Tag Archives: Supply Side Inflation

Jul 20 2023

Freedom Flyers


Armstrong economics Blog/Real Estate Re-Posted Jul 20, 2023 by Martin Armstrong

Have you ever noticed a decorative eagle plaque above a home in America? This was once a popular symbol back in the day to symbolize freedom from mortgage payments. Homeowners would adorn their houses with this symbol to indicate that they were free from the bank and owned their home free and clear. Around 40% of owner-occupied homes have been paid off, further adding to the housing inventory crisis.

The 2022 Federal Housing Finance Agency reported in 2022 that 84% of outstanding mortgages locked in a rate below 5%, while 63% secured a rate at or below 4%. Mortgage rates surpassed 8% last week and those who own are unlikely to sell. While some point to double-digit mortgage rates in the past, it was not difficult for buyers to put down 40% upfront since housing prices were low in comparison to wages. This was also a time when the cost of living supported a traditional lifestyle where only one partner was required to work.

Although COVID and low rates created strong demand, the underlying issue is the Great Reset. Institutions are set to own 40% of all single-family rentals by 2030, precisely on time for Agenda 2030. Regular buyers have been outbid by institutions coming in with cash payments. BlackRock is now the largest landowner in America. This is all by design. They do not want people to afford a home because then there would be no need for 15-minute cities, and forever renters living in ADUs. The inventory issue will not recover because no one can outbid the institutions who do not need to borrow money.

Jul 12 2023

BRICS & The Gold Backed Currency Idea


Armstrong Economics Blog/Gold Re-Posted Jul 12, 2023 by Martin Armstrong

QUESTION: Marty,

Will the Brics launching a gold backed currency be the catalist for bankrupting 3rd world economies? Or is it rising interest rates on their debt?

Tks for all the light u share in a confusing economic landscape.

Cbeers
.baldy

ANSWER: It is unlikely that we are looking at a BRICS single currency like the euro, for that would require a central monetary authority, surrender of sovereignty as in Brussels, end any possibility of QE, etc. We would need to completely collapse the idea of Keynesian Economics insofar as it has evolved, allowing deficit spending.

There is no special magic to gold. It was first restricted to only kings, for it was considered to be the tears from the sun god. As more gold was discovered, it began to be used for the jewelry of wealthy aristocrats. Then it became used as money in its natural form, known as electrum, a natural alloy of gold mixed with silver.

Then they refined the gold electrum and created the first bimetallic coinage around 560 BC. This required a sufficient supply of gold to create a money supply. As the quantity increased, the value of gold declined relative to both silver as well as commodities in general – inflation.

The real argument behind gold as a backing is that its quantity is limited. However, over the centuries, the silver/gold ratio has fluctuated anywhere from 8:1 to 120:1. From this perspective, the real objective here is to prevent the government from creating money at will. Thanks to Keynesian Economics, governments have the power to create money at will, allowing them to retain power and exert it in their endless wars thanks to the Neocons.

The real objective here with the issue of BRICS is that both Russian and China object to the dollar being the reserve currency in the middle of geopolitical tension. Yet the Biden Administration has undermined everything by removing Russia from SWIFT. That set in motion the collapse of globalization, and it has shown to the world that the US now controls the SWIFT system, which renders it no longer politically neutral.

This is where the IMF is trying to desperately move in for the kill to replace the dollar with their electronic digital currency. This is really no better because the IMF will also play political games. Strauss-Kahn was appointed managing director of the IMF on September 28, 2007, with the backing of then–President of France Nicolas Sarkozy. He was set up, and in New York, they came up with a maid in a hotel who claimed he tried to rape her. They wanted to remove him became he was independent. He served in that capacity until he was forced to resign on May 18, 2011. All the charges were later dismissed for the lack of any credibility. Yet, his replacement was Obama’s friend Christine Legard, a board member of the economic terrorist organization, the World Economic Forum. She was installed in the IMF and immediately threatened all the tax havens to turn over all their secret accounts so they would be removed from SWIFT. She also threatened the Vatican.

