Posted originally on Mar 27, 2025 by Martin Armstrong
Treasury Secretary Scott Bessent continually denies that tariffs will become a tax on consumers. When asked if the Trump administration was comfortable with the rising cost of goods, Bessent declared, “the American dream is not ‘let them eat flat screens.’”
“Not at all,” Bessent replied. “What I’m saying is the American dream is not ‘let them eat flat screens.’ If American families aren’t able to afford a home, don’t believe that their children will do better than they are [doing], the American dream is not contingent on cheap baubles from China, it is more than that. And we are focused on affordability, but it’s mortgages, it’s cars, it’s real wage gains.”
If tariffs become more widespread the inflationary effects will cause the affordability of items to rise. No one can afford to repair their homes when lumber costs are soaring. Builders are forced to raise costs on new housing starts, for example, when materials rise in expense. The issue here is not the demand for cheap Chinese goods but the demand for essentials like energy, steel, etc.
Auto prices are at an all-time high. We steered away from pushed EVs on the public but are refusing to permit cheaper Chinese autos in our country. Autos are being targeted hard by tariffs and manufacturing costs have becoming astronomical. China is able to produce cheap autos because manufacturing costs are far less.
Treasuries impact mortgage rates and are largely driven by supply and demand for US government debt. When inflation rises due to tariffs, bondholders demand higher yields to offset the decreased purchasing power. This leads to declining bond prices and rising interest rates across the board, including for mortgages.
As for wages, businesses will face higher operating costs due to tariffs and have less revenue to pass on to employees. Worse, businesses seeking to avoid reciprocal tariffs may simply leave the US.
Politicians should not quote Marie Antoinette. The French people made her pay with her head when the economy turned down. Bessent and others advising Trump fail to understand the broader impact of stifling free trade. Furthermore, these statements are out of touch with the cost of living crisis as informed Americans know that tariffs will impact far more than the cost of a flat screen TV.
Posted originally on Mar 27, 2025 by Martin Armstrong
They are preparing the European public for the inevitable—European troops on the ground in Ukraine. “Will you fight for Germany? None of us wants war, but we already have to prepare for it. How ready are we really?” German magazine Stern states on its latest cover.
Germany has been discussing reintroducing mandatory military service since the war began—a war that was never Germany’s battle but always the obligation and responsibility of the German people. Over a decade ago, Germany knew they were going to fight Russia and Ukraine will be their entryway. I discuss this in detail in my book, “The Plot to Seize Russia” in detail. The West could not simply enter Russia without giving the public a reason for warfare and creating countless fake flags, demonizing its opponent through propaganda, and attempting to weaken its military through a proxy war. We are now embarking on the beginning of the third world war, thanks to the manipulation of the elites in power who have no regard for human life.
German Defense Minister Boris Pistorius said in May 2024 that he was “convinced” that Germany “needs a form of military conscription.”While there is no conscription, Germans are required to register for a potential draft before they turn 18. By June of 2024, I was informed by multiple personal sources that this registration had been extended to include women. One reliable source informed me that her female family friend was sent a notice to register at 59 years old.
The only safe demographic seems to be the 17+ million migrants in Germany. There is a reason that this magazine cover was not forced to feature a diverse individual. Sorry, but most of these male migrants refused to fight for their own nations and were protected by the German government to ensure they never had to.
This sentiment is spreading across Europe, and governments are beginning to warn the people through media messaging that they should prepare for war. The Bundeswehr, Germany’s military, currently has around 262,000 troops, but it would like to boldly increase its size with 200,000 additional troops and will spend €100 billion in a special fund to modernize its military.
European leaders have demonized US President Donald Trump for insisting upon a ceasefire. The world saw him publicly yell at Zelensky for sending hundreds of thousands of men off to die as countless troops perish daily in a war that Zelensky knows he cannot win. Europe is prepared to replenish Ukraine’s military by sending its own soldiers. They have already released the propaganda whereby fighting for Ukraine’s independence equates to fighting for European independence. Trump’s victory may have prolonged the inevitable, but global warfare is indeed inevitable.
Posted 0riginaly on Mar 27, 2025 by Martin Armstrong
The European External Action Service is intended to ensure diplomacy and peace throughout Europe, but the new head, Kaja Kallas, has been promoting the opposite. “[T]he European Union wants Ukraine to win this war” against Russia, Kallastweeted out. Her response prompted ten European diplomats to speak out. “She (Kallas) is still acting like a prime minister,” said one EU diplomat to Politico. The former Estonian PM is a known neocon who was installed in her current position to push the war narrative. Worse, Kallas has aspirations to one day lead NATO.
Kallas has been blinded by her newfound role and overestimates her power. After Zelensky’s infamous meeting with Trump, Kallas declared Trump was unfit to lead the US, tweeting “the free world needs a new leader.” Not exactly the response of a diplomat. She immediately released demands to the 27 European Union members, demanding 1.5 million rounds of artillery ammunition and additional aid for Ukraine. People began calling the €40 billion the “Kallas Plan” as she alone felt that she had the authority to dictate defense spending for the entire European Union.
