Pension Funds & the New Norm


Armstrong Economics Blog/Pension Crisis Re-Posted Aug 3, 2021 by Martin Armstrong

COMMENT: Well Marty, it’s not so hard to figure out which pension funds are your clients. All we have to do is look at the ones cutting government bond holdings. All the top pensions in Japan were always at all your WEC events. I remember talking to the attendees of Japan’s Government Pension Investment Fund. They just cut their holdings. Big surprise!

JF, Tokyo

ANSWER: Hope things are well for you there. Any pension fund that holds government debt in size and thinks it will return to normal is probably as delusional as those who think it will return to normal after 100% of the world is vaccinated with Gates’ magic potion #19. There will be endless streams of variants for the next 10 years and a virus will evolve to defeat vaccines. That is why they roll the dice each year with the flu shot. They are trying to anticipate the next variant. There will never be a return to normal. This is all about power. They have tasted the lure of power and will never relinquish that power willingly. That is why history is littered with revolutions against tyrants, and I believe Gates is the tyrant of the 21st century who history will remember not so fondly.

Berlin Protest August 1, 2021


Armstrong Economics Blog/Civil Unrest Re-Posted Aug 2, 2021 by Martin Armstrong

There was a massive protest with tens of thousands of people protesting the new lockdowns. The official press claimed there was only 600 and naturally labelled them as Nazis. The previous week, there was a Gay Pride demonstration and the police did nothing. Here the police were beating protestors and a  49-year-old man died after being detained by officers during the protest which the government was forced to admit on Monday.

The protestors have defied orders to disperse. Germany has now established roadblocks so people cannot enter Germany by car demanding proof of COVID vaccine. The police in Germany, as in Australia, are still supporting the tyranny and obviously are the real Nazis who, as in Nuremberg, made the excuse that they were just following orders. Do you really think beating women and children is morally OK as long as the government orders you to do so?

The resistance has not died and the scheme of this Great Reset will lead to violence. Schwab has the audacity to say that the violence will be because the people want his policies of equality. I think they want his policies to end and freedom restored.

Today most industrialized countries boast life expectancy figures of more than 75 years, according to comparisons compiled by the Central Intelligence Agency (U.S. Central Intelligence Agency. Country Comparison: Life Expectancy at Birth. Updated 2017.) This is their real problem – overpopulation and we have enjoyed postwar the best living conditions in human history. They do not like that and want to revise the system not expand it.

Australian Government Begins Army Patrols to Keep Citizens in Lockdown Until Next Year


Posted originally on the conservative tree house on August 2, 2021 | Sundance | 127 Comments

Things are really super sketchy in Australia.  The covid restrictions have been getting increasingly more intense, as a result two weekends ago massive protests started.  However, this past weekend thousands of police were deployed in rings around metropolitan areas to stop people from assembling to protest.  At the same time this past weekend,  Google blocked Sky News from uploading news feed to their YouTube channel.

Check out this video report.  The Australian army have been dispatched to keep citizens compliant and locked-down.   The vaccination rate is approximately 20%, and the government intends to keep everyone locked down until the vaccination rate reaches 70%.  According to Prime Minister Morrison, that threshold *should be* achieved by the end of the year.  That means Australians will remain locked-down for the remainder of this year.

Nuts !

Australian Tyranny Growing?


Armstrong Economics Blog/Australia & Oceania Re-Posted Jul 30, 2021 by Martin Armstrong

Some readers in Australia are reporting that the government is now trying to block access to our site. You can usually circumvent that with a VPN. I find it very interesting that we are NOT blocked in China or Russia, but in Australia? This is only an indication of the Decline and Fall of the West.

The forecasts of our computer are NOT my personal opinion. Many have written in saying our forecast that the USA will break up and no longer exist post-2032 nor will the EU, which may have seemed unthinkable at our WECs until now. Unfortunately, this is how history is made. Humanity keeps making the same mistakes over and over again and the corruption in government is like cancer that eats away at society to the point it will always turn authoritarian as its respect and power begins to slip away. The more the people turn from government, the worse they respond, and then, in the end, that is what revolution is all about. History repeats because we never learn and thus it is a process of self-referral.

