Tag Archives: oil

Mar 15 2018

The Resistance to Change is Why We have Panics


Armstrong Economics Blog/Forecasts

Re-Posted Mar 15, 2018 by Martin Armstrong

COMMENT: I have been following your blogs for the past two years and have attended the past two WECs. I read with interest your continued comments on CALPERS and its pension mismanagement. I’m an attorney advisor and a client disclosed a few months ago that they had purchased $1m in municipal debt on the recommendation of their broker. They were complaining about undisclosed fees. I asked them why they would purchase muni bonds in a rising interest rate environment, they said it was to balance their portfolio with bonds. They also expressed some amusement that I purchased a house in Florida. They didn’t sell right away and were deaf to any discussion about the status of fiscal irresponsibility in CA, particularly the Democratic control of all levels of government. So I kept harping on the rise in interest rates, and they finally liquidated their entire muni bond position after rates did start to creep up. Trying to explain any historical info that you provide was a non-starter since to sell their real estate would be a big inconvenience and they don’t like the idea of changing their lives that much. It reinforces that people are unwilling to change until the crisis hits and no doubt they’ll rush out with everyone else at the same time. Hard to move that mentality unless people have a cycle-oriented view.

RDE

REPLY: Of this is exactly the problem. I have often spoken how I go to high level meets in various governments. They know what we are forecasting, but to claim I am a “governmental advisor” is in my view a misrepresentation. True, I am called in many times before a crisis. Despite the fact I have warned them in advance, nobody seems to do actually anything UNTIL the crisis hits. So I view myself more as a canary in the coal mine. They seem to consult me ONLY to see if I have changed my mind and/or our forecast. Only one country has ever done anything I told them in advance and they are in Asia. Not a single country has ever done ANYTHING I have advised in advance, They have listened to me ONLY in a state of PANIC.

Anyone who portrays themselves as some advisor to government is misrepresenting the facts. Governments will NEVER listen to avoid a crisis. They ONLY act because of a crisis. For example, I was called in back in 1985 when they were using people to pretend that experts agreed with forming G5. Nobody that I heard agreed and that is when I wrote to President Reagan (see:Martin Armstrong to President Reagan October 25, 1985 ).

The response from the White House said thanks, but no thanks.

After the Plaza Accord in 1985, then they pulled the Louvre Accord to try to stop the volatility. They were stunned when the markets kept going despite the fact that the governments tried to stop the decline of the dollar.

Then when the Crash of 1987 came. suddenly they wanted the research and amazingly conceded that the number one problem was the rise in volatility I had originally warned they would create. So nobody EVER listens until the CRISIS hits. This seems to be human nature. This is why I do what I do. Walking from meeting to a meeting among governments is fruitless. They will NEVER prevent the Crash & Burn. It is just not in their nature nor human nature.

This is what the old saying means: You can lead a horse to water, but you cannot force him to drink. It just seems to be part of humanity. There is just no changing it this seems.

Mar 15 2018

Repetitive Patterns in the Money Supply – Will Coins Become Extinct?


Armstrong Economics Blog/Economics

Re-Posted Mar 15, 2018 by Martin Armstrong

Inflation over time raises the cost of raw metal and we see that such coins vanish from the money supply. Britain is the latest in line to eliminate the 1 & 2 pence coins. They are costing more to produce than they are worth. I have written about the monetary reform Act of 1857 when the penny was drastically reduced in size. Canada eliminated the penny as well.

The United States dropped copper from the penny in 1982. Today, the penny is made of 97.5% zinc. It is copper-plated to give the appearance that it is still really copper. Throughout history, the supply of copper, gold, and silver, have all risen and fallen at different times based on their own cycle. Where the Persians had excess gold, the Greeks only had silver mines. The Romans had neither silver nor gold and began their monetary system with bronze.

We can see how the three empires began with gold, then silver, and finally bronze and modern society turned to paper starting with the Chinese during the 13th century. The main coin of the Persians was known as the gold Daric, whereas the dominant coinage among the Greeks was the silver Athens tetradrachm known as the Owl. The Romans were the last to depart from the Bronze Age. Their coinage remained bronze until silver was introduced and struck in Greek denominations beginning in 280BC, which was just one 51.6-year wave from Alexander the Great (336-323BC).

As-Decline (1)

 

We can see the same process of the rising cost of copper that prevailed during the early Roman Republic. The Roman As drops from 280BC with a weight of 341 grams to 10.6 grams by the time of Augustus (27BC-14AD). The drastic decline was been 280BC and 115BC, which was about 19 waves of 8.6-years.