Her proposal angered many European leaders who saw that Kallas was coercing them into contributing additional aid to Ukraine based on the size of their individual economies. Yet another unelected bureaucrat dictating a blanket policy for Europe. She reacted to the criticism by asking for €5 billion in artillery shells, but everyone is aware she will demand more.
One European diplomat openly praised her extreme measure, stating, “We are in 1938 or 1939,” and “it’s not the time to hold back processes.” Kallas herself said she received “broad political support” despite the pushback from elected European leaders, especially those in Southern Europe unprepared to make a major donation to Ukraine based on a percentage of their GDP. This is part of the strategy to bolster Europe’s military power now that NATO’s top donor is not in favor of World War III.
The European Union is a complete and utter disaster. Brussels is home to unelected neocons who have never had the best intentions for Europe. It is impossible to set blanket policies for 27 nations and expect the repercussions to be equal. Elected officials are overridden by Brussels at every turn, as we recently saw with Hungary being silenced for voting against yet another aid package. Allowing the elected leaders to vote is simply a show as the bureaucrats in Brussels know they hold the ultimate authority. The Kallas Plan and future endeavors of this nature aim to not only destroy Russia, but to destroy Europe financially.
Posted originally on Mar 26, 2025 by Martin Armstrong
There is not a single European leader who has made a statement. All they constantly do is insult and threaten war. NATO Secretary-General Mark Rutte said: “If anyone were to miscalculate and think they can get away with an attack on Poland or on any other ally, they will be met with the full force of this fierce alliance. Our reaction will be devastating,” he declared in Warsaw. “This has to be very clear to Vladimir Vladimirovich Putin and anyone else who wants to attack us.”
They know nothing about military strategy, nor are they interested in peace. Instead, they want war and will create a false flag to achieve that goal. Europe is in very dire condition. Cyclical Storm Clouds are gathering. The Eurozone has reached adramatic inflection point, and the refusal to address the debt consolidation from the outset has put Europe at risk for a severe sovereign debt crisis. But the stakes today are incredibly high. If one member fails, this will disrupt everything, weakening the Eurozone beyond repair.
Constantly threatening war and a single attack on Poland will bring a devastating retaliation if you are pushed to that point. You MUST attack the entirety of the Eurozone. You would need to take out NATO headquarters before they could even run to their bunkers.
Putin criticized Lenin, saying he was not a statesman; he was just a Bolshevik. You can now say the same about all of these European leaders. There is not a single statesman among them. These morons are placing the entire world at risk because they think threats work. History demonstrates that it will never work. They neither understand Russia. Worse still, they certainly do not understand themselves. They have waged a proxy war against Russia via Ukraine and think they can defeat Russia conventionally, and their threats will prevent a nuclear exchange. This proxy war guarantees this will be WWIII.
Posted originally on Mar 26, 2025 by Martin Armstrong
QUESTION: Mr. Armstrong, Nobody has a computer that covers everything. Your forecast at the WEC that the Democratic Party would collapse is unprecedented. Nobody has even contemplated that such a thing could happed. Yet night now this is unfolding. The new polls from NBC News and CNN. The former poll showed that only 27% of Americans held a positive view of the party, with only 7% holding a “very positive” view. Both are record lows for the poll. Then, the CNN results found the Democrats’ approval at 29%, setting the record low for that poll as well.
Is there anything you can say as to how Socrates can forecast what nobody is capable of even thinking about?
Wm
ANSWER: My confrontation with the bankers who told the CFTC to shut us down after the forecast that Russia would collapse in 1998 was predicated on the assumption that the forecasts work only because I have more institutional clients than the NY crowd combined. What they never considered was that just maybe I discovered something profound that the New Yorker called the Secret Cycle.
What I discovered changed my life. There are two paths of research.
(1) The Max Path: You start with a theory and cherry-pick facts to claim you are right
(2) The Adam Smith Path: You observe to figure out how something functions.
You cannot discover what you already know.
The complexity that exists is remarkable. But the precision of how and when events will take place is also astonishing. All economic theories from Marx onward began with the same assumption: that the business cycle is random and that, therefore, the government, via its central banks, can manipulate it to create perpetual prosperity.
I had a nice discussion with Paul Volcker, and he agreed. The business cycle was about 8 years. Both Volcker and Burns concluded that the business cycle always wins. All the theories that try to manipulate society to eliminate the business cycle are out of mind. What I bumped into was not mere complexity but precision that I never expected to discover.
This is Not the First Political Party to Collapse
A significant factor in the collapse of the Federal Party was the anti-state view in favor of centralized federal power. Additionally, there was the War of 1812. For a long time, the Federalist party supported peace with Britain and war with France, whereas the Democratic-Republican party had the exact opposite position. Eventually, British behavior towards the US during its war with France caused anti-British and thus anti-Federalist sentiment. The Democrats have sought to exert power in Washington and dictate policy to the states on issues such as abortion. They have also supported Ukraine and fostered the war against Russia, which was why the Neocons swung to the Democrats.
