Tag Archives: Stock Markets

May 3 2024

US Home Prices Nearing All-Time Highs


Posted originally on May 3, 2024 By Martin Armstrong 

House US Real Estate

Home prices in the US are near all-time highs. As I repeatedly stated, we can no longer look at real estate on the national level. Demand and value are contained to certain states and areas of certain states that the public has deemed most desirable, largely due to political factors such as taxes. Yet, at the moment, buyers are swiping up real estate where available. The S&P CoreLogic Case-Shiller posted a 6.4% gain in February after January’s 6% spike, marking the fastest uptick in home prices since November 2022.

The 20-city composite jumped 7.3% on an annual basis, rising from January’s posting of 6.6%. The 10-city composite saw an 8% annual rise, up from 7.4% in January. February was the third consecutive month of rising home prices in all cities, with Washington D.C., New York, San Diego, and Los Angeles experiencing all-time highs in price.

San Diego saw an 11.4% annual rise in home prices, the largest jump in the 20-city composite. Detroit and Chicago posted 8.9% annual gains. Yes, we will eventually see the red states surpass the blue. Smart money is moving into assets like real estate. The downside of real estate is that they impose a property tax on it annually, but investors enjoy that passive income.

There is a notion of “now or never” among first-time buyers as it simply no longer makes sense financially to rent. A person’s ability to qualify for that first downpayment has diminished with rising rental costs. Rental costs increased 3.15% from February 2023 to February 2024, further rising to 3.6% annually in March of this year. This is close to the pre-pandemic growth rate of around 4.1%, but rental pricing is up 36.6% from the pre-pandemic era. While difficult to judge on a national basis, the average rental now costs $1,983 per month, but it is much higher in places like New York City ($3,206 average) or San Francisco ($3,024) hence why we are seeing people sweeping up real estate there.

Shelter is 34% of CPI. The April 10 release from the Bureau of Labor Statistics found that shelter costs have risen for the past 40 months. In March, shelter costs were the largest contributing factor for core inflation. Rising home prices will not benefit the economy or lead to any positive indicators that inflation is waning.

Apr 20 2024

Insurance is Always a Scam – Beware – They Pay NO CLAIMS in time of war


Posted originally on Apr 20, 2024 By Martin Armstrong 

Loyds refuse to pay for NordStream R

Loyds Nord Stream v (1) LIC and (2) Arch – CL-2024-000094 – Defence

Switzerland-based Nord Stream AG filed a lawsuit against the insurers for refusing to compensate the company. Nord Stream estimated the cost incurred by the attack to be between €1.2 billion and €1.35 billion and is seeking to recoup over €400 million in damages. The insurers, Lloyd’s Insurance Company and Arch Insurance Company responded that since the Nord Stream explosions were “more likely than not to have been inflicted by… a government,” they have no responsibility to pay for damages to the pipelines.

British insurers took the position that they have no obligation to honor their coverage of the Nord Stream pipelines because they were blown up in September 2022, because they were destroyed as an unprecedented act of sabotage, most likely carried out by a national government. They have contradicted reports of the Washington Post and others claiming that a private Ukrainian team was responsible for the massive act of industrial sabotage.

In their legal brief, you can download above, filed by Lloyd’s and Arch Insurance Companies, they state that the “defendants will rely on, inter alia, the fact that the explosion Damage could only have (or, at least, was more likely than not to have) been inflicted by or under the order of a government.”

Consequently,  they argue, “the Explosion Damage was “directly or indirectly occasioned by, happening through, or in consequence of” the conflict between Russia and Ukraine and therefore falls under an exclusion relating to military conflicts. This is important because regardless of your insurance, going into war means they will never pay any claims. Personally, I have NEVER had any insurance company EVER pay what I was covered for. When I die, I am sure they will claim that he is a clone and he is hiding somewhere.

A tree once fell on my brand-new car in a storm. It was then sent to Bordentown Autobody to be repaired. They burned down with my car in it. Allstate Insurance screwed me because I paid cash for the car, and as soon as they knew no bank was involved, they claimed there were two deductibles and subtracted about 25%, knowing that would be my legal fees to make it UNREALISTIC to sue them. Insurance is ALWAYS a scam.

Apr 4 2024

Can Socrates Predict the Lottery?


Posted Apr 4, 2024 by Martin Armstrong

lotto

Can Socrates predict the lottery? We ran tests on that probably 30 years ago, and the results were interesting. No matter what it is, there is always a cycle. You cannot predict the lottery number as a whole, for the possible variables are tremendous.

In the past few years, we have seen continual advertisements for record-breaking jackpots, but this is not some mere game that you can strategically win. You must realize you are betting against the government, and the house never loses.

