I wrote about this effect in my economics thesis in 1965 and the bottom is that you have to look at the distribution of IQ/Education and the shift has been away from the jobs in the average range of IQ/Education into the upper ranges i.e. from labor to tech jobs. What this means as the shift continues is very simple there will be fewer and fewer people ABLE to do the jobs that are created.
Tag Archives: TTIP
Dollar Stores are Falling, Spelling Trouble for the Economy
More lower paying jobs than in the past with higher taxes, more expensive energy and food health care and school leaves less money for anything else.
The Euro Crisis & The Previous Debt
Armstrong Economics Blog/European Union
Re-Posted Mar 29, 2017 by Martin Armstrong
QUESTION: Hello Martin, I understand and agree to what you are saying in your post however I cannot understand what you mean when you say that: “Secondly, leaving all individual member states with past debt yet converted that to euro, then resulted in their debts doubling in international value as the euro doubled going into 2008.” Here, I cannot follow how it is possible that Greece’s PAST debt could double due to the euro doubling in value since the PAST debt has already been converted to euro. If the PAST debt had been in any other currency and then when the euro would double then I could understand that the debt also could double. Am I missing out something here?
Regards,
MG
ANSWER: All members past debts were in their home currency, including Germany. Upon joining the Euro, the past debts were converted to the Euro also, because their old currencies were abandoned. What I mean by international value is if you look at the debts of all member states, when the euro doubled in value from 80 cents to the US dollar to $1.60, from a US investor, he doubled his money holding Greek debt or any member’s debt. We can see that the dollar rose sharply against the drachma between 1995 going into 1999 demonstrating that the drachma declined 47% going into the formation of the euro. The cost of servicing the past debt rises in real terms and when they had to pay off the debt and roll into new debt, they were paying in international value more than it was worth upon joining the euro.
Back during the Reagan Administration, I met with the U.S. Treasury and warned that Volcker raising rates to 14% meant he was suppressing inflation immediately, but causing it to exponentially rise by the end of the decade. Why? Because central banks cannot stimulate or suppress and economy with interest rates when the government is the biggest borrower. Whatever they think they are doing by raising rates to stop people from borrowing has no impact upon government for they will always spend other people’s money freely. In that meeting, I was flatly told it was OK because the government would be paying back with cheaper dollars. In this case, the rise in the euro to $1.60 meant the opposite – member states would be contracting and had to pay out huge sums beyond what they originally owed. This was no different from people who took out Swiss loans and then the Swiss franc/euro peg broke. Suddenly the borrowers owed q lot more in their home currency when the Swiss rallied.
Consequently, the past debt of Greece was in drachma and the decline in the currency meant that its debt in terms of dollars (international value terms) fell almost by 50%. Upon joining the euro, the past debt was then converted to euro – not before. Therefore, in international terms of value, the debts effectively doubled in real terms. This would NOT have been a problem had all the debt of member states been consolidated into a federal debt for Europe. Thereafter, any new borrowing would have been purely state debt NOT acceptable for reserves in the banking system.
In this manner, the past debt, which does not stimulate the immediate economic position, doubled in real terms and increased the cost of servicing the past debt. This is how the economy was strip-mined. Had the debt been consolidated into one federal debt, that burden would have been relieved upon by member states. This would have allowed the euro to then actually compete against the dollar. It is likewise a total joke that people think China and Russia can sell US bonds and somehow that will dethrone the dollar. Pension funds and institutions in Europe and the US will not suddenly sell all dollars and buy rubles and yuan denominated debt. There is such a thing as credit ratings.
As long as federal debt exists and pension funds are compelled by law to own government debt, you will not dethrone the dollar simply by trade or any combination of China and Russia. That is just absurd. The big money simply cannot move to rubles and yuan. A lot more has to change.
KOMMONSENTSJANE – Russia Is Pissed: Threatens To Spill Obama Admin Secrets If US Intel Doesn’t Stop Leaking — Arlin Report
I thinks its time that we find out what the hell has been going on since 9/11 with our government.
Source: Russia Is Pissed: Threatens To Spill Obama Admin Secrets If US Intel Doesn’t Stop Leaking So how do we the people learn of these secrets if/when released? Liberal news media? Not likely……… Fox News …….mostly likely. Independent news definitely!
Reblogged on kommonsentsjane/blogkommonsents.
Russia is pissed – love it – that is good – BRING IT ON. The American people would love to know what the back allies of Obama’s politics promised Russia.
By the way, it is not a secret if more than one person knows the secret!
kommonsentsjane
Nation Building Gone Wrong
Armstrong Economics Blog/Economics
Re-Posted Mar 29, 2017 by Martin Armstrong
Economic events have the most interesting way of exposing economic theories and orthodoxies and how seriously flawed they truly are these days. The fixed-exchange rate system and the Gold Standard imposed by Bretton Woods collapsed simply because they never fixed the supply of dollars, yet gold and other currencies were fixed to dollars. Only an idiot would assume you could fix currencies and gold to the dollar and expect that to be maintained while creating dollars with no limit.