While we see the same process of a decline in Roman silver denarius into the 3rd century, what emerges is always the effort to reform. The Roman Emperor Diocletian (284-305AD) reintroduced silver coinage as well as bronze. Once again, we see the gradual reduction in the bronze coinage while the silver and gold were not affected.

The bronze coinage simply keeps reducing as we see what is going on today. In 348 AD, a new bronze denomination was also introduced known as the “centenionalis” in a monetary reform carried out by Constantius II (337-361AD) with an initial weight of 6.6 grams. The weight almost immediately began to decline rapidly to 4.3 grams. He also introduced the half-centenionalis, which seems to continue to be produced and eventually becomes the standard until about 360AD. Despite the noble effort, the inflationary trend continued and the value of bronze kept rising forcing the discontinuation of this denomination 354 AD after just 6 years (one volatility cycle). This was then replaced by the reduced bronze denomination of about half the weight known today simply as the AE3 or half-centenionalis.

During the reign of Julian II (360-363AD), he attempts yet another monetary reform trying to restore the original Folles of Diocletian known as a Double Centenionalis or a Majorina. This new denomination bronze denomination was 28mm in diameter with a weight of 8 grams. This monetary reform lasted unmolested until about the reign of Arcadius (383-408AD). For about 19 years, the Double Centenionalis remained fairly true to its weight. When we see once again usurpers begin to rise in the West such as Magnus Maximus (383-388AD) in Britain and the usurper in Rome itself of Eugenius (392-394AD) where the bronze coinage is reduced to a tiny token with a weight of 0.94 grams.

From about 400AD until the final collapse of Rome in the West during 476AD, bronze coinage is poorly struck and typically only tiny 1 gram coins. Many emperors did not even strike bronze coinage. When the Vandals from North Africa invade and sack Rome3 during 455AD, the word today is still used “vandalize” which refers to the events at that time. Copper was scarce so the Vandals stripped the roofs of Roman buildings which had been adorn in copper to shine brightly as if it were gold.

Therefore, throughout history, the cycles between the three metals are significantly different and thus we see periods during which bronze if rarer than gold or silver and at times each metal comes into excess supply and shortages. This is one primary reason any attempt to establish fixed ratios has always failed without exception. We are following the same path. Soon, all metal will be worth too much to use for coins.

Mar 14 2018

Is it St Mark or Alexander the Great Buried in Venice?


Armstrong Economics Blog/Ancient History

Re-Posted Mar 14, 2018 by Martin Armstrong

QUESTION: I just returned from Venice and I was told that they stole the bones of St Mark from Egypt and built a church there for them. The four horses on the Church they stole from Constantinople. It seems a bit strange that they would go take relics from somewhere else. Do you have any comments on the Venetian Empire and their kleptomania?

JE

FourHorses

ANSWER: Venice had extensive trading connections with the eastern Mediterranean regions as well as an off/on relationship with the Ottoman Empire. Venice was the medieval center for the trade in antiquities as well as ancient coins. They loved history and it was a serious business in Venice. The Venetian gold ducat even rose to be an internationally accepted coin. This pictures St Mark standing giving a gonfalone to the kneeling doge (head of Venice). So indeed, St Mark was the center of Venetian culture. The four horses were from a chariot full size driven by Constantine which once stood in Constantinople before the Venetians conquered the city. They took just the horses back to Venice.

This interest in antiquities and relics first began in the Middle Ages and initially was focused on holy relics, which included removal of the bones of St. Mark from Alexandria in 828AD and moving them to what became known as St Mark’s Square. Most of the important early coin collections were actually formed through Venice. Andrea Loredan was a patrician of an old family of Venice dating back to the 12th century that occupied hereditary seats on the Great Council from 1297 onward. The family still exists today with the Palazzo Loredan Cini at Campo San Vio. Andrea Loredan was a serious coin collector who ordered an illustrated list of all his coins to be made in 1560 in order to help with their sale. A reproduction of that list has been produced by the American Numismatic Society – Irritamenta: Numismatic Treasures of a Renaissance.

With respect to the mummified body of St Mark, there is still a controversy that the remains are not that of St Mark, but Alexander the Great. Three early Christian sources stated that St Mark’s body was burnt after his death. As the story goes, the pagans seized Saint Mark in Alexandria, Egypt, when he was serving the Liturgy and beat him, dragging him through the streets and threw him in prison. On the following day, the crowd again dragged him through the streets to the courtroom, but along the way, Saint Mark died. The pagans were so angry and the Egyptian tradition was to preserve the body, so they wanted to burn the body in disrespect. It is said that when they lit the fire, everything grew dark, thunder crashed, and there was an earthquake. The pagans then fled in terror. Some Christians then took up the body of Saint Mark and buried it in a stone crypt on April 4th, 63AD.

