Tag Archives: Supply Side Inflation

Mar 13 2024

PAX


Posted originally on Mar 13, 2024 By Martin Armstrong 

Augustus AR Cistoporus PAX of Ephesus

COMMENT: I have investigated what you have said about our Western leaders. From the US to Britain, the Balkans, France, Poland, and Germany, they all want war. I am 77 now. My whole life was about creating peace. I remember Richard Nixon opening China and dividing it from Russia. I believe you are correct.  There is no explanation for everyone seeking war other than to hide their appalling government mismanagement.

Thank you for your analysis. It is always unmatched.

GKB

Athens Owl 449 413BC Egyptian Imitation

REPLY: History repeats, and human nature never changes. We have the model from Rome, the greatest empire ever created. The Pax Romana was achieved by everyone benefiting in their economic relations. Once these people removed Russia from the SWIFT system, they condemned the United States to its demise. The rise of the BRICS has nothing to do with fiat money. All money has always been fiat. From ancient times, we find imitation coinage of the dominant economy being created by other regions, showing that there was always a premium over the metal content if it was a coin of the dominant economy like the US dollar today. Here is an imitation of an Athenian Owl stuck by the Egyptians, who never had coins until they were conquered nearly 100 years later by Alexander the Great. They issued imitation Athenian Owls because they were the currency of international trade.

Julius Caesar AR Denarius Imitation Genuine

Even the Celts, when Julius Caesar conquered Europe, still imitated his coinage. The metal was virtually the same, so it was a counterfeit but an imitation. The Celts still used Roman coinage for their monetary system.

Celtic Imitation of Greek Stater Philip II

Even 300 years before Caesar, when the Macedonians were the dominant economic power of Phillip II and his son Alexander the Great, we find Celtic imitations of Macedonian gold where they at least tried to imitate the design.

Julio Claudian Imitations

Even after Caesar conquered Europe, we find Germanic imitations of Roman bronze coinage. Once more, they could have created their own coinage but imitated the coinage of Rome.

Faustina Sr Imitations

As trade expanded with India, we find a series of Indian imitations of Roman gold coinage running the course of 300 years. We see Celtic imitations of Roman coinage as well as Germanic coinage, which also ran for about 300 years.

Leo I Siliqua Imitation

The fact that we have hundreds of years of imitations of the dominant economy PROVES beyond a shadow of a doubt that the coinage was NOT based on the metal content; there was always a premium applied to the dominant currency in the world at that time.

Fiat Money

This entire nonsense that the dollar is just a fiat currency is absurd. The value of ANY currency is the strength of its economy. The dollar has been the RESERVE currency BECAUSE everyone wanted to sell their products to American consumers.

Pax Romana 2

The PAX Romana took place BECAUSE all the conquered lands found it was beneficial to be part of the empire, for they could sell their products. World Peace was created by allowing free trade as the Romans did. Then, the people would oppose any local politician preaching war, for it would cut off their income. We were on the verge of world peace before COVID-19, when everyone participated in the world economy. Today, that has all been destroyed. Peace is no longer fashionable – it is hatred and war that now define world leaders.

This is a lesson our Politicians Must Learn, and the Neocons in

America – Europe – Russia – China

at really the enemies of the people. 

War is never created by the people – only by the elites in power.

As King Louis XIV of France said on his deathbed:

Louis XIV War
Mar 11 2024

Right on Inflation, Wrong on Tariffs – Gary Cohn Outlines Biden Inflation and State of Economy for 2024 Election


Posted originally on the CTH on March 10, 2024 | Sundance

Gary Cohn appears on Face The Nation to discuss the finance, the economy and the pain felt by consumers.  He won’t say it directly, for obvious reasons, but what Cohn describes in terms of political support boils down to Main Street business supporting Donald Trump and Wall Street Multinational Corporations supporting Joe Biden.  That is ultimately what is obvious at a macro level.