We are clearly staring into the eyes of a major global sovereign debt default. This is also why they are pushing for war. They plan on holding another Bretton Woods II, and the IMF will make its pitch to rule the world. This is all part of the scheme for this one-world government.

Jul 12 2023

BoC Study: 59% of Canadians Willing to Accept CBDC


Armstrong Economics Blog/Central Banks Re-Posted Jul 12, 2023 by Martin Armstrong

The masses do not realize what CBDC really entails. It is marketed as a convenient and modern way to bank. In truth it is a tool for control, an important tool that governments need to usher in the Great Reset. A recent poll by the Bank of Canada aimed to see how willingly the public would accept a new digital currency. Surprisingly, the majority said they were willing to make the switch without hesitation.

An alarming 59% of respondents said they are willing to switch to CBDC once available. They do not realize that they won’t have a choice in the matter. Around 43% said they were “somewhat willing” to accept CBDC. Then 11% said they were “very willing” and 5% “extremely willing.” Only 25% said they would not make the switch, which again will not be optional. Only 16% admitted that they do not understand the concept.

It appears that the public does not understand the risks involved. Over half (51%) said they were confident the central bank would securely handle their transactions and data. Around 56% said they were concerned about the potential for fraud, cyber attacks (53%), personal data misuse (44%), and lack of anonymity (35%). The central bank, of course, did not ask the real question – Are you comfortable with the government controlling all of your financial transactions?

Eighteen of the G20 countries have already begun developing digital currencies. The real threat here is that CBDC will provide governments will full access to our finances. We see how easily private banks de-bank individuals. Trudeau was able to cancel accounts of protestors and their alleged supporters in an instant.

CBDC would allow government to deny people access to their finances entirely, especially since cash will not be an alternative. The WEF wants to link individual IDs to the banking system and throw in social credit scores for good measure. A WEF spokesman recently said during the Summer Davos that they would like to control what people buy and ban unapproved purchases. Then they will ensure no money goes off the grid as governments want to tax us into oblivion. Now is the time to show resistance to the idea. Once they implement these policies, there is no going back. They will give us a timeframe to convert our cash to a CBDC and then governments will have complete control over our finances.

Jul 10 2023

Gold Back Currency Reality


Armstrong Economics Blog/Gold Re-Posted Jul 8, 2023 by Martin Armstrong

QUESTION: Do you think the BRICS would create a gold-back currency as proposed by Russia?

SJ

ANSWER: The Neocon has directed the Biden administration to remove Russia from SWIFT. Their single-minded goal is destroying the world economy, but they do not care. They think they will conquer Russia and China and dominate the world so they will worry about the monetary system afterward.

You have to understand that if the BRICS followed that directive and created a single gold-back currency, they would have to end any idea of international trade. This proposal is understandable given the hostility of the United States from the Neocons, who are now in charge. Congress is oblivious to what is happening, and the American public is arguing over Transgender destroying the family unit.

This is not some simple one-dimensional idea that we create a limited-backed currency. That will be DEFLATIONARY and, at the same time, promote civil war in the United States. Politicians cannot run for office, promising endless gifts, forgiving student loans, etc. You cannot have deficits. This would NECESSITATE the end of Marxism once and for all.

This idea of a gold-back currency requires political change on a grand scale.  That is coming. Post-2032 will be a new monetary and political system. Before then, they are pushing CBDC, and they will restrict what you can buy or sell, and this is all to retain power because they KNOW they are losing it. But in the process, they are destroying everything. The people who voted for Biden had no clue that they were voting for a coup and the ultimate destruction of Western civilization as we have known it.

I buy gold, but I also understand the game. I do not want gold-back currency; I prefer gold to remain as a hedge against the government. If they back the currency with gold, this time, they will be knocking down every door to confiscate it all.

These Neocons have already divided the world economy in two. They think they will conquer the world. The enemy is within.