The Hartford Convention of 1814-1815 was essential in the Federalist party’s collapse. This mostly Federalist convention in New England suggested some constitutional amendments. Still, it was alleged to consider New England’s secession from the Union and a separate peace with Britain, not unlike California. After the war, the convention was widely viewed as an act of treason and a black mark on the reputation of the Federalist party.
What is also overlooked is that the Federalists were essentially a mercantilist party compared to the South, which was agrarian. Alexander Hamilton, along with most Federalists, was trying to raise the status of the United States internationally while still fighting the last war. Thus, the Federalists were pro-industrialization, which was still in its infancy. They say that industrialization would make the United States a more powerful nation in the eyes of the international community. Many wrongly assume that the Federalists were a “conservative” party in the modern sense. Yes, Hamilton was pro-bank and pro-business.
Hamilton also established the National Debt to raise the United States’ credit standing in international eyes. However, he was foremost a federalist, building the United States into a significant power. What is overlooked is that the Federalists were the ancestors of not just the Whigs but also FDR insofar as they saw the federal government had a role in regulating, managing, and controlling society and the economy.
Don’t forget that during the Whiskey Rebellion, a tax revolt in Pennsylvania, George Washington sent troops to kill those who rebelled. That was the essence of the Federalists: dictatorial power from a central command. The Federalists, like Roosevelt, believed in a positive role for the federal government. That is the place the Democrats have occupied today. Biden tried to hire 75,000 IRS agents who would be armed.
Then came the War of 1812, disrupting manufacturing imports to the United States, which led even the Jeffersonian Republican Party to relax its policies toward industrialization. The Federalists had supported Britain for business. But many manufacturers found the laissez-faire of the Republican Party to be more beneficial than the Federalists, whose policy was if it moved, tax it. If it stopped moving, kick it. The War of 1812 killed the Federalists, and more industrialists moved to Jefferson.
Instead of the War of 1812, when the British burned Washington, DC, and the Federalists had supported the British, today we have the Neocon Proxy War in Ukraine against Russia, and some idiots on Capitol Hill wanted to commission a marble bust of Zelensky to stand in the US Capitol next to Washington and Jefferson.
The Democratic Party still refuses to admit that, just perhaps, their radical fringe proposing sex changes in prison for illegal aliens just might have gone too far. Producing comic books on equality and handing them to the Taliban for $$20 million. In the real world, you have to have a feasible business plan. In Washington, the crazier the idea, the more money you get.
Here are the two computer forecast arrays from 2018 and 2024. 2024 was a significant target in 2018, yet the 2021 target was the strongest with a Panic Cycle. That was Biden. That was all she wrote, folks, for the Democrats. They will not exist by 2033.
This chart plots as a percentage of total seats combined in the House and Senate. They peaked out before slavery, and each rally produced a declining trend. Sorry, but this is a bear market. It will be time to turn out the light for the Democrats, and their wacky WOKE agenda is loved only by the extreme fringe. My father was a Depression Democrat. He would never have voted Democrat today.
I am starting with a book on the Economic Confidence Model that I promised I would do to leave for society. I will probably print the first edition myself, for it will be well illustrated and formal publishers don’t like that because it is too expensive to produce. The second edition can be stripped of the illustrations they do not want to print. But I tend to be a perfectionist. It has to be right to put my name on it. I don’t sell advertising here because I do not want to appear to endorse any product.
Posted originally on Mar 24, 2025 by Martin Armstrong
Good news for the people of Mississippi—lawmakers have finally removed the state income tax. Mississippi is now joins Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington, Texas, and Wyoming in eliminating this excessive and predatory taxation practice.
The first income tax was created in 1861 during the Civil War as a mechanism to finance the war effort. In addition, Congress passed the Internal Revenue Act in 1862, which created the Bureau of Internal Revenue, an eventual predecessor to the IRS. The Bureau of Internal Revenue placed excise taxes on everything from tobacco to jewelry. However, the income tax did not last and was not renewed in 1872. In the Springer v. United States 102 US 586 (1881), the Supreme Court upheld the income tax.
The origin of the current income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913. It was on June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax.
Once this Marxist concept of direct taxation was created, then the government must know everything we do, track us for it assumes we all cheat and lie, and in the process, it is hunting money globally to the point that world economic growth has been declining.
Those against Mississippi eliminating the income tax are proponents of big government. They are concerned that the lost revenue will hurt the public sector and low-income residents will be disproportionately burdened as other taxes are likely to rise. Yet, eliminating the income tax will directly lead to Mississippians receiving a larger take-home pay. Businesses, especially small businesses, end up taking on this tax as is passed through from entities to the individual owner who is unable reinvest those funds into his or her company. Businesses will now have the ability to become more competitive and attract a more desirable workforce.
The state has until 2037 to determine how to manage its budget without robbing its citizens and punishing workers. Income tax will fall from 4% to 3% in 2027 and then will see a 0.3% reduction until it is eliminated entirely.
Income tax is a relic of failed economic policies that governments refuse to abandon because it gives them direct control over the wealth of the people. When you tax income, you reduce incentives to work, invest, and innovate. Governments use the tax as a reason to continue perpetual spending that always leads to deficits. States do not need this tax to function. States need to operate within their means to function without punishing the people for fiscal mismanagement.
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