Tag Archives: sustainability

Jan 10 2018

Why Governments are Like an Ameba


Armstrong Economics Blog/Politics

Re-Posted Jan 10, 2018 by Martin Armstrong

 

QUESTION: Mr. Armstrong; You may be called the legend because of your forecasts on so many levels, but it might also be because you have met with more governments than probably any economist or analyst. My question is simple. From your experience, do you believe you can prevent the economic carnage that is becoming so obvious to everyone except those in government?

SK

ANSWER: The idealistic belief in intelligence and goodness embedded within human beings is increasingly confronted with the harsh experiences of reality. We all indeed act in our own self-interest or we would take no action (Smith’s Invisible Hand). Even an ameba, which lacks consciousness as we define it being self-aware, still responds to its surrounding and engulfs its prey to survive. It responds due to its hardwired nature. Unfortunately, humans also possess at that inner level this same survival instinct that is hardwired. This makes it increasingly unlikely that willingness to change gains sufficient strength in time for the abyss to be reached. Hence, we must crash and burn.

Because the government will respond in the same manner as an ameba, there is no hope that they will spontaneously look in the mirror and reach an OMG moment of realizing that they are causing the demise of our society. Consequently, they will consume our liberty until they push it to the point that society will then act only in its self-interest to survive. Historically, all governments collapse once they have consumed rights, liberty, and privileges in their desire to maintain control and in the end, die by their own greed for power. They lack any consciousness of what they are doing precisely as an ameba. There is no reasoning for there is no one single mind to reason with.

Therefore, neither I nor anyone else, possess the power to prevent the cycle from unfolding. The very best I can hope for is perhaps to influence the reconstruction

Jan 9 2018

World Debt Burden has Exceeded $230 Trillion


Armstrong Economics Blog/Sovereign Debt Crisis

Re-Posted Jan 9, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I find it interesting how you have pointed out that when it comes to public debt, the USA is actually far better than Europe or many in Asia. You also forecast that debt would begin to rise sharply from mid-2017 going into 2021. Do you have any figures to support that forecast?

NW

ANSWER: Yes of course!. The volume of global debt is rising significantly. According to the Institute of International Finance, total liabilities in the third quarter of 2017 surpassed $230 trillion. This is an increase of 16 trillion compared to the end of 2016. As the interest rates continue to rise, the debt servicing costs are simply going to explode. As a whole, Europe is over 100% of debt to GDP on average compared to the USA at about 73%. Government debt has exceeded $60 trillion.

This entire system is coming undone. The debt servicing is exploding as rates begin to rise. The Sovereign Debt Crisis is very much alive and wel

Jan 9 2018

Ukraine & the Next Revolution


Armstrong Economics Blog/Eastern Europe

Re-Posted Jan 9, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I want to thank you for defending the Ukrainian people in their quest to overthrow the government corruption. You are a great inspiration here in Kiev. What does your model show for the success of our revolution looking ahead?

PN

ANSWER:  There are many in the West who know nothing of Ukraine and simply attribute the revolution to the CIA. I understand the disillusionment in Ukraine about these pretend analysts. They pontificate CIA and ignore that there was a real uprising of the people. Following the breakup of the Soviet Union, Ukraine endured years of corruption, mismanagement, lack of economic growth, currency devaluation, and problems in securing funding from public markets. The corruption became widespread and Yanukovich’s sons were engaged in a protection racket preventing people from going into small business. There is no other evidence of how the Ukrainian people have suffered under political corruption that has not really changed. Yanukovich was removed, but those under him are still in power and just changed their stripes. The corrupt politicians did not realize that when the government tried to arrest Mikheil Saakashvili, the ex-Georgian leader-turned Ukrainian opposition politician, the people would rally and rescue him from the police wagon freeing him. The accusations that he plotted to overthrow the government is on par with the corruption. I have a friend who lives close to him. He stood on the roof preaching to the people as the police tried to grab him. It was a real spectacle of corruption.

They have also accused Saakashvili of accepting funding from an exiled Ukrainian businessman in a bid to seize power, which he denies. Thousands of people even gathered outside the courthouse after an almost-eight-hour hearing where the government tried to use the criminal process to eliminate an opposition leader. This is standard in politics and we see the Democrats in the USA trying the same tactics to Impeach Trump. The people are against demanding the impeachment of President Petro Poroshenko trying to stamp out corruption once again in Ukraine.