I’m starting the video at 03:08 for the purposes of emphasizing inflation.  What Cohn says about U.S. inflation is essentially accurate and I have a Cliff Notes, tldr, HERE.  However, what Cohn says about tariffs creating inflation is not accurate, as outlined by the 2017 through 2020 results of Trump tariff policy.  Cohn says, “No one absorbs tariffs, except the consumer,” this is false.  As we saw in 2017, 2018, and 2019 China, Asia and the EU essentially dropped their export prices to retain access to the USA market and offset tariff costs.  That’s just a statistical reality.

https://youtube.com/watch?v=wQZg5dzdiyU%3Fstart%3D188%26feature%3Doembed

The transcript is HERE; however, I want to draw attention to a geopolitical aspect that is not getting enough attention.  Specifically, the cost of FOOD PRODUCTS and the attached inflation.

Why is food inflation continuing to be a problem?  Why is food inflation not just a USA problem?  Why are the EU farmers protesting?  These questions are easily answered, and yet no one in the Western financial press will explain.

The Build Back Better agenda, known in the USA colloquially as the Green New Deal, carries with it massive increases in cost for energy products.  Fertilizer, which needs natural gas, and farming, which needs large amounts of fuel, diesel and fuel oil, uses costly energy products.  Packaging, plastics (petroleum derivatives) and cardboard also require large amounts of energy.

The manufacturing (heating, cooling, freezing) as well as storage and transportation of food products also use massive amounts of energy.  Additionally, and specifically because of the nature of their consumption, the increased energy costs associated with generating food travels quickly through the supply chain.

Food inflation is always the first thing you notice when the prices of energy products skyrocket.  This is well known and not subject to debate; everyone accepts this.

In the past 30 +/- years, large multinational corporations known as Big Ag have created a system where the USA generates a massive amount of the global food supply.

The advent of modern farming fertilizer, pesticides, seed genetics and other farming products/equipment that increase crop yield, has also been a big factor in the capacity of the USA and Western farming world to increase production.  As the globe became more reliant on the production efficiencies of the Big Ag “Western world,” they simultaneously became dependent on the outcome.  That dependency put them at risk of feeling the impact of inflation when you think about the farm products.

The result was that when Western Ag farming costs skyrocketed, the high cost of harvest outcomes were not just felt in the USA and/or Western nations.  As food production costs increased, the higher costs of production transferred into all the exported products.  Food inflation was exported globally.

The Western Build Back Better and Green New Deal energy policies subsequently meant the world was going to pay a higher price for food globally.  That’s what happened.

The Yellow Zone was responsible for a higher percentage of global food production.  The Yellow Zone is also the place where energy policy was changed in such a radical format that massive increases in energy costs were created.

The Yellow Zone (geopolitically the “West”) drove up the cost of farming, the Gray Zone pays a higher price.  This was all by design and not accidental.  The corporations who supported the BBB/GRD agenda all benefit.  The citizens who need to eat, do not benefit.

So, when you see EU farmers protesting against the ridiculous ENERGY POLICY changes of the West, you must accept the USA bears a greater responsibility for creating and demanding the increased prices that farmers globally are having to deal with.

In Gray Zone areas, where domestic food production costs are not subject to the changed energy policy, there is little to no food inflation.  However, the more dependent the country is to food imports (ingredients or final product) the more they are impacted by rising farming costs.

Grey Zone countries that can self-sustain on the production of food and have no energy agenda have little food inflation.

The more the country is strangling energy production and driving up energy prices, the higher the cost of farming and subsequently the higher index on food inflation.  The two metrics are directly related.

Food inflation globally is a big problem.  Western energy policy is exactly why!

Mar 9 2024

Ep 3300a – It’s All About To Fall Apart For The [CB]/[WEF], Time To Restructure The Economic System


Posted originally on Rumble By X 22 Report on: Mar 7, 2024 at 5:00 pm EST

Mar 9 2024

The Coming New Monetary System


Posted originally on Mar 8, 2024 By Martin Armstrong 

QUESTION: Hello Martin, been reading your passages for a few months now. I had a question for you.

What currency do you think BRICS will use to settle trades in the future and if that he bitcoin could be a viable option? Since you don’t see the USD being the world currency by 2035.

Thanks for the wisdom.

