Tag Archives: The Forecaster

Mar 14 2018

President Trump Visits San Diego To Review Border Wall Prototypes (Video)…


Re-Posted from The Conservative Tree House on March 13, 2018 by

President Donald Trump traveled to San Diego today for a tour of eight border wall prototypes today along with a speech to members of the military at Marine Corps Air Station Miramar.

This is President Trumps first trip to California as president. The peoples’ president spent about an hour reviewing the 30-foot wall segments near the U.S.-Mexico border. Trump’s promise of building a border wall was the primary visible promise made during the 2016 presidential campaign trail. As president, he has been steadfast in his push for the completed project.

“If you don’t have a wall system, we’re not going to have a country,” Trump said at the site of the prototypes. “There’s a lot of problems in Mexico. They have a lot of problems over there. And they have the cartels. And we’re fighting the cartels, and we’re fighting them hard. … But the fact is, if you don’t have a wall system, it would be bedlam, I imagine.”

Mar 14 2018

Rex Tillerson Removed as Secretary of State…


Re-Posted from The Conservative Tree House on March 13, 2018 by

Secretary of State Rex Tillerson did an excellent job representing the professional and deliberate diplomatic approach of the U.S. and President Trump administration.  His personal view toward foreign service on behalf of the U.S. was exemplary, and deserves high praise.

Having said that, as President Trump stated earlier today, there was also more than a tinge of disunity between the advocated views of Tillerson and the views of the Commander in Chief toward economic national security.   At times the fractures between policy perspectives were visible.  Over time those differences became more obvious.

As Secretary of the DoS Rex Tillerson supported the Paris Climate Treaty; the President did not; Secretary Tillerson supported the Obama administration’s Iran deal; the President did not; Tillerson was more apologetic toward lax immigration policy; the President is not; and there were other visible departures visible surrounding the use of economic leverage to achieve national security advancements, specifically on the issue of China and North Korea policy.

The primary perspective, drawing the greatest contrast, surrounded President Trump’s view and expressed policy of emphasizing strength; particularly economic strength – to gain national security objectives.

After many years of projected weakness by the former administration one of the key tenets of the Trump presidency has been reestablishing national security by focusing on unapologetic U.S. economic power regardless of global opinion therein.

Unapologetic economic power is where the views of President Trump and Secretary Tillerson parted.  T-Rex projected more of a humble and altruistic approach; almost seeming embarrassed at times to participate in discussions of economic conflict and confrontation.  Indeed it often seemed awkward for Mr. Tillerson as he carries a less confrontational and more servant-minded constitution.

While he is not a pure ‘globalist’ per se’, Secretary Tillerson was less deliberate toward achieving territorial economic goals as a method to achieve geopolitical national security.  On matters surrounding these issues, T-Rex was more Wall Street than Main Street; more traditionally republican than change-agent populist.

Despite the media’s inability to see the severity of perspective, President Trump is not going to be swayed on matters of national economics.  POTUS Trump will listen to alternate opinions based on current events, but his forward advancement toward U.S. economic security will not be slowed by high-minded analysis leading to paralysis.   Within his outlook, always in the back of his mind, the clock is ticking… there’s an inherent sense of urgency.

Forcing economic change to enhance the territorial economic security of middle-America requires the ability of the change-agent to ignore the feelings and sensibilities of outside nations who will be confronted in the process.  Diplomacy must be set aside when entering the predatory world of massive trillion dollar economic deals.  There is no room for friends and comfort here, after thirty years of inept acquiescence, from President Trump’s perspective, winning is the only acceptable outcome.

Stopping the exfiltration of American wealth demands severity: “we either have a country or we don’t.”  Within that dynamic the value of diplomacy is necessarily lessened in favor of more deliberate and unapologetic policy advancement.  Inside that dynamic President Trump and Secretary Tillerson did not agree – and that is a major point of disunity.

As Commerce Secretary Wilbur Ross has stated several times: “economic security is national security.”   President Trump fundamentally believes that our national security requires independent U.S. economic security.  Everything is downstream from the economics of the issue, any issue, regardless of the issue – foreign or domestic.

Carrying a sense of urgency toward these national security issues, delicate sensibilities -and the opinion of the media who protect them- are necessarily dispatched like a feather in a hurricane.  Again, “we have no choice”, as often heard from President Trump.

Going into year #2 of the administration the current emphasis is a structural reset in the U.S. approach toward global trade.  “Killers” are of value now; thirty years of talking and losing is over.  As such inside this seismic trade-policy-shift, a parallel geopolitical strategy is being played out from the Middle-East through allies in Europe and into Asia around the rarely moved cornerstones of economics and trade.