They can block free thought, imprison people that speak out against this tyranny, or have them assassinated. It will not stop the decline and fall they have set in motion. These drastic usurpations of power that are pure EVIL, will not save the day. They will divide and separate the nation and in the end, they will lose all power.

Australia attained independence nation status on January 1, 1901, after the British Parliament approved a law that allowed the six Australian colonies to administer the Commonwealth of Australia exclusively. Like the United States, Australia will also break apart. This is what happens when governments think they can retain power by dividing the people to prevent a unified revolution.

Post-2032, we have to eliminate representative government. It should be a direct democracy where an issue to be voted on must stand alone and they should be a supreme court to determine that any law is constitutionally legal BEFORE it is ever enacted. There should NEVER be any direct form of taxation whatsoever.

Protests in NYC Now Against BlackRock


Armstrong Economics Blog/Civil Unrest Re-Posted Jul 30, 2021 by Martin Armstrong

People are starting to notice that BlackRock is joined at the hip with Schwab’s World Economic Forum.

Israeli Government Approves COVID Fascism, Compulsory Vaccinations and Legally Required Masks For All Citizens Effective August 8th


Posted originally on the conservative tree house on July 24, 2021 | Sundance | 310 Comments

Comrades, it must be said that Israeli fascism is a particularly ironic form of Fascism.   However, when you combine fascist government dictates from the Jewish state along with newly approved forced vaccinations, the level of irony exceeds adequate encapsulation.

The only level of irony missing is armbands for the non-vaccinated. Here’s the Announcement (with excerpt transcript below):

[TRANSCRIPT] – … “Dear citizens, those who refuse vaccines are endangering their health, those around them and the freedom of every Israeli citizen. They are endangering our freedom to work, the freedom of our children to learn and the freedom to hold celebrations with the family.

Those who refuse vaccines hurt us all because if all of us were vaccinated, we would all be able to maintain daily life. But if one million Israelis continue to not get vaccinated, this will oblige the eight million others to shut themselves in their homes.

Therefore, the [Corona] Cabinet decided today that as of 8 August, those who refuse vaccines will not be able to go to the cinema, the theater, the synagogue, the amusement park, the soccer game or any activity with over 100 people, indoors or out, unless they bring negative results from a coronavirus test, at their expense. Yes, they will fully bear the costs of the test.  There is no reason why the taxpayers and people who have carried out their civic duty and have been vaccinated should finance tests for those who refuse to get vaccinated.

Regarding flights, people who have been vaccinated will be able to fly to the clean countries and return; after they receive negative test results in Israel, they will be exempt from quarantine.

But on the other hand, those who refuse to get vaccinated will enter quarantine for a week, no matter what country they will have returned from. These actions will help us block the morbidity. From here, I appeal to everyone who knows someone who refuses to get vaccinated: Persuade them. Explain to them that they will not hurt others.

[…] When two people wear masks, with all of the viral load that we mentioned, the likelihood goes down by 98%.  Therefore, every citizen must wear a mask in closed spaces. This is not a recommendation, this is a legal requirement.” (read full transcript here)

The irony is jaw-dropping.  The nation state of Israel has become the very embodiment of what it claimed to oppose.  While it is often said that in order for some forms of ideology to exist they must pretend not to know things, this example is very remarkable.

Last point… Watch carefully how Mark Levin and Ben Shapiro approach this issue – or even if they address it at all.  My hunch says the most likely course of action they will take, at least they would prefer to take, would be to ignore it completely.  But, we’ll grant them the benefit of the doubt and watch for their reaction….

This is a high risk moment for those who have held themselves up as principled advocates for self-determination.  A very interesting moment for those of us who have long seen through the veil.

Italy Joins France in COVID Vaccination Requirement to Engage in Social Life, Restaurants, Theaters, Stadiums, Gyms, Shopping


Posted originally on the conservative tree house on July 23, 2021 | Sundance | 76 Comments

Last week the French government announced they would require a “sanitation passport” for any French citizen who wanted to engage in almost all forms of social life like shopping, eating at restaurants, movie theaters, or events where crowds were present.  There has been some backlash and protest, but not nearly enough to stop other EU nations from following the French process.

Today, the Italian government announced similar measures with their “green pass” to force vaccinations upon the Italian people if they wish to participate in social functions that interact with other people.

