Published on Jul 12, 2018
Armstrong Economics Blog/Italy
Re-Posted Jun 24, 2018 by Martin Armstrong
Italy will no longer rescue immigrants sailing from Libya. They have withdrawn their Italian Coast Guard and instructed captains of vessels that from now on, ships in the area off Libya should apply for help to the Libyan Coast Guard. Up to now, the Italian Coast Guard has played an important role in coordinating refugee rescue operations outside its own waters. According to Maritime Law, the coordinator of a rescue operation must provide the refugees with a safe haven. Italy will no longer provide that status off the coast of a foreign country. Ital began recusing ships back in 2015. Under Maritime Law, once they did that, they were obligated to give them shelter. Here back in 2015, they recused 1,000 but most of these are just men, not families with women and children.
Armstrong Economics Blog/Germany
Re-Posted Jun 18, 2018 by Martin Armstrong
There are some saying that Angela Merkel will be overthrown in a matter of weeks and others saying that there is no plot to remove her. Nevertheless, scandal rising in Germany over the refugee crisis keeps brewing behind the curtain. Cyclically, 2018 may be a peak in Merkel’s career despite what people are trying to deny.
Angela Merkel was born in Hamburg, West Germany, on July 17, 1954, and was actually trained as a physicist. She entered politics after the 1989 fall of the Berlin Wall. She eventually rose to the position of chairwoman of the Christian Democratic Union party becoming Germany’s first female chancellor. Moreover, Merkel has actually become the best-known politician in Europe whose face is more recognized than anyone else in Europe no less Brussels.
Merkel grew up in a rural area of the German Democratic Republic or East Germany. She studied physics at the University of Leipzig, earning a doctorate in 1978, and later worked as a chemist at the Central Institute for Physical Chemistry, Academy of Sciences from 1978 to 1990. She has obviously not made the connection between physics and the economy for if she just looked at the laws of thermodynamics she would have an epiphany and realize that there MUST be a business cycle.
Nevertheless, with the fall of the Berlin Wall in 1989, Germany was caught up in a euphoric moment and many expected East Germans to have the same work-ethics as those in the West as well as an understanding of the way things really worked. Merkel joined the Christian Democratic Union (CDU) political party and was quickly appointed to Helmut Kohl’s cabinet as minister for women and youth. She rose simply because she was a woman and from the East. It made good political propaganda. Merkel would later serve as minister for the environment and nuclear safety.
The political tide began to change and with Kohl’s defeat in the 1998 general election, she was named secretary-general of the CDU. Then in 2000, Angela Merkel was chosen party leader, but she lost the CDU candidacy for the chancellor to Edmund Stoiber in 2002.
Finally, on October 10th, 2005 Germany was on the brink of a new and volatile political era until a deal was cut that made the conservative leader Angela Merkel the country’s first ever woman chancellor. It came only after three weeks of a long, complicated dispute over the previous month’s indecisive election, Gerhard Schröder announced he was resigning. Angela Merkel became chancellor leading a “grand coalition” between her Christian Democrat party and its Bavarian ally the Christian Social Union, and Schröder’s Social Democrats.
Many questioned just how long such a coalition would last. Nonetheless, Schröder’s resignation came with a huge price tag. The Social Democrats emerged from days of secret negotiations with eight seats in Germany’s new cabinet and virtually all the big portfolios – including foreign, finance, health, environment, and transport. Merkel gave up tremendous economic power to become chancellor with the CDU taking only six cabinet posts. Merkel denied that the Social Democrats had got all the best jobs, and instead called it a “new beginning for Germany”.
Therefore, Merkel became Germany’s first female chancellor since it became a nation in 1871 who was also from East Germany fulfilling a dual role as the first female chancellor and the first East German chancellor to take control of Germany. Merkel was then elected to a second term in 2009.
Angela Merkel was reelected for a fourth term as chancellor in September 2017 with a vote that was well below 35%. However, although her CDU party held its majority in the Bundestag, because of her policy on allowing all the refugees into Germany, the far-right Alternative for Germany (AfD) won 13% emerging as the new third-largest group in parliament for the first time a right-wing political party regained any power since 1961.
