QUESTION: These economists who propose this MMT claim that since the U.S. borrows in its own currency, it can print dollars to cover its obligations, and can’t go broke. The theory has won converts among freshman Democrats like Alexandria Ocasio-Cortez as a way to finance such social policies as the Green New Deal and Medicare For All. There seems to be something seriously wrong here. You have taught me to see the world as a whole. I think these people have blinders on and do not take into account foreign ownership of US debt. Would you comment on that aspect, please?
JG
ANSWER: Very good. Yes, we are all connected and these people behind MMT are idiots. This is the same old story that we can just print our way out because we owe money to ourselves. That is a nice naive theory which reflects the ignorance of those behind MMT. At the end of 2018, foreigners owned about $6.2 trillion of U.S. debt or approximately 42% of the total national debt. Meanwhile, the American public/institutions held $16.1 trillion and 23% of the national debt. The sheer numbers available from the government prove what they are saying is NOT TRUE!!!!!! Their theory that MMT is possible because we borrow from ourselves is just absurd.
They assume that we can borrow indefinitely and just print money to cover the expenses. The fallacy here involves the simple fact that 39% of the debt is held by foreigners. That reality exists BECAUSEthe dollar is the reserve currency as Europe is drowning in its socialism. Federally, the states have income taxes but not a consumption tax. In Europe, you have an income tax that is higher than the USA by at least 20%, and then on top of that you have a 20% VAT consumption tax. Additionally, there are mountains of municipal taxes and all sorts of regulations and fees. The USA has the biggest consumer economy because the consumer is left with nearly one-third more of their income as disposable to spend compared to Europeans. Add the fact that the USA also has NEVERcanceled its currency and therefore the US dollar is used internationally. About 60% of American dollars all circulate outside the United States. Clearly, MMT would also disrupt the entire world economy.
The theory that QE proves them correct is seriously wrong. The world is in a deflationary trend. The dollars are in HIGH demand because it is going nuts everywhere else. The increase in the supply of dollars has NOT been inflationary because the world is sucking them up. They do not understand the demand is global, not domestic. Remember the Money Plane? Skids after skids were being shipped outside the USA of $100 bills to supply the demand worldwide. When that demand shifts, their entire theory of MMT will blow up in their face.
QUESTION: Marty, just reported this past week America’s trade deficit hit a record $891 billion while, in the same week, unemployment report fell to 3.8%. Does this refute the conventional economic belief that trade deficits take away jobs and output?
Cheers, TGM
ANSWER: What is reported as trade is not simply trade. The numbers are all screwed up. It tracks actual goods as well as services and that includes capital flows. The accounting system is set up in such a way that capital investment buying bonds, stocks, and real estate go into the Capital Account. However, all dividends and interest earned by a foreigner on US assets then are accounted for in the Current Account. It is the Current Account that people report as trade which is not correct because it also includes interest and dividends. Thus, the more foreigners invest in a country, the more it will erroneously appear to be expanding the trade deficit as interest and dividends flow back on their capital investment.
QUESTION: Marty,
Big fat question for you regarding the UK and the SNP.
You seemed to support Scotland breaking away from the UK in 2014, but since then you’ve voiced your concern on the socialist policies of the SNP. I share that concern, as do a growing number of people here, in not so sunny Scotland.
Unfortunately, SNP seems to have introduced a few more taxes into the system in the last year. One of which is that the higher tax band in the rest of the UK has been raised to 50K, whilst in Scotland, it has been kept at 43k. The other latest tax is that if the company you work for have parking spaces and you drive to work and park your car there, you can be hit with around £450 per year.
Looking back on the history of UK general elections, the SNP hit a high point in the October 1974 general election, polling almost a third of all votes in Scotland and returning 11 MPs to Westminster. They then dropped to under 6 seats till the 2015 election, where they went from 6 seats (in 2010) to 56 in 2015. You could argue the rise to 56 seats was due to the fact people either wanted independence or voted for them as they were happy to be led by them in Scotland but not wanting to be independent. They dropped to 35 seats in 2017, primarily due to people being fed up with the independence record being regurgitated over and over.
To summarise then, the large rise in ’74 followed by a big drop in its support at the 1979 General election, followed by a further drop at the 1983 election. Will we see this again? Big rise in 2015, followed by a large drop in 2017 and the same again in the next election?
Personally, I think the tax rises will take a big toll on their support and they will get hammered in the next election.
Many thanks for your thoughts and wisdom.
G
ANSWER: I love Scotland. Every time I flew in to Edinburgh to do an institutional conference for a day, I was introduced as a 7th generation Scotsman – never an American. The separatist movement is separate and distinct from the SNP, which is one step to the right of communism. I was living in London when “Braveheart” came out. I remember going to the movies there, and on the way out everyone was saying how some member of their family was Scottish.
That said, the SNP socialist policies are brain dead and this idea that they must remain part of the EU is beyond stupidity even for someone who is dead mentally. There is absolutely no economic validity to remaining inside the EU. The British have NEVER won anything of significance in the European court. What will it take to make the British realize that they are not really welcome in the EU for resentment remains that it was the Brits who saved Europe from both Napoleon and Hitler.