Without a green pass, Italian citizens and visitors will not be allowed to eat at restaurants, attend theaters, or events where any size crowd might be assembled.

(France24) […] The so-called Green Pass is a digital or paper certificate that shows if someone has received at least one jab, has tested negative or has recently recovered from COVID-19.

As of Aug. 6, the pass will be required to go to gyms, swimming pools, sports stadiums, museums, spas, casinos and cinemas. Eating in indoor restaurants also requires a pass.  Some 48.2% of Italians are fully inoculated and 14.1% are awaiting a second jab, according to latest data. (read more)

Italian Prime Minister Mario Draghi said, “Calls for people not to get vaccinated is a call for people to die. If you don’t vaccinate, you get sick, you die or you let other people die”, in his effort to use political and social peer pressure to gain vaccination compliance.

Stay tuned, this forced vaccination protocol is very near to happening here in the USA.  The mid-term COVID variant, also known as the Delta Variant,  is being used in order to establish the groundwork for the 2022 election cycle.

The scale of U.S. governmental push and pressure on private companies to comply is unlike anything I can remember in my lifetime.   The effort is very creepy now…. and we can anticipate that free and independent states who are not forcing a mandated vaccine will likely come under even more extreme federal pressure.

What she didn’t say


by Tabitha Korol

Islam is a totalitarian ideology, its laws believed to be the literal word of Allah and, therefore, immutable in every respect through eternity. Their adherents are under obligation to “rule the entire world and submit all of mankind to the faith of Islam. Any nation or power that gets in the way of that goal, Islam will fight and destroy.”  Among the many methods of warfare is lying.  War is deceit, Allah is the “master of all scheming,” and deception has become an artform in Islam. Further, because lying is permissible in Islam, lies are not discernible because the deceiver bears no conscious guilt. 

Although it is true that deception within Islam is subtle and sophisticated, it is only effective on willing subjects, those who already have a root of bitterness toward Israel, the Jews and/or Western civilization.  Islam serves to formulate their contempt and justify it.

With this as background, an internet acquaintance sent an Israeli video to a friend who had taken a Holy Land tour years before.  The friend replied she had been to the West Bank (ancient Israel’s Judea and Samaria) and had
“nothing but contempt for Israel.”  Her statements are presented in bold face, and I will provide the backstory – what she didn’t say.   

“We went to a Christian Palestinian school and heard how the Israeli soldiers terrorized the school children.  The IDF constantly goes into the West Bank to arrest and terrorize Palestinians, especially the young children.”

She was already deceived.  What she didn’t say was why soldiers would spend their time entering the area to arrest children.  Does she choose to be oblivious of the many countries that use their children in armed conflict, 14 noted, 7 in Africa.  Closer to home,  America’s left is using our school children against our country, and encouraging groups like BLM and Antifa to burn cities and harm our protective forces, the police.  Children do commit crimes worthy of arrest, in the West Bank and worldwide, and those not arrested in America may be our own undoing. 

In Islam, the entire family unit is compelled to further the cause of Allah and the Palestinians are notorious for putting their women and children in harm’s way, at rocket launches or on roofs of building where explosives are stored, so that their deaths, whether self-inflicted or caused by retaliatory fire, will increase the casualty count for world pity. Older children are used to discharge ignited kites and incendiary balloons over Israel, while smaller children are placed on road embankments with a supply of rocks to throw at passing cars, often causing crashes and death.  They are also used in tunnel construction, expendable should the tunnels collapse. The children are raised without interests in reading, music, or Little League games, but with an obsession for Mohammed’s 1400-year war against the Jews, willing to accept martyrdom should they go up in smoke.   

The silence of the Christian schools and of the World Council of Churches (WCC) amounts to complicity in the ruination of the Palestinians’ children and the murder of Israeli’s. 

The friend attached a film that showed the IDF handling themselves in exemplary fashion, with one speaking calmly to the five-year-old boy, not harassing or brandishing weapons, while the other five or six were standing at a distance, unmenacingly, not looming over the child.  Questioning is not harassment, and the boy was holding the hand of another, in his late teens, perhaps an older brother.  Of course, the child is frightened because he did something wrong, but had he been terrified, he’d have tried to hide behind his brother.  He may have caused a fatal crash and knew he was being reprimanded – or feared worse, depending upon the lies that permeate their culture.  There is no doubt that the soldier would be stern to make him understand that he’d caused irreparable harm, perhaps killed a child like himself.  He was escorted to the IDF car calmly with his brother, presumably heading for headquarters.  Although he would be lectured about right and wrong, there is no doubt that he would be given a chocolate bar. 