Following the 2017 election, political problems surfaced by mid-November 2017 in the attempt to form a new government coalition collapsed. The Free Democratic Party (FDP) pulled out of talks with the CDU/CSU and the Greens, over differences regarding the refugee crisis.
The entire refugee crisis is clearly going to be Merkel’s downfall. Then in March 2018, the SPD voted to renew its coalition with the CDU after its leader Martin Schulz resigned. This step finally cleared a path for Merkel to retain the position as chancellor, but she would have to give up financial control to the socialists to maintain her political power for a fourth term.
Nevertheless, the refugee crisis and the mismanagement of the entire issue has resulted in clashes between Angela Merkel and German interior minister Horst Seehofer. There is a serious political crisis brewing where Merkel could be forced out of her chancellor position.
Armstrong Economics Blog/Economics
Re-Posted Jun 15, 2018 by Martin Armstrong
After reading your blog post about the 300% increase in the cost of healthcare for refugees, I wondered the cost in this country for illegal aliens. Healthcare. Education. Food stamps. Etc. I googled anywhere from 3.4 to 11 billion dollars from health care alone.
I laughed out loud after reading the above. You wrote about the turn on the last group of people off the boat.
Keep up the good work and see you in Nov
ANSWER: The cost of socialism is not merely over the top, it has altered the migration patterns within human society tremendously. The waves of migration from Europe to America were each inspired by the economic conditions at home. Therefore, we find the Irish, Germans, Italians, and English all coming during varied waves or periods overall when looking at the majority (naturally there were people from each group who moved for personal reasons). Nonetheless, the one thing that they all had in common was that they paid for their passage and they did not expect social benefits for free.
Today, the migration patterns are purely economic, but they are inspired by socialism whereby they need only show up and receive automatic income and benefits. When the European migration took place, predominantly during the 19th century and then waves after World War I and World War II, the people received no handouts from the taxpayer. There were no social programs to receive free living expenses. Churches provided food when people gave to charity BEFORE there were taxes. Europeans migrated to the United States to start new lives and to earn a living — not because they would be subsidized.
There are waves of migration that are caused by political unrest and no doubt some of that was at the reason for people fleeing Syria. Less know is the wave of refugees fleeing to Colombia and Venezuela who are also seeking security and economic stability since the army continues to support the Venezuelan socialist government that is collapsing. There were Americans in the south who fled to Brazil during the Civil War. They were called Confederados (Portuguese pronunciation: [kõfedeˈɾadus]) and were some 10,000 to 20,000 Confederate American refugees. They settled primarily in the state of São Paulo.
Providing welfare checks to show up on your soil alters the reasons for migration that have existed for thousands of years.
Published on Mar 6, 2017
Armstrong Economics Blog/Socialist
Re-Posted Jun 12, 2018 by Martin Armstrong
Everyone knows I donated my time to try to reform Social Security and privatize it back in the 90s. I was even shuttling between the Chairman of the House Ways & Means Committee, Bill Archer, and the House Majority Leader Dick Army. I argued for the privatization of Social Security to allow it to become a wealth fund allowing it to invest in equities.
The Dow Jones Industrials recently broke through the 4,000 level. The greatest obstacle was the Democrats. I had laid out the structure that we allocate money according to the track record of the manager. I was doing this because I had no interest in managing the money of this nature. The Democrats wanted to replace the fund managers at will when they retook the majority. I explained that this decision should not be political. I did not care if the fund manager voted Democrat or Republican. That just never sunk in.
The Democrats painted this private investment as “risky” and they would vote against it. So Social Security invests 100% in government bonds. Let’s see. The Fed lowered the interest rates to “stimulate” the economy. The net effect is that Social Security is simply a slush fund with no possible economic growth. The loss has come at the “opportunity risk” of leaving the money in bonds.
Had Social Security simply become a wealth fund as so many nations around the world have adopted, it would NOT be in danger of a financial crisis today. This is the result of the Democrats who always want to strangely keep the poor poor and punish the rich. They talk about income inequality and portray this as “unfair.” Yet, the very way the “rich” make their money is through investment, which the Democrats have rejected for more than 40 years.
