ECB Declares Two Italian Banks Have Failed


The European Central Bank (ECB) has announced as of June 23rd, that it was declaring two Italian banks insolvent. Veneto Banca SpA and Banca Popolare di Vicenza SpA have failed since the two banks repeatedly violated the regulatory capital requirements. The determination was made in accordance with Article 18 (1a) and Article 18 (4a) of the Uniform Resolution Mechanism Regulation.

The European banking crisis continues.

Germany Secretly Passed Total Surveillance of Everything



Governments routinely pass laws that are expanding their powers to the detriment of personal rights that are buried deeply in legislation only a diehard will read. We have heard about these type of sneaky legislation in the USA, but all governments are the same and Germany just proved it is no more honorable than the the worst of American politicians.

The Bundestag passed a secret legislation giving government full espionage powers against the private sector claiming it is an urgent case. The German government is now authorized, thanks to politicians claiming to represent the people, with the right to secretly install spy software on computers and smart phones clandestinely. This will be used for taxes, not just terrorism.

The law was intentionally hidden in a law on driving bans. It was secretly attached at the last minute hoping nobody would notice. Now the German government can monitor messenger services on smartphones and targets WhatsApp so they can intercept or read messages BEFORE encryption. The government can secretly download their spyware to the cell phone of the suspect without their knowledge. The government claimed: “We are increasingly observing that criminals communicate in encrypted form. This makes it increasingly difficult for the authorities to clarify even the most serious offenses, “said Thomas de Maizière (CDU). The problem is the term “criminal” and tax avoidance is a criminal offense.

The government is loving hackers for they use this as the excuse to grab more power. Rather than simply develop better security, they naturally prefer to empower their intelligence services and police authorities for monitoring measures under the pretense of it being “criminal” and then expand this power to collect taxes.

This is all about government collapsing. They know it. But they refuse to reform. Why surrender a good power until you have no alternative? The problem is, that promotes revolution.

Chicago Police Pension Goes Bust


Chicago’s police pension fund won’t have enough money to pay benefits to retirees in 2021, according to a projection by Local Government Information Services (LGIS). At the end of 2020, LGIS estimates that the Policemen’s Annuity and Benefit Fund of Chicago will have less than $150 million in assets to pay $928 million promised to 14,133 retirees the following year.

This is the fate of state and local pension funds. There is a storm gathering on the horizon and of course these state and local governments will be raising taxes to try to stay afloat. The system is collapsing and it is totally unsustainable. This is the very same crisis that destroyed the Roman Empire.

The Plight of Junk Science in All Fields


Junk Science is the real crisis we face as so many people think that Global Warming is caused by man and Co2. Of course, those who really believe this is the problem that will destroy the world perhaps should just commit suicide and take the dog with them. Since we exhale Co2 that would reduce the problem in their mind and save the world by setting a good example.

Junk Science plagues us in every field of science be it economics to health. For 25 years we were told that eggs are bad. How many people ordered egg whites only. Then the Junk Science was revised, but after 25 years, nobody noticed. When scientists learned that high blood cholesterol was associated with heart disease, they immediate black-listed all foods with high cholesterol content. It took 25 years of study to figure out – oops, we were wrong! You just didn’t really hear the “oops we were wrong” but instead you heard of another great danger – saturated fat! It became evident that cholesterol in food by itself was not the culprit after all — the real great evil was saturated fat, This is what had a much bigger effect on blood cholesterol when it was discovered that full-fat dairy products and fatty meats are loaded with saturated fat and that triggers the body to produce cholesterol.

This is the problem with analysis. The can conclude that everyone who has eaten a carrot eventually dies. That is an absolutely correct statement. They study one component and draw a correlation and thus produce the definitive relationship. They did that with interest rates. Higher rates means the stock market will decline. Oops. The Fed just raised rates and the Dow made a new high. Interesting! See it is the carrot paradox.

Money Theory

In economics, we had the Quantity of Money Theory that has driven central banks into Quantitative Easing expecting inflation and after 10 years of desperately trying to stimulate inflation, they have been beaten to a pulp by deflation. As always, they make a false simple assumption at the outset which then leads to the false result. They also fail to comprehend that there is the contraction within the economy creating deflation from technology advances. The work force is stagnant and unless they stay current with technology, they will quickly find themselves UNEMPLOYABLE with no useful skills.

