Musk Offers to End World Hunger Under One Stipulation


Armstrong Economics Blog/Corruption Re-Posted Nov 3, 2021 by Martin Armstrong

If billionaires paid their fair share, we could allegedly solve world hunger. How?

David Beasley, director of the UN’s World Food Programme (WFP), called out billionaires such as Elon Musk and Jeff Bezos for not donating funds to solve world hunger. “Just $6 billion could keep 42 million people from dying,” Beasley claimed. Musk took to Twitter with a bold offer — he would personally donate $6 billion if the WFP could explain precisely how they would spend the funds. Furthermore, the richest man in the world is asking the WFP to provide a public record of exactly how the money will be spent.

David Beasley replied to Musk, “Headline not accurate. $6B will not solve world hunger, but it WILL prevent geopolitical instability, mass migration and save 42 million people on the brink of starvation. An unprecedented crisis and a perfect storm due to Covid/conflict/climate crises.” In other words, $6 billion will not solve world hunger as the people managing that sum of money could never keep it out of their pockets. Musk replied to Beasley with a link to an ongoing, unpunished, child sex abuse scandal where UN “peacekeepers” abused hungry children. The details are too grotesque to publish here, but make no mistake about it — the UN is not an entity intent on saving the world. They had to turn down a generous donation of $6 billion because they knew that they could never report the paper trail, and the results would likely be a request for more money.

The Nord Stream 2 Pipeline Delay


Armstrong Economics Blog/Energy Re-Posted Oct 29, 2021 by Martin Armstrong

(Nord Stream Pipeline)

European Union leaders are scrambling for solutions to the energy crisis, but their feared friend from the East has reminded them that a solution exists. According to the Associated Press, gas prices in the EU have spiked to 95 euros from about 19 euros per megawatt-hour in the past year. Around 90% of gas is imported to the EU, and Belgian Prime Minister Alexander De Croo said that the only long-term solution is to invest in renewable energy. “And in the long term, there is only one solution — invest more in renewable energy so we are less vulnerable to price fluctuations for fossil fuels,” he said.

Hungarian Prime Minister Viktor Orban blamed the Green Deal plan for higher prices, which aims to reduce greenhouse emissions by 55% by 2030, with the goal of becoming carbon neutral by 2050. Some leaders are pointing to the use of nuclear energy, such as France, Bulgaria, Croatia, Czech Republic, Finland, Hungary, Poland, Romania, Slovakia, and Slovenia. However, the 27-nation bloc has not designated nuclear power as a sustainable investment yet.

(Nord Stream 2 Pipeline)

In comes Putin and the controversial Nord Stream 2 pipeline that would carry much-needed gas from Russia to the EU beneath the Baltic Sea. “If the German regulator gives approval tomorrow, supplies of 17.5 billion cubic meters of gas will start the day after tomorrow,” Putin said. The Russian president has previously criticized the EU for not signing long-term contracts and failing to work with Russia on energy trade. European Commission President Ursula von der Leyen said that relying on gas from Russia makes the bloc “vulnerable,” but it seems that they are already vulnerable and in a worsening situation with no solution in sight. EU energy ministers are set to meet in December, where they are likely to kick around solutions while ignoring the one that is a pipeline away.

China Rationing Diesel


Armstrong Economics