Tag Archives: Universal Basic Income

Mar 13 2023

The Myth of Fair Value


Armstrong Economics Blog/Understanding Cycles Re-Posted Mar 13, 2023 by Martin Armstrong

QUESTION: If the metals are not trading at a fair value relative to everything else, then does that not prove they are manipulated?

SN

ANSWER: Your problem is the assumption that everything must be trading at some fair value. That is up there with the theory of random walks.  ALL markets trade for periods where they remain well below fair value. That was the entire takeover boom of the 1980s which they also blamed on me because I was advising many of the takeover players. I simply showed these charts back then which show in terms of book value, the Dow Jones bottomed in 1977. The market was grossly undervalued because you could buy a company, sell all its tangible assets, and double or triple your money. Michael Douglas’ famous speech in that movie about “greed” would not even be possible if everything always trade like some mythical robot at fair value. Everything overshoots and undershoots.

The metals are NO DIFFERENT. Every market swings between grossly UNDERVALUED and then grossly OVERVALUED. This is part of the business cycle. If there were no periods of gross undervaluations, there would not be a sudden boom either.

This is what you have to come to grips with. There is such a thing and the business cycle. Our cyclical analysis would not be possible if everything was trading at a flat line of fair value. This nonsense in metals is made up of people who have been wrong, and need to blame someone else. It is like blaming climate cycles on CO2. This notion of fair value is rooted, I hate to tell you, in Marxism, because he too did not understand  the business cycle.

Jan 11 2023

The Fed & the Misinformation


Armstrong Economics Blog/Central Banks Re-Posted Jan 11, 2023 by Martin Armstrong

QUESTION: Marty, I was there at your Berlin conference when one of the attendees openly admitted he was from the Bundesbank. He was very open about it. There have been other central bankers at your WEC. I suppose they have to attend just to get a whiff of the trend. Powell has come out and asserted the Fed’s independence and it will not make policy based on climate change. That was very refreshing.  The bulk of analysts still cry about the creation of money at the Fed are insisting that a recession is coming because when the Fed stops printing, we will see a correction worse than 2008. Some call this a confetti party. Many claims to be fed watchers, but have never stepped inside their door. Meeting the people I have at your WEC events, you are always in the center and I can see it is not your opinion but Socrates that they want to listen to for an unbiased view. So will there be a huge correction when this party is over or have the fed watches been talking sophistry with no real insight?

HD

PS: What about a Dubai WEC because the world imposes vaccine passports?

ANSWER: I know, This is the typical myopic domestic view that the Fed is in a very dangerous situation and a wrong move in any direction could cause a financial system meltdown worse than 2008. The argument is that since we have a debt-based monetary system if the Fed stops increasing the money supply this will lead to an economic withdrawal process that will be worse than 2008-2009. Once more, this is only looking at the domestic economy. They live with blinders on and do not see the world around us with respect to the globalization policies that are all in chaos.

Even at Davos in 2003, Alejandro Toledo, then President of Peru, urged the participants to listen to the voices of those protesting outside and to build a bridge with the participants of the Porto Alegre anti-globalization conference. “We must give a human face to the global economy and globalization,” he said. “Managing the economy is not an end in itself, but a means to improve the quality of life. Globalization is meaningless if it does not contribute to reducing poverty all over the world. “ Schwab preaches equality but at the price of Authoritarianism and the loss of individual rights.

The Fed is not between a rock and a hard place domestically. It just made it clear that it is not like the ECB and is not in the climate change business. The Fed is INDEPENDENT and will not be bullied by Biden. The Fed understands that it has become the world’s central bank and its actions in raising rates have had a far greater impact externally particularly in emerging markets because so many other nations issue their debt in US dollars.

The focus is not entirely on the nonsense of the domestic number of the money supply. If a foreigner buys property in the United States, they convert their currency to dollars, and in effect that increases the domestic money supply for that capital now free up cash domestically. The Fed has no control over that aspect and central banks have become aware of this effect which is not taught in economics class and not factored into the doomsday forecasts all based on the same reasoning forever.