Jul 4 2023

Reinsurance Rates for Catastrophic Coverage Jump as High as 50% to Insurance Companies Effective July 1st


Posted originally on the CTH on July 3, 2023 | Sundance 

As if carrying Homeowners insurance in California and Florida wasn’t already subject to ridiculous increases in premiums, things are about to get a lot worse.

Effective with the July 1st notification, Reinsurance rates, these are companies who insure the insurance companies, are telling their clients there will be up to a 50% increase in cost for underwriting catastrophic coverage.  Perhaps claims in the past few years have been higher; however, I suspect the issue amid the reinsurers is partly connected to the issue that surrounds banks and bond rates.

Back when interest rates were near zero, banks and reinsurers likely scooped up lots of Treasuries and bonds. As the Federal Reserve hikes rates those bonds have declined in value. When interest rates rise, newly issued bonds start paying higher returns to investors, which makes the older bonds with lower rates less attractive/valuable. The result is that most banks, and I suspect big reinsurance houses, have some amount of unrealized losses on their books.

Whatever the reason, the big reinsurance companies are now telling the insurance carriers their catastrophe rates are going up as high as 50%.  Those insurance companies will then pass those rate hikes to the individual policy holders for commercial buildings, residential homes, cars, RV’s etc.  Bottom line, homeowner insurance rates are about to go up again with policy renewals, especially in Florida and California.

LONDON, July 3 (Reuters) – U.S. property catastrophe reinsurance rates rose by as much as 50% at a key July 1 renewal date, broker Gallagher Re said in a report on Monday, with states such as California and Florida increasingly hit by wildfires and hurricanes.

Reinsurers insure insurance companies, and have been raising rates in recent years because of steepening losses, which industry players put down in part to the impact of climate change. Higher reinsurance rates can affect the premiums which insurers charge to their customers.

U.S. reinsurance rates for policies which previously faced claims for natural catastrophes rose 30-50%, Gallagher Re said.

Reinsurance rates for similar policies in Florida rose 30-40%, the broker added.

Some insurance firms have pulled out because of the risk of heavy losses. State Farm said in May it would stop selling new insurance policies to homeowners in California.

In Florida, “all the major carriers (insurers) left and so you ended up with this market which is populated by a large number of very small, very thinly capitalised insurers which is exactly what you don’t want,” James Vickers, chairman international, reinsurance, at Gallagher Re told Reuters. (keep reading)

In Florida specifically, homeowners insurance costs have now generally risen higher than the mortgage payment for a middle-class family.  This is not sustainable.

Not Good !

Jun 30 2023

US Households Paid an Additional $10K Under Biden Regulations


Armstrong Economics Blog/Politics Re-Posted Jun 30, 2023 by Martin Armstrong

University of Chicago professor Casey Mulligan recently compared regulatory records from the Obama Administration to now. Mulligan found that Biden has imposed the most costly regulations in recent history at a rate of $617 billion annually. Her research concluded that the average American household now pays $9,600 more under Biden.

This uptick in spending found in this study is solely due to regulation. If we were to factor in inflation, which Biden poured gasoline on (no pun intended), the figure would be even higher. The Build Back Better agenda comes at a cost to the people. Auto fuel and emissions standards compose one-third of total regulatory costs alone.

Trump attempted deregulation and saved the average American household $11,000 during his four-year term. Trump’s main regulatory initiative that was a costly mistake was Operation Warp Speed, which cost over $300 billion. “President Trump showed that regulatory costs can be subtracted rather than perpetually added,” the report states. “Four years of President Trump reduced regulatory costs by about $11,000 per household. Eight years would have saved a total of more than $21,000, which is a gap of $61,000 to $80,000 from the Biden trajectory.”

Biden had the audacity to tote “Bidenomics” at a recent speaking engagement. Clearly, his economic policies have put America in a dire situation. Biden plans to continue implementing costly regulations. Mulligan’s estimates also do not account for the coming war his administration is thrusting us into without just cause. The nation simply cannot afford to keep him in power. Too bad we don’t have the ability to determine our own elections.

