Wilbur Ross Discusses U.S. Economy, China Trade, Tariffs and Hong Kong….


Commerce Secretary Wilbur Ross appears (in studio) on CNBC to discuss the current state of the U.S. economy, the ongoing issues with communist China, the ‘next step’ trade tariffs and the situation in Hong Kong.

Stunning Day of Economic Gaslighting – Despite All Positive Data, Corporate Media Cheering For Recession…


A “negative yield curve“;  a pending “economic recession“.  These are the obtuse and ridiculous proclamations of the Mainstream Corporate Media today.  So let’s take a moment to discuss how stunningly -intentionally- disconnected they are.

Always remember, there are trillions of dollars at stake; and these media entities have a vested interest in maintaining the Wall Street position, adverse to Main Street USA.

First the “negative yield curve” aspect; where long-term bond rates (returns on investment) are lower than short-term rates (returns).  As Reuters proclaims:

“A key bond market metric turned negative for the first time since 2007 on Wednesday, sending stocks tumbling”…

I must admit, I actually started laughing out loud when I first read that proclamation. Allow me to introduce a radical concept in economics: “supply and demand” !

The long-term borrowing rate for return on investment dropped momentarily lower than the short-term borrowing rate of return on investment because massive numbers of foreign investors were rushing to buy long-term U.S. bonds.   Wait… what?  Yes, a ‘negative yield curve’ is what happens when everyone wants to buy bonds in your long-term economy.

There weren’t enough long-term bonds to fill the demand of those who wanted to purchase them.  Ergo, the return rate of interest dropped because there was no need to have an incentive to sell them…. everyone wants them.

So the yield drops, because the U.S. doesn’t need to incentivize the sale… because everyone is lined up to buy them.  See how that works?

Do lines of people wrapping all around the world trying to get to the U.S.A Bank and buy U.S. treasury bonds sound like the USA economy (underlying the bond) is weak or in trouble?

It’s OK to laugh out loud.

No, really, it’s ok.

Yes, Alice, it’s true.  The financial media would have you believe that customers lined-up around the building to purchase your products means your business is about to close because of a lack of customers.   THAT my friends is the stupidity of it.

The U.S.A economy is so strong, so healthy, and forecast to remain so with such intensity, that everyone wants to purchase dollars because it is the world’s highest predicted rate of return for investment….. And somehow the media can spin that into a bad thing.

No, really.  That’s the narrative of today.

Now let’s look at the second stupid “A looming recession“:

First, a “recession” is two consecutive quarters of negative GDP growth.  That’s how you define a recession.  So to start a recession you need need one quarter of negative GDP growth right?  Well, duh, it hasn’t happened, and there is not a single economist who is predicting a negative Third Quarter growth rate (July, Aug, Sept., ’19).

First Quarter GDP growth was 3.1%. [Beating all expectations] Second Quarter GDP growth was 2.1%. [Again, beating all expectations]… and somehow the Third Quarter is suddenly going to be negative growth?   It’s OK to laugh again.

So how does CNN et al  “warn of a looming recession” when there’s not a single economist forecasting a negative GDP for the third quarter?   Well, they make shit up that’s how.

Think about it…. if the economy was contracting, people would not be getting hired right?  Employers would be laying people off right?  Businesses would be selling off assets right?  Wages would be dropping right?

Do you see any of these things happening?

No?  Why not?

Because it ain’t happening, that’s what !!!

The U.S. economy is not shrinking.  Main Street is strong, and getting stronger.

Go back to point #1, would the world be rushing to buy dollars if the U.S. economy was on the precipice of collapse?  Think about it.

Now, that said, there are some economies that are shrinking; and they all have something in common.  The manufacturing export dependent nations are in trouble because President Trump is starting to limit their access to their most desired customers, the USA. And President Trump is telling companies that operate in those export nations that it would be in their best interests to come to the United States to make their goods.