The IDF take their representation of Israel very seriously and see themselves as goodwill ambassadors. The Israeli soldier understands that this could be the difference between a child who recalls a reasonable outcome or one who will seek jihadi revenge.  Research shows that there is a total disconnect between the International Criminal Court’s (ICC) accusations against Israel and the reality on the ground. 

“The Ecumenical Accompaniment Programme in Palestine and Israel (EAPPI) is now present in the small village of Yanoun,” wrote the person with contempt for Israel, implying that their presence was necessary to keep an eye on Israeli abuse.

What she didn’t say is that Yanoun is one of many Bedouin encampments, often with camels, that settle illegally on Israeli land that is impermissible to all because it lacks infrastructure – electricity, sewage, water, health and welfare services.  America has many areas not zoned for housing, and all sovereign countries are justified in granting or withholding building rights.  The Israel High Court approved the order to demolish the village, according to laws that apply to all, and Israel usually offers alternative housing to the nomads, but they refuse.  The EAPPI, founded by the World Council of Churches, has been maintaining a round-the-clock presence in Yanoun since 2003, working with the Palestinians against Israeli law.  They maintain an antisemitic, adversarial position toward the State of Israel, which includes lying about a mismanaged, Palestinian-caused water shortage.  They appear to be trained in Islamic lies.

One frequent accusation is that the IDF soldiers rape Arab women, a familiar act of violence by Arab men worldwide – again, this is projection.  It is documented that one anti-Israel activist, a professor, asked an Israeli soldier if he knew how many Palestinian women were raped by IDF forces.  The soldier replied, “none,” as far as he knew.  She triumphantly responded that he was right, because, she said, ‘You IDF soldiers don’t rape Palestinians because Israelis are so racist and disgusted by them that you won’t touch them.’”

“Jewish people have come into Yanoun and burned down their olive trees.  The people have been so terrorized that there are only about 50 Palestinians left,” she continued.

What she didn’t say is why Israelis raze certain homes and destroy trees.  Families of murderous terrorists lived in those homes and constructed terror tunnels under the groves to penetrate Jewish villages and murder the residents.  This is an all-too-familiar theme in Palestinian children’s propaganda stories.  Any destruction, therefore, becomes necessary as security as well as a means of punishment and deterrence.   

According to Regulation 119 of the Defense (Emergency) Regulations that Israel inherited from the British Mandate (1947), the military commander may order the destruction of any house, structure or land suspected of being the source of “any firearm fired illegally, bomb or hand grenade or any explosive thrown, blown up or detonated.”  Did no one tell the woman that immediately after the Six-Day War, Israel offered to negotiate land for peace with Jordan, Syria, and Egypt, but was refused each time?  Israel did not want the responsibility of administration over the area, but while it was thrust upon her, she improved infrastructure, schooling and life expectancy for the Palestinians.  Nevertheless, Israel began the destruction of terrorists’ homes after the first Intifada of violent riots (1967).  By 1994, Israel began turning over administration to the Palestinian Authority. 

“We went to a Christian Palestinian school . . .,” she said, and spoke negatively.

What she didn’t say is that the ecumenical accompaniers serve the World Council of Churches (WCC) in Palestinian areas.  They report of soldiers who search teachers, harass residents, and close the schools, but never reveal the causes – the Palestinians’ daily violence, tear gas and riots.  Apparently, it breaks the hearts of those reporting that Palestinian children are escorted in and out of their communities, but there is no comparable sympathy for Israeli children escorted in and out of their shelters or hospitals after the Palestinians explode their weapons or themselves in a crowd.

EAPPI fears for the West Bank children who are harassed, but not for the Israeli children who are blown up in school buses by Palestinian terrorists, or for such as the three Israeli teenagers who were kidnapped on June 12, 2014, and killed, their  bodies found in the West Bank field on June 30, 2014 – and other similar events.