ANSWER: The only benefit of Bitcoin is that it is neutral. But it is insufficient for world commerce because it cannot be used for lending or credit, or you end up in the same situation where it is just leveraged – the very complaints about fractional banking. You deposit $100 in a bank, and they lend out $92, and then two accounts show the same cash. The money supply can be multiplied many times through credit. The nonsense that Bitcoin would replace the dollar as the reserve currency only shows that those people do not understand the world financial system. To accomplish that, you will destroy everything – mortgages can no longer be made, and the entire world is plunged into a truly monumental depression, sending us back to the Dark Ages.

The primary argument against the dollar is that the Neocons have turned it into a political weapon by sanctioning Russia and removing it from SWIFT. That woke up many countries, who then realized that the dollar had become a weapon and no longer an impartial currency in world commerce.

The de-dollarization is NOT economic-based but POLITICAL. Wake up! This is not the standard fiat money nonsense. This is about political power to force countries to do the bidding of American Neocons or else!

Private Assets Government Assets

The more practical neutral element would be gold. But there cannot be a “GOLD STANDARD” whereby you fix the price. With time, such a system will collapse, as did Bretton Woods. A monetary system MUST float, as does the economy and everything else. During a depression or recession, people sell assets and run to cash. In inflationary booms, you buy assets and get rid of the cash. LOOK – I am NOT an academic! I advise on trillions of dollars and have watched how capital responds for about 50 years. It is always self-interest – not theories of equality.

Gold 400 oz Bars

400 oz Central Bank Gold Reserves

I have been called in by central banks worldwide BECAUSE we have been the largest institutional adviser since we have focused on capital flows and currency markets. I can tell you that central banks are NOT buying gold because they think it will go up. That has absolutely NOTHING to do with such decisions. They are buying gold because it is NEUTRAL, and you can no longer trust the dollar, British pound, or the Euro, no less the Yen, etc. All Western currencies are now subject to political intervention as we enter the mere risk of war and Neocon intervention.

Florence

The only way to create a neutral, NON-POLITICAL world currency would be one where international transactions are carried out in gold – BUT on a FLOATING RATE – not fixed. During the 14th century, even Florence had a two-tier system where gold was used for international transactions and silver for domestic transactions. The more practical monetary system would be for each country to maintain its own currency for domestic use, and the international settlements would be in NON-POLITICAL gold.

This is the problem with the Euro. They eliminated the currencies to end the fluctuations between the member states. Still, the refusal to consolidate the debts meant that the volatility that once existed in the currencies was merely shifted to the bond market where each member’s debt trades according to their credit rating, as is the case among the 50 states in the USA.

Mar 9 2024

Free Home Loans for Illegal Migrants in California


Posted originally on Mar 8, 2024 By Martin Armstrong

Leaving California

Liberal California lawmakers are proposing new legislation that would grant illegal migrants zero-down, zero payment home loans. Assemblyman Joaquin Arambula, D-Fresno, who penned the bill, states, “The social and economic benefits of homeownership should be available to everyone.” This completely insolent maneuver is a slap in the face to all taxpaying citizens who can barely afford homes of their own.

The program would expand the California Dream for All Shared Appreciation Loans that began in 2023 with a $300 million budget intended to house 2,300 applicants. This fund failed in 11 days as the people who pass these laws have absolutely no concept of basic finance. This time around, they’re ensuring that only people who do not work full-time will be qualified as the new qualifications are that someone must earn under 120% of the median county income, and be the first GENERATION in their family to own a home on US soil.

The changes to the failed legislation is as follows:

LEGISLATIVE COUNSEL’S DIGEST

AB 1840, as amended, Arambula. California Dream for All Program: first-time homebuyers. eligibility.

Existing law establishes the California Housing Finance Agency in the Department of Housing and Community Development, and authorizes the agency to, among other things, make loans to finance affordable housing, including residential structures, housing developments, multifamily rental housing, special needs housing, and other forms of housing, as specified. Existing law establishes the California Dream for All Program to provide shared appreciation loans to qualified first-time homebuyers, as specified. Existing law establishes the California Dream for All Fund, which is continuously appropriated for expenditure pursuant to the program and defraying the administrative costs for the agency. Existing law defines “first-time homebuyer” for these purposes. Existing law authorizes moneys deposited into the fund to include, among other moneys, appropriations from the Legislature from the General Fund or other state fund.