National liberty, that is actual liberty – not the perception of liberty, is directly tied to economic victory.  During this reset there are only two groups: predators and prey.

Confronting China (Xi Jinping) economically was/is what brought North Korea (Kim Jong-Un) to the table of discussion to give up their nuclear ambitions; it was not diplomacy that created the breakthrough conditions for a national security win.  What brought China/DPRK to this position was the very real possibility of looming economic defeat.  President Trump’s approach won, Secretary Tillerson was surprised.

President Trump has aligned his economic opponents into his preferred geography. Everyone within sight is either an adversary or an ally.  However, allies are now reduced to being benefactors who will smartly get out of the way while the apex predators destroy their opposition.  Year two is about resolving to achieve economic victory regardless of international collateral damage. There is no longer any room for negotiating terms.  Diplomats retreat to the hilltops.  The era of economic Titans has come again.

Final point – When approaching specific goals and objectives President Trump works through a strategy based on phases.  President Trump doesn’t retain people past their expended usefulness.  Rex Tillerson did an outstanding job as Secretary of State introducing the Trump administration to nations’ of the world.

The diplomatic introductions and niceties are now complete; it’s time to get down to business.

Mar 14 2018

Former Secretary of State Rex Tillerson Press Conference – 2:00pm Livestream…


Re-Posted from The Conservative Tree House on March 13, 2018 by

Former Secretary of State Rex Tillerson is scheduled to hold a press conference moments from now to discuss current events including his exit from the Dept. of State and his replacement by CIA Director Mike Pompeo.

UPDATE: Video Added

PBS News Livestream – NBC News Livestream – CBS News Livestream

Mar 13 2018

Direct Democracy – Is it Possible?


Armstrong Economics Blog/Basic Concepts

Re-Posted Mar 13, 2018 by Martin Armstrong

 

The advancement in technology today certainly allows us to scrap the Republican form of government with pretend representation of the people by career politicians. There is no reason we cannot vote from home on every bill and that no bill may be merged with any other subject matter. There should be no sneaking spending for military tucked inside a Clean Water Act. Direct Democracy can work ONLY if it respects a Bill of Rights that precludes SOCIALISM no matter how noble the goals. It must also EXCLUDE all legislation to do with religious morals so no outlawing abortion or even prostitution no matter how much it will offend some. Do not forget that is another religious group get control, they will reverse it and retaliate again their opposition. No law will EVER eliminate either action and the most one can do is to restrict where it is and require a license to ensure it is conducted in a safe environment and leave God to judge.

Every tourist who has ventured to Amsterdam visits the famous red light district where girls are in shop windows typically wearing bathing suits (not naked). The street is packed probably with 99% tourists rather than customers, but it is famous, safe for both the people and the girls, and certainly a curiosity. They are not walking down the streets as they still do in LA, New York, Chicago, or Boston. Girls are not abducted and forced into prostitution. There have been movies on that subject like TAKEN, which are very real.

I have often told the story about flying back from London with my girlfriend into JFK and I went to the curb waiting for the car and she went to the bathroom. There was a very famous Supermodel I did not know at the time standing there and she started to chat. I had flown in on the Concord and she knew that but she had stiletto high-heels and a very short leather mini-skirt. I did not notice her on the plane so I assumed she was a hooker looking to pick up passengers when they land in NYC, which is very common. When my girlfriend came out and saw me talking to her she got jealous. She said I can’t leave you alone for 5 minutes you are talking to a supermodel. I said what are you talking about? She was a hooker! I was just being polite! She then said she was on the plane. Based on the provocative dress, it seemed to me like the standard hooker uniform in New York City. I remember staying the Excelsior Hotel on the Via Vittorio Veneto during the 1970s and having to push through prostitutes just trying to walk down the street to go to dinner. NYC 42nd street used to be that way as well.

Direct Democracy will never work once you cross the line into perceived morality. One person’s moral principles will differ from another. When I travel to the office in Abu Dhabi, I am impressed that you see the freedom of religion in play. There are men with their four wives in burqas and women dressed in western style. Neither objects to the other. Women are free to wear two-piece bathing suits on the beach and this photo I took shows. They cannot walk the streets or go to a mall dressed like that, but there are places in the USA that object to that as well.

