Tag Archives: The Forecaster

Mar 10 2018

The Economic Confidence Model & Why there are 6 waves


Armstrong Economics Blog/ECM

Re-Posted Mar 10, 2018 by Martin Armstrong

QUESTION: Dear Mr. Armstrong,

Firstly – sorry to hear about the passing of your mother.
Secondly – thank you very much for reading and answering questions.
My question – what is the significance of the six repetitions in the ECM? Six 8.6 years make a cycle and six of these make a larger cycle and then six of these make a super-cycle. Why six? Why not five or seven? Can you explain the significance?
Thank you
g
ANSWER: The Economic Confidence Model is actually a three-dimensional wave structure. The volatility is a different frequency and that is what determines the number of 8.6-year waves for this is building in intensity. What you get at the end of these 51.6-year waves is very profound. After the 1774.95 peak, we end up with a revolution against the monarchy. The next wave peak in 1826.55 Russo-Persian War, 1826-1828, Greek War of Independence, Battle of Monte Santiago between Brazil and Argentina, Mexican Constitution is formed, the Maryland Democratic Party begins creating the confrontation between the Democrats and Republicans (South v North), and even Thomas Jefferson and John Adams both died on the 4th of July 1826 (1826.50) whereas the peak of the wave was July 19th. The next wave 1878 saw the Long Depression which was called the “Great Depression” until 1929-1932. Then the next wave was 1981.35 which marked the peak in interest rates even to the day. The next one will be 2032 and this will be followed by the shift from the West to the East in economic power.
Mar 9 2018

Super-MAGA-Nomics: A Trade and Policy Discussion With Secretary Wilbur Ross….


Re-Posted from The Conservative Tree House on March 9, 2018 by

It’s always a superMAGAnomic day when we get to hear Commerce Secretary Wilbur Ross talk shop.  Two interviews today means extra doses of winnamins are needed to help digest all the winning.

Wilburine begins with Fox Business Charles Payne talking trade and NAFTA:

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Secretary Ross also appeared on Bloomberg to talk with the pearl-clutching Brits:

U.S. Commerce Secretary Wilbur Ross discusses possible negotiations with several countries over exclusions to President Donald Trump’s tariffs on steel and aluminum, the effect of the tariffs on the U.S. economy, and the exit of Gary Cohn from the White House. He speaks to Bloomberg’s Julia Chatterley on “Bloomberg Markets.”

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Mar 9 2018

Republic Steel Announces Recommission of Lorain Ohio Steelworks – Hundreds of Jobs Scheduled To Return….


Re-Posted from The Conservative Tree House on March 9, 2018 by

Excellent news for the community of Lorain, Ohio, where it was announced today that Republic Steel has plans to recommission at least one blast furnace by the end of this year. They are also estimating the possibility of putting a second blast furnace back on-line due to production forecasts as a result of President Trump’s steel and aluminum tariffs.

Lorain Pig Iron is beginning the process to start the mill’s Blast Furnace 4,  by working with contract service providers to submit proposals for the recommissioning.  Since 2015 over 1,000 workers in Lorain were laid off.  BF4 has been dormant since 2016 when the remaining 200 steelworkers were laid off.

If Republic Steel fires up two blast furnaces (BF3 and BF4) at this ironworks, over 1,000 jobs could be created depending on the number of shifts each day.  100 to 200 jobs per shift, per furnace, equals 300 – 600 jobs per furnace/24 hrs.  That’s a tremendous economic lift to the people living in/around Lorain, Ohio. Great news.

LORAIN, OHIO — Two of the blast furnaces at Republic Steel on East 28th Street could be up and running by the end of this year.

According to a news release, Lorain Pig Iron LLC, or LPI, is beginning the process to start the mill’s Blast Furnace 4, or BF4, by working with technical service providers to review and submit proposals for the recommissioning.

In restarting BF4, the company would be able to produce and distribute 1 million tons of pig iron annually.

LPI, which is jointly owned and operated by Republic and Minnesota-based ERP Iron Ore LLC, also is evaluating starting up the mill’s Blast Furnace 3, or BF3, which would double pig iron production in Lorain to 2 million tons annually. (read more)

…Jobs, Jobs, Jobs

Mar 9 2018

Treasury Secretary Steven Mnuchin Discusses Trade, Employment, Tariffs, China, Taxes, Debt, and “Territorial” MAGAnomics…


Re-Posted from The Conservative Tree House on March 9, 2018 by

A very confident Treasury Secretary Steven Mnuchin appears on CNBC for a wide-ranging interview on current economic subjects. Within the discussion [14:00] Secretary Mnuchin affirms the U.S. economy is nowhere near “full employment”; an economic reality which highlights how much labor statistics were manipulated by political ideologues the prior administration(s).