Ukrainian Revolutions Have Been:

Khmelnytsky Uprising (1648–57)
Ukraine after the Russian Revolution
Ukrainian War of Independence (1917–21)
Declaration of Ukrainian State Act (1941)
Declaration of Independence of Ukraine (1991)
Orange Revolution (2004–05)
Euromaidan (2013–Present)/2014 Ukrainian revolution

This has demonstrated a close correlation with a 52-year cycle aligning with the Economic Confidence Model of 51.6-years. This appears to be on schedule for a rise in tensions again here in 2018, but the peak is most likely coming into play in 2022

Jan 8 2018

The Municipal Debt Crisis Begins


Armstrong Economics Blog/Germany

Re-Posted Jan 8, 2018 by Martin Armstrong

I have previously reported that about 50% of German municipalities are insolvent. This is a global trend and we are witnessing it in the United States as well. The North Rhine-Westphalian Association of Cities has called for help from the future German federal government as the building crisis among financially weak municipalities continue to escalate. This includes the fourth largest by area in Germany with the capital situated in Düsseldorf. The main cities include Cologne, Düsseldorf, Dortmund, and Essen. They are pleading for a grand coalition between the CDU and SPD to save the municipal governments. With the end of the historic low-interest phase, interest rates are poised to rise dramatically in Europe and they begin to see that the appetite for new debt from the government is sharply declining.

Politicians have been hiding this municipal crisis in Germany until after the elections when it was assumed Merkel would win as always. Now the cat is coming out of the bag and we will begin to see the real impact of nearly 10-years of subsidizing governments by the ECB rather than actually stimulating the economy that never bounced. This is a fundamental background issue behind the rise in interest rates between 2018 and 2021.

Jan 8 2018

US Taxes Can Expose Wealth of Royal FAMILY in UK


Armstrong Economics Blog/The Hunt for Taxes

Re-Posted Jan 8, 2018 by Martin Armstrong

The marriage of Prince Harry with Meghan Markle, an American, presents a real nightmare for the Royal Family. Meghan is required by law to not merely pay taxes on worldwide income, but if she receives money from her husband or his family, that will be income of gifts both of which will be taxable in the USA even if she never returns to the United States – EVER!

Worse still, Meghan will have to file Form 8938 if she has more than $300,000 worth of assets in any given tax year. She is already a millionaire for her acting career so filing Form 8938 means she will have to reveal in great detail all assets she owns. This may now include foreign trusts and details of the royal family’s estate that was previously undisclosed. One the USA and Japan tax worldwide income. Everyone else is far more civilized. You do not pay taxes if you live overseas. The theory is rather simple. You pay tax because you are using the services. Under USA law, you are owned by the government and are thus the property of the state and whatever you make even living outside the USA, taxes art due.

The tax code is proving a difficult obstacle for the Royal Family.

Jan 7 2018

Will England Break-Up Not Just the United Kingdom


Armstrong Economics Blog/BRITAIN

Re-Posted Jan 7, 2018 by Martin Armstrong

QUESTION: Hi Martin.

In your recent blog posts, you talk about the possible timing of the break up of Britain but you talk about that in terms of the regionalisation or break up of England only. Have you not said before that Scotland is likely to become independent sometime in the next few years? Perhaps you could explain how that possibility fits in this process?

Thanks

CGB

ANSWER: There are two expansions on the island of Britain. The more commonly known is the formation of the United Kington which took place in 1707 under Queen Ann. That saw Scotland under English Rule and the birth of the United Kingdom. However, before the reign of Eadgar (959-975 AD), England was divided into Anglo-Saxon kingdoms. It was Eadgar who instituted a uniform coinage throughout the land and a single government. While Eadgar set the pattern for the ‘reformed’ coinage of the later Anglo-Saxon and Norman period and standardized the use of the king’s portrait as in old Roman tradition, it was all about creating BRITAIN as a nation-state.

If we look back in time, we see that the first Anglo-Saxon kingdom to really become powerful was Mercia. It was the King of Mercia who was the one who actually resurrected the old Roman Empire’s monetary system for all of Europe since the French copied his idea. We see that King Offa of Mercia was the first king to put the portrait of himself and his wife on the coinage as was the tradition in the Roman Empire.

Here is the Roman Emperor Claudius who married Agrippina, Jr. in 49AD. You will find throughout the history of Roman coinage, the Roman family of the emperor was traditionally portrayed on the coinage. Constantine the Great even issued coins with the portrait of his mother. Trajan issued coins depicting his father and Septimus Severus issued coins showing his wife and two sons.

The Romans placed great value on family. This is where the idea of virginity of their women was proposed and to be a woman priestesses of the Roman goddess of the hearth, Vesta, in the state religion of ancient Rome, they must be virgins known as Vestal Virgins( Latin: Vestales).

Evidence of the power of Mercia lies in the coinage of Offa who adopted the Roman culture. It was Offa who actually issued the first gold coin after the fall of Rome in Europe. He was copying the Islamic gold coin for trade demonstrating his contacts beyond Britain. He inscribed his name on the Islamic imitation coinage but obviously could not read what the Islamic legends actually said. This gold issue is extremely rare.

Therefore, we have two historic break-ups that Britain faces in the future. Eventually, the United Kingdom will break apart formally, but with the collapse of Brussels and the EU Project, we are also likely to then see AFTER 2032, the general trend toward decentralization of governments as a whole. Hence, we will see England break apart into the old Anglo-Saxon regions as we will see the United States break apart. This is the cycle of dissolution politically against centralized government, which is why the Communist experiment also collapsed. Then you begin again and reform nation-states in the next major cycle wave. Society comes together for economic efficiency, and then government abuses its power, which in turn then results in the cycle of dissolution and it all begins once again.