During the year 310AD after Constantine, I the Great becomes Emperor in 307AD and two years before the Battle at Milvian Bridge on October  28th, 312AD, a church was constructed over the relics of Saint Mark. The Pope prayed a prayer on the grave of Saint Mark when the church was then a little chapel on the eastern coast containing bodies said to be of Saint Mark and some of his holy successors. The church was later enlarged in the days of Pope Achillas, who was the 18th Pope.

After the Siege of Alexandria in 641AD, the tomb of Saint Mark was no longer in Christian hands. The church was greatly ruined in 641AD when the Arabs invaded Egypt. Then in 680AD, Pope John III rebuilt the church. In 828AD a group of Venetian Christian merchants traveled to Alexandria and obtained the body of Saint Mark. As the story goes, these merchants used pork to prevent the Islamic authorities from inspecting what they were transporting. The Venetians and the body of Saint Mark managed successfully to make its way to Venice.  The church was destroyed again in 1219, during the time of the crusades, and was rebuilt once more. However, during the 16th century, the French explorer Pierre Belon mentions the founding of the church in 1547.

The other tomb of a mummified person in Alexandria was that of Alexander the Great. The location of Alexander the Great’s tomb has remained a great mystery. After the death of  Alexander in Babylon, the possession of his body became a subject of negotiations between his generals. Where to bury Alexander became a controversy. Aegae was one of the two originally proposed resting places. The body, however, was stolen en route by Ptolemy I Soter, the general who took Egypt. According to contemporary records for the years 321–320 BC, Ptolemy initially buried Alexander in Memphis. Sometime during the early 3rd century BC, Alexander’s body was transferred from Memphis to Alexandria, where it was reburied in a new tomb. It was this tomb that became a major tourist destination for hundreds of years.

Caracalla-B1Julius Caesar paid his respects to the tomb of Alexander the Great. The first Emperor of the Roman Empire Augustus declined the opportunity to visit any tombs saying that he came to see a King and not a bunch of dead people. Emperor  Caracalla (198-217AD) had seen himself as the reincarnation of Alexander the Great. Caracalla even retraced Alexander’s route to Egypt however and in 215AD, Caracalla was warmly received when he visited Alexander’s tomb. For some unknown reason, he slaughtered many of Alexandria’s inhabitants shortly thereafter. It is known that Caracalla apparently left with a piece of Alexander’s body armor. According to chronicler John of Antioch, Caracalla removed Alexander’s tunic, his ring, his belt with some other precious items and deposited them on the coffin.

When John Chrysostom  (349 – 407AD), the Archbishop of Constantinople visited Alexandria in 400AD, he asked to see Alexander’s tomb and remarked, “his tomb even his own people know not”. Later authors claim to have seen the tomb during the 9th century.  Others claimed to have visited a sepulcher in the center of Alexandria that was still venerated as the resting place of Alexander. This seems to be unlikely given the fact that the Christians sought to destroy anything that was a Pagan worship. Therefore, credible historical references of Alexander’s tomb continued only until about 390AD, and then vanish.

It has been argued that two years after the last historical reference of Alexander’s tomb, another tomb in Alexandria seems to surface after 310AD. But it is not the tomb of Alexander, the tomb belongs to Saint Mark. Saint Mark had been dead for over 300 years. Some have suggested that the mummified body of Saint Mark could, in fact, be Alexander the Great. The missing link is the question that if the Christians did indeed rescue the body of St Mark from the pagans and it was not burned, then was it mummified in Egyptian tradition or simply buried? If in 828AD a group of Venetian Christian merchants took a mummified body, was it really St Mark? Could the pagans have rescued Alexander’s body from the Christians who would have certainly destroyed it in their rage and placed it  in a church pretending it was St Mark to protect it?

The Copts (Greek Orthodox Christians) believe that the head of St. Mark remains in a church named after him in Alexandria, and parts of his relics are in St. Mark’s Cairo’s Cathedral. Some believe that the rest of what are believed to be his relics are in the St Mark’s Basilica in Venice, Italy. However, back in 1063, during the construction of a new basilica in Venice, Saint Mark’s relics could not be found. According to legend, in 1094, the saint himself revealed the location of his remains by extending an arm from a pillar. The newly discovered remains were then placed in a sarcophagus in the basilica pictured here. There remain many questions about the body in the church. In Egypt, every year, on the 30th day of the month of Paopi, the Coptic Orthodox Church celebrates the consecration of the church of St. Mark and the appearance of the head of the saint in the city of Alexandria. This takes place inside St. Mark Coptic Orthodox Cathedral in Alexandria, where the saint’s head is said to be preserved.