The Scots voted for independence in a referendum which was clearly rigged by London and the EU. But that was the prelude to BREXIT, which the government is doing its best muck up again over this unwarranted fear over trade. The economy will turn down very hard in Europe in 2019 into 2020 before bottoming. This will alter the politics ahead rather significantly. In Brussels, they will be blaming the Brits, while the Italians will begin to voice their opinion that the Brits got it right after all.
Cyclically, the United Kingdom that was first created back on May 1st, 1707, under Queen Anne (1707.331). On the 309.6 year cycle of the Economic Confidence Model, we arrived at 2016.9315. The BREXIT vote took place on June 23rd, 2016 (2016.476). A referendum on Scottish independence from the United Kingdom took place on Thursday, September 18th, 2014 (2014.715). That meant the Scottish vote was 307.384-years from inception. This was cyclically a confirmation that BREXITwould, in fact, succeed in 2016.
However, the true Scottish Separatist/Nationalism Movement actually began back in 1934 during the economic hard times of the Great Depression. It was in 1934 when the Scottish National Party (SNP) was founded, making its primary goal the future independence of Scotland. The party gradually began gaining ground after World War II, which was propelled by the discovery of rich oil resources in the North Sea during the 1970s. Then in 1974, the SNP won 30% of the Scottish vote and 11 seats in Parliament after campaigning on the slogan “It’s Scotland’s oil!”
Of course, the first major step toward Scottish independence came in 1995. The first and greatest reason for creating a Scottish Parliament in 1999 was that the people of Scotland demanded and deserved the human right to democracy. The UK Government’s white paper on Scottish devolution, Scotland’s Parliament, was published in July 1997. It set out proposals for a new Scottish Parliament and drew heavily on the Scottish Constitutional Convention’s 1995 (see the report: Scotland’s Parliament, Scotland’s Right).
A referendum was held on September 11th, 1997 to ask the Scottish people whether they wanted a Scottish Parliament and whether it should have tax-varying powers. In that 1997 referendum, the Scots voted in favor of devolution of powers, which meant that although Scotland remained part of the United Kingdom, its government gained a broad range of new powers. It would have the power to set its own tax rates as well. Among these new powers was also the right to control education and healthcare. This lead to the creation of a Scottish Parliament for the first time since it was dissolved in 1707. At the peak of the economy in 2007, the SNP won an upset victory in the Scottish parliamentary elections, ending some 50 years of Labour Party dominance. Then the SNP leader Alex Salmond became the first elected minister of Scotland. He won a second term in 2011 and was able to use his party’s historic mandate to secure approval for a referendum on independence for Scotland.
It took just two 8.6-year cycles from 1995 to the beginning of the separatist movement in 2012. In 2012, Salmond and British Prime Minister David Cameron signed an agreement to hold that referendum in 2014. Subsequent negotiations lowered the voting age in the referendum for 16 and determined that it will pose a single question: “Should Scotland be an independent country?”
The problem the SNP faces is they have mixed up independence, socialism, and remaining in the EU rather than the UK. In this regard, they have truly lost their way and do not comprehend either trade of the fact that socialism is collapsing right in front of their face.
Hot new dating app, Red Yenta, pairs idealistic socialists to fight “non-consensual power dynamics,” and perhaps for a cuddle and a peck on the cheek. Slackers of the world unite! Will this business of bringing together passionate anti-capitalists raise a mountain of venture capital, or will the hyper-political pitch raise red flags for investors? Right Angle is a production of the members at http://BillWhittle.com
QUESTION: Mr. Armstrong; Your movie the Forecaster was on TV here in Scandinavia. That introduced me to your research. When I discovered your film was on TV in Europe, Canada, and Asia, but not the United States, that merely confirmed the corruption in New York. Here in Finland healthcare is comprehensive and it is taking down the government. On Friday, the government in Finland collapsed after it was unable to reform healthcare. Every aspect you have written about is unfolding. Why will mainstream media not report your success?
UVH
ANSWER: Healthcare is destroying Western Civilization for the costs are far too high. Because they have been subsidized by the government, they have not been subjected to the normal business cycle. They just always have their hand out in uptrends and down. The government in Finland resigned on Friday after they failed to come up with reform to cut costs in healthcare. Between that trend and government pensions, these two forces are putting pressure to keep raising taxes and lowering the standard of living for everyone else. This is what I mean that we are in the stages of a collapse in socialism. There should be no government pensions where people have not contributed anything toward their future. Healthcare MUST be cut off and forced to be competitive. Obamacare was all about cheating the youth and forcing them to pay for healthcare they did not need to reduce costs for those who did need it. This is the hallmark of socialism – how to live off of other people’s money.
As far as the press is concerned, the prevailing view is that they very much understand it is all about CONFIDENCE. A market crashes and the head of state comes out and tells the people everything is fundamentally sound. Can you imagine if he went on TV and announced the economy is going to completely collapse for 2 years? People would panic. The prevailing belief is that even in the face of collapse, you must always point in the other direction.