Additionally, Secretary Mnuchin discusses the administrations’ focus on ‘reciprocal trade deals’ as the cornerstone of new trade constructs. This is a seismic shift in U.S. trade position. The secretary replaces the word “globalism” with a more nuanced “world-wide”; and “economic patriotism/nationalism” is replace with the word “territorial”.

Also worth noting is the larger dynamic of “intellectual property” (vis-a-vis China) and how the inherent Trump policies therein overlay trade positions between the U.S. and China. As we have previously mentioned the USTR Lighthizer 301 investigation into China could be exponentially more significant than Steel and Aluminum tariffs. Secretary Mnuchin confirms this aspect albeit with a measure of necessary opaqueness.

Mar 9 2018

President of United Steelworkers Union: “Members Won’t Forget What Trump Did, He Stopped Wealth Transfer”…


Re-Posted from The Conservative Tree House on March 9, 2018 by

Leo Gerard, the President of the United Steelworkers Union, talks to a very frustrated Chuck Todd about the effect of President Trump’s new tariffs and his appreciation therein.

Chuck Todd has all his Media Matters talking points prepared to outline his narrative; however, unfortunately for the toad, he came up against a very knowledgeable union leader with a solid grasp of the details and important specifics.  WATCH:

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As you can see from President Leo Gerard’s comments he well understands the value of Commerce Secretary Wilbur Ross, U.S. Trade Ambassador Robert Lighthizer and administration trade strategist Peter Navarro. The next phase of MAGAnomic Main Street trade initiatives involves global “trade reciprocity” advancement.

Mar 9 2018

President Trump’s Stunningly Effective North Korea Policy Leaves Professional Diplomatic Corps Gobsmacked…


Re-Posted from The Conservative Tree House on March 8, 2018 by

The statement tonight by South Korean National Security Adviser Chung Eui-yong is so jaw-dropping in significance it has left the professional diplomatic apparatus stunned.

A year of targeted and strategic geopolitical policy execution by President Trump, Secretary of State Rex Tillerson and U.N. Ambassador Nikki Haley has resulted in North Korean leader Kim Jong-un accepting denuclearization and requesting a meeting with President Trump to achieve terms therein.

Yeah, HO-LEE-CATS is an understatement.  The possibility of a willingly denuclearized Korean peninsular is such an astounding policy victory; it is difficult to conceptualize.  Here’s the statement from South Korea’s Chung Eui-yong:

“Good evening, today I had the privilege of briefing President Trump on my recent visit to Pyongyang, North Korea.  I’d like to thank President Trump, the vice-president and his wonderful national security team, including my close friend General McMaster.” 

“I thanked President Trump that his leadership, and his maximum pressure policy together with international solidarity, brought us to this juncture.  I expressed President Moon Jae-in’s personal gratitude for President Trump’s leadership.”

“I told President Trump that in our meeting North Korean leader Kim Jong-un said he is committed to denuclearization. Kim pledged that North Korea will refrain from any further nuclear or missile tests; he understands that the routine joint military exercises between the Republic of Korea and the United States must continue.  And he expressed his eagerness to meet President Trump as soon as possible.”

“President Trump appreciated the briefing and said he would meet Kim Jong-un by May to achieve permanent denuclearization.”

“The Republic of Korea along with the United States, Japan and our many partners around the world, remain fully and resolutely committed to the complete denuclearization of the Korean Peninsular.” 

“Along with President Trump we are optimistic about continuing a diplomatic process to test the possibility of a peaceful resolution.   The Republic of Korea, The United States and our partners stand together in insisting that we not repeat the mistakes of the past; and that the pressure will continue until North Korea matches it’s words with concrete actions.  Thank You.”   (link)

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(Tweet Link)

Korea Times – North Korean leader Kim Jong-un has expressed willingness to meet U.S. President Donald Trump for talks over denuclearization, South Korean officials visiting Washington said, Friday.

In response, Trump said he would like to meet him by May, they said.

National Security Office chief Chung Eui-yong, one of President Moon Jae-in’s envoys to Pyongyang who is now visiting Washington, said in a press briefing at the White House that he delivered such messages of Kim to Trump.

