will be 100% lost.

Feb 15 2023

Depression Scrip – Coming to a Region Near You


Armstrong Economics Blog/Cryptocurrency Re-Posted Feb 15, 2023 by Martin Armstrong

QUESTION: At the WEC, you said as the nation breaks apart, the most likely course of action will be the creation of local currencies. You also said you would post a catalog of Depression Scrip. I have not seen that. Can you post that, please?

Thank you for a great WEC. Always learning something new.

GJ

ANSWER: Sorry. I may have forgotten to publish that because I searched Amazon and could not find it. It was published back in 1984. Because Depression Scrip is not a huge field of collectors largely because most have never heard of the existence of private currency during the Great Depression, this book is quite rare. You may find some used copies that go for $125 or more.

I have studied the subject from the standpoint of economics. During the reign of Tiberius (14-37AD), he was very frugal and as such there was a shortage of money which led to a Financial Panic in 33AD. During such periods, private money surfaces as a necessity. This is why history repeats because human nature never changes. It will always respond the same way.

Here is private money from the Panic of 1837. The denomination reads 12 1/2 cents. This was issued by a Coffee House. Here is a half-penny issued by the New York store of Macy’s in 1876 following the Panic of 1873.

Throughout history, we see the very same reaction each and every time. I have collected a large number of private currencies covering the various financial waves of panic since Roman times. It has been a critical part of being able to forecast what takes place during these events. The common denominator is always humanity since we never change for thousands of years. We only progress in terms of technology – not our human emotions.

Here is private scrip issued by the San Francisco Clearing House where transactions were settled in the bond and stock markets. The backing was the private shares in companies. This was the Panic of 1907.

Here is another issued in 1908 in Augusta, Georgia. It was the Panic of 1907 that really we began to see widespread stock exchanges issuing money that began because if there was a shortage of cash, you could not conduct any business whatsoever since it was impossible to pay.

Here is the Chicago Clearing House which issued private money during the Great Depression in 1933. We find various stock exchanges issuing private currency in times when there was a shortage of money because people were hoarding their cash in times of uncertainty.

This was the very first Depression Scrip I ever saw and immediately purchased it. This opened the door in economics for me to understand how things function during a great crash. What took place during the Great Depression was that there was such a shortage of cash, over 200 cities began to issue their own currencies just to enable transactions to take place. Businesses could not hire people because there was no available cash to pay them

There are catalogs available in German concerning the NotGeld, private issues of currency, during the Hyperinflation of the 1920s. Once again, it does not matter what nation or culture. The same human response will unfold every time.

As the United States breaks up, as is the case in Europe, we will see currencies appears on a regional basis. This is how it will always work. I spent more than two decades investigating these trends and collecting scrip from all financial crises going back to ancient times. Without access to these examples, there is just no economic historical account that has ever tied all of this together. I had to explore this all on my own.

Feb 15 2023

The Real Debt Crisis is Here


Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted Feb 14, 2023 by Martin Armstrong

QUESTION: Marty, Ever since the debacle in London with the long-term debt, there have been whispers in NYC about how the demand for long-term is drying up. When this becomes critical, is that when the whole thing comes crashing down?

KW

ANSWER: That was the real gist of Yellen’s speech back in October of 2022. Of course, the US press will never elaborate on this problem until it smacks them in the face. Yellen publicly admitted that the Treasury asked the primary dealers of US government debt for their views on the merits and limitations of a buyback program. The Treasury Borrowing Advisory Committee, made up of market participants, highly recommended considering the move because the demand for long-term was declining.

Yellen herself publicly acknowledged the decline in trading volume in 20-year bonds, which they reintroduced in 2020 thanks to COVID. Quoting from her direct comments:

“The 20-year Treasury is an area, an issue where there’s been less liquidity — but we haven”t made any decisions about it.” 

Even the Securities Industry and Financial Markets Association came out and publicly also stated last October that there had been episodes of illiquidity. This was the same problem that created the Crisis in the Long-term British gilt market.