“Meddling” in the 2000 Russian Election


QUESTION: Mr. Armstrong; I watched your movie the Forecaster with great interest. I then watched the Showtime interview of Putin by Oliver Stone. It suddenly struck me that he stated that U.S. intelligence agencies, interfered in the Russian 2000 election. That why they blocked your movie from appearing in the United States when it was on TV here in Canada and a friend of mine watched in on the airplane traveling here from Europe. That’s how Putin became president because of the attempt to blackmail Yeltsin. I had an OMG moment.

Are they still going forward with the Hollywood movie? Will this be the typical movie funding issues where people can invest in a film for a piece of the action?

Thanks. You really were the guy that knew too much.

EL

Hermitage_Capital_Management

ANSWER: I just got the script for the Movie. Handed it out to some friends and the comments are that they could not put it down. The comments from the professional Hollywood script reader’s review was:

“The Forecaster Of Princeton is a fast-paced financial
thriller in the vein of such classics as Wall Street and
The Wolf Of Wall Street. However, the script manages to set
itself apart from similar offerings by crafting a
protagonist that isn’t necessarily motivated by greed and
excess. Further, the script features a unique component,
which is the protagonist’s ability to predict foreign
events. Overall, the script is strong enough to warrant
consideration.“
Many have asked can they invest in the film production for a share. Yes. That is how it goes. I have no details on any of that. All I know is they are doing private funding. Most movies go to the banks for funding. For obvious reasons, that will not be the case here. My deal was I was only interested if it portrayed the truth about the issues of international intrigue. That has been met. It now goes to a director and then they select the case. None of that has been completed yet. I think the script was well written for the writer had legal background which helped a lot.

As for the other part of your question, the answer is also Yes. Just about everyone in that matter which surrounded my case was killed insofar as those involved with Russia. I helped Dominic Dunn break that story – Death in Monaco. Safra tried to get me to invest with him in his Hermitage Capital. I refused and warned him my model was forecasting the collapse of Russia, which ended up as the Long-Term Capital Management collapse.

Safra-Berezovsky

If it were not for the “meddling” in the 2000 Russian election blackmailing Yeltsin not to run and install Berezovsky as President to control the natural resources of Russia, Putin would never be in charge to begin with today. Berezovsky fled to Britain where he supposedly hung himself and Safra died in Monaco. There were several others who died as well. So Putin’s comments regarding the 2000 election he did not give details. I did in the Forecaster and the movie will be a fast-paced international thriller.

Welcome to Deflation


People are just starting to grasp why deflation is also present in the USA. Despite all the screaming about Quantitative Easing, most remain confused why hyperinflation has not taken place. Most are obvious to the fact that there is a dynamic process involved that is a lot more complex than traditional economics teaches in school. Sorry, but the quantity of money theory does not work. It is way too simplistic and this has led to massive confusion. Even the central bankers are staring to call for help.

The latest news that Amazon was buying Whole Foods saw a plunge in retail and grocery stocks. Amazon put book stores on the list of bankruptcy victims and we see similar troubles for Sears, the company that made its name using the railroads to deliver goods by mail order. The deflationary tone has been in place since 2015.75 and it is a combination of problems one of which is the technology advancement. Many people see the advance of robots displacing jobs. However, the reason unemployment rose dramatically to 25% during the Great Depression was not from the collapse of industry. It was (1) the advancement of technology with the combustion engine that wiped out agricultural jobs (aside from the horse industry) and (2) the vast dust bowl which then wiped out farms entirely.

The Amazon takeover of Whole Foods is highlighting this technology shift. The jobs of the future will be more in the technology programming area. All the office spaces I looked at for moving our office were, without exception, law firms closing down. Lawyers are now far too common and we are seeing the saturation reducing the once high paying jobs that enticed kids into law school.

Cyclically, everything evolves. Retail stores are declining and Amazon has been opening showrooms rather than stores. You get to go touch the product and it will be delivered to your home. They are also bringing in fully automated stores. You will have an app on your phone, walk into a store, take whatever you want, and your card will be billed as you walk out the door. There go the store clerks.