Kim also said he was “committed to denuclearization” and would “refrain from any further nuclear or missile tests,” Chung said. (link)

“Complicated business folks,… Complicated business”

When it comes to the use of economic leverage to create U.S. national security outcomes, well, we are learning at the knee of an economic master player. {Deep Dive}

 

Mar 9 2018

The Creature from Jekyll Island – Unprofessional Propaganda Book


Armstrong Economics Blog/Central Banks

Re-Posted Mar 9, 2018 by Martin Armstrong

The_Creature_from_Jekyll_Island-2

QUESTION: Martin. Have you read the book Creature of Jekyll Island by Edward Griffin it is about the Feds and how they control? Many years ago I thought it was fiction but after reading it again it is true. My Question what can we do money will be what they want it to be the control?

ST

ANSWER: The book you refer to is propaganda. There are quotes in there that he simply made up about the Rothschilds. Go ahead and try and find the source. I have written about this before. That book is highly dangerous for it completely misrepresents and fails to understand that elastic money began in the 1850s and was created privately by clearing houses. It worked perfectly fine and it was not economically disastrous but BENEFICIAL!

The ability to create money by the Federal Reserve is essential. However, that design was directly beneficial for it would buy ONLY short-term corporate paper in a crisis when banks could not lend. Buying in corporate paper saved jobs. The key was a simple fact it was corporate and NOT the government. Corporates have to pay back – the government does not.

It was not that the Fed was evil, it was that the Fed was usurped by Congress during World War I and directed to buy only the paper of the government. It was that aspect that has altered the role of the central bank and is demonstrated who the ECB in Europe now own 40% of all government debt and they cannot stop without creating a crisis.

The Creature of Jekyll Island advocates what Jackson did, and that will lead to a massive Sovereign Debt Crisis among the States and undermined the entire economy both domestically as well as internationally. That is by no means the answer. The answer lies in the curtailment of politicians. The banks owned the Fed BECAUSE it was a bailout system that they paid into. It was never intended that taxpayer money would be used to bail out banks. Once the banks became the seller of government debt, they then had a grip on government and with the Fed only buying government debt, the entire system is nothing like the intended design.

Mar 9 2018

Interbank Market Collapsing


Armstrong Economics Blog/Banking Crisis

Re-Posted Mar 9, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; Has interbank lending collapse due to a lack of confidence concerning counter-party risk?

Thank you for being a rare source with experience

ER

ANSWER: Yes that is a correct statement. The failure of Lehman and Bear Sterns was the result of interbank lending when they could not make good on the collateral they posted the day before in the REPO market. Then we had the collapse of MF Global, which was also a loss linked to the overnight markets. Now mix in the LIBOR scandal and banks were scrutinized for manipulating LIBOR rates in the interbank market.

The interbank lending market is a market in which banks extend loans to one another for a specified term, typically 24 hrs. Most interbank loans are for maturities of one week or less, the majority being overnight. Such loans are made at the interbank rate (also called the overnight rate if the term of the loan is overnight).

The collapse of this market is a clear warning that liquidity is extremely vulnerable. When crisis strikes, liquidity will simply vanish entirely. This warns that volatility will rise sharply and it appears to be predominantly focused in on the debt market.

Mar 9 2018

The Analysts Are Turning Back to Bearish Again


Armstrong Economics Blog/Dow Jones

Re-Posted Mar 9, 2018 by Martin Armstrong

CNN Money is reporting the headline “A top JPMorgan Chase executive is warning that stocks could fall as much as 40% in the next few years.” CNN reports that Daniel Pinto, JPMorgan’s co-president, said on Bloomberg Television he believed that market gains should continue for the next year or two. However, he added that investors were nervous could result in a “deep correction” of between 20% and 40%, “depending upon the market values at the time the downturn starts.”

Indeed, this was the pause we were looking for from January. We did not see a collapse as in terms of 1987. Instead, this is simply the transition period where the marketplace must come to grips with a Sovereign Debt Crisis and that means rising interest rates will devastate the bond bubble. So exactly how does that equate to a 40% decline in equities?

What is clear is that the initial stages of this consolidation period involved the marketplace coming to grips with the shift from PUBLIC to the PRIVATE rationale. In other words, inflation, rising interest rates, the rapid rise in interest rates, explosion in public debt, and the inability of governments to fund their never-ending deficit spending at the federal, state, and local levels. Then as the economy begins to worsen, this will also historically lead to trade wars.

This is good news. We need the majority of analysts to turn bearish in order to restore the upward bias we have enjoyed for the past 8 years. We can see that our Energy Models are not in a position for a major high. They have been rising, not declining as new highs were made. This strongly suggests we will still see higher highs in the years ahead. The more analysts we get back to bearish, the strong the breakout to the upside later on.