All the analysis is constantly based on the Quantity Theory of Money which no longer works in our global economy. That was the foundation of the money theory that emerged with Sir Tomas Greshan who was the agent for the British crown. He saw that when Henry VIII debased the coinage, the value declined in Amsterdam when the exchange rate was solely based upon the metal content of the currency.

All we have ever heard is that the Fed has the power to create money out of thin air. They never explain why the Fed was given that power. You cannot have a fixed money supply as the population increases, then you end up with DEFLATION which is the rise in the value of money. They are married to the argument and nothing you can do will deter them from that saying. During the Great Depression, people hoard their money and do not spend it. That was why the ECB went to negative to try to force people to spend money. You can DOUBLE the money supply but if the people hoard it, you will never create inflation.

Because people hoard their cash, there was a huge contraction in the velocity of money. This resulted in massive shortages and it led to over 200 cities issuing their own money to try to enable a local economy to still function for there was not enough cash to even pay anyone for services.

INFLATION is actually the decline in the purchasing power of the currency as measured against assets. DEFLATION is the rise in the value of money and the decline in the value of assets. The way the term “inflation” is handled today, the government puts the blame on the private sector. During DEFLATION we are blamed for not spending our money.

All this talk about bail-ins and bail-outs misses the point. They act as if they in the end really matter. HYPERINFLATION will never arrive based on increasing the money supply. It arrives with the collapse of CONFIDENCE in the government. Germany imposed a forced loan and confiscated 10% of everyone’s assets in December 1922. Germany lost the war and in 1918 there was a Communist Revolution that led to the creation of the Weimar Republic. The money supply increased 10 fold during 1922 when they were struggling to meet the reparation payments. That undermined the confidence in the government. But it was December 1922 when they confiscated  Note that the hyperinflation took off in 1923 after that forced loan. It was no longer safe to have assets in banks.

This idea that we are headed into so black hole all because the Fed creates money is insane. That misinformation that the German Hyperinflation was all because of printing money was totally absurd and a lie. Once the government stole 10% of everyone’s assets, that was the final straw. They then had to print just to try to cover costs and meet reparation payments.

The Lesson of Germany is seriously distorted and has inflected the view of money supply and inflation which ignores the actions of the government. That is the real issue.

Jan 10 2023

Uniparty Peace or Violence? Ray DiLorenzo 


Those who make peaceful revolution impossible will make violent revolution inevitable  –  John F. Kennedy Is violent or peaceful revolution on the horizon?  The United States of America as the ‘Great Experiment’ in self-government is failing.  While people slept, elites have been allowed to take over, not in governing, but in ruling.  Elections are awash in fraud.  Government institutions are seemingly impotent in applying checks and balances…corruption is overflowing.  Our culture has been pushed to decline by a godless social ideology.   The elite have taken an active part.  They know the world is about to collapse or be changed, but they are prepared, lifeboats at the ready, while the common folk stare at the cold water nearing their feet. People are now talking about the Uniparty.  Who are they?  What are they? 

The Uniparty is a resurrected buzzword for the joining of the Democrat and Republican establishment to obfuscate the will of the American people and push forward The Great Reset for their own interests.  The perfect marriage.  They’re a veritable fifth column working to destroy America as founded, sometimes competing with each other for lead turncoat.   It includes bureaucrats, members of the media, big business, and academia. The Republicans involved (RINOS) are closer to Democrats than members of their own party, but many are so far up in seniority they dare not leave the party. They have become an unrecognized third party, more recently, a party dedicated to stopping the outsider, Donald Trump.  

Make no mistake, Mitch McConnell would rather be Minority Leader in the Senate than just a senator in a majority Senate.  Why else would he withdraw millions in support of 2022 Senate candidates?  He’s responsible for trillions in spending under Biden and the inflation we are all feeling.  He is a RINO in the first degree, a failure and a disgrace. Polled Democrats and Republicans say they are not well represented in government (PRRI).  Except for a brief respite during the Trump presidency, the GOP hasn’t truly represented their voters for many years.