The whereabouts of Alexander’s body remains one of the great mysteries yet to be resolved. Some argue it was buried in a remote community outside of Alexandria. A DNA test of the body in St Mark’s of Venice would resolve the issue and settle the question is the person of Greek or Semitic origin? Naturally, such a test would never be allowed for what if it showed it was the body of Alexander the Great? Can you imagine what that would do to Venice?

Mar 13 2018

Direct Democracy – Is it Possible?


Armstrong Economics Blog/Basic Concepts

Re-Posted Mar 13, 2018 by Martin Armstrong

 

The advancement in technology today certainly allows us to scrap the Republican form of government with pretend representation of the people by career politicians. There is no reason we cannot vote from home on every bill and that no bill may be merged with any other subject matter. There should be no sneaking spending for military tucked inside a Clean Water Act. Direct Democracy can work ONLY if it respects a Bill of Rights that precludes SOCIALISM no matter how noble the goals. It must also EXCLUDE all legislation to do with religious morals so no outlawing abortion or even prostitution no matter how much it will offend some. Do not forget that is another religious group get control, they will reverse it and retaliate again their opposition. No law will EVER eliminate either action and the most one can do is to restrict where it is and require a license to ensure it is conducted in a safe environment and leave God to judge.

Every tourist who has ventured to Amsterdam visits the famous red light district where girls are in shop windows typically wearing bathing suits (not naked). The street is packed probably with 99% tourists rather than customers, but it is famous, safe for both the people and the girls, and certainly a curiosity. They are not walking down the streets as they still do in LA, New York, Chicago, or Boston. Girls are not abducted and forced into prostitution. There have been movies on that subject like TAKEN, which are very real.

I have often told the story about flying back from London with my girlfriend into JFK and I went to the curb waiting for the car and she went to the bathroom. There was a very famous Supermodel I did not know at the time standing there and she started to chat. I had flown in on the Concord and she knew that but she had stiletto high-heels and a very short leather mini-skirt. I did not notice her on the plane so I assumed she was a hooker looking to pick up passengers when they land in NYC, which is very common. When my girlfriend came out and saw me talking to her she got jealous. She said I can’t leave you alone for 5 minutes you are talking to a supermodel. I said what are you talking about? She was a hooker! I was just being polite! She then said she was on the plane. Based on the provocative dress, it seemed to me like the standard hooker uniform in New York City. I remember staying the Excelsior Hotel on the Via Vittorio Veneto during the 1970s and having to push through prostitutes just trying to walk down the street to go to dinner. NYC 42nd street used to be that way as well.

Direct Democracy will never work once you cross the line into perceived morality. One person’s moral principles will differ from another. When I travel to the office in Abu Dhabi, I am impressed that you see the freedom of religion in play. There are men with their four wives in burqas and women dressed in western style. Neither objects to the other. Women are free to wear two-piece bathing suits on the beach and this photo I took shows. They cannot walk the streets or go to a mall dressed like that, but there are places in the USA that object to that as well.

We cannot judge others by our own moral beliefs. That is God’s role – not man. Yes, there is the famous saying of Arnaud Amalric (died 1225) who said:  “Novit enim Dominus qui sunt eius.” (“Kill them. For the Lord knows those that are His own.”). I have previously written about the right to Freedom of Religion which means we must remain free from moral laws imposed by a majority upon a minority. That is why the Christians were persecuted and when they became the majority, then the Christians persecuted the pagans. We kill so freely proclaiming we are doing God’s will and yet so many claim to know God’s will. We have terrorists waging Holy Wars in the name of God whose will they have interpreted. This is why I wrote:

“This question is probably the greatest conflict morally that humanity faces, with the likelihood of any solution being impossible. If Mormons want to have more than one wife, that is fine, provided it is a local issue. Others who disagree have no right to say they are wrong and use the federal law to prosecute them. The freedom of movement is essential for if you do not believe in the culture of a local region, you should be free to leave and join a community that you agree with. Without this respect, society cannot function free of conflict, violence, and war. Perhaps this is just our fate. To some extent, we need to stop judging others by what we believe and let God sort that out on Judgement Day.”

The Ten Commandments form the core of fundamental principles that are actually essential to the foundation of society. The prohibition against killing can have no exception that it is OK to kill as long as the head of state says so. Every person has the right to self-defense, but not to invade another’s home or nation. There can be only a single standard for which a person’s liberty may be restricted, which was best articulated by John Stuart Mills:

“That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant … Over himself, over his body and mind, the individual is sovereign.” (On Liberty)

There was the Prohibition period where women demanded alcohol be outlawed because men became drunk and failed to be a proper husband and/or father. This was certainly not the majority of men, but they then imposed this law upon them all. All they did was fund organized crime and that led to countless killings. Many farmers were imprisoned for making their own alcohol.

