The US Census report has shown that the net migration from the New York City area has surged during 2016, and that even included myself. Indeed, much more people are leaving the New York region than any other major metropolitan area in the country. Since 2010, the New York area has lost almost 4.5% of its population. This included New Jersey, Connecticut, Long Island, and the lower Hudson Valley. The number of people who left in 2015 was 187,034. Last year, 2016, that number jumped to 223,423. The number of international immigrants settling in the tri-state area declined from 181,551 to 160,324. The international migration has slowed and this trend means that taxes will only rise.
Meanwhile, Cook County, Illinois has lost more population than any other county in the United States from July 2015 to July 2016, according to the latest U.S. Census Bureau report. Clearly, the highest taxed states are losing the most people. Nevertheless, the data clearly shows that the higher the state tax rate, the greater the migration outward.
The State of New York as a whole lost 95,591 people and California came in second losing 93,915 with New Jersey losing 76,175, Illinois lost 52,804, and Michigan losing 47,347.
The three states at the top of the list for destinations are Texas posting a gain of 109,887 people, Florida 61,395, and Colorado 41,501.
QUESTION: Mr. Armstrong, I was reading one analyst who claims we need a new dollar. He said that in 1832 Gold coins were produced at a face value of $20 each, and the one ounce Silver coins retained their $1 valuation and were issued in 1792. He concluded: “In summary. A Silver coin standard in 1792. A Gold coin standard in 1832. Paper Gold/Silver Certificates in 1900. Then Federal Reserve notes in 1933. This is where it stands now. Each century a new US Dollar. So why do we need a new US Dollar?” You have shown pictures of gold backed currency before 1900 and you wrote $20 gold pieces were not minted until the California Gold Rush in 1849. Are any of these statements remotely correct? This is very confusing.
SF
ANSWER: Sorry, but no. They are all wrong. Just pick up a US coin catalog and you will quickly see the first silver dollar was minted in 1794, not 1792. There were no silver dollars minted at all between 1805 and 1840 and the first $20 gold coin was indeed issued during 1849 because of the California Gold Rush. The largest gold coin previously was $10 and it was issued in 1795 and here too there were no $10 gold coins issued after 1804 until 1838. So, I’m not sure where 1832 comes into play. The first gold back paper currency was issued in 1863, not 1900. That’s another strange statement.
None of these facts are remotely close to being true.
As far as 1792, Thomas Birch struck experimental coins the Disme (10 cent), Half Disme, and the One Cent. These were not the coins officially adopted by the US government and are considered to be patterns. The debate was rather profound at that time whether the coins should bare the portrait of the president as was the case of Cromwell during the English Glorious Revolution. Others rejected that concept and said it would appear to be a monarchical practice. George Washington is said to have also rejected the idea of placing himself on the coinage.
The Birch coins were therefore patterns struck during the period of debate with the portrait of Liberty. Therefore, the official coinage of the United States did not begin until 1793 with a half-penny and penny, with the silver denominations following in 1794. The first 5 cent coin was not issued until 1866 with the inflation of the Civil War. The first 3 cent coin appeared in 1851 struck in silver and the 2 cent in 1864 in bronze. The half dime was struck in silver in 1794 until 1805. Half dimes were not reissued until 1829.
What these people totally lack in their accounts is the fact that there was a crisis from the very beginning with trying to peg the dollar to European currencies despite the fact it was a silver and gold standard. In 1792, congress adopted a bimetallic standard and the 15 to 1 ratio of silver to gold. The precious metal content of a US dollar was fixed at 371¼ grains of silver or 24¾ grains of gold. Just like trying to fix the British pound in the ERM or the Swiss peg to the Euro, everything went nuts and forced the suspension of silver coinage in the United States.