 The term Uniparty has been applied loosely from time to time from at least FDR, but Ralph Nader gave it proper context in 2000 meaning the Washington establishment.  People have used ‘Uniparty’ for various purposes, neo-liberalism, green causes and the like.  But, it is now used primarily by conservatives to attack the linking of mainstream Republicans and Democrats against America First or conservatism. The Uniparty is not on our side.  They are essentially socialist and globalist or just lowlifes looking for opportunity.  They are a government within a facade of a government.  They have an agenda, and you are not part of it. Even though George Washington abhorred the thought of political parties, the human trait of forming tribes was always too great.  And now the tribe mentality has crossed party lines.

Why does it seem like America is on a fast track to a destination no one voted for?  No matter how we vote, no matter what we say, no matter what we reject in the market place, the country seems headed over a cliff, and we have no control over it.  How is it that Trump was able to turn our country around a full 180 degrees in just a few short years?  We were being held back by past administrations. The Uniparty has put our country on autopilot and programmed that autopilot with no input from the people. 

With only 15% of Americans saying our country is going in the right direction (AP), did we really vote for increased crime, inflation, higher taxes, open borders, more drug trafficking, censorship, the elimination of any morality?  Do Americans want 4,000 page bills smelling of pig, made into law in the middle of the night that no one has read?  Do Americans want legislation written in the shadows? Why can’t we win an election that reflects the voter’s sentiment? 

Even Democrats are getting nervous (80%).  Why do Disney and Hollywood keep releasing movies that shock our moral conscience, even when they fail at the box office? Hollywood complains that their earnings have fallen, yet they continue to give us junk.  Why is it more profitable to stay home rather than work?  Why do politicians seem to ignore their constituents?  Why do the Biden, Clinton and Pelosi families get to break any law they want?  Why does Congress name bills that don’t reflect content.  Over a year and a half ago, Congress approved Biden’s $2.5 trillion infrastructure bill.  Where’s the infrastructure?  Now we find out that only 25% of the bill had anything to do with infrastructure. We did get a $20 million heated sidewalk.  

 Americans were lied to with regularity during the Bush and Obama administrations and now with Biden.  We were not allowed to get what we wanted during the Trump administration… nor were we allowed to get what we voted for in 2020 and in 2022.  Not allowed?  By whom?  The Globalist Uniparty.  Since Tucker Carlson reported that the CIA had a hand in the JFK assassination, one can imagine Uniparty implication.   Representative Constitutional Democracy is dead in America!  It is dead because the Uniparty has willed it so.  Their power is more important than your freedom and liberty. It is considered ultra-conservative today to preserve our nation as founded. There is, however, a cadre of Republicans like Andy Biggs (AZ), Bob Good (VA), Andy Harris (MD), Lauren Boebert (CO), Matt Gaetz (FL), Matt Rosendale (MT), Eli Crane (AZ), Chip Roy (TX), and Byron Donalds (FL) that are determined to fix Washington, and they will not be deterred.   They refuse to compromise with a political cartel that is destroying America, or Kevin McCarthy who has a Conservative Review score of 54% (F).  They are our last refuge in this government…true courage!  These Representatives are doing their job.  They are representing their constituents who put them there and standing for the principles for which this country was founded.  What a concept.

Maybe McCarthy will lower his head a bit in remorse for his past political transgressions.  We are no longer the same country. It’s in the hands of the globalist establishment and they are not about to let go.  Oh, they may have allowed us to win a thin margin in the House because the number of votes couldn’t be overcome, or they just want us to think everything is normal, but who is the Speaker of the House?… an establishment shill?   Trump was sold as the anti-establishment president, yet many of his appointments were head scratchers.  It was a swinging door.  It was no surprise that he couldn’t get the wall built or the swamp drained.  Paul Ryan was Uniparty. Trump constantly criticized Bush’s WMD/Iraq war and then he appointed Bolton as National Security Advisor.  Go figure. I am not an anti-Trumper, but during the Trump administration, it became apparent that it was going to take more than a president to fix this country.  Trump was checked at every turn until his checkmate in 2020. In times of emergency, some react quickly, some slowly, needing time to process, in many cases to their detriment.  Now that agents from Hell are working to undermine our nation, removing the foundation holding it up, people are still trying to process what is happening in spite of all the evidence. 