Institutions do not want to buy the long-term in the face of (1) rising interest rates to fight inflation, and (2) unlimited handing of money to Ukraine that will NEVER come back for Ukraine is a black hole and reliable sources are deeply concerned that Ukraine will lose and exist no more.

The escalation in debt on the horizon with World War III is beyond the capacity of the Primary Dealers to buy.  They are strained now with the debt expansion for socialism, then Ukraine, and add War, this system is cracking NOW! The Primary Dealers cannot buy more debt than their balance sheets allow. The “whispers” running around have been on the street. The press has not articulated this for (1) it’s above their pay grade to comprehend, and (2) they cannot dare report the truth.

Feb 15 2023

Consumer Price Index Increases 0.5 in January, 6.4% Annual Inflation Rate


Posted originally on the CTH on February 14, 2023 | Sundance 

The Bureau of Labor and Statistics released the January consumer price index today [DATA HERE] reflecting what you already know.  The overall inflation rate stands at 6.4%, after the anniversaries of the first two waves of price increases have now tolled.

Inflation is the measure of price increases over time.  Following two years of massive jumps in price, we are now cycling through and comparing current prices to the previous period when prices had already skyrocketed.

This gives a false impression of price moderation (hindsight inflation); however, the price of goods and services is significantly higher, and those prices will not drop. The higher prices are now embedded in the economy.

After a brief respite, a plateau, in energy price increases over Nov (0.5%) and December (0.4%), the January energy prices began climbing again (0.6%).  This is what we have all noticed in the past three months.

Additionally, “shelter” costs, rent and housing, continue to increase in price (0.8%, January). Overall shelter costs now +7.9% for the 12 months preceding January, 2023, with rents up 8.6% for the period [Table-1].

We have also cycled through the anniversary of the first two waves of massive food price increases, ending January 2022.  Despite that cycle, food prices still show an increase of 10.1% for the preceding 12 months. Cereals +15.6%, dairy +14.0%.  These food price increases are on top of similar jumps in the period that preceded January ’22.  Most of these volatile food price increases are attributable to the overall scale of energy and transportation costs.  These prices will never reverse.

The issue is compounded because the inflation rate is still far exceeding the rate of wage growth.  This means workers and working families are going backwards and spending more than they earn for the exact same housing, food and energy products they were purchasing a year ago.

This wage squeeze means little to no disposable income, which then applies to the rest of the household checkbook economics.  With less disposable income, fewer non-essential products and/or services are purchased by working families.  This situation creates the snowball effect of lessened overall economic activity.

(Via CNBC) – […] Rising shelter costs accounted for about half the monthly increase, the Bureau of Labor Statistics said in the report. The component accounts for more than one-third of the index and rose 0.7% on the month and was up 7.9% from a year ago. The CPI had risen 0.1% in December.

Energy also was a significant contributor, up 2% and 8.7%, respectively, while food costs rose 0.5% and 10.1%, respectively.

Rising prices meant a loss in real pay for workers. Average hourly earnings fell 0.2% for the month and were down 1.8% from a year ago, according to a separate BLS report that adjusts wages for inflation.

While price increases had been abating in recent months, January’s data shows inflation is still a force in a U.S. economy in danger of slipping into recession this year. (read more)

According to the wage report: “from January 2022 to January 2023. The change in real average hourly earnings combined with an increase of 0.3 percent in the average workweek resulted in a 1.5-percent decrease in real average weekly earnings over this period.”  Workers are working longer hours, making slightly more pay, but the rate of inflation means their actual “real wages” are still dropping.

The way to break out of this cycle is to first unleash the U.S. energy sector and drive down the costs of oil, gasoline, diesel fuel, home heating oil, natural gas and electricity rates.  However, the entrenched nature of the climate change ideology, blocks the professional political class from providing the energy sector relief.  Both Democrats and Republicans want the Joe Biden “green new deal” energy policy.

FUBAR!