By 1795, an ounce of gold in the US had a ratio of 15:1 and was under pressure because in Paris it was worth 15½ ounces of silver to one ounce of gold. By 1799, the ratio continued to expand reaching 15¾ ounces. This presented a huge arbitrage opportunity, so bullion dealers bought United States gold coins using Spanish silver coins and they shipped them to Europe to be melted and re-sold. The net capital outflow was huge and American coin was vanishing rapidly. Finally, in 1804, President Thomas Jefferson was forced to order that no more gold $10 eagles and silver coins were to be struck. All we see are copper coins being produced at this point in time.
Then by 1813, the silver/gold ratio continued to expand reaching 16¼ to 1 as gold had become very scarce. At this point in American economic history, 98% of all U.S. gold coinage would have be melted down by the bullion dealers. Gold became rare and none was being imported to the US officially. Any gold that did make it to the States was not for the US mint but only in private transactions. Beginning in the 1820s, some new gold finds were made in Georgia and North Carolina. However, the supply of gold in America was never enough to allow gold coins to circulate widely. The $5 gold half-eagles continued to be struck, but marginally with about 50,000 coins annually. In 1920, the new finds in gold sparked a sharp rise in production reaching 263,806 $5 coins. However, the show of economic power dwindled rapidly falling to under 15,000 coins struck in 1823.
There was no “bullion fund” authorized by a congress to buy bullion to be coined. Congress was strapped for cash. The U.S. dollars were accepted as the equivalent of Spanish dollars in the Caribbean, and since unworn Spanish pieces had a higher silver content than the U.S. coins, it became profitable to export the American dollars, exchanging them for the Spanish pieces which were then melted down. This is why Jefferson suspended production of silver dollars in 1804, which lasted for nearly 40 years. From that point, the half dollar became the dominant U.S. silver coin.
A crisis in the money supply had emerged. Finally, a senate committee reported in 1830 that so few quarters, dimes, and half dimes had been struck from the birth of the nation that there was less than one coin struck for each person in the country. The total face value of silver coins struck from inception was only about $25 million in silver coins minted since 1794 and the gyrations in the ratio left about $14 million still in circulation by 1830, of which $2 million represented bank reserves. Consequently, they seem to be oblivious to this history of our monetary system.
As far as when did Federal Reserve notes begin? Sorry, that was 1914 and the Fed was created in 1913. The $500-$10,000 notes were not issued until 1918. True, gold was confiscated and there was a bank holiday in 1933, but that was not the beginning of the Federal Reserve notes. I am not sure why all these dates are so wrong and how this impacts the objective of a forecast
QUESTION: I understand that when people lose confidence in government that equities, precious metals and real estate will rise in value. Looking at real estate, will vacation rental properties also rise in value?
RM
ANSWER: Generally speaking, vacation properties will not fair as well as basic properties in a reset only because people contract in their spending. The real estate boom peaked in 2007, but that was the over-leveraged houses for the lower-end. The high-end corrected and then rallied into 2015.75. That has peaked out in REAL TERMS. The nominal values will still rise as a factor of the purchasing power of the currency, but real estate will now fall to third place in the States. Cities are still buoyant generally because of capital flight from overseas. Some places have been attacked politically, such as Australia and Vancouver. In the case of latter, the attack was just local so the foreign capital shifted to Victoria and places like Toronto.
The vacation home in a crunch will perform the worst. The big vacation home bust was 1927. That was the Florida land boom. John Ringling in the mid-1920s, entered the field of land speculation and founded Sarasota, Florida. John was once one of the world’s wealthiest men, yet he died with only $311 in the bank.
The problem with real estate on this cycle is that it has been seriously leveraged. It was FDR who came up with the 30 year mortgage to try to support real estate prices that had fallen to 10 cents on the dollar and sometimes less. If you did not have cash, you could not buy. That measure instigated to support real estate prices has now become the problem in real estate. Values depend upon borrowing. When confidence declines, people fear the future. It is at that moment that banks will be unable to lend for 30 years if there is no bid lacking the confidence long-term.