Time is running out. My great fear is that the Uniparty is going to continue destroying our country for their purposes without opposition. Elections now seem futile.  The judicial system has been neutered.  Congress and the judiciary does not act even when they have legal precedent. Partisanship has taken the place of patriotism. Too many of our patriot politicians are mealymouthed, instead of expressing outrage. Profiles in courage seems relegated to a remote past. The new Congress must take the lead in fixing our country.  If the people take the lead, it is not going to be pretty. If enough people feel they no longer have a say in our government, my fear is that they will push back, and push back hard.  Americans will put up with just so much. 

Admiral Yamamoto recognized this after Pearl Harbor and said with regret, “I fear all we have done is awaken a sleeping giant and fill him with a terrible resolve.”    Will the Uniparty relent, give power back to the people and bring us peace and stability or hold on to their power with a jealous obsession and inevitably bring about violence?  What does history say?
Jan 3 2023

Ukraine Used New Year’s Even to Kill Russians in Barracks


Armstrong Economics Blog/War Re-Posted Jan 2, 2023 by Martin Armstrong

Zelensky’s forces of the Ukrainian military had fired four long-range missiles that had been provided by the US (HIMARS) with US training to kill Russian soldiers in the barracks on New Year’s Eve. Russia says that they shot down two of the four. Just after midnight on New Year’s Day, Ukrainian missiles were fired and struck a vocational school in Makiivka that housed soldiers. Some 300 are injured and 63 are dead. While that is not supposed to be fair in war just killing soldiers in the barracks rather than on a battlefield, this war is anything but normal.

The Ukrainians used New Year’s Eve. We should be on guard now for attacks over Orthodox Christmas.  Both sides will most likely attack fiercely.

Nov 28 2022

Why I Look at the Dow First


Armstrong Economics Blog/Economics Re-Posted Nov 28, 2022 by Martin Armstrong

COMMENT: Why do you focus on the Dow over the S&P 500 and others?

ANSWER: New analysts claim that the S&P 500 provides a better picture of the markets compared to the Dow. Although the S&P 500 obviously has a larger catalog, the Dow is a direct reflection of international capital flows. Look toward the Dow to see where big money is moving.

The S&P 500 is domestic-oriented, and fund managers and institutions tend to focus on this index. The NASDAQ typically reflects retail, often tech-heavy, and usually does not peak at the same time. Each index offers a completely different perspective. The Dow Jones Industrials is the big money. You will notice that this index leads the way. It is the first out of a key low because it is typically the foreign capital based on currency. You will also notice the Dow tends to top out first because the big money tends to pull out first also due to currency.

Capital is flowing like never before, and the smart money is on the move. Socrates users have access to our capital flow heat map that shows where money is moving in real time. The USD remains the last safe haven, and money is pouring into the US. Look to the Dow for the best international perspective.

Nov 27 2022

Not Just Recession—Massive Economic Shift!


Lee Camp Published originally on Rumble on November 26, 2022 

This is not just a Recession — it is a Massive Economic Shift!

Nov 13 2022

Interest Rates Rise will Not be Slow


Armstrong Economics Blog/Interest Rates Re-Posted Nov 13, 2022 by Martin Armstrong

This interview with FXStreet is from 2015. Some are surprised at the consecutive rate hikes, but our models have been indicating for a very long time that rates would rise rapidly. There would be no soft landing. Central banks maintained artificially low rates for far too long and were backed into a corner. They created a problem long ago, and it will cause pain for “some time,” as Powell usually states, for the situation to be under control.