QUESTION: I get up in the morning, make coffee and read your blog. Thank you for your service to humanity.
Ok, so the Democrats want to go back to the 1950’s with 70% tax rates. Does that also mean they’ll reinstate the same deductions that were available back then? For example, passive activity loss rules would go away, personal credit card interest, medical expenses, and job expenses would be deductible, companies could deduct meals and entertainment, vehicle expenses, corporate jets etc. Also, there was a tax credit of 10% of the cost of new and used equipment placed in service. It is unfair to look only at the tax rate without looking at how taxable income was calculated. And how about Social Security tax being applied to a few thousand of earned income.
M

ANSWER: No. They will never put back all the deductions. This is all about raising taxes for their claimed Socialistic Agenda but in fact, as the deficits rise and interest expenditures explode, they will be raising taxes sharply as they always do pretending to be taxing just the super-rich.  They NEVERlower taxes on the middle class. They just point to the rich to raise taxes without any benefit to anyone else. Normally, the play games with the definition of the rich.

The Trump Taxcut denied deducting what you pay in taxes to a state after 10k. They blame Trump for that yet this has been on their wish list for the past 30 years. If the Democrats get hold of the White House and the Senate, you can bet your life they will not change that deduction. They silently all cheered for that – both Democrats and Republicans. The Definition of the rich has always been classified as “household” income. The burden of student loans preventing the youth from leaving home and buying their own house is wiping out the economy. It has reached a 75-year high coming in at a stunning 40%! The impact of this is the call among Democrats behind the curtain to get the IRS to add all the incomes in a household including the children to push them higher into the category of the “rich” which starts at the $250,000 level – not $10 million. The plan will be to raise the taxes on the rich and the define who are the rich. They will NEVER tell you the truth to your face. This is all part of the decline and fall of Western society.

While the BitCoin people have hated me for not agreeing with them that a private currency could displace the currencies of all nations and BitCoin would be the new “reserve currency” killing the dollar, to me they are in serious need of help. They have ZERO comprehension of governmental power and ZERO understanding of what is going on behind the curtain. The IMF has come out and stated that each nation should issue their own cryptocurrency and these fools cheers claiming I am not with it and do not get this new age of technology. Sorry, but these people are really clueless if not perhaps undercover people with a mission to get people willing to surrender their final liberty – paper money.

While cryptobugs advocate gold is dead and BitCoin will conquer the financial world, they miss the point entirely. The IMF is by no means embracing cryptocurrencies for the same reason these people have claimed it will bypass central banks. The IMF is advocating the end of paper money to kill the underground or black economy solely to aid the hunt for taxes and to PREVENT bank runs. If there is no paper money, how can you run to the bank in a panic demanding to withdraw your money? They also argue eliminating paper money will end crime.

Now,  Michael Andrew, the man appointed by the Australian Federal government to lead the ‘Black Economy Taskforce’ at the end of 2016, is arguing for an interim-step.  He believes tracking the currency denomination is the best solution in stopping the underground/black economy and grabbed taxes if you found a $50 or $100 bill on the street and failed to give the government their 50%.

Governments are going broke. They will not listen and instead, they are obsessed with just a solution for the next quarter. They lack any vision of the future and will NEVER tax responsibility for their own mismanagement. Their single solution is to always raise taxes rather than reform. The more they press toward this cashless society the greater the economic implosion. What comes after the elimination of cash and the budgets are never balanced with institution starting to shift to private assets rather than government bonds that pay nothing and present huge risks will be the default on social programs without the corresponding reduction in taxes. This all leads to the inevitable collapse of Western Society just as we witnessed the collapse of Communism in 1989.

Our model is famous for forecasting the collapse of Communism and even the fall of the Berlin Wall (November 9, 1989; 1989.857). The likelihood of Western Socialism surviving as some benevolent government will come to an end by 2041.457. The 1989 Tiananmen Square protests that culminated on June 4th, 1989 (1989.424). This means we should begin to see a sharp rise in civil unrest cyclically speaking beginning October 28th, 2020 going into the US Presidential elections.

The future appears very dark unless we can convince the world governments that they face a hopeless path to secure its power. In this hunt for taxes, they are destroying all liberty. They cannot reasonably pretend to be governments of the people and by the people in a wonderful land of democracy and opportunity when they need to track everything we do and have. Paying a babysitter will be illegal with cash. Society will not run to cryptocurrencies with open arms. We will be forced to return to barter systems.

The total global debt hit a record $184 trillion, which is the equivalent to more than $86,000 per person. That is actually more than double the average per-capita income. People ask me will our solution work? Can we really just end government debt and convert it to cash restricted to investing in domestic companies? I will put it this way. There is absolutely NO OTHER CHOICE!!!!

We either default, which will result in civil war and revolution, or you inflate your way out like Venezuela so your Social Security check will not even buy a cup of coffee. A default will result in war. People will then riot demanding they have been cheated. Inflating the way out is completely different. You paid them what was promised. It’s not your fault it buys nothing.

