Armstrong Economics Blog/Economics
Re-Posted Oct 15, 2019 by Martin Armstrong
You repeatedly say that Socialism is dying. I live in a rural area of Oregon. As a personal observation, what I see around here is that more people, and especially the younger, are indeed moving TOWARD Socialism. The influence of the media is so strong that even people we know who advocate gun rights and the Constitution are willing to give up both to see Trump out of office and love the Bernie rhetoric of free everything. So, with the “dying” part, is it referring to more countries moving away from it than are moving toward it? We seem to be heading that direction, and rapidly at that.
ANSWER: Socialism is dying because other people’s money is running out. Yes, we see that socialism is rising in its extreme actions from climate change being usurped to justify the confiscation of wealth and control of the economy. It is also prevalent in the rise of Bernie Sanders and Elizabeth Warren in the USA and the Labour Party in the UK.
This is the final rally of socialism before the crash. It is more akin to the final Phase Transition of a market as it makes its fatal high like the Dot.com Bubble, 1929, or Tokyo 1989.
So do not confuse the rise in the outward demands of socialism. We are running out of other people’s money and the unfunded promises will reach $400 trillion by 2032. There is no possible way to fund that without a crash & burn.
We also see this manifesting in the stark political divide between left and right. The left in Britain is saying the Prime Minister should be jailed if he carries out Brexit without a deal. The people voted for Brexit. They lost. That does not matter.
We are in the collapse of government and the socialistic promises since World War II are all coming due. Economically, this is a battle to the end. The left wants to confiscate all the wealth of the right. This is the end of the purpose of civilization and the beginning of pure tyranny.
I for one have no desire to live in a socialistic world of tyranny. I will most certainly leave and move to Asia rather than live under such tyranny.
Re-Posted Oct 15, 2019 by Martin Armstrong
QUESTION: I have a question, you wrote :
“Those in Europe who have a position in cash, it may be better to have shares or a private sector bond or US Treasury. Given the policy in Europe of no bailouts, leaving cash sitting in your account could expose you to risk in the months ahead.”
For example, if one has a trading account with a bank, is leaving cash in the bank’s trading account immune to potential seizure indicated in your comment?
Appreciate your clarification,
ANSWER: The risk in Europe is that there is no true rule of law. On the one hand, there is this policy of no bailouts for that would mean money could cross borders. Then there is the rising socialism which is turning into real hatred of the rich.
There is no definitive answer. Europe will do whatever it has to do when the time comes shy of doing the right thing. I have written before when Italy could not meet its debts on short-term paper, they simply decreed that your 90-day paper was now a 10-year paper.
Governments can do whatever they desire. We have no recourse against governments. No private company could act in such a manner. This is one primary reason why I believe governments should be prohibited from borrowing. People are fools for buying their paper and always expecting that this time will be different.
Armstrong Economics Blog/Technology
Re-Posted Oct 14, 2019 by Martin Armstrong
If you thought you could hide, you will soon need a face transplant to do so. Chinese scientists at the Fudan University and Changchun Institute of Optics, Fine Mechanics and Physics, have developed a 500MP cloud-connected “super camera” that can reportedly pick out facial details of an individual person among thousands in a crowded stadium.
Simply put, there is no place to hide.
Armstrong Economics Blog/Foreign Exchange
Re-Posted Oct 14, 2019 by Martin Armstrong
QUESTION: Hi Martin,
I have been following you for about 5 years now and have been to 2 WECs. At the beginning of last year, I ventured into the forex markets with limited experience and some speculative money. I’ve have been adding money to my forex accounts over this time and thanks to you and Socrates I have just about doubled my money over this time frame. Now my forex accounts have become more than speculative money for me. I have been really looking forward to riding this dollar rally wave into the monetary crisis cycle into 2021/22 but some for your recent posts regarding the liquidity and European banking crisis brewing has given me pause. I have been planning on taking money out of my forex accounts gradually to at least withdraw all my seed money but naturally, my concern is the safety of the forex markets or brokers in regards to the crises ahead. Do forex brokers have any particular risk in the liquidity and European banking crises?