This bill would specify that the definition of “first-time homebuyer” includes, but is not limited to, undocumented persons. an applicant under the program shall not be disqualified solely based on the applicant’s immigration status. By expanding the persons eligible to receive moneys from a continuously appropriated fund, this bill would make an appropriation. The bill would recast the fund so that appropriations from the Legislature from the General Fund or other state fund are deposited into the California Dream for All Subaccount, which the bill would create and make available upon appropriation by the Legislature for specified purposes.

In fact, this is not a “loan,” but another taxpayer-subsidized program, as qualified applicants will receive the funds to put 20% down on a home without making a payment on the loan or to the CHFA. The funds will only need to be repaid if the borrower sells or refinances the home, but the property may be held for an indefinite amount of time.

California has the largest homeless population in the nation who are discarded members of society, even the veterans who served our nation. The average price of a home in California is about $750,709 based on Zillow’s estimates, marking a 4.4% YoY increase, which makes a typical 20% downpayment around $150,141.80. Due to high prices, California boasts the second largest renter-occupied market in the nation behind New York, with 49.7% of the population opting to rent largely out of necessity.

This should receive bipartisan backlash and open the eyes of even the most liberal citizens. The government is using the resources it collects from you via taxation to push a political agenda through the use of illegal unvetted migrants who are toppling state budgets and destroying America from within.

Mar 8 2024

Powell: March Rate Cut Unlikely


Posted originally on Mar 7, 2024 By Martin Armstrong

Powell Jerome

Those who follow this blog already knew that the Federal Reserve would not drop rates in the future due to unsustainable fiscal policies paired with America’s increasing involvement in foreign wars. All of the talking heads were preaching that rates would significantly decline to pandemic levels, as if that were the historical norm. Every fiscal policy in recent years has exacerbated inflation and the Fed cannot keep up with government spending. QE FAILED. The artificially low interest rates of the recent past were completely unsustainable and relied on outdated theories.

The outdated understanding based on Keynesian Economics remains to increase the supply of money and it MUST be inflationary. The Fed raises rates to reduce consumption and lower rates to stimulate consumption. It’s a very nice theory, but when actually tested, it utterly fails. Lower rates will NEVER cause people to invest UNTIL they believe that there is an opportunity to invest. We are watching the big players withdraw from equities, let alone government debt. We are in a private wave where money is running off the grid at a rapid pace.

DowIntRates 1929

The peak in interest rates took place in 1899 at virtually 200%. Yet, 1929 was the real bubble top and it peaked with 20% interest rates in call money on the NYSE. In theory, the biggest boom should have been met with the highest interest rate. In truth, the “real interest rate” as I have defined it is when the interest rates exceed expectations. If you think the stock market will double, you will pay 25% interest.

As you can see, while interest rates hit nearly 200% in 1899, the share market did NOT crash percentage-wise anything as it did following 1929. Look, there is a lot more to this than meets the eye. Everything must be addressed on a global scale for it all depends also on the direction of capital flows. There is just a lot more to this than simply the money supply and interest rates.

CALLMONY MA

Now, Powell continues to explain to the public that VOLATILITY and economic conditions are beyond the control of the Fed. “We believe that our policy rate is likely at its peak for this tightening cycle,” Powell said. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured.”

Powell Fed Got Inflation Wrong Nov 2021

All the news of inflation waning, including recent data, is inaccurate propaganda intended to calm recessionary fears. Even by the government’s data, inflation is up 3.1% compared to last year. It was an unprecedented moment when Powell broke with Washington and criticized the government for their unsustainable spending. The Fed NEVER criticizes the government, despite the two being separate.

Hence, I say to stop blaming the Fed. They are not the ones creating all the money but are working to match monetary policy with unsustainable fiscal policies. We are looking at trillions in deficits per year. There is no restraint when creating new massive spending packages. Then people blame the central bank with no concept that it’s only a fraction of “money;” the real issue is CONGRESS.

Listen, interest rates cannot decline in the face of war. The 2020 yearly array showed a turning point for a high in 2022 and a possible correction into 2024. I explain this in more detail on the Socrates private blog but buckle up for the year ahead.

Mar 7 2024

Scared of the National Debt? You Should Be.