To inflate the way out requires a completely different set of patterns. Right now, the theory is that WE THE PEOPLE are the problem. If we all paid what the government thinks we should then they will be fine. They increase taxes and increase enforcement and believe it is their divine right of kings to act in this manner. What we are witnessing so far is not the inflation path – but the hardline path that leads to only violence as we are witnessing in France

According to GOBankingRates, to afford a house now in California it requires $89,280 annual salary.  This is the highest in the nation and is a warning that taxes are pushing the limit in California to the point that house will enter a very sharp decline as people keep trying to leave. This chart is interactive and you can click of each state to look at what is required. An interesting exercise. The cheapest state is Ohio where you need an annual salary of 28,800 to survive.

France is now preparing to use chemical weapons against its own citizens around Paris to counter-attack the Yellow Vest rioters as their anti-Macron protests continue after 5 weeks. This chemical is a debilitating powder that can be spread over an entire area of the size of six football fields in ten seconds. So far, the police have arrest well over 150 people and they have used both tear gas and water cannons. President Emmanuel Macron’s administration is showing its increasing desperation to maintain power. The use of such chemical weapons could backfire dramatically.

(see unedited private video postings uncensored)

France is the highest taxed population in the industrialized world. We are receiver numerous accounts from readers there from cities outside of Paris where there are major protests and violence taking place that people have been unable to leave their homes while others report they cannot reach them. It appears that much of the protests outside of Paris are not being reported in mainstream media. This type of media blackout has been standard in hopes of preventing others from joining.

There was a major protest in 1932 known as the Bonus Army were veterans from World War I had demanded the bonus the government promised them. They occupied Washington and then President Herbert Hoover allowed the army to roll in tanks to get rid of the protesters. That even played a major part in Hoover losing the election to FDR. Macron between study his history. There is serious potential here that we are witnessing a major political change coming to France.

QUESTION: Hello,
Since the Fed ‘created’ ‘money’ after 2008 that was then deposited back at the Fed by the recipient banks ( say,75% of it), it is not easy to see why the Fed is to blame for the credit explosion since 2008- nor for the very slow ( like a paralytic centipede) hike in Fed Funds that seems already as I write to be seen as a problem.
Surely it is the banks who truly created the money ( out of nothing as usual) by financing the purchase of EXISTING assets at ever-rising prices (and also consumer spending) rather than new business expansion?
In other words, the fault is at the bottom to be laid at the door of the banks. They created the wrong kind of credit bubble ( not that any such is ever a good idea).
What say you, Sir?
Many thanks
B.

ANSWER: There is a deeper problem that nobody addresses. The entire Keynesian philosophy of increasing the money supply was based upon the practice whereby private money was being created during each crash since 1857. It worked perfectly. Here is a Depression Scrip for $1 to supplement the money supply during a crisis. There was nothing wrong with this concept.

The original design of the Federal Reserve in 1913 was PERFECT!!!!!! It “stimulated” by purchasing corporate short-term paper which created an elastic money supply. The paper naturally matured and thus the money supply contracted. When Congress usurped the Fed in World War I and ordered it to buy only government bonds to fund the war, they NEVER returned the Fed to its original design.

Changing the structure of the Federal Reserve has altered everything. Now the Fed “stimulates” buying government debt EXCLUSIVELY! It buys in that debt it THINKS from the banks, but foreign governments were selling it to them as well – particularly China. Therefore, the money NEVER made it directly into the economy. The banks complained to the Fed so it then created excess reserves DEFEATING the very Quantitative Easing.

Therefore, the structural alteration of the Federal Reserve for World War I transformed the theory of Quantitative Easing into an INDIRECT stimulus rather than DIRECT. They “hoped” the banks would lend but NEVER did. Interest rates did not decline on credit cards and consumer loans in proportion to what the Fed was doing. The entire stimulation theory fails BECAUSE the Fed does not act directly with the economy and relies on the banks.

I have been warning that raising taxes is DEFLATIONARY because you are reducing the net disposable income. Governments simply cannot get that through their head. In Romania where protests over political corruption have been unfolding, the government revealed its plan to try to comply with EU austerity raising they hope 10 billion lei ($2.5 billion US) in extra revenue. The market response has been a dramatic crash in Romanian stocks as they plunged and bond yields spiked the greatest in the past several years.

This is where the austerity is destroying the European economy. Romania is attempting to reduce its budget deficit that is pushing the country beyond critical EU thresholds. This new tax will include a tax on the banking industry. This is having an immediate knee-jerk reaction where foreign investors are bailing out. Using global warming as an excuse as in France, new taxes on energy and telecommunications companies are included. The government is also reducing social benefits in the retirement system also due to the pension crisis which is worldwide.

This is all part of a Global Contagion is the COLLAPSE in Confidence we see into January/February 2019.