You simply cannot legislate morality. Only a fool will try. This is what is so deeply wrong with SOCIALISM, for it defies the Ten Commandments, created hatred and divides the nation, has always led to more bloodshed than any other division (Communist Revolutions) and has hopelessly condemned society to a violent cycle of endless war.

When the economy turns down, class warfare rises and is used as the excuse to punish those who have more. If we are EVER going to end the cycle of violence, we must begin with a Direct Democracy eliminating career politicians, but it must also be confined prohibitin it to impose any morality by law. There will always be women who prefer prostitution. It cannot be outlawed, but we can license it and restrict it to specific areas as you see in Amsterdam. It is God’s role to judge others – not ours. As soon as one person stands up and demands laws to enforce their personal religious belief, they must respect that they will create a violent response from the opposition. When the opposition gains the majority, then the tables will be turned.

Direct Democracy can work ONLY when restrained from trying to create morality by law. ONLY if someone violates another then the law should apply. As Mills said: “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant … Over himself, over his body and mind, the individual is sovereign.” We cannot legislate morality. The sooner we stop this nonsense, the sooner we will all enjoy true liberty. I must defend someone’s right to disagree and speak their mind, for to deny that person the right to speak will become just a hypocrisy.

Mar 13 2018

US To Become Biggest Producer of Oil in the World?


Armstrong Economics Blog/Energy

Re-Posted Mar 13, 2018 by Martin Armstrong

By next year, the US will become the world’s largest oil producer thanks to the fracking boom. Perhaps the US outdid the current Primus Russia earlier this year, said International Energy Agency (IEA) chief Fatih Birol: “The growth of US shale oil is strong and the pace is very high – the US will soon become the world’s largest oil producer.”

At the end of 2017, US oil production rose to over ten million barrels a day (bpd). As a result, the USA production passed that of Saudi Arabia, which has been the world’s largest exporter of oil. It appears that US oil production will continue to expand going into 2020 before we see a correction thereafter. There is no doubt that the US has significantly changed the global oil market. This has placed tremendous pressure on Organization of Petroleum Exporting Countries (Opec) to reduce its production in an effort to stabilize the market price of oil. Opec and other leading producers have agreed on a decline in production since the beginning of 2017. Oil prices have since increased.

Aug 4 2014

Why everyone wants a “Piece” of the Pie — “The South China Sea”


Why China Wants Control Of The South China Sea In 10 Charts

Re-Post from Zero Hedge
Tyler Durden's picture

Submitted by Tyler Durden on 08/02/2014 20:00 -0400

A stunning $5.3 trillion in goods cross South China Sea every year, and as we previously explained, 190 trillion cubic feet of gas reserves sit below the ocean floor – enough to replace China’s natural gas imports for over a century – so it is hardly surprising that the world’s largest importer of oil wants control of such a critical region.

 

As Bloomberg illustrates in these 10 incredible graphics, everyone has a claim on the same territory and tensions are rising. “The Chinese believe they have the right to be a great power,” said Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. “What we are seeing is a hardening of China’s stance about its place in the world.”

 

 

What’s at stake…

 

The Claims…

 

The Chaos…

 

As Bloomberg concludes,

The ambitions of China’s leaders don’t stop at the nine-dash line.

 

“China’s ultimate long-term goal is to obtain parity with U.S. naval capacity in the Pacific,” said Willy Wo-Lap Lam, adjunct professor at the Centre for China Studies at the Chinese University of Hong Kong. “This is a long-term proposition. At this stage the Chinese understand they don’t have the capacity to take on the U.S. head-on.”

 

“China is testing the limits of America’s alliance relationships in Asia,” said Storey. “By pushing and probing and essentially showing that the U.S. isn’t willing to respond to these provocations, it is undermining those alliances and hence ultimately U.S. credibility and U.S. power over the long term.”

 

There are two schools of thought on the eventual outcome of China’s ascendancy, according to Rory Medcalf, director of the International Security Program at the Lowy Institute for International Policy in Sydney.

 

One argues that dominance of the South China Sea is an inevitable outcome of China’s economic and military expansion. The other says that China will have to curb its ambitions or risk provoking a conflict, even war, which could draw in the U.S.

 

It’s not possible to judge which scenario ends up proving right, said Medcalf. “The story is only beginning.”