John F. Kennedy in his debate with Richard Nixon during 1960, made it perfectly clear that Bretton Woods was in trouble indirectly and created the first gold panic postwar. He said the USA could stop the decline in the dollar at any moment – stop expanding military bases worldwide. For every dollar spent on creating an overseas bases and then hiring locals for staff and paying US soldiers to live there was the perfect way to export dollars with nothing in return. In trade, you received something back. Through trying to control the world, the military just squandered American wealth with nothing to show for it but their power games of national building that have never worked even once. Government’s have been engaged in national building for centuries. The Romans, Charlemagne, British, Napoleon, Hitler, Genghis Khan, Japan and others have sought to engage in national building by invasion. None of their empires have survived intact to this very day.
The comedy movie, the Mouse that Roared, was a take how the USA did not seek to occupy foreign governments, they sought to turn them into vassal states. In this manner, this movie rightly showed how a bankrupt small state could become economically sufficient by declaring war on the United States and losing.
Effectively, the USA did not lose to trade, it really lost due to the lost cause of nation building. The USA version was not to occupy other countries, for that would bring back the idea of imperialism. Instead, they poured dollars outward to subjugate other countries, turning them into vassal states. This was not “imperialism” in the classic sense – economic stupidity that cost far too much and undermined the economy in a similar manner to imperialism.
Scotland Wants a Second Referendum to Exit UK
Armstrong Economics Blog/BRITAIN
Re-Posted Mar 29, 2017 by Martin Armstrong
The Scottish government wants a second referendum on independence from the UK. The Parliament in Edinburgh will decide as soon as next week, as the Scottish Prime Minister Nicola Sturgeon said. The referendum could take place between autumn 2018 and spring 2019. Of course, this would really be a brain-dead action if Scotland believes it should remain inside the EU. That would be trading one benevolent union to a totalitarian one.
Withdrawal From the UN Gains Logic as a Reform In the Era of Trump
The UN has been a bad idea from the get go cut all the funding.
Border searches of electronic devices prompt FOIA lawsuit against Trump administration
Who cares about the inconvenience its our country theirs.
‘AP’s malicious lie’: Russian tycoon denies dealing with Trump’s ex-aide to ‘benefit Putin’
Trumps ties are speculative at best while Hillary’s are well known and documented.
Protests from USA to Russia
Armstrong Economics Blog/Civil Unrest
Re-Posted Mar 28, 2017 by Martin Armstrong
Civil Unrest is rising around the world. In the USA, demonstrations have been organized to support Donald Trump in a counter-demonstration move against the Obama/Soros uprising. In Los Angeles, Trump supporters were confronted by opponents of Trump and the two groups ended in violence. The Obama/Soros supporters were partially traditionally masked.
The Trump supporters were trying to organize marches in about 40 US cities for Sunday. However, many cities were denying the Trump supporters the right to even assemble. In Philadelphia, the police stopped such an event they alleged for safety, as the news page Philly.com reported.
I wanted to see how RT would report the Russian protests. They reported that about 600 people were arrested and some 8,000 people protested. As the rally continued, RT reported that the “police used loudspeakers to call on the protesters to disperse.”
The protest was against corruption, and they accused Minister President Dmitry Medvedev of corruption, demanding his resignation. A few days ago, six officials had been arrested for embezzlement of public funds, which were actually intended for construction work on the estate of President Vladimir Putin. As the Russian investigative committee reported on Wednesday, at least 225 million rubles (around 3.6 million euros) were devoted to the construction of “public buildings”.
According to Russian media reports, money was spent on building several buildings on Putin’s property in Novo-Ogarevo near Moscow. Kaminow and its partners were supposed to build a reception building, a hotel, and a garage there between 2012 and 2015, as the newspaper Kommersant reported. The contract amounted to a total of 5.7 billion rubles, of which 45 per cent went to Ateks without the works being completed.
Navalny had been arrested in Moscow by security forces and taken to a police station. Hundreds of demonstrators gathered around the bus to stop them from leaving. Navalny is mainly known for his blogs in Russia. A court sentenced him to a suspended sentence of five years in February for embezzlement. Navalny, on the other hand, wants to appeal. He plans to compete in the 2018 presidential election against Vladimir Putin. According to surveys, however, the liberal opposition has few chances. However, the anti-corruption protests are hoping for more popularity among the population.
“I am very glad that so many people from the east of the country go to Moscow,” said Navalny shortly before his arrest. He called for the protests after he had made allegations against Medvedev, after which he had accumulated a wealth far above his income. A spokesman for the Prime Minister called the allegations “propagandistic attacks”.
At a demonstration in Vladivostok on the Japanese Sea Reuters, reporters counted atleast 30 attacks. People unrolled a banner with the words “The Minister President must answer”. A 17-year-old student said that in many other countries, governments would have to step down after such accusations. According to eyewitnesses, there have also been arrests in Yekaterinburg in the Ural industrial region. Media also reported arrests in other cities, including St. Petersburg and Novosibirsk.
Centinel2012 