Jan 7 2018

Cross the Line & They Go Nuts


Armstrong Economics Blog/AI Computers

RE-Posted Jan 7, 2018 by Martin Armstrong

COMMENT: They use to call you Mr. Yen. They also called you the manipulator of the world. Then it was the legend. Now they will call you Mr. Dow.

All the best

SJ

REPLY: Well, they always have to find someone to blame. Cross the line and try to explore new methodologies and they just go nuts. I can understand Mr. Yen, and I get the crazy allegation by the government that I manipulate the world economy, but the “legend” I really remain clueless as to what that one is about. As to Mr. Dow – well I suppose that’s next in the queue.

They prefer to always claim I have too much influence rather than look at what I am saying and the methodology. It is just human nature to desperately try to keep everything unchanged. Labelling someone is a form of downgrading them.

Jan 6 2018

BitCoin Reality Check?


Armstrong Economics Blog/Cryptocurrency

RE-Posted Jan 6, 2018 by Martin Armstrong
Jan 6 2018

The Technology Advance in War will Increase Civilian Casualties


Armstrong Economics Blog/War

Re-Posted Jan 6, 2018 by Martin Armstrong

COMMENT: Marty. Hi.

In your article, you stated that when the unemployment goes up, they take us to war to cut down the population. True but now its different.

WW2 was a big historical change in who gets killed. WW1 and previous wars typically it was the soldiers who die. WW1 only saw about 5% > fewer civilians die. Once we got to WW2 we saw 80% of the deaths were civilians. Ever since then, mostly civilians die in wars now.

It was the technology shift that has brought about this.

So now, Kim and Trump push some buttons and millions of civilians die.

OK. Been cold up here. Getting down to -13° this weekend. And were on the warm side of the lake Lol.

N

REPLY: You are correct. The impact of war is much different today. The civilian casualties will be much greater than in previous wars. That’s technology for you. Keep warm. It is even snowing as far south as Tallahassee. This is one forecast I wish would be wrong.

Jan 5 2018

At What Point do we reach Euphoria in the Equity Markets?


Armstrong Economics Blog/Forecasts

Re-Posted Jan 5, 2018 by Martin Armstrong

QUESTION:

Marty,

John Templeton has said “Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” “If you want to have a better performance than the crowd, you must do things differently from the crowd.”

My question is…….. at what point do we reach euphoria in the equity markets?

ANSWER: Our Energy Models are designed to ascertain that dimension of a market. Naturally, everyone responds to whatever the last event is in recent memory. Therefore, the 2007-2009 Crash lives on in their experience so that means they will be skeptical of new highs. We have witnessed that with analysts constantly calling for every new high would be the last. They keep trying to forecast the last event because they missed that one as well.

The only way to approach this is from a quantitative viewpoint. Human opinion will inevitably be wrong no matter who it is. How the market responds to our Energy Models is critical for long-term forecasting. Look at the chart for 1929. Here you see that there is a huge spike in energy which peaked in February 1929. The market rallied to new highs but note that the Energy Models we not making new highs. This peak BEFORE the major high confirmed a very serious undermining of the market structure warning that this type of high was a Bubble and therefore would not be exceeded for decades.

Now compare this to the Energy Models for the 2007 high. We do not have aBUBBLE formation at all and the high came on the reaction high following the major high for the move. This confirmed this was by no means a BUBBLE and in fact new record highs would be make once again.

Let’s turn to the DOT.COM BUBBLE. The first thing you will notice is that the Energy was clearly in a BUBBLE formation. The slight difference here is that the Energy Model peaked the week after the high rather than before. This confirmed that it was not going to be a 1929 type event and the new record highs would be made which indeed unfolded in April 2015 which was 61 quarters intraday and 66 quarters to close above the 2000 high on a quarterly basis.

Here is gold for the 1980 BUBBLE. Once again you see the extreme BUBBLE formation and here the peak took place with the peak in gold. So while we are not looking at the same type of formation with the peak unfolding in advance of the high as in 1929, this reflected that gold would eventually make new record highs within a mid-term perspective. Unquestionable, it took 19 years for gold to decline before the major low was established. Gold finally exceeded the 1980 high during the crisis of 2008.
Now, let us look at the current situation. Again we do not have a major BUBBLE formation. What we do have is a market that is still expanding and in fact, the high on our Energy Models on the weekly level took place last week. This implies we would still press higher into January and that has been out target once you exceeded the November high.
We are by no means in a 1929 BUBBLE type of formation. Here is the view of the 1987 Crash. Like Gold, the peak came 1 week following the high. Yet we see escalating advances in Energy leading into the 1987 high. So far, we lack that type of pattern warning that the real advance in our Energy Models is yet to come.
Therefore, the answer to your question is rather simple. It is always a matter of TIME rather than price. As markets rally, human interpretation of price will always be wrong. NOBODY is going to call this final high from a human perspective and anyone who claims that will be a fraud. It is not a matter of opinion for we can personally only forecast what we think is possible, to begin with.