Thank you for all you do!
ANSWER: That is hard to answer. It all depends on the broker and where are they — Europe or America. I suspect you are talking about America. It depends upon the firm.
We are in a position where there is a crisis on the horizon and we will see a hard landing outside the USA. The impact of a European banking crisis can send the dollar significantly higher. The risks for accounts will be in Europe, for there are no bailout policies and others will claim that these policies would only bailout out the rich. So politically, Europe would present the far greater risk into 2021.
Armstrong Economics Blog/Central Banks
Re-Posted Oct 14, 2019 by Martin Armstrong
QUESTION: Hi Martin,
I can understand how JP and EU backed themselves into a corner with negative rates. Happy to give them the benefit of the doubt when this all started 3-4 years ago even though it was obvious this was not going to end well.
However, what I don’t understand is the thought process that reserve banks today need to perpetuate eternal growth when I would think their role should be to smooth out extremes (debatable this is even possible).
RBA is a case in point as while the Australian economy is slowing, it is nowhere near terrible. There is talk that they will now also look to lower rates to near zero and start QE. I get that all reserve banks are looking to maintain lower exchange rates and so they need to keep pace with the rest of the world but one would think they would learn better from mistakes of EU and JP.
My question is, is this a global conspiracy or just plain stupidity?
Thanks for all ….
ANSWER: The original theory was to smooth out the business cycle. The political governments turned to the central banks and argued that they were responsible for the money supply. Therefore, it was allegedly their duty to control inflation irrespective of the spending of politicians. This was an inconvenient economic truth.
The problem is that the ONLY theory they have is the Keynesian Model. They really have no other theory to rely on. So they keep lowering rates, hoping to stimulate demand, and are oblivious to the economic reality that the political side is hunting taxes and becoming more aggressive in tax enforcement. The two sides are clashing and the central banks are now TRAPPED with no alternative. They are afraid to raise interest rates for they assume the economy may plunge. Yet, they are also looking at the national debts that governments never pay off. Raise the rates and the government budgets explode and that comes back as a political disaster.
A lot of people have asked me if I would step in and restructure this mess. To even do that you have to have the crisis first. There is no way they will allow anyone to come in and avoid this crisis. They will pray at the foot of their bed before each night that their theory will somehow work. That is not going to happen or prevent anything. We must experience the pain before they would EVER consider any reform.
This is sublime ignorance rather than a conspiracy. It brings the mind those famous last words: Father, forgive them for they know not what they do!
Armstrong Economics Blog/Sovereign Debt Crisis
Re-Posted Oct 13, 2019 by Martin Armstrong
We must understand that municipalities are going broker everywhere in the West. More than 50% of the municipalities in Germany are in trouble. We see the same trend everywhere. The Swedish Kommunivest movement where municipalities banned together to sell their debt which they cannot pay off only illustrates the problem.
We then have states/provinces facing a fiscal crisis. The primary driving force has been the pensions they have been paying themselves. Quebec has been escalating into a fiscal crisis ever since 2007.
This is all coming to a head in the next Monetary Crisis Cycle. This will be a very interesting WEC this year. We tried to make this one a smaller event given we had a large session in Rome. Given the degree of this crisis and the overwhelming requests to attend, we were able to get more space to accommodate more than the 500 limit we had set.
Attendees will receive this special report on the Monetary Crisis Cycle. So buckle-up. Keep your hands and feet inside the vehicle. This will be a rise prone to volatility with a lot of ups and downs.
Jonathan Turley asks a question today about why the media will not allow any discussion of Joe Biden’s obviously corrupt Achilles heel to be discussed.
Within his article Turley cites examples of CNN, NBC, MSNBC and a host of other mainstream news outlets that will not allow any discussion of Joe Biden’s transparently visible weakness. He ponders ‘why’?
[…] When Rep. Lee Zeldin (R-N.Y.) raised the issue on CNN, host Erin Burnett cut him off: “There is no evidence of Joe Biden doing anything wrong, and this is something that has been looked into, and I think — I want to make a point here — I think what we need to talk about right now is what did the president right now do or not do.” Other CNN hosts have repeated the line of “no evidence of wrongdoing” like a virtual incantation.