The WCC, which trains volunteers to promote boycotts of Israel and engage in antisemitic rhetoric, is funded by several Western governments, the EU, and the UN.  Their EAPPI program, which consists of 350 member churches in 110 countries and 500 million Christians worldwide, has been in place for 15 years, with a stated mission of “Christian unity,” which shamefully includes anti-Israel advocacy.  Their activism has explicit antisemitic overtones, as they have repeatedly compared Israel to Nazi Germany, accused Israel of apartheidism, and continue to instigate a broad-based boycott, divestment and (total) sanctions (BDS) on Israel.  Their numerous lies and accusations include blaming Israel for planting knives in Palestinians who were shot after attempting to stab Israelis, and for attempting Palestinian depopulation.  While the WCC claims not to “countenance” Israel with Nazi Germany, they do not discourage their representatives’ denunciations, and continue to favor boycott products of Jewish “settlements.” 

This warrants an additional note about “settlements.”  The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted by the UN General Assembly on September 13, 2007, by a majority of 144 states in favor, 4 votes against, and 11 abstentions, recognized that indigenous people (also known as first people, aboriginal people or native people) have the right to the lands, territories and resources, which they have traditionally owned, occupied or otherwise used or acquired and that the exercise of these rights shall be free from discrimination of any kind.  According to international law, the Jews are the indigenous people of the lands referred to as Judea, Samaria, Palestine, Israel, and the Holy Land, and therefore fulfill the criteria required by international law. The Jews are the original ethnic group that settled Judea and Samaria 3,500 years ago, when the land was bestowed upon the Jews by the Almighty.  Statements to the contrary are political, not legal.

What she didn’t say was that the Arabs from the neighboring states, who now call themselves Palestinians, are the invaders, interlopers, and aspiring conquerors, and the WCC is a blight on America for not supporting one of America’s most dedicated allies.  

One final word about the woman who has “nothing but contempt for Israel.”  We would give her the benefit of the doubt to suggest that she doesn’t know the facts, but the reality is more likely that she visited the West Bank under the auspices of the WCC in support of their anti-Israel agenda.  Once ripe for deception, she is now a zealous missionary of outright lies and half-truths. 

Please share if you care

By Tabitha Korol

JoeBamanomics – Federal BLS Report Shows Declining US Wages 1.2 Percent Lower Than Last Year, Biden Administration Leading Economic War on Women


Posted originally on the conservative tree house on July 16, 2021 | Sundance | 64 Comments

Well, well, well…. though financial media will say this is remarkably unexpected, it is something CTH specifically predicted we would see – and it is happening exactly on the timeline CTH anticipated.

The Bureau of Labor Statistics releases the second quarter national wage rate data today {BLS DATA HERE}.  U.S. wages DECLINED 1.2% in the second quarter of 2021 compared to last year.  When reviewing the data [Table 2], look at the negative impact to women, specifically Black and Asian women:

TOP LINE – Combine a 1.2% decline in earned wages with a 5.4% overall inflation rate recently reported {Go Deep},  and what you get is a 6.6% drop in real income amid the working class.  That, my friends, is exactly what we said should be expected.  That is also why the JoeBama administration needs to pump more money into the system (human infrastructure spending) in order to stop people from realizing just how bad it is.

You cannot have declining wages and massive inflation and expect the middle-class to survive.  Additionally, when I said six weeks ago that we had just passed peak home value, this is another data point to bolster that prediction.  We are in a plateau period on macro-level real home values, from this point they start dropping.  You cannot have near double digit drops in real income and simultaneously expect people to afford high mortgages.  It just doesn’t happen.

The declining wage rates, and the more substantive drop in real wage rates due to massive inflation, are specifically hitting the lower tier of the working class harder.  Yet despite this,  Biden is intent on importing even more economic migrants to put even more downward pressure on wages for the working class.

These are very real outcomes of policy.  Working class Blacks and Latinos will feel this even more, yet this is the special interest group that Democrats claim to support.  The reality is exactly opposite from the narrative sold by the Biden administration.

The Democrats know this. These outcomes are not accidental; they are a feature not a flaw in their policy.  This is why they need to keep spending to retain the ruse.

There’s no way around this.  Despite the pundit and financial class selling a counter-narrative, home prices will crash and unemployment will go up.  I know this is directly against the current talking points, but the statistical reality is clear.  CTH was the first place who said two months ago that home sales will plummet, that is starting to happen right now.  There’s no way for it not to happen, the big picture tells us why.