As the stock market rises further and interest rates remain low, the disparity of income will expand rapidly because they are comparing profits on investment as income rather than wages. We should expect the Socialists to get a lot more vocal over the years ahead going into 2020. They will call for the heads of the “rich” rather than address the fact that they are the very people who prevent the poor from getting ahead.
When we ended part I... A U.S. foreign policy that provides the opportunity for fully-realized national authenticity is a paradigm shift amid a world that has grown accustomed to corrupt globalists, bankers and financial elites who have established a business model by dictating terms to national leaders they control and influence.
When you take the influence of corporate/financial brokers out of foreign policy, all of a sudden those global influence peddlers are worthless. Absent of their ability to provide any benefit, nations no longer purchase these brokered services.
As soon as influence brokers are dispatched, national politicians become accountable to the voices of their citizens. When representing the voices of citizens becomes the primary political driver of national policy, the authentic image of the nation is allowed to surface.
In western, or what we would call ‘more democratized systems of government‘, the consequence of removing multinational corporate and financial influence peddlers presents two options for the governing authority occupying political office:
♦One option is to refuse to allow the authentic voice of a nationalist citizenry to rise. Essentially to commit to a retention of the status quo; an elitist view; a globalist perspective. This requires shifting to a more openly authoritarian system of government within both the economic and social spheres. Those who control the reigns of power refuse to acquiesce to a changed landscape.
♦The second option is to allow the authentic and organic rise of nationalism. To accept the voices of the middle-class majority; to structure the economic and social landscape in a manner that allows the underlying identity to surface naturally.
Fortunately we are living in a time of great history, and we have two representative examples playing-out in real time. •One example is the U.K. and voices of the British people who have voted to Brexit the European Union. •The second example is Mexico, and the upcoming July 1st election of Andres Manuel Lopez Obrador (aka AM LO), a national socialist.
In the U.K. we see the government turning more authoritarian and distancing itself from the voices of the majority who chose to rebuke the collective association of the EU. In recent decisions the government has taken a more harsh approach toward suppressing opposition, and as a consequence oppressing free speech and civil liberties.
This doesn’t come as a surprise to those who have followed the arc of history when the collective global elite are rejected. Globalism can only thrive amid a class structure where the elites, though few in number, have more controlling power over the direction of government. It is not accidental that the EU has appointed officials and unelected bureaucrats as the primary decision-making authority.
By its very nature collectivism requires a central planning authority who can act independent of the underlying national voice. As the Trump Doctrine clashes with the European global elite, the withdrawal of the U.S. financial underwriting creates a natural problem. Subsidies are needed to retain multiculturalism. If a national citizenry has to pay for the indulgent decisions of the influence class, a crisis becomes only a matter of time.
Wealth distribution requires a host. Since the end of World War II the U.S. has been a bottomless treasury for EU subsidy. The payments have been direct and indirect. The indirect have been via U.S. military bases providing security, and also by U.S. trade policy permitting one-way tariff systems. Both forms of indirect payment are now being reversed as part of the modern Trump Doctrine.
Similarly, in Mexico the Trump Doctrine also extends toward changed trade policies; this time via NAFTA. The restructuring of NAFTA disfavors multinational corporations who have exploited structural loopholes that were designed into the agreement.
With President Trump confronting the NAFTA fatal flaw, and absent of the ability of corporations to influence the direction of the administration, the trade deal ultimately presents the same outcome for Mexico as it does the EU – LESS DOLLARS.
However, in Mexico, the larger systems of government are not as strongly structured to withstand the withdrawal of billions of U.S. dollars. The government of Mexico is not in the same position as the EU and cannot double-down on more oppressive controls. Therefore the authentic voice of the Mexican people is likely to rise.
Andres Manuel Lopez Obrador (AM LO), is a nationalist but he is not a free-market capitalist. AM LO is more akin to a Hugo Chavez soft-Marxist approach with a view the central governing authority is the best structure to control the outputs of the production base and distribute equity.