Germany, the economic engine for the EU, is a manufacturing export dependent nation, and it is contracting.  China is a manufacturing export dependent nation and their manufacturing is contracting.  But the U.S. is strong, because we are not dependent on exports.  In fact the U.S. consumes more than 80 percent of what we produce; we are a self-sustaining economy.

Our U.S. economic strength is why Asian and European investors are rushing to buy dollars (US Bonds); and why the U.S. treasury doesn’t need to provide high yield rates as incentives to buy them (hence the negative yield curve).

Stop me when any of the U.S. economic data has even the slightest implication of a slowdown, or “looming recession”.

Our last jobs report showed 164,000 new jobs created in July (yeah, like two weeks ago).  In addition 363,000 people moved from part-time to full-time employment… does that sound like a weak economic outcome?  Current blue-collar wage growth is in excess of 3.4%, and current overall U.S. worker income is growing at a rate exceeding 5.4%.

Does any of that sound like what you see just before a “looming recession”?

(BEA Data Source – Link)

Every actual data result exceeds expectations.

Every measurable KPI in the U.S. economy beats every forecast.

Show me data that supports this “looming recession” claim.  Guess what; you can’t because it is a manufactured bucket of nonsense.  Abject stupidity created in the basement of media narrative engineers and pushed into the U.S. mainstream talking points in an effort to create something that doesn’t exist.   You know the word for that? “Gaslighting” !

Why?

Why are the financial pundits doing this?

Because the engine for the U.S. economy is the U.S. consumer.  The Wall St./Media pundit goal is to erode consumer confidence, instill fear, and hopefully get people to sit on those high wages…. thereby creating a self-fulfilling prophecy.

This my friends is the battle behind Wall Street -vs- Main Street.

There are trillions of dollars at stake.

[You Can Read More Here]

Wealth, Poverty, and Politics


Published on Dec 8, 2015

Recorded on September 18, 2015 Hoover Institution fellow Thomas Sowell discusses poverty around the world and in the United States. Poverty in America, he says, compared to the rest of the world, is not severe. Many poor people in poverty in the United States have one or two cars, central heating, and cell phones. The real problem for the poor is the destruction of the family, which Sowell argues dramatically increased once welfare policies were introduced in the 1960s.

Has the “Smart Money” Entered the US Share Market Yet?


QUESTION: Dear Armstrong,
According to Dow, a bull market has 3 phases, the final being the distribution by the smart money to the public.
You stated that retail is still not participating. Could this be why the market appears to be unable to stop going up? Because the smart money continually fail to entice the dumb to jump in?
Cheers
GF

ANSWER: So far, the “smart money” has been more foreign than domestic. We have not even remotely reached that level where the domestic “smart money” is sticking more than their toe in the water. Just look at the Dow in euros compared to US dollars. The Europeans have been making a fortune buying the dips in the US market on a currency play in addition to the market itself.

Have You Ordered Your Bionic Tail, Cybernetic Arms and Jet Hoverboard?


Published on Aug 12, 2019

Will recently-invented human-assist technology — a bionic tail, cybernetic arms and a jet hoverboard — make your life easier, or provide opportunity for greater control by Progressives over your movements? Have you ordered yours? Right Angle is a production of the Members at https://BillWhittle.com

Can the US Government Really Force the Dollar Lower?


QUESTION: Hi Martin, What tools do the US have to TRY and manipulate their dollar lower (other than cutting interest rates) and in your opinion would they be successful? How much do they have in the Exchange Stabilization Fund? Do they have a defense plan to limit and control capital flows coming in?
Thanks,

RM

ANSWER: They lack any power to prevent a dollar rally. The Exchange Stabilization Fund (ESF) is a U.S. Department of Treasury emergency reserve fund that includes holdings of U.S. dollars (USD), other foreign currencies, and special drawing rights (SDR) funds. The financial statement of the ESF can be accessed at “Reports” or “Finances and Operations.” However, all previous attempts at manipulating currencies have ended in disaster. Yes, the U.S. could put capital controls to block capital coming in, but they would destroy the world economy if they even attempted such a hair-brain idea.