We cannot judge others by our own moral beliefs. That is God’s role – not man. Yes, there is the famous saying of Arnaud Amalric (died 1225) who said:  “Novit enim Dominus qui sunt eius.” (“Kill them. For the Lord knows those that are His own.”). I have previously written about the right to Freedom of Religion which means we must remain free from moral laws imposed by a majority upon a minority. That is why the Christians were persecuted and when they became the majority, then the Christians persecuted the pagans. We kill so freely proclaiming we are doing God’s will and yet so many claim to know God’s will. We have terrorists waging Holy Wars in the name of God whose will they have interpreted. This is why I wrote:

“This question is probably the greatest conflict morally that humanity faces, with the likelihood of any solution being impossible. If Mormons want to have more than one wife, that is fine, provided it is a local issue. Others who disagree have no right to say they are wrong and use the federal law to prosecute them. The freedom of movement is essential for if you do not believe in the culture of a local region, you should be free to leave and join a community that you agree with. Without this respect, society cannot function free of conflict, violence, and war. Perhaps this is just our fate. To some extent, we need to stop judging others by what we believe and let God sort that out on Judgement Day.”

The Ten Commandments form the core of fundamental principles that are actually essential to the foundation of society. The prohibition against killing can have no exception that it is OK to kill as long as the head of state says so. Every person has the right to self-defense, but not to invade another’s home or nation. There can be only a single standard for which a person’s liberty may be restricted, which was best articulated by John Stuart Mills:

“That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant … Over himself, over his body and mind, the individual is sovereign.” (On Liberty)

There was the Prohibition period where women demanded alcohol be outlawed because men became drunk and failed to be a proper husband and/or father. This was certainly not the majority of men, but they then imposed this law upon them all. All they did was fund organized crime and that led to countless killings. Many farmers were imprisoned for making their own alcohol.

You simply cannot legislate morality. Only a fool will try. This is what is so deeply wrong with SOCIALISM, for it defies the Ten Commandments, created hatred and divides the nation, has always led to more bloodshed than any other division (Communist Revolutions) and has hopelessly condemned society to a violent cycle of endless war.

When the economy turns down, class warfare rises and is used as the excuse to punish those who have more. If we are EVER going to end the cycle of violence, we must begin with a Direct Democracy eliminating career politicians, but it must also be confined prohibitin it to impose any morality by law. There will always be women who prefer prostitution. It cannot be outlawed, but we can license it and restrict it to specific areas as you see in Amsterdam. It is God’s role to judge others – not ours. As soon as one person stands up and demands laws to enforce their personal religious belief, they must respect that they will create a violent response from the opposition. When the opposition gains the majority, then the tables will be turned.

Direct Democracy can work ONLY when restrained from trying to create morality by law. ONLY if someone violates another then the law should apply. As Mills said: “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant … Over himself, over his body and mind, the individual is sovereign.” We cannot legislate morality. The sooner we stop this nonsense, the sooner we will all enjoy true liberty. I must defend someone’s right to disagree and speak their mind, for to deny that person the right to speak will become just a hypocrisy.

Mar 13 2018

Will US Companies Repatriating Cash Home Create Banking Crisis Outside USA?


Armstrong Economics Blog/Banking Crisis

Re-Posted Mar 13, 2018 by Martin Armstrong

 

QUESTION: Mr. Armstrong; Do you believe that if American companies do repatriate dollars to get the low tax rate in the USA, will this impact foreign banks as capital withdraws? I figured you are the best qualified to answer that question nobody seems to be discussing.

Thank you for sharing your expertise.

SY

ANSWER: That is a very interesting question and it is indeed unique. I cannot think of anyone who has asked that one yet.  Let us assume that U.S. corporations will repatriate at least 25% of their estimated US$2.6 trillion of offshore funds to take advantage of a one-off 14% tax holiday. It will not matter if they are selling euros, yen, pounds, or yuan. Switching their fund from the offshore dollar funding markets to domestic dollars will have a similar impact to the same trend that took place between 1980 and 1985 that drove the dollar to all-time record highs.

American corporations moving capital sends a powerful impulse through global finance system. Despite the rise of China and the creation of the euro, the world has never been so “dollarized” as it is today. The euro is a complete failure for there is no single market with a centralize debt to compete with the dollar as an alternative. China is rising, but it is not ready for prime time. There is no alternative to the dollar. That is the real crisis in the world economy.