Things are changing rapidly. The high cost of labor because of Obamacare has been destroying a lot of jobs. The first thing your account tells you is not to higher employee number 26. Technology is helping to reduce the high cost of labor, which is being driven up because of taxes and healthcare which the employee never sees.

Improving you skills for the future is absolutely paramount to survive

Top Executives of Barclays Charged


The British Serious Fraud Office (SFO) has brought charges against Barclays and four former executives surrounding the Qatari investment during the 2008 financial crisis. You may remember at the time Lloyds and RBS were offered UK government support with certain strict conditions attached. However, Barclays declined the government offer and instead turned to Qatar which eventually became the biggest single shareholder, with around 6%.

The rumor around the financial markets at the time was that the UK government offer was better for the shareholders (unqualified) but the restrictions imposed meant that no board members would receive bonus payments until monies had been repaid. Talk at the time was that faced with that proposition of spending bank money to secure future bonus payments – the board declined the UK Government offer and went with the Qatari investment. The SFO also charged former top Barclays executives after investigating a two-part fundraising that included a $3 billion Barclays loan to the Qatar Gulf state.

The men are the most senior bankers ever to be charged in Britain for alleged crimes during the financial crisis. They face jail sentences of up to 10 years if found guilty.

EU Proves It Has Become an Authoritarian Government


The European Commission President JEAN-CLAUDE Juncker, has come out and boldly stated that Poland and Hungary and their refusal to take in a single refugee person under a plan agreed in 2015 to relocate 160,000 asylum-seekers from Italy and Greece, said: “Those who do not want to accept people with a different skin colour or a different belief come from a world of ideas that I do not consider compatible with the EU’s original mission.” Juncker further said that if the refugee crisis existed previously and Poland and Hungary refused to accept the refugees, they would have been denied membership.

The entire refugee crisis was created by Angela Merkel. It was never presented for a vote to the member states. The EU has proven that there is no right to vote and it has become an unelected government with authoritarian powers. Juncker never stands for election by the people. The establishment of the EU government is its a throw-back to the days of kings claiming the divine right to rule.

Meanwhile, estimates of refugees who would still migrate to Europe range in the 30 to 35 million. This indeed seems high for that is 10% of the population of the United States. Even if it is half that amount, it would break the economy of Europe and crush it into dust. You have and excess of people totally unfamiliar with Western culture or with a skill set capable of the 21st century.

Public Education Has Always Been a Weapon Employed by the State


COMMENT: I found your comment on public education fascinating. Has it been a tool for centuries to alter the minds of children?

ANSWER: Yes. There have been plenty of examples restricting what can be taught and what is prohibited. Joseph Stalin is famous for his state control of education. He boldly stated: “Education is a weapon whose effects depend on who holds it in his hands and at whom it is aimed.”

The trial of Socrates (399 BC) was held to determine the philosopher’s guilt on two charges: (1) asebeia (impiety) against the pantheon of Athens, and (2) corruption of the youth of the city-state. He was charged with “failing to acknowledge the gods that the city acknowledges” and “introducing new deities” which corrupted the ideas of the youth.

Education has been a tool of government for a very, very long time.

Suicide Over European Banking Crisis


Greece-Pensioner-2

The European “bail-in” rules have been cheered claiming taxpayer money will be spared. However, many seniors bought bank bonds for their retirement. In the rescue of the small Banca Popolare d’Etruria, a retiree who had lost more than 100,000 euros worth of bonds lost everything and committed suicide. There have been many such events that do not always make the press. In Italy,  the death of a pensioner who also committed suicide after losing his life savings as a result of a controversial move by the government to rescue four banks. The 68-year-old hung himself at his home in Civitavecchia, a port town near Rome, after the so-called “save banks” plan wiped out €100,000 in savings held at Banca Etruria, one of the four lenders included in the government rescue deal announced on November 22nd, 2015. There was the 23-year old who committed suicide over £8000 in debts for student loans. A Greek pensioner who was 77-years old committed suicide in central Athens shooting himself with a handgun just several hundred meters from the Greek parliament building in apparent despair over his financial debts.

The government have made promises and socialism was all about protecting the people from the evil capitalists. But the politicians became the capitalists and now all the promises are being reversed or modified. The crisis we face ahead is so many people believed in what they told everyone. What happens when they discover it has been just a lie?