Mainstream media will not report something that would warn of such a crash. The government would be on the phone and ask what are they doing? So it is not some conspiracy against me personally. They are not ready to publish such information. The Wall Street Journal published this chart of the business cycle ONLY when the low was coming into play to restore confidence. They will publish what I have had to say ONLY at the bottom and then tell the world this is the guy who predicted the collapse, and now he says it is over. In 1987, we forecast that the low would hold and new highs would unfold by 1989. Larry Edelson in the movie even talked about that. This was when brokerage houses were offering $100,000 for me just to speak for a few hours telling everyone I forecast the market crash and was now forecasting new highs. So it was to their advantage to bring me out.
Here is a short video clip of an introduction by TIR securities back then in London for that very purpose.
That is just the way it works. It is not a personal conspiracy outside the United States where, yes, the press defends the banks so they cannot report what I have to say. I have even written for the Wall Street Journal. While I have not submitted any Op-eds ever since I seriously doubt that would publish it. Perhaps I should try just to prove that point.
QUESTION: You said Socrates has been back tested. What did it write technical the day of the high in 1929?
PO
ANSWER: It has learned from all the data globally. Here is the technical analysis it wrote for 9/3/1929 without human editing:
The market scored a new major high on 09/03/1929 which is up 4 days from the last cyclical low. The broader rally has been over the past 17 days with a rise of 14%. This market has exceeded intraday 2 of three projected resistance points and it has closed below 2 others. Our underlying pivot providing some support lies at 37806. At the moment, the projected extreme resistance stands at 39120. Given the closing was weak, a lower opening followed by a break of this low of 37823 would warn that we may have an important temporary high in place as of this session.
The Uptrend Channel Resistance stands above the market at 39415 while the bottom of this Channel rests at 37966. Meanwhile, resistance provided by the top of this Channel will stand at 39648 for the next session.
The view from our Energy Models, the fact that the market is making new intraday highs in price and our Energy Models are declining, this warns of a divergence, which has been going on for the past day. Therefore, this immediate rally may prove to be unsustainable when such a divergence appears.
Here was the array. Note that it called for a 2-day correction into the 5th a bounce with a back to back Directional Change. There was a low on the 13th with a 4-day rally/consolidation and the 19th was the next Directional Change. The Panic then began on that Friday 20th. The Directional Changes are pretty good indicators.
Note: The Alpha cycles have been combined in the new arrays for display purposes. They were cycles only from high. The Beta Cycles were derived exclusively from lows
Dr. Victor Davis Hanson, Martin and Illie Anderson Senior Fellow in Classics & Military History at the Hoover Institution, Stanford University, presented at the 18th Annual Kern County Economic Summit.
Attorney for Covington High School student Nick Sandmann, Lin Wood, discusses the ongoing lawsuits against media enterprises including the Washington Post and CNN:
The lawyer representing Covington High School student Nick Sandmann has told Fox News he plans to file a lawsuit against CNN likely next week.
According to Fox News, lawyer L Lin Wood discussed his intentions for a more than $250 million lawsuit in an upcoming broadcast interview with host Mark Levin:
(FOX NEWS) CNN is likely to be hit with a massive lawsuit worth more than $250 million over alleged “vicious” and “direct attacks” on Covington Catholic High School student Nick Sandmann, his lawyer has told Fox News.
Lawyer L. Lin Wood discussed his decision to sue CNN for its reporting and coverage of his client during an interview that will air on Fox News Channel’s “Life, Liberty & Levin” on Sunday at 10 p.m. ET.
[…] “CNN was probably more vicious in its direct attacks on Nicholas than The Washington Post. And CNN goes into millions of individuals’ homes.”
[…] “They really went after Nicholas with the idea that he was part of a mob that was attacking the Black Hebrew Israelites, yelling racist slurs at the Black Hebrew Israelites. Totally false.
“Now you say you’ve seen the tape; if you took the time to look at the full context of what happened that day, Nicholas Sandmann did absolutely nothing wrong. He was, as I’ve said to others, he was the only adult in the room. But you have a situation where CNN couldn’t resist the idea that here’s a guy with a young boy, that Make America Great Again cap on. So they go after him.”
Wood continued: “The CNN folks were online on Twitter at 7 a.m retweeting the little one-minute propaganda piece that had been put out. … They’re out there right away going after this young boy. And they maintain it for at least two days. Why didn’t they stop and just take an hour and look through the Internet and find the truth and then report it? Maybe do that before you report the lies.”
[…] “I’ve got some young, smart lawyers that are working hard as we can,” he told Levin. “Double-checking, and listen, when we file complaints, we’ve investigated it because we want to get it right. Maybe CNN can learn from that.” (read more)
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This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
ANSWER: I love Scotland. Every time I flew in to Edinburgh to do an institutional conference for a day, I was introduced as a 7th generation Scotsman – never an American. The separatist movement is separate and distinct from the SNP, which is one step to the right of communism. I was living in London when “Braveheart” came out. I remember going to the movies there, and on the way out everyone was saying how some member of their family was Scottish.
Centinel2012 