Vacation homes will be at the bottom of the list. I personally bought what was a vacation second home on the beach. I bought it for 50% of what they paid in 2007. They had a sizable mortgage on it and could no longer afford the payments on a second home. Such is life.
QUESTION: Mr. Armstrong, on the one hand you are pessimistic, but on the other you are very optimistic. Many of these analysts just say everything is going to hell from currency to stock markets. Do we survive? Which camp are you really in?
BK
ANSWER: You do not change unless you have no choice. Only those who are explorers take risks and they are far and few in the mix. The bulk of human society play it safe. So unfortunately, society must go through the crash and burn in order to create the change. This is why no civilization has ever lasted forever. What child has ever listened to their parents and did not stick their finger in the flame of a candle? We all must do that to know that fire does burn.
So yes, on the one hand this is pessimistic, yet on the other it is very optimistic looking forward to the change that is coming. There may be a storm swirling around us. However, if we know what is happening (1)we will not get sucker punched, and (2) just maybe we can be part of the mover and shakers who can make a difference and push that change in the right direction. If not, well, we can all grab a rock and meet in the Caribbean and start our own country.
Civil forfeiture in the United States has been a controversial legal process in which law enforcement officers take assets from persons suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing. The new March 29th, 2017 Department of Justice’s Inspector General just issued a report and has stated that since 2007, the DEA has seized $3.2 billion in cash from people who weren’t charged with any crime. These people in congress will not protect the people they pretend to “represent” when it comes to money. This is out right theft.
The overwhelming view within Europe is that the dollar is about to make a big move to the downside. We warned that the dollar would decline basically to retest the uptrend line. Failing to get through that technical level and bouncing off it, is technically a very bearish signal for the Euro – not the dollar. That technical resistance for this second quarter stands now at 10870 where we reached intraday 10906 last month. Last week provided an outside reversal to the downside. Now a weekly closing below 10493 will warn that the dollar can rise very sharply.
The greatest problem in the traditional analytical world when it comes to currencies is the bulk of these analysts cannot wrap their head around that a currency is not a share price. They talk as if it is a share price and the decline in the dollar would be bearish because Trump is a crazy man and his meeting with China will be a disaster. If the dollar declined, that is what Trump wants because a lower dollar will make selling US products overseas easier.
When analyzing a currency, it is OPPOSITE of a a share price. Up is really down and down is really up. What is stunning, is how all these analysts keep taking about the dollar crash as if that would be bearish. Emerging markets dollar debt is about half that of the USA national debt. A lower dollar they will be jumping for joy – less to pay back.
If you want to create the worst possible outcome and really disrupt the world economy, you need the dollar to soar to new highs – NOT decline. Because the currencies had to be restarted in Europe following World War II, politicians touted the rise in their currency as proof they were doing a good job. The rise in the Euro from 80 cents to $1.60 was seen as bullish for Europe because it was defeating the dollar. In reality, the US economy expanded, European products became too expensive, and many European companies began to open up plants in the USA. What that move was doing was undermining Southern Europe and it was helping the USA – not Europe.
Europe will be wiping its brow if Le Pen is defeated in France on May 7th. In reality, what will happen is the opposite. Brussels will wipe its brow and think it dodged the bullet and this nasty age of “populism” will come to an end. They will not change course, proclaim they were right all along, and then push forward to the federalization of Europe until their political bubble bursts in the near future.
The dollar is by no means finished. The ONLY way to undermine the world economy is to see a STRONG DOLLAR, not a weak one.
The May target is still be BIG target for this year. That may indeed be influenced by the French elections on May 7th. We are holding the Hong Kong WEC this year after the May elections.
It’s getting harder for the mainstream media and their asset-gathering sponsors to hide the reality of the post-Trump rally economic ‘improvement’ from investors’ eyes.