Posted originally on Mar 7, 2024 By Martin Armstrong 

NationalDebtNYCVBillboard

A new billboard launched in New York City’s Times Square is sounding the alarm on America’s growing national debt crisis. “Scared of the national debt? You should be.” US national debt spiked past $34 trillion at the top of the year and continues to rise due to massive spending packages. Now that America is committed to funding two largescale wars and 7.2+ million new migrants, America will continue sinking deeper in a hole.

The Committee to Unleash Prosperity (CTUP) funded the billboard and said its aim to inform the voting public on the policies that will destroy this nation. CTUP says that this is a bipartisan problem that must be revealed to average person. Their website quotes Milton Friedman:

“Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt.”
Friedman Milton Autograph

The average person does not realize that these “free” aid packages to Ukraine, Israel, Taiwan, the migrants, climate change, etc., come at the expense of the US taxpayers. YOU are paying for all of these measures. Government has and will raise taxes in order to fund these fiscal measures but they will NEVER collect enough revenue from the people to cover their spending. Then these measures lead to rising inflation where goods cost significantly more and our dollar is worth significantly less.

The Congressional Budget Office stated that national debt reached 97% of GDP by the end of 2022.  I repeatedly point to Jerome Powell’s 60 Minute interview where he breaks with Washington to point out how utterly unsustainable government policy has become. “How do you asses the national debt?” the interviewer questioned the Fed chairman. “We mostly try very hard not to comment on fiscal policy and instruct Congress on how to do their job,” Powell answered, adding that Congress has oversight on the Fed and not the other way around.

@60minutes

60 Minutes witnessed migrants struggling to get through coils of sharp wire to illegally enter the U.S. #60minutes #eaglepasstx #borderpatrol #usborder #migrants

♬ original sound – 60 Minutes

“In the long run, the US is on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path and that just means that the debt is growing faster than the economy,” Powell finally warned, later adding, “effectively, we are borrowing from future generations.” He warned that we must begin to prioritize fiscal policy immediately to fix this unending crisis. Again, his comments were unprecedented as his agency is largely unable to criticize Washington. How is the Federal Reserve supposed to regulate price stability when their overlords are doing everything possible to steer the nation’s economy off the deep end?

So what can the public do and what’s the point of this billboard? It begins with your voice and ends with your vote. Stop supporting these endless wars, they are only hurting the nation from within and are NOT meant to attain victory or liberate anyone. We are not helping the people of Ukraine by prolonging their war. We are not saving the world by throwing money at climate change policies. We simply do not have the resources to fund millions of migrants who continue to show up at the border every minute. All of these policies are hurting the economy and, ultimately, the future of America and the American people.

Mar 6 2024

Cap on Credit Card Late Fees Hurt Financially Illiterate Americans


Posted originally on Mar 6, 2024 By Martin Armstrong 

CreditCardDebt.Chart_

The Biden Administration implemented a new rule that will cap credit card late fees at $8. The Consumer Financial Protection Bureau has praised the measure, estimating it will save Americans over $10 billion annually in late fees, or around $220 annually per person as 45 million Americans have experienced these fees within the last year, but this measure may be more harmful than helpful.

Credit card debt in America is at an all-time high of nearly $1.13 trillion and continues to rise as around 56 million Americans carry credit card debt. The typical late fee payment is around $32, but this is merely the fee for missing a payment and does not account for compounded interest. It seems like common sense, but one must realize that the average person is not financially literate. The concept of basic finance is not a mandatory requirement for the public education system, leading many people to live off debt, well beyond their means, with no chance of recuperating. America has the leading median level of credit card debt among all developed nations. There is a widespread belief that one can afford certain goods if they are approved for a line of credit, which only benefits the banks.

Debt Hole Cannor Climb Out

Now, the banks are certainly profiting on late fees, which account for about 15% of credit card profits based on the CFPB’s 2021 Consumer Credit Card Market Report. Do these fees deter reckless spending? A 2022 ABA-led survey found that 46% of respondents said they made it a priority to pay off their credit cards on time to avoid late fees. That particular study found that a fee of $10 was enough to redirect one’s attention to their financial obligations. Another study by the Harris Poll and NerdWallet found that Americans were more likely to make a payment of their cards if a $30 fee was implemented.