Jun 12 2023

The True Story of Hyperinflation


Amstrong Economics Blog/Cryptocurrency Re-Posted Jun 12, 2023 by Martin Armstrong

QUESTION: Dear Mr. Armstrong,
could you please explain what happens in technical terms from a capital flow perspective, when confidence is lost and hyperinflation starts to begin?
For example Turkey. When Erdogan was elected i think you wrote that ever since the lira started dropping. So confidence in politics is key. Do you think one day we will see hyperinflation in Turkey?
And another example, is Yugoslavia: what caused the hyperinflation (in technical terms/capital flow perspective)? Are foreign investors getting rid of the dinars? Too many dinars than suddenly rushed back into Yugoslavia causing hyperinflation?
Regards,
Magdalena Š.

ANSWER: The misnomer about hyperinflation is that it is caused by printing money. It is a RESPONSE to the collapse in the confidence of the government.  If we look at the 3rd century, this is where we find the greatest number of hoards of ancient coins. What began this was the capture of Valerian I by the Persians in 260AD.

Valerian was the first Roman Emperor to be captured and Rome was unable to recuse him. That shook the confidence of the Roman people, but it also was a signal to the barbarian tribes in the North that if the Persians could do it, they could as well. Within 10 years, Emperor Aurelian constructed the great wall around Rome. Never before did Romans have such a defensive wall. That had a powerful army.

There was a trend toward debasing the silver coinage which began with Nero to try to fund the rebuilding of Rome after the Great Fire. But that did not undermine the confidence in the Roman Monetary System any more than our perpetual deficit spending since World War II.

However, a spark is ignited and suddenly that trend turns into what I have called a Waterfall event in the purchasing power of the currency. Such an event has taken various forms. However, the end result is the collapse in the confidence of the government and as a result, that is when you get that waterfall event.

In the case of Germany, Yugoslavia, Hungary, etc, there was a 1918 Revolution where communists seized power and the emperor of Germany lost power. In that case, they actually asked Russia to take Germany after their revolution in 1917. This was the beginning of the Weimar Republic.

Germany was saddled with reparation payments demanded by France. First, you had a communist revolution and people with capital began to flee to other places in Europe or certainly move their money out of German banks. It was this drain of wealth that forced the Weimar Republic to print money to try to make their reparation payments. Then in December 1922, they seized 10% of everyone’s assets and handed them a bond.

Here you can see that after that December 1922 confiscation, hyperinflation simply took over. It was NOT the printing of money that caused the hyperinflation it was the collapse of confidence FIRST which then compels the government to expand the money supply lacking taxation revenues etc.

I suspect the spark this time may be the Digital Currency and the proposed cancellation of paper currency. This is why people are moving to anything tangible from real estate, gold, silver, ancient coins, and even equities. With DIGITAL CURRENCY they will have capital controls and prevent you from even moving money outside of your country.

The precise day of the ECM was the announcement of the IMF Digital Currency which they intend to replace the US dollar as the reserve currency. This may be timed with the turning point in 2024. It is unlikely that they would cancel paper currencies before the 2024 election. This is all being

Jun 8 2023

Gold & the Future


Armstrong Economics Blog/Gold Re-Posted Jun 7, 2023 by Martin Armstrong

QUESTION: Mr. Armstrong, first I want to thank you for your independent analysis. In gold, all they ever say is buy – buy – buy. It seems if you ever say anything else, they ridicule you. Gold to them is a religion, not an investment.

My question is that you have always said that the fourth challenge to a high is when it breaks out. Do you expect that this year?

Thank you ever so much

WK

PS: Was that you at the Premier of Pandemic3?