During a Bloomberg TV interview this morning, New York Fed President Bill Dudley admitted there’s “no rush to hike” as the “economy is clearly not overheating,” warning of the potential for Q1 weakness as “sentiment [improvements] are not showing up in the hard data yet.”
Indeed Mr. Dudley… and the ‘hard’ data has NEVER caught up to spiking sentiment…
For 12 months in a row, Americans’ spending has grown faster than their incomes.
Income growth YoY is the highest since May 2015 as spending growth slowed… with real disposable personal income seeing its first YoY increase since July.
February personal spending disappointed modestly, rising just 0.1% MoM while incomes grew at 0.4% MoM, as the savings rate rose to its highest since October 2016
In Ireland, a reader has sent this gem in. The Communications Minister Denis Naughten is so proud of himself for changing the definition of a ‘television set’ to include your laptop in order to extend the TV license fee to be applied to computers, laptops, and large tablets. He believes he will generate an extra €5m a year. As our reader put it: “from that ‘shining light’ of the EU, Ireland is prepared to stoop in hunting even more cash from its people. … Is there no end to this lunacy? Internet next I’m sure!”
In Sweden, as of April 1st, a new tax will be applied to ALL electronics. Are you ready for this? The reason is of course not to raise money, but to protect people from electronics; including everything from the fridge to tvs and laptops. On April 1, Sweden will impose a new so-called “chemical tax” on electronics and appliances. The purpose of the new tax is said to reduce the amount of hazardous flame retardants in our homes.
We are faced with tax revolts throughout Western Culture. Governments are all broke. Of course, they will never consider reform. The answer is always just grab more and more money from the people. This is why they are moving to eliminate cash to prevent people from evading taxes. This is not going to end nicely. The American Revolution was “No taxation without representation” and the French Revolution was also over excessive taxes – Let them eat cake. This is why we must crash and burn. You simply cannot reason with those in government to recognize that they are the problem. Thus, history constantly repeats and taxation is the driving force behind revolution historically in all cultures.
QUESTION: Mr. Armstrong; You said China will become the financial capital of the world after 2032. That means the US must decline. At the same time, you have been consistent in forecasting a bull market in the U.S. share market when everyone else keeps calling for a crash. Are the two connected in some way?
Thank you
HS
ANSWER: Yes, these two events are interlocked. All markets function very distinctly. They move like a pendulum. The famous one in the United Nations building with the classic physics experiment, Foucault’s pendulum, is propelled by the rotation of the earth itself. While it had long been known that the Earth rotates, the introduction of the Foucault pendulum back in 1851 was the first visual proof of the rotation of the Earth in an extraordinary easy-to-see experiment. The pendulum remains in a constant oscillation relative to the universe. As the earth rotates, we can see that it does so around the constant path of the pendulum swing.
This applies to market behavior as well. There is a constant oscillation to everything we call our Benchmarks. They remain constant within the universe and everything else rotates around them. The energy that maintains the cycle is the constant oscillation between two extremes. The further it swings in one direction, the greater the energy moves in the opposite direction.
This is the very essence of how everything moves. This is the creation of energy to keep things going from the instant of creation also known as big bang. Personally, I do not believe in just a simple big bang. I believe after big bang; the expansion will stop and then reverse and move back toward the point of origin. Then it will explode outward once again. I do not believe it was a one-time event since energy can neither be created nor destroyed – only transformed between states.
Now apply this to markets. The real energy within a market is always to trap the majority, for then they lose money and it forces them to cover their position. If 90% of the people are long, then any news can set off the collapse. If you scare the majority, there will be no bid when you try to sell, which results in a flash crash. Likewise, this current rally in the Dow from 2009 has been the most bearish in history. The majority of analysts still keep calling for an inevitable crash. Retail participation still remains near historic lows. You cannot get a crash of major consequence as long as the bulk of the people are not invested in the market. Here you see how the market ALWAYS makes a false move just before it makes the real move in the direction of the underlying trend. At each correction, the emotions run high and people ALWAYS expect whatever trend is in motion will remain in motion. Hence, shorts build up and then they are compelled to cover and that gets the rally moving.