The fabric of socialism runs naturally through the DNA strain of Mexico, and indeed much of South America. This is one of the reasons why the current Mexican government is so corrupt. Multinational corporations always find it easier to exploit socialist minded government officials.
When bribery and graft are the natural way of business engagement, the multinationals will exploit every opportunity to maximize profit. Withdraw the benefit (loophole exploitation) to the financial systems, and the bribery and graft dries up quickly. A bottom-up nationalist, albeit a soft-Marxist like AM LO, is the ultimate beneficiary.
The authentic sense of the Mexican people, rises in the persona of Andres Manuel Lopez Obrador – who actually does personify the underlying nature of the classic Mexican class-struggle.
Thus we see two similar yet distinct outcomes of the Trump Doctrine. Within a highly structured U.K. parliamentary government the leadership becomes more authoritarian and rebukes the electorate; and in Mexico a less structured government becomes more socialist and embraces the underlying nature of the electorate.
It is not accidental the historic nature of the U.K. is a Monarchy, and the historic nature of Mexico is socialist. Revolution not withstanding, both countries are now returning to their roots.
We are indeed living in historic times.
MEXICO CITY (Reuters) – Leftist candidate Andres Manuel Lopez Obrador extended his double-digit opinion poll lead to claim half of voter support ahead of Mexico’s July 1 presidential election, a voter survey showed on Monday.
Lopez Obrador, who has consistently ranked in the lead in major polls, has 50 percent of voter support, 26 percentage points ahead of his nearest rival, according to the poll published in newspaper El Financiero.
The former Mexico City mayor’s support rose from 46 percent in a May survey by the same pollster. (read more)
Published on Nov 13, 2017
Frontlines Tiananmen Square 1989 Protest documentary from 1996.
Chinese troops storm through Tiananmen Square in the center of Beijing, killing and arresting thousands of pro-democracy protesters. The brutal Chinese government assault on the protesters shocked the West and brought denunciations and sanctions from the United States.
In May 1989, nearly a million Chinese, mostly young students, crowded into central Beijing to protest for greater democracy and call for the resignations of Chinese Communist Party leaders deemed too repressive. For nearly three weeks, the protesters kept up daily vigils, and marched and chanted. Western reporters captured much of the drama for television and newspaper audiences in the United States and Europe. On June 4, 1989, however, Chinese troops and security police stormed through Tiananmen Square, firing indiscriminately into the crowds of protesters. Turmoil ensued, as tens of thousands of the young students tried to escape the rampaging Chinese forces. Other protesters fought back, stoning the attacking troops and overturning and setting fire to military vehicles. Reporters and Western diplomats on the scene estimated that at least 300, and perhaps thousands, of the protesters had been killed and as many as 10,000 were arrested.
The savagery of the Chinese government’s attack shocked both its allies and Cold War enemies. Soviet leader Mikhail Gorbachev declared that he was saddened by the events in China. He said he hoped that the government would adopt his own domestic reform program and begin to democratize the Chinese political system. In the United States, editorialists and members of Congress denounced the Tiananmen Square massacre and pressed for President George Bush to punish the Chinese government. A little more than three weeks later, the U.S. Congress voted to impose economic sanctions against the People’s Republic of China in response to the brutal violation of human rights.
Armstrong Economics Blog/SPAIN
Re-Posted Jun 4, 2018 by Martin Armstrong
With the collapse of the head of Spain, Spanish Prime Minister Mariano Rajoy, and the change in hands of the state to the Socialist Pedro Sanchez, the Nationalists retook control of Catalonia’s regional government on Saturday. A new cabinet was sworn in ending just over seven months of direct rule from Madrid by Rajoy. The cabinet is now led by Quim Torra, who was a close aide to former Catalonia leader Carles Puigdemont, who the Germans arrested on behalf of Rajoy who wanted him imprisoned for life or outright dead on arrival. The new head of Spain, Pedro Sanchez, has stated he wants talks on Catalonia reversing the policies of Rajoy. However, he has stated that he opposes any independence referendum.