♦ Inflation Data Link

♦ Prior Prediction Link

May 2021 – “It will be very interesting to watch how the housing market responds over the next few months. If the trendline continues we should see a considerable softening in home sales, again depending on region, as the inflation hits the working class.”  Imagine what happens when they stop pumping money into the economy.

Inflation Data Released Today Shows White House July 4th Price Claims Were Total Crap, Gas Prices Doubled, Annualized Total Inflation Rises to 5.4 Percent and Climbing


Posted originally on the conservative tree house on July 13, 2021 | Sundance | 115 Comments

On July 4th, a little more than a week ago, the White House made the preposterous claim that holiday food was cheaper than last year. Everyone who buys groceries knew that level of propaganda was unmitigated nonsense and the consumer pricing data released today shows exactly that.

According to the BLS, June prices jumped 0.9%. Every month this year the CPI has been rising faster than the prior month, which essentially means inflation is rising at an ever-increasing rate. Annualized inflation (June 2020 -vs- June 2021) now shows an overall inflation rate of 5.4%.

However, at a 0.9% monthly rate -if the level stabilizes- that means the real inflation rate is 10.8% Yeah, that’s a serious problem.

The BLS data (see table 7) shows that gasoline has doubled in price year-over-year. Unleaded regular gasoline is now 46.4% higher than last year. That level of fuel price increase is crushing the working class and blue collar workforce.

Inflation overall is currently rising three to four times faster than wages. That means real wages are dropping as Americans are paying more for everything, including fast turn consumable products like food and fuel. Again, we repeat… durable good sales will suffer as disposable income shrinks. Additionally, rising housing prices combined with diminishing blue collar wages is an unsustainable trend.

JoeBama economic policies are crushing the middle-class. The multinational corporations, Wall Street and the investment class benefit as Biden policies directly create a U.S. service driven economy {Go Deep}. Under JoeBama, the wage and wealth gap is growing again after three years of Trump policies closing it. Working class wages are dropping, and investment class earnings rise. This is the intentionally created outcome when America-First policies are cancelled.

Overall energy prices have jumped more than 32% year-over-year. This is a direct outcome of Biden policy. Used vehicle prices are up a whopping 45% vs 2020.

The financial media are working overtime to protect Joe Biden from the outcome of policy by deflecting blame to COVID-19, but the issues are far more substantive than their weak justifications. All of this was predictable. After several months of claiming the inflation was transitory or temporary, now the same financial media are shifting the narrative to say we need to just accept long term inflation is the new normal.

I cannot express my frustration adequately as we watch this play out and know how much propaganda is being pushed to justify it.  {Go Deep} and {Go Deep}.  CTH has outlined for years how these direct economic outcomes are a result of actual government policy.

Everything the Biden administration is doing is making things worse, and now we are seeing big drops in real wages as the inflation rate is far beyond wage growth. Under Biden inflation is massive and wage growth is non-existent. This is an exact reversal of the Trump-era outcome where inflation was low and wage growth rates were high.

You might remember when President Trump initiated tariffs against China (steel, aluminum and more), Southeast Asia (product specific), Europe (steel, aluminum and direct products), Canada (steel, aluminum, lumber and dairy specifics), the financial pundits screamed at the top of their lungs that consumer prices were going to skyrocket.  They didn’t.  CTH knew they wouldn’t because essentially those trading partners responded in the exact same way the U.S. did decades ago when the import/export dynamic was reversed.

Trump’s massive, and in some instances targeted, import tariffs against China, SE Asia, Canada and the EU not only did not increase prices, the prices of the goods in the U.S. actually dropped.  Trump’s policies led the largest deflation in consumer prices in decades.  At the same time Trump’s domestic economic policies drove employment and  wages higher than any time in the past forty years.  With Trump’s policies we were in an era where job growth was strong, wages were rising and consumer prices were falling.  The net result was more disposable income for the middle class, more demand for stuff, and ultimately that’s why the U.S. economy was so strong.

Going Deep –  To retain their position China, the EU responded to U.S. tariffs by devaluing their currency as an offset to higher prices.  It started with China because their economy is so dependent on exports to the U.S.

