Posted originally on May 6, 2024 By Martin Armstrong
Eleven states may face capital gain taxes to comply with theBiden Administration’s 2025 budget, in which the government must hunt the people for taxes to pay for a fraction of their spending. The concept of capital gains was not within the original Constitution. The Founding Fathers established a completely new nation in an attempt to flee government tyranny, but yet again, Democracy has fallen into a Republic where the people have no say.
Capital gains were introduced in 1913, The 16th Amendment granted US Congress the power to levy income via taxation, which remained at around 7% until 1921. Congress quickly determined that they needed to extort citizens for more money and created two brackets. The 7% tax became a standard for income tax, but investors who held for over two years, an insignificant amount of time, were punished for saving and forced to pay 12.5% to Washington. Fast forward to 2025, and we are looking at the top marginal rate rising to up to 57.9%! The current capital extortion rate is around a quarter of one’s capital.
This idea of hunting down the rich is utter nonsense as it becomes an excuse to eliminate the middle class. The big money can take the risk, but the average investor cannot. This will deter small business investment and entrepreneurs who greatly contribute to innovation as they bring creativity and imagination to business.
Naturally, the 11 states are primarily blue. Californians really destroyed their state by voting for Gavin Newsom, and now they may face a top tax of 57.9% to cover the state’s excessive spending and growing deficit. New York and New Jersey, two states that should have stayed red, will face the second-highest capital gain taxation at a rate of 55.5%. These states already pay astronomical taxes on things such as property. Minnesota is looking at a tax of 55.45%, Oregon 54.5%, and Maine 51.75%, with the remaining states (Iowa, Kansas, Nebraska, Georgia, and Idaho) all facing capital gain extortion rates above 50%.
Why on Earth would anyone want to conduct business in these states? If Biden remains in power, it will be a wonder if major corporations continue to choose to do business in the United States at all. Businesses could go literally almost anywhere else and face lower rates of taxation. Additionally, the American consumer has been stretched so thin through dollar devaluation, inflation, and taxation that they are not spending the way they once did. Capitalism is under attack; success is a punishable offense.
America’s consumer economy will continue to decline while places like China see their middle class grow and the consumer economy rise. China is not creating worthless spending packages on climate change. Remember, they told us clear as day that the goal is to destroy America’s standing as the world’s leading superpower. Klaus Schwab has been aiming for 2030, but the computer has been honing in on 2032 before Schwab released plans for Agenda 2030. Unfortunately, this is all precisely on schedule as America enjoys its final time in the spotlight as the world’s financial capital.
Posted originally on the CTH on May 1, 2024 | Sundance
Aleksandr Dugin is the most famous political philosopher in Russia. His ideas are considered so dangerous the Ukrainian government murdered his daughter, and Amazon won’t sell his books. Tucker Carlson talked to him in Moscow.
Watching this interview while sitting in a kitchen in Russia is a little odd, however, what Dugin explains does seem to lineup with my perspective as an American in Russia. The explanation for why leftists (progressives) in the USA seemingly reversed their entire worldview about Russia in a decade does seem to make sense.
I have shared that modern Russian social society is much more traditional than the expressed Western value system you find embodied in progressives. Russia is far more nationalistic and less globalist; meanwhile, the USA has moved far closer to globalism and is less nationalistic. Within this shift, the change in democracy also reconciles.
As Dugin notes, Western democracy is no longer about the majority of the citizens; the national identity has been erased in favor of governing rules by a minority. The commonality of sex (two genders) has been erased in favor of multiple-gender identity, expanded individualism, which is simply a reflection of the fractured bond of commonality. It is an interesting conversation. WATCH:
It should be noted before people in the USA and English speaking “West” start running around with romantic images of Russia, that the Russian people do not think about such issues… AT ALL. The average Russian thinks about social politics about as much as the average American, which is to say – not much at all.
However, all of that said, someone asked me about COVID-19 in Russia and what was the general sensibility of the issue. I have had some rather fascinating discussions thanks to that question.
I never thought I would find a population more cynical about COVID-19, the “pandemic of ’20/’21” and the vaccine protocol than Americans on average. I was wrong. In my conversations with Russians about it, the average person in Russia was far more cynical than the average American.