Desperate for funds, the government has seemingly been promising larger jackpot prizes. Now, they claim that 65% of their earnings will go to the person with the winning ticket. The federal government takes a mandatory cut of all jackpot winnings and pushes all winners into the top tax bracket. State governments also demand a cut of jackpot winnings. There is a fee for public beneficiaries, retailer commissions, and administration costs as well.

You have a 1 in 292.2 million chance of winning the Powerball lottery and a 1 in 302.6 million chance of hitting the Mega Millions lottery. However, you’re more likely to be struck by lightning (1 in 15,000), attacked by a shark (1 in 3.75 million), or die from a bee sting (1 in 55,764), to name a few.

In addition to collecting taxes on winnings, the government receives tons of funding from ticket purchases. New York, the most popular state for lotto, earned over $10.545 billion from lottery revenue in FY23, allocating $3.7 to the Lottery Aid Education fund. This is a stark jump from FY21 when the state earned $8.5 billion on lottery revenue.

The likelihood that you, as an individual, will win is extremely rare. The likelihood that the government will win is absolutely guaranteed, and they earn more for extended contests and larger jackpots.

What we did discover was partial success on individual numbers—123456. For example, partial success is running an individual cycle on each digit. Trying to run a cycle on the number as a whole was pointless.

Apr 1 2024

A Blast from the Past


Posted originally on Apr 1, 2024 By Martin Armstrong 

1990 Cover PEI_Foreign_Exchange_The_Long_Term_1990

PEI1990 Capital Flows

COMMENT: Marty, I was cleaning out my office. I get around to once every 31.4 years, and I found your report that was controversial back in 1990 when you were at war against the fundamentalists who were always getting it wrong, as they still do today. I scanned it in and thought you should post this for the newcomers. You invented capital flow analysis, and you may not qualify for a Nobel Peace Prize since you advocate for peace rather than war, but you are in a category all by yourself. Being a trader rather than an academic who was in the trenches rather than in an ivory tower. People need to know that.

See you in London

SK

Smith Invisible Hand

REPLY: Very interesting. Yes, they always use war to cover up something else. Hitler and Napoleon were trying to resurrect the old Roman Empire over all of Europe. The days of empire building inspired by the Physiocrats that the wealth of a nation was agriculture, so you conquered nation after nation are long gone. Adam Smith wrote his Wealth of Nations to challenge the French Physiocrats and their view that only agriculture was wealth. He argued that it was the total productivity of a nation that constituted its wealth.

Marx v Smith

Then along came Marx, and the wealth became labor, and he tore apart the economy out of jealousy. He attributed nothing to human imagination, the source of all economic advancement. Communism proved that the government was incompetent in regulating or developing the economy.

Smith highest impertinance

Smith was NOT an academic. He went out to observe how everything truly functioned. The socialists hate Smith because they follow Marx and want to force the economy to function the way they think it should. They reject any concept of a business cycle and come up with stupid theories like Random Walks, for that means that they can then manipulate society because it is all just random.

AI Computing

They are now all in a tissy. The government wants to REGULATE AI, and Biden put our illustrious VP in charge. There is a real threat that they will regulate what they do not understand and, in the process, destroy the industry, as they did with investment advice and force people offshore, giving birth to the Hedge Fund Industry.

Mar 1 2024

The Dow Breaks Out to New High Closing


Posted originally on Feb 29, 2024 By Martin Armstrong 

DJIND M Bifurcation 2 29 24

The Dow exceeded the January high and closed February at 38,996.39. The NASDAQ composite has yet to exceed the 2021 high despite the AI Bubble. This still reflects the international capital flows, and our Chaos Models show there will be a trend emerging with a gap between the main turning points ahead. The atmosphere of WAR is impacting the market and the capital flows. Comments from Macron calling to send in troops to Ukraine to prevent somehow its fall, which is inevitable, has only led Putin to say that then opens the door to nuclear warfare.

They are determined to start a war this summer before the 2024 US elections. Both European leaders, NATO, and the Neocons are living in sheer terror of a Trump victory, for he is anti-war, CBDCs, and climate change. If they cannot prevent Trump from taking the White House, I fear they will assassinate him, for there is way too much at stake for these people. I would be very concerned about July, for things appear to be heating up and going into Panic Cycles in many markets come August/September.

We have reached our target of 40,000 we set back in 2011. Our resistance now in the Dow, given a continued rally, is forming at the 42,000-43,000 area.  Exceeding that overhead barrier opens the door to a test of 50,000.

I will do a monthly review tomorrow.