China first started subsidizing the targeted sectors hit by tariffs. However, as the Chinese economy was under pressure they stopped purchasing industrial products from the EU, that slowed the EU economy and made the impact of U.S. tariffs, later targeted in the EU direction, more impactful.

When China (total communist control over their banking system) devalued their currency to avoid Tariff price increase, it had an unusual effect.  The cost of all Chinese imports dropped, not just on the tariff goods.  Imported stuff from China dropped in price at the same time the U.S. dollar was strong.  This meant it took less dollars to import the same amount of Chinese goods; and those goods were at a lower price.  As a result ,we were importing deflation…. the exact opposite of what the financial pundits claimed would happen.

In response to a lessening of overall economic activity, the EU then followed the same approach as China.  The EU was already facing pressure from the exit of the U.K. from the EU system; so, when the EU central banks started pumping money into their economy and offsetting with subsidies, they essentially devalued the euro.  The outcome for U.S. importers was the same as the outcome for U.S-China importers.  We began importing deflation from the EU side.

In the middle of this there was a downside for U.S. exporters.  With China and the EU devaluing their currency, the value of the dollar increased.  This made purchases from the U.S. more expensive.  U.S. companies who relied on exports (lots of agricultural industries and raw materials) took a hit from higher export prices. However, and this part is really interesting, it only made those companies more dependent on domestic sales for income.  With less being exported there was more product available in the U.S for domestic purchase…. this dynamic led to another predictable outcome, even lower prices for U.S. consumers.

From 2017 through early 2020, U.S. consumer prices were dropping. We were in a rare place where deflation was happening.  Combine lower prices with higher wages and you can easily see the strength within the U.S. economy.  For the rest of the world this seemed unfair, and indeed they cried foul – especially Canada.

However, this was America First in action.  Middle-class Americans were benefiting from a Trump reversal of 40 years of economic policies like those that created the rust belt.

Industries were investing in the U.S. and that provided leverage for Trump’s trade policies to have stronger influence.  If you wanted access to this expanding market, those foreign companies needed to put their investment money into the U.S. and create even more U.S. jobs.   This was an expanding economic spiral where Trump was creating more and more economic pies.  Every sector of the U.S. economy was benefiting more, but the blue-collar working class was gaining the most benefit of all.

♦ REVERSE THIS… and you now understand where we are with inflation.   The Joebama economic policies are exactly the reverse.  The monetary policy that pumps money into into the U.S. economy via COVID bailouts and federal spending drops the value of the dollar and makes the dependency state worse.

With the FED pumping money into the U.S. system the dollar value plummets.  At the same time,  JoeBama dropped tariff enforcement to please the Wall Street multinational corporations and banks that funded his campaign.  Now, the value of the Chinese and EU currency increases.  This means it costs more to import products and that is the primary driver of price increases in consumer goods.

Simultaneously a lower dollar means cheaper exports for the multinationals (Big AG and raw materials).  China, SE Asia and even the EU purchase U.S. raw materials at a lower price.  That means less raw material in the U.S. which drives up prices for U.S. consumers.  It is a perfect storm.  Higher costs for imported goods and higher costs for domestic goods (food).  Combine this dynamic with massive increases in energy costs from ideological policy and that’s fuel on a fire of inflation.

Annualized inflation is now estimated to be around 8 percent, and it will likely keep increasing.  This is terrible for wage earners in the U.S. who are now seeing no wage growth and higher prices.  Real wages are decreasing by the fastest rate in decades.  We are now in a downward spiral where your paycheck buys less.  As a result, consumer middle-class spending contracts.  Eventually this means housing prices drop because people cannot afford higher mortgage payments.

Gasoline costs more (+50%), food costs more (+10% at a minimum) and as a result real wages drop; disposable income is lost.  Ultimately this is the cause of Stagflation. A stagnant economy and inflation.  None of this is caused by COVID-19.  All of this is caused by economic policy and monetary policy sold under the guise of COVID-19.

This inflationary period will not stall out until the U.S. economy can recover from the massive amount of federal spending.  If the spending continues, the dollar continues to be weak, and as a result the inflationary period continues.  It is a spiral that can only be stopped if the policies are reversed…. and the only way to stop these insane policies is to get rid of the Wall Street Democrats and Republicans who are constructing them.