ANSWER: We still have a barrier of overhead resistance at the 2160-2180 level and some at 2200. After that, the next resistance is around 2600. Keep in mind that Ukraine is the MOST untrustworthy country on the planet. Already arms provided to Ukraine have been used in the attacks inside Russia. The F16s will be used to attack Crimea. All they will do is spread their hatred and they are deliberately trying to create World War III. They will create a false flag to attack a NATO country and claim it was Russia. They have been desperately trying to capture a Russian missile so they can fire it at Poland.

Our computer shows NOTHING but war ahead, especially from 2025 onward. But for now, expect the volatility to begin to rise again from June into next January. INFLATION will NOT subside. It cannot when we are at war. Biden will spend whatever he is instructed by the Neocons.

Yes, I was at the Premier in Austin, Texas. That is me in the background.

Jun 5 2023

Credit Card Debt on the Rise


Armstrong economics Blog/USA Current Events Re-Posted Jun 5, 2023 by Martin Armstrong

Credit card debt in the US spiked to its highest quarterly level in Q4 2022 after increasing by $85.8 billion. The average American household has about $10,000 in credit card debt, marking an 8.9% YoY increase. Now, Americans are facing $1 trillion in credit card debt due to rising APR and inflation.

The Federal Reserve reported that credit card debt has risen by $250 billion over the past two years amid record inflation. Consumer spending declined during the pandemic, as did credit card debt. However, inflation was nowhere close to what it is today. Credit balances declined by $100 billion from Q1 of 2020 to Q2 of 2021. Consumers were paying off their debts during this time, aided by numerous stimulus packages provided by the government.

Everything changed when Biden took office, killed America’s energy independence, and inflation began to spike. The central bank raised rates right before the war in Ukraine broke out, and have continued to do so at every meeting since. Various data collectors noted that consumers are not using their credit cards for luxury goods – they’re using credit to simply get by and pay for essentials.

Bankrate reported that 46% of cardholders cannot pay off their monthly credit card payments, up 7% from last year. The average APR is around 24% as of May 2023. The US Bureau of Labor Statistics claims that the CPI rose 0.4% in April after increasing 0.1% in March. I reported how the true inflation rate is over 30%; they do not want to scare the public by posting the real data. Food, energy, shelter, and all the essentials to survival have reached historic levels. If nearly half of people cannot pay their credit card balances off each month, and interest is at a record high, consumer debt is guaranteed to rise continually. Nothing is more inflationary than war, and our war cycle is picking up going into 2024. So not only is the US government drowning in debt, but the average American is also struggling to make ends meet.

Jun 5 2023

Sunday Talks, Kevin McCarthy Defends His Budget Ceiling Bill – Focused Heavily on a Return to Regular Budgetary Order


Posted originally on June 4, 2023 | Sundance 

House Speaker Kevin McCarthy appears with Maria Bartiromo to address criticism about details within his debt ceiling bill.  The criticism is very valid, and is being made by many people who are unhappy with the deal to raise the debt ceiling.  However, the primary defense point of McCarthy surrounds a return to regular budgetary order.

As noted by McCarthy, the 12 house appropriations bill that form the traditional federal budget, are due in Aug/Sept for fiscal year 2025 which begins October 1st.  That is where substantive spending will be reduced, well below current spending levels.  However, Bartiromo confronts that outlook by asking ‘what if’ the Senate doesn’t take up the federal budget bill, preferring instead to use the funding mechanism provided within the debt ceiling bill.  {Direct Rumble Link}

The budget debate may sound somewhat parliamentarian, because the nuance of federal budgets is exactly that.  The mechanism to force congress to create a regular order budget is the debt ceiling. Essentially the national credit limit. If you take away the mechanism to force the budget, there is no force mechanism to require the budget.  WATCH:

Speaker McCarthy gets offensive when Maria ask him about what’s in the debt ceiling bill.

The amount of debt carried in your own household budget is only a problem if you have a limit on your credit. If you have unlimited credit, meaning you can borrow endless amounts of money, then you can spend as much as you want. This willy-nilly raising of the national debt ceiling is the issue at the core of why federal budgets are not passed.