Lowering interest rates will not help for if capital fears survival elsewhere, the level of interest rates will mean nothing. Just look at the creation of the G5 at the Plaza Accord. The market had already turned so their manipulation was already in the direction of the decline. When the dollar fell too far and the other members complained, they then held the Louvre Accord. The markets saw them as incompetent and the dollar continued its cyclical decline on schedule.

Therefore, I have yet to find any period in history where there has been a coordinated effort that has ever succeeded.

 

Why Gold Stocks Rallied During the Great Depression


QUESTION: Hi Marty
Can you enlighten us on what happened back in history to gold mining shares in terms of why shares did not collapse during the crash of 1929 compared to what happened to mine shares in 2008?

What happened to the shares held by the public in 1933 when FDR confiscated gold?
So you were safe holding the shares!

GG

ANSWER: You must realize that gold was money under the gold standard. You can see how it declined following the commodity rally during World War I and eventually bottomed in 1924. During the Great Depression, cash was king and as such Homestake rallied into 1930, but then began to break out with the Monetary Crisis in 1931. The sharp rise came in 1934 with the devaluation of the dollar. Therefore, any comparison to modern times is irrelevant since we are not on a gold standard. Gold now responds in the opposite direction of the currency.

The US Military’s Most Powerful Gun


Real Engineering

Published on Oct 13, 2017
Be one of the first 200 people to sign up with this link and get 20% off your subscription with Brilliant.org! https://brilliant.org/realengineering/

 

An Environmental Economist to Take the Head of the IMF


QUESTION: Mr. Armstrong; You had once written the Christine Lagarde was only a lawyer and she was really put in the role of the IMF chief by Obama. What do you have to comment on this new Bulgarian selection? DO you know her?

HU

ANSWER: Kristalina Georgieva will probably take over the International Monetary Fund (IMF). At least this Bulgarian is an economist, and she has banking experience whereas Christine LaGarde did not. Georgieva is currently chief executive of the World Bank. I do not know her personally, although we probably shook hands yet nothing more.

Georgieva was considered back in 2016 for the post of the UN Secretary General, but was passed over for the Portuguese António Guterres. For the IMF, Georgieva was the candidate of France and of some Eastern European states. Germany and others were backing the former Dutch Finance Minister Jeroen Dijsselbloem. This time the French won.

If we look at Georgieva background, she does hold a doctorate in economics and research at the London School of Economics and at the Massachusetts Institute of Technology (MIT). From 1993 to 2010 she worked at the World Bank. She headed the Environmental Department of Washington Bank and, in the meantime, her representative office in Moscow. In 2010 she moved to Brussels becoming a Commissioner as Europe’s top development aid worker.

When Jean-Claude Juncker took over the Presidency of the Commission in 2014, he made Georgieva Vice-President in charge of the budget. Georgieva had been involved in a major restructuring at the World Bank turning it greener. We should keep in mind that Georgieva wrote her doctoral thesis on “Environmental Policy and Economic Growth in the US.”

 

Can the Fed really Control the Economy?


QUESTION: This whirligig talk of whether the Fed cuts rates by 25 or 50 basis points is carnival-level absurdity. Does the Fed have the “pretense of knowledge,” as F.A. Hayek, said, that they can regulate the economy like turning up or down the thermostat? I know you don’t agree with this, Martin, but then, Wall St. trades on daily sentiment not ideology.

TM

ANSWER: I understand the theory, but where it is seriously flawed is the idea that people will borrow simply because you lower rates. More than 10 years of Quantitative Easing, which has failed, answers that question. The way the Fed was originally designed allowed it to stimulate the economy by purchasing corporate paper directly, which placed it in a better management position. Buying only government paper from banks who in turn hoard the money fails. As Larry Summers admitted, they have NEVER been able to predict a recession even once.

 

 

The Fed lowered rates during every recession to no avail just as the ECB has moved to negative rates without success. The central banks are trapped and they are quietly asking for help from the politicians which will never happen.