[…] For news shows on MSNBC, CNN and other cable networks, nothing is more disgusting than the mention of what Hunter Biden actually was doing in Ukraine.
[…] Joe Biden has insisted he never spoke with his son about his foreign dealings — an incredible but categorical statement. The then-vice president flew with his son on Air Force Two on an official trip to China but suggests they never discussed his son’s deal seeking $1.5 billion in investments with the state-backed Bank of China. During the trip, Hunter reportedly introduced his father to Chinese private equity executive Jonathan Li, who was part of that deal. Yet Biden insists he was never told of any business linkage or dealings. (read more)
Perhaps here’s “why”…
Long time CTH readers will have references to hundreds of examples of the UniParty at work. The basic elements about HOW money interacts with politics and who really controls the seats of power in DC has been discussed exhaustively.
The Big Club, is a myriad of financial interests who manipulate politics for personal power, wealth and influence. Wall Street multinational corporations, meaning those who rely upon the constructs of corrupted ‘globalism’, make up about 75% of the overall manipulative influence over U.S. trade, financial and political policy.
National corporations, those who gain through the growth of Main Street USA, only hold about 25% of the financial influence in politics; they are vastly outgunned. The power shift diminishing nationalism toward globalism happened over a period of 30 years +/-.
The purchased priorities of modern Democrats, that is the selling out of Main Street USA in favor of a “service driven economy”, have traditionally been aligned with the U.S. multinationals. Wall Street’s global elite support democrats because it’s the money that matters.
To the extent that democrats have ultra-left-wing social policies the Wall Street crowd doesn’t really care. That stuff doesn’t effect them; they can purchase ways around the nuttery and build walls around their houses etc. It is always the money that matters to those at the head of the political table. President Trump is the common enemy because he is weakening the multinational wealth model in favor of Main Street USA.
So, when it comes to democrat candidates, specifically the “chosen one” to represent the interests of the DNC Wall Street alignment, as we discussed back in 2017:
[…] The DNC party apparatus (donors and influence agents) will select the candidate. Then they will construct the road-map to the nomination using blockers, controlled opposition, dark horse candidates and splitters to carefully guide that chosen candidate to victory.
All-the-while the ‘others’ will be gathering the needed data to support the “chosen one”. The Democrat electorate will be oblivious to it.
The national party apparatus coordinates with the state party machines. Everything is always top down, timed, mapped out and planned by design. This doesn’t mean the downstream state party individuals need to know the specifics, because they don’t.
Back to Joe Biden.
Biden is currently “The Chosen One”. That is to say Biden is the candidate chosen by the global power elite to protect their financial interests. That is the answer to Johnathan Turley’s question. That is why the U.S. corporate media, part of the system that protects the interests of the Big Club, will not allow discussion of Biden’s obvious Achilles heel.
The Big Club selected Joe Biden. They go all-inon any of their selections, and they are going to help him regardless of how stupid they look doing it. However, if Biden can’t deliver a win (and it looks increasingly like Biden will fail)…. well, the Club will cut him off and replace with another “chosen one”. That’s why some people believe Hillary Clinton might re-emerge.
It is possible, but unlikely.
The Clintons are tenured club members; they might be able to lobby the members for another effort. However, it would take an overwhelming amount of DNC Club hubris and confidence to support a Clinton -vs- Trump 2.0.
However, there is a more likely argument to be made that Biden’s failure was planned. Coordinated by members who planned to push the Moonbattery of their useful idiots (their base) to the furthest reaches of left-wing policy; thereby creating a void that none of the current candidates could ever fill.
If that Machiavellian scheme is correct, and I wouldn’t put it past the DNC/Club to create such a design, into this DNC/Club created void another “chosen one” would be inserted at the opportune moment. This basic premise is a modification of the Democrat’s favorite rule book: (1) manufacture a crisis; and then (2) don’t let the crisis go to waste.
Regardless of all else, if the Money Managers behind the DNC Club don’t think Joe Biden can deliver, he will be replaced.