Feb 19 2024

Japan Slips to Fourth-Largest Economy


Posted originally on Feb 19, 2024 By Martin Armstrong 

The Last Days of Japan

Germany has overtaken Japan to become the world’s third-largest economy behind the US and China. Japan’s economy contracted by 0.4% in Q4 after a 3.3% decline in Q3. GDP hit $4.2 trillion in Japan in 2023 compared to Germany’s $4.4 trillion.

Japan’s economy is expected to grow by 1.4% this year. Still, Bank of Japan governor Kazuo Ueda held rates negative and warned that the future policy presented an “even more challenging year” ahead. The current interest rate in Japan is -0.10%, as the central bank falsely believed lowered rates would attract investment and stimulate the economy. The Bank of Japan has maintained a negative interest rate policy since 2016 without success.

Japanese public debt is a serious issue and now stands around $9.2 trillion (1.30 quadrillion yen), or 263% of GDP, and is the highest of any developed nation in relation to GDP. Around 43% of that debt is held by the Bank of Japan, and they have been unable to attract investors.

Inflation is gradually easing in Japan, with December producing a 2.6% figure in contrast to October’s 3.3% posting. However, Japan is becoming increasingly involved in overseas battles and recently sent another aid package to Ukraine in solidarity with the West. North Korea is constantly provoking the nation, and the situation in Taiwan is scaring away would-be foreign investors.

This shift in rank is not due to the German economy growing stronger. Germany is in a tough situation thanks to those in Brussels who eliminated its energy independence and implemented harsh regulations on every sector. There was once a time when people referred to Asia’s market as “Asia and Japan,” as Japan was the top runner for the continent. Various factors are contributing to Japan’s decline. I discuss this topic in further detail in the report “The Last Days of Japan.”

Jan 10 2024

NY Fed Survey: Americans Optimistic on Inflation


Posted originally on Jan 10, 2024 By Martin Armstrong 

Inflation up

According to a recent survey by the New York Federal Reserve, Americans’ inflation expectations have dropped to the lowest level in three years. “How much worse could it get?” the average person assumes. The median expectation is that the inflation rate will be up 3% one year from now, down from a high of 7.1% recorded in June 2022. The survey found that Americans anticipate wages rising by 3% to meet their inflation expectations. Consumers have not been this optimistic since January 2021.

However, the people still anticipate that inflation will remain above the Fed’s 2% target in the longer term, with projections of around 2.6% three years from now and 2.5% five years from now. The Federal Reserve’s last forecast states inflation will decline to 2.2% in 2025 before reaching its lofty 2% target in 2026.

Inflation.Expectations.NYFED2024

The year began with a massive disruption in the global supply chain and increased cargo costs. There are countless protests occurring among farmers across the world who disagree about the future of crops and food price stability. The leading driver that is not discussed – WAR! America is funding two major conflicts at the moment and sinking deeper into debt. The extreme geopolitical uncertainty and risks associated with war always lead to higher energy prices, increased production costs, and massive government spending, further fueling inflation.

Dec 12 2023

The Second-Largest Contributor to US Private Debt


Posted originally on Dec 12, 2023 By Martin Armstrong 

Car in Driveway

The Federal Reserve Bank of New York’s data shows that auto loans have surpassed student loans, becoming the second-largest debt burden for U.S. consumers. Auto loan debt has reached $1.582 trillion, exceeding the $1.569 trillion in student loan debt. This surge in auto loan debt is attributed to rising vehicle prices, leading consumers to take out larger loans at higher rates.

Lenders have responded to this trend by tightening restrictions on auto financing, with approximately 30% of lenders reporting significantly tighter lending standards. The pressure for companies to switch to EVs and inventory shortages have contributed to the increase in vehicle pricing, resulting in consumers financing more expensive vehicles.

At the same time, the government is moving full speed ahead to reach their target of 50%+ EVs by 2030. Thousands of auto dealers have penned the Biden Administration to explain how this policy is significantly hurting their business. The public is drowning in debt over mostly gas-powered purchases, and EVs are significantly more expensive to purchase and maintain. Car manufacturers are focused on producing cars of the future rather than autos that fit the budget and lifestyle of the middle class.

Bidenomics believes student debt should be waived for those who knowingly took on the debt. Will those supporting Bidenomics also push to forgive this mounting auto debt? Like diplomas, people may realize their EVs cost more than they’re worth and they cannot keep up the payments. Perhaps the public, including those who do not own cars, should subsidize these car purchases through taxes since that is the same premise as student loan forgiveness.

The World Economic Forum is in partnership with global governments to end private car ownership by 2050. Owning a car is becoming an increasing luxury. Insurance costs could be a topic for another time as most states have seen their premiums skyrocket. Major cities around the globe like London and New York City are implementing congestion and traffic taxes as well.