Again, one must understand that the average person cannot compute the cost of compounding interest. Borrowing money is not a legal right and should be done with the utmost caution. Simply forgetting or dismissing financial obligations has consequences.

The banks will find a way to profit off the people in other ways. It is the nature of banking. Rob Nichols, the president and CEO of the American Bankers Association, explained that other measures could be implemented that will hurt everyone. “The Bureau’s misguided decision to cap credit card late fees at a level far below banks’ actual costs will force card issuers to reduce credit lines, tighten standards for new accounts and raise APRs for all consumers – even those who pay on time,” Nichols said. This is yet another Biden Admin policy favoring the financially irresponsible at the expense of others.

So, what is the CFPB recommending as an alternative? CBDC. The agency is first suggesting digitizing banking so that consumers have instant access to their credit scores and spending habits. Again, these numbers are disregarded by a portion of the population. The agency is patronizing all Americans by stating we are not intelligent enough to know when to pay off our monthly debts without digital notifications and reminders.

Financial literacy is desperately needed in America. So, while the Biden Administration is breaking its arm patting itself on the back for this surface-level win for the everyday man, the ruling does nothing to combat the growing personal debt crisis.

Feb 27 2024

Ep 3292a – Big Names Selling Off Stocks, Pattern Established, Market Correction Coming


Posted originally on Rumble By X 22 Project on: Feb 26, 2024 at 7:45 pm EST

Feb 23 2024

70% of American Cities in Debt – Pension Crisis will Cause Taxes to RISE


Posted Feb 23, 2024 By Martin Armstrong 

Pension Crisis

A study by Truth in Accounting (TIA) revealed that 70% of America’s largest cities fell into a deficit in fiscal year 2022. Out of the 75 cities studied, 53 simply did not have the funds to pay their bills. The study found that the total debt among the 75 cities had reached $288 billion, and despite the $307.4 billion of assets shared among them, the cities held $595.3 billion in unfunded pension plans.

US law requires cities to maintain a balanced budget, yet no one is holding the representative accountable. Mind you, this data was collected BEFORE the migrant crisis toppled city budgets. Cities have been overreporting their revenue and incorporating borrowed funds into their total revenue calculations. These cities push off bills until the beginning of the next fiscal year to alter calculations.

Pensions and health care were the major issues burdening American cities long before Washington required taxpayers to bankroll the 7+ million new illegal residents. As the report notes: “The most common accounting trick cities use to understate government costs is not including true compensation costs. Cities provide employees with salaries and employee benefits, such as healthcare, life insurance, and pensions. While pension and other post-employment costs, such as health care, will not be paid until the employees retire, they still represent current compensation costs earned and incurred throughout their tenure.”

Cover Pension Crisis

I have been warned for many years that the government pension plans operate like a Ponzi scheme and have been waiting to implode. Government employees have the defined-benefit (DB) while we get the defined-contribution (DC) plans. Most state and local government employees, actually 87% of those working full time, participate in a defined benefit (DB) pension plan. They contribute NOTHING but are guaranteed a pension on top of what they earned, plus free healthcare for life. Under these promises, these employees have never been required to save for the future and will demand that the public be taxed on anything and everything to keep to this Ponzi scheme on life support.

UNDER NO CIRCUMSTANCE should you allow your pension fund to be managed by any government-related entity. They cannot pay government employees so they have sought to suck in everybody else to cover up their losses. Before 2032, there will be more people on retirement from government than actual employed workers. The government must continue to raise our taxes because they are incapable of creating reform.

The reason I highlight the migrant crisis is that we are now shelling out billions of dollars every month to support a new influx of people who have also never contributed to the system. They are providing them with “free” shelter, food, debit cards, and more. Then, they decided to prevent these very people from obtaining working permits to ensure the select few with good intentions cannot ween off government/taxpayers.

Look at history to see how this situation plays out—warning: the pension crisis will not end nicely. When the government could no longer afford to pay the army, it began sacking Roman cities that opposed their general. They turned inward and cannibalized their own cities, weakening the entire empire, thereby allowing the barbarians to come through the gates. We have followed the very same mistakes as Rome. This is just how empires always end. We are no different.