U.S. lending rates are critical to the world economy. The Bank for International Settlements (BIS) says offshore dollar funding has risen fivefold to US$10.7 trillion since the early 2000s, with a further US$14 trillion of global dollar debt hidden in derivatives. BIS research also confirms that the rise and fall of the dollar is the major cycle of dollar liquidity which is driving the world’s investment appetite and global asset prices. This liquidity spigot is clearly being turned off. The Fed is not only raising rates, it is also reversing bond purchases exactly OPPOSITE of the ECB which openly admits it will repurchase government debt as it expires. The Fed is shrinking its balance sheet while the ECB is trapped and cannot dare take the same steps.

The BIS is warning that China, Canada, and Hong Kong all have the risk of banking failures that are greater than that of Europe. Apple Inc. said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and spend tens of billions on domestic jobs, manufacturing and data centers in the coming years. That is more than a quarter-trillion. The answer is YES – ABSOLUTELY. US companies will bring back a substantial amount of that money and this will reduce deposits overseas and that will increase the risks of bank failures outside the USA, but probably more so in Asia than Europe. The ECB will most likely prop-up banks no matter what it says.

Mario Draghi will NOT stop Quantitative Easing and he WILL NOT raise rates until he can get out the door. His term at the ECB is for 8 years and sources say he cannot wait to leave. Draghi will extend his signature landmark bond-buying stimulus programme that is just life-support for the member governments at least September 2018 officially but indefinitely until he leaves. He does not want to be blamed for the economic disaster he has created for the world and as such he is trapped in the ECB until October 2019. The question will be can he really keep up this insane losing position that much longer or will the entire house of cards come crashing down.

So look first to bank failure on the rise in Asia, and they will spread to Europe. Nonetheless, there is deep concern about Italian banks and that may be the spark which ignites the next catastrophe.

Mar 13 2018

US To Become Biggest Producer of Oil in the World?


Armstrong Economics Blog/Energy

Re-Posted Mar 13, 2018 by Martin Armstrong

By next year, the US will become the world’s largest oil producer thanks to the fracking boom. Perhaps the US outdid the current Primus Russia earlier this year, said International Energy Agency (IEA) chief Fatih Birol: “The growth of US shale oil is strong and the pace is very high – the US will soon become the world’s largest oil producer.”

At the end of 2017, US oil production rose to over ten million barrels a day (bpd). As a result, the USA production passed that of Saudi Arabia, which has been the world’s largest exporter of oil. It appears that US oil production will continue to expand going into 2020 before we see a correction thereafter. There is no doubt that the US has significantly changed the global oil market. This has placed tremendous pressure on Organization of Petroleum Exporting Countries (Opec) to reduce its production in an effort to stabilize the market price of oil. Opec and other leading producers have agreed on a decline in production since the beginning of 2017. Oil prices have since increased.

Mar 13 2018

Lou Dobbs Trade and Tariff Discussion With Commerce Secretary Wilbur Ross…


Re-Posted from The Conservative Tree House on March 12, 2018 by

U.S. Department of Commerce Secretary Wilbur Ross discusses the recently imposed steel and aluminum tariffs and America’s future trade relationships with all nations including the very protectionist European Union.

“Economic security is national security” ~ Secretary Wilbur Ross

Reminder: Regarding ‘European Union (EU) retaliation’, forget it; they won’t.

The protectionist EU hypocrites simply cannot afford to go toe-to-toe with the U.S. on trade. The UK is in the process of formalizing their Brexit terms; the EU (essentially ‘Germany’) needs to find a way to make up for the lost revenue (billions in taxes) from the UK economy. Currently the UK pays Brussels approximately a billion per month on a $2.5 trillion economy; that will stop.

Brexit reduces the overall EU GDP by $2.5 trillion. German Chancellor Angela Merkel cannot -and will not- challenge President Trump. In addition to being politically weak, Merkel has attached her economy to expansive environmental regulations (Paris treaty), though she is now attempting to pale down those regulations. Chancellor Merkel cannot afford to run the risk of losing any access to the U.S. market.

Mar 12 2018

Fifty Former Failed Obama Administration Foreign Policy “Experts” Form Think-Tank To Unite Against President Trump…


Re-Posted from The Conservative Tree House on March 12, 2018 by

This is just too rich. Seriously.

From the insufferable Iran deal… to the appeasement “Russian Reset”… to the Libya fiasco… to the rise of ISIS… to installing the Muslim Brotherhood in Egypt… to the explosion of terrorism in Yemen… to civil war in Syria… to the crisis in Ukraine… to the 2010 State Department apology tour (WikiLeaks cables scandal)… to their inability to stop North Korean nuclear ambitions and the rise of China as an influential power… there were/are zero foreign policy successes in eight years of the Obama administration.