Decades ago, someone could purchase a nice car with less than a month’s pay. Kelly Blue Book states that the average price of a new car was $48,008 as of March 2023, which is 27.8% more than pre-COVID pricing. The average cost of a crossover or SUV now ranges between $30,353 and $74,502, with costs rising by over 6% every year since 2020. We will see car ownership become an increasing luxury.

Dec 7 2023

Cost Of Living Outpaces Wage Increases


Posted originally on Dec 7, 2023 By Martin Armstrong 

Powell Fed Got Inflation Wrong Nov 2021

A recent study by Achieve revealed that despite a 37% increase in income, many Americans are facing financial challenges due to rising costs and high interest rates, leading to a surge in personal debt. The average monthly participation in debt resolution programs increased by 119% in the first nine months of 2023 compared to 2020. Wages are rising but they simply cannot keep up with the growing cost of living.

The typical household income of individuals enrolled in debt resolution programs was $59,900 in 2023, a notable increase from $43,598 three years prior. The study’s findings reflect the impact of inflation, a challenging interest rate environment, and the winding down of government stimulus on consumer debt levels. The report underscores the need for measures to address the rising debt burden and its potential impact on income growth.

The study also found that people are facing financial hardship significantly earlier in life. The average age of someone facing debt resolution was 52 in 2020, but that age has since decreased to 44 in 2023. Nearly 40% of people entering debt resolution programs are Millennials, which is also the age demographic of those with the sharpest increase of credit card delinquencies. Nearly everyone is living on credit as balances rose $154 billion YoY, marking the most significant increase since 1999.

No one feels relieves when new inflation reports are released. Governments can release whatever data they like but the fact remains that the price of EVERYTHING has become too much to maintain. Inflation allegedly peaked in June 2022 at 9.1% but I cannot think of anything that has dramatically decreased in price since then.

Dec 7 2023

Should Argentina Peg its Currency to the Dollar?


Posted originally on Dec 6, 2023 By Martin Armstrong 

Monetary System 2

QUESTION: What about Argentina willing to peg pesos to USD? THANKS for all you are doing for us! ALL THE BEST TO YOU AND FAMILY

TD

ANSWER: First and foremost, what collapsed Bretton Woods and the gold standard was persistent deficit spending. They fixed the price of gold to $35 but then spent recklessly every year. you CANNOT have a fixed exchange rate, a pegged exchange rate, or any sort of a gold standard as long as you retain a Marxist/Socialist agenda where you spend more than you have.

In addition, any Pegging of a currency is significantly different than a Fixed Exchange Rate. Under a Fixed Exchange Rate, the main purpose is to facilitate trade. However, you are not expressly subordinating your economy to the economic trend of everyone else in the system. Each nation is still independent, and if their balance of payments falls out of line, then they alone have a monetary crisis.

Henry VIII Debased Groats

Sir Thomas Gresham was the agent for the English Crown in Amsterdam, the Wall Street of Europe at that time. Henry VIII was debasing the currency, and nobody wanted to lend money to him, fearing that what they would be repaid with was debased. Hence, Gresham’s law.

Pegging to the dollar Pegged

A Pegged currency is far worse for the host currency’s economic conditions are imported. If Argentina pegs to the USD, then raising or lowering interest rates by the Fed and the boom-bust business cycle are automatically exported to Argentina. It would be better to peg to a basket of currencies that would be a hybrid system closer to a fixed currency regime for trade.

Napoleon Single Currency 1024x675
970 Nero

Napoleon had actually summoned the best minds and talents from all over Europe into his service. His court was deliberately filled with able men from all over Europe: Dutch, German, Italian, and even Polish. These foreigners worked in the highest offices of his imperial civil service – not exclusively French.

It was Napoleon who created the first single currency in Europe following the Roman Empire. He standardized the weight of the coins so that 40 francs equaled 40 Lire in Italy and 320 Reales in Spain. This was really Napoleon’s idea of resurrecting the Roman empire. Please take note of his coinage. He is pictured wearing a laurel wreath as a Roman emperor. He was far more than just a general. The new movie was interesting, but they overlooked his economic decisions, which were decades ahead of anyone else in Europe.

Latin Monetary Union

The unification of Europe was the accomplishment of Julius Caesar. However, it was Napoleon who standardized the monetary system post-Rome after the Dark Age, which became the inspiration for the Latin Monetary Union by 1865 and later the Gold Standard post World War II.

EuropeanGoldCoinage 1803 1947 R

Even the United States’ $5 gold coinage was equivalent to the standardization of world coinage during the 19th century.