Markets are fractal. So whatever you see on only level of time, must exist on all levels of time or else it is not real. The Dow made a Yearly FALSE MOVE on a number of occasions. For example, the high of 1916 dropped from 8500 to 6590 and established the low in 1917. It then swung to the upside, reached new highs at 11960 in 1919, and then on the panic back down.
The Dow made its intraday high in 1889, which was followed by a one year panic into 1890. It then swung back to the highest yearly closing in 1892 with the famous Panic of 1893 immediately thereafter.
A similar pattern unfolded with a high in 1872, a panic penetrating the previous year’s low in 1873, and then a dramatic swing to new high the next year in 1874.
These are just a few examples.
The goldbugs simply hate me even saying that gold can still move below $1,000. They approach everything only in a linear concept – it must only move up and never down. This is how they lose money consistently. The extreme ones are married to this idea that gold will rise in an apocalyptic fashion when everything else turns to dust. There is always a FALSE move before the true direction. A move for gold below $1,000 will create the energy needed to send it soaring past the $2300 level which is the 1980 high adjusted for inflation. This is what our Reversal System is all about. It is to define that point of no return where we can differentiate between a false move and a real breakout.
Now, because everything is fractal, and we have been able to identify the existence of constant Benchmarks in everything, it becomes possible to observe the rotation of capital around the world which is behind the rise and fall of every civilization since the dawn of the human race. In 1990, China was just 5% of world GDP. Now in 2015 it has risen to 15%. The United States is the world’s largest national economy in nominal terms representing 24.5% of nominal global GDP.
We first must send the share markets up dramatically. This will be the FALSE MOVE that makes everyone see that the USA is the only game in town. That will be the extreme point, reaching the maximum swing and then its own weight will cause it to move back in the opposite direction. Just as the British Empire rapidly collapsed following World War I handing that title of Financial Capital of the World to the USA, we will see the same take place as that title moves to China. One of the critical factors that will kill the US economy will be taxes and overregulation – both the socialist’s dreams come true. What broke the back of China and Russia in 1989, was this same failure of Marxist philosophies that call for total central planning by government. It is merely the West’s turn to now collapse because of the same philosophy of Karl Marx.
Only a fool believes in the fairy-tales of happily ever after. There is a cycle to everything. The Pension Crisis Report went into detail. Men mature slower than women, so historically the man was always much older than his wife. Hollywood sold lust as love at first sight and as the age difference collapsed, divorce reached cyclical highs. As they say, a girl becomes a woman at 23 but a boy does not become a man until 40. Women married boys but expected them to be men. Today, much of the youth reject marriage and having children. The demographics and changing life styles are undermining the entire idea of pension systems. This is a crash that will also propel the shift. Interestingly enough, in the former communist regions, people never trusted government so they expected nothing in return by tyranny. In the West, society still believes in government and the dream that they will be there. When government falls, Western society will not be as self-sufficient as they were in China. Socialism replaced the family structure in the West so children did not save to take care of their parents – that was government’s job. We face a lot of real social problems moving into 2032. That’s what our WEC conferences are all about.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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
So yes, on the one hand this is pessimistic, yet on the other it is very optimistic looking forward to the change that is coming. There may be a storm swirling around us. However, if we know what is happening (1)we will not get sucker punched, and (2) just maybe we can be part of the mover and shakers who can make a difference and push that change in the right direction. If not, well, we can all grab a rock and meet in the Caribbean and start our own country.
Europe will be wiping its brow if Le Pen is defeated in France on May 7th. In reality, what will happen is the opposite. Brussels will wipe its brow and think it dodged the bullet and this nasty age of “populism” will come to an end. They will not change course, proclaim they were right all along, and then push forward to the federalization of Europe until their political bubble bursts in the near future.
Centinel2012 