There was not a single Obama foreign policy initiative that had any success. Every single place where the prior administration put their attention, the results were complete failure, crisis, chaos and worse conditions in the aftermath. That’s the 2009-2017 reality.

Today it is discovered that fifty of the most well known Obama foreign policy officials  have come together to form a think-tank group called “National Security Now“. Their singular mission is to be the “resistance” to the Trump administration’s foreign policy. You have to see the names to recognize how bad these people were at policy:

♦Ben Rhodes ♦Susan Rice ♦Samantha Power ♦Denis McDonough ♦Tom Donilon ♦Tony Blinken ♦Jen Psaki and more. The list is a veritable ‘who’s-who’ of short-sighted foreign policy, ineptitude and diplomatic failure. There’s literally not a success between them, and they are uniting together to advocate against President Trump.

These Obama Officials are opposing the same President Trump who:

•put the plan in place to destroy ISIS and carried it out in the first year; •initiated massive change in the mid-east which saw Arab countries confronting extremism (including Qatari funding of the Muslim Brotherhood); •expanded international energy partnerships to remove the influence of Russia; •confronted China’s expansive economic agenda and halted it; •smartly used economic influence to bring North Korea to the point of accepting ‘denuclearization’; and •leveraged Pakistan to influence the Taliban to the negotiation table in Afghanistan…

…All of this in the first 14 months of his administration; while simultaneously dealing with three U.S. land-falling hurricanes and numerous national disasters and downsizing the U.S. State Department by 30%.

Go figure.

Mar 12 2018

President Trump Tweets Secretary Ross Reevaluating EU Trade Deals….


Re-Posted from The Conservative Tree House on March 12, 2018 by

Just a short post to reflect upon.  We have consistently stated the #1 reason for opposition to President Trump is financial (ie. economic); “There are Trillions at stake“.

Everyone admits the past 40+ years of U.S. trade deals have resulted in the massive export of U.S. wealth via jobs and manufacturing gains within other nations.  The financial beneficiaries of those prior trade positions were: Wall Street, multinational corporations and multinational banks. The losers of prior trade priorities was the U.S. middle-class.

So ask yourself, friends and family this very important question:

If prior U.S. trade policies resulted in the export and redistribution of U.S. wealth… What happens when you reverse the process?

In the answer to that question we discover the opposition to U.S. President Trump.

Example Here

Mar 12 2018

What is the Difference between Institutional & Speculation?


Armstrong Economics Blog/Training Tools

Re-Posted Mar 12, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I was talking to a friend who works in one of the banks you probably classify as the club. He knew you right off the bat. He said you have been probably the largest institutional advisor in the world. He said clients question the bank’s research and openly contrast it with yours. My question is simply this. What makes your institutional advice so dominant? Is it different from what you put out on your blog?

Just curious

HD

ANSWER: Interesting question. Institutions CANNOT be flipping their portfolios back and forth. They are not interested in what will the Fed do next week. They cannot react to such short-term swings. Our models are fractal and dynamic. We have the largest database ever assembled and that is what it takes to do accurate long-range forecasting. What you also must understand is how can a guy write a book and describe the feeling it is to give birth. Sure, he can interview women and write down the overview of what they say. But he cannot possibly really know what it feels like.

Look, 99% of all these self-proclaimed analysts have NEVER traded size. The look at the market from a short-term trader perspective and do not even understand how to do strategically position a portfolio. Oh sure, they can advocate the standard 60% equities and 40% bonds. Yet what happens when government bonds default? What happens when 10-year rates are 3% or less and you need to make 8% to cover your liabilities moving forward? They are clueless when it comes to actually the problems in size and how you even place orders.

 

 

The questions from institutions are strikingly different. They need to know when major trends change and how to adjust their portfolio and when. They are not concerned about when is the high Tuesday or Wednesday. Therefore, our institutional services are strategically different. You are either long or short. There is no pension fund that can buy even a 10-year government bond paying 3% for they are locking in a 50% loss. If you have not played in the big leagues, don’t bother. How you hedge is strikingly different from speculative trading.

We are able to differentiate between short-term changes in trend and long-term. That is the key. Plus, even if someone comes up with a new model and tries to get a meeting with a major institution if they can get 15 minutes that will be a miracle. Why? Nobody is going to take an unproven model for if it fails, that person loses their job. We have a track record and reputation going back into the 1980s. There is no risk with us because of that and they already know we have more institutional clients than anyone for decades.