I’m not sure why, but a larger than 50% group of the Russian people did not buy into the fear and hype. From the conversations I have encountered, more than half the population didn’t trust the claims by the Western medical establishment.
Additionally, fewer than half the population of Russia appear to have accepted the vaccine. We are told the vaccine compliance rate for the first injection in the USA was around 65 to 70%. It does not seem like 70% of Russians took the vaccine; it seems that Russia had a much lower compliance rate based on responses to the question.
I’m not exactly sure why the biggest segment of the Russian population didn’t fall for the COVID-19 pandemic hype; perhaps their cynicism against “institutions” of a totalitarian state helped them on this subject, I don’t know. However, the most frequent response is the average Russian just didn’t believe COVID-19 was as dangerous as the various health agencies were saying it was.
The government of Russia pushed the vaccine, perhaps not as aggressively as the USA and other Western countries, but they did push it hard. However, it appears much less than half the population followed the govt advice.
I’ll have more later on some granular Russian dynamics as they appear to present.
It really is bizarre being here in Russia. There are zero Western tourists or travelers in this country. The only tourists and/or foreigners Russia has seen for over two years are all from Asia (mostly China). When the average Russian hears my American voice speaking English, the immediate reaction is shock, followed by extreme curiosity – it’s wild.
There’s nothing to be fearful about or worried about. Everywhere seems to be safe, orderly and exceptionally well cultured; maybe even a little annoyingly so. The polite and unwritten social rules are followed by everyone with a general compliance unlike anything I can remember seeing in the USA. Everything from how you cross the street to obeying social standards on subway travel is extraordinarily polite and mannerly; factually it’s a little weird.
Do not romanticize Russia in your mind’s-eye; there are major issues here, and the quality of life in the average USA neighborhood is much higher. However, on the cultural part of polite social norms, most Russian social life is like a step back into the 1950’s USA with perhaps a bigger dose of visible counter-culture evident.
The USA boomer generation would recognize the shallow coldness behind the eyes of Russians who avoid eye contact and appear to be task oriented in life. Oddly, if you grew up as a USA Gen-Xer, socially current Russia is probably more like the place of your fond memories, and going to a large shopping mall is like stepping back in time 30 years. If, however, you have a gen-Z or ‘zoomer’ in the familial crew, they would think modern social Russia is backwards and too regimented.
From what I can tell, those Western (generational) viewpoints are entirely due to the speed of transition that Dugin notes from the rising of Vladimir Putin to the leadership of Russia.
There ain’t no welcoming room for Barack Obama, Bill Ayers, Cass Sunstein, Samantha Power and/or any of the progressive crew here. Russian patriotism is probably at the highest generational point in a long time, and I doubt President Putin is going to miss the opportunity to perma-ban all the Western corporations that exited Russia after the sanctions came along.
The reality of the Western sanction regime is really going to take an entire series of articles to explain. T-mobile cell phone service works here (go figure, no blocks at all), as long as you don’t interface your device with Russian internet wifi, which is really funny.
Yes, you can connect to all the banned Western stuff through the cell phone network (value of a yellow phone in Russia), and simultaneously you can connect and access all of the banned stuff the USA government controls and stops Americans from seeing/using if you have a grey zone originating phone and cell phone number. lolol
It really is bizarre how an individual person can operate, in this fragmented communication world, once they teach themselves the tools and techniques. Perhaps the most stunningly obvious difference between Yellow and Grey – anyone with a passport can open a bank account in Russia. The RU banks even have their computers set up to plug in to your device and upload apps, because the Apple/Google app stores don’t permit it (sanctions).
There is a lengthy learning curve, but it is well worth the time figuring out how to navigate the financial matrix the West has constructed. The sanctions against Russia are stunningly irrelevant, and were not designed to keep Russia out of the western financial system. The Sanctions were created to keep Americans, Canadians, AU/NZ, Japan and EU locked into the West.
Posted originally on May 1, 2024 By Martin Armstrong
I do not agree with Donald Trump’s view of the Federal Reserve. I speak on behalf of sound economic policies that benefit the people. I do not blindly support a political candidate for the sake of being on the right side. Now, I criticized Trump during his presidency for constantly pressuring the central bank to lower interest rates. There are rumorsswirling that Trump, if elected, would set the price of interest rates himself without the advice of the Federal Reserve. While this may be an extreme side of the rumor, Trump and every other president would like more power over the Federal Reserve — BAD IDEA!
What we must keep in mind is that the Federal Reserve’s original design, which lasted for about one year, was brilliant. The classic banking model involved borrowing from depositors on a demand basis and lending long-term, making a profit on the spread in interest rates, such as for business loans and mortgages. This was relationship banking, not today’s transactional banking model.
This was fractional banking insofar as about 8% of the money needed to remain free to service demand requirements. The crisis comes during an economic contraction when people run to the bank for a loss of confidence and demand to withdraw their funds. This results in the value of cash rising in purchasing power compared to assets, so asset values collapse.
The idea of “elastic money” was to increase the supply of cash during such a crisis to meet the demand for withdrawals and that would offset the need to sell assets by calling in long-term debts. By increasing the money supply on a temporary basis, the Fed could offset the contraction in theory smoothing out the business cycle.
This was a brilliant scheme. However, it has been Congress, and not the Fed, that corrupted that mechanism. The banks technically owned the Fed as this was supposed to save the taxpayer money. The banks should contribute to their own bailout fund. Furthermore, the Fed’s design was also about buying in corporate paper when banks would not lend money. This was a mechanism used to offset rising unemployment if corporations could not fund their operations. They supplemented this by the management of regional interest rates to balance the domestic economy. Each branch of the Fed could raise or lower their local interest rate autonomously to attract capital when there was a local shortage or deflect capital when there was too much.
Congress began to manipulate the Federal Reserve for their own self-interest when World War I broke out on April 6, 1917. The alteration to the design of the Fed was to direct it to buy government bonds, not corporate. In this first step, they never reverse this decree after the war. They removed the brilliant design to stimulate the economy directly by purchasing corporate paper during a recession. In the last 2007-2009 crisis, the government wrote a check to TARP and hoped that the banks would lend money, but they did not. Removing this first pillar of the independent Fed distorted the entire system. It then made little sense for bankers to own shares in an entity that was no longer privately controlled.
Banks became traders during the 1929 Boom-Bust Cycle. Goldman Sachs became deeply involved in the bull market, establishing numerous trusts and mergers. Goldman Sachs expanded the leverage going right into the eye of the storm that was about to hit starting on September 3, 1929. The crash wipes our 70% of Goldman’s entire market.
The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibited commercial banks from engaging in the investment business. Around 5,000 banks failed during the Great Depression largely because banks sold trusts and foreign sovereign government bonds to the public in small denominations. Bill Clinton later repealed Glass-Steagall and handed the power back over to the bankers. Disaster strikes every time the government tries to manipulate the free market.
People believe the Fed has the power to create money out of thin air, yet never explain why the Fed was given that power. You cannot have a fixed money supply as the population increases, then you end up with DEFLATION, which is the rise in the value of money. You can double the money supply, but if the people hoard it, as they tend to do during private waves when the public loses all trust in government, you will never create inflation. There was a huge contraction in the velocity of money during the Great Depression for this very reason.
The Biden Administration, as has the Trump Administration, has come after the Fed. Politicians merely want the economy to appear strong under their reign and fail to see the long-term impact of policies. Politicians have no knowledge of economics or the insight to run the Fed. Not to mention that law does not permit Washington to bark orders at the Fed, although Washington does oversee the Fed and can force the central bank to change its policies to align with government spending or repel debt buyers.
Trump is a borrower, not a lender. His bankruptcies were the result of the business cycle and he leverages himself to the hilt so when the recession comes, he gets in trouble and when it is booming he claims to be a fantastic investor. But he is no trader. He could have hedged the business cycle but did not.
Chairman Jerome Powell and Trump clashed repeatedly. Not so coincidentally, Powell and numerous Fed bank presidents have their terms expiring in 2028 – a key year, as indicated by our models. The Biden Administration has already driven the economy off a cliff. The central bank is merely trying to heal an already injured economy with a limited medical kit.
The Fed is INDEPENDENT and will not be bullied by Biden or Trump. The Fed understands that it has become the world’s central bank and its actions in raising rates have had a far greater impact externally particularly in emerging markets because so many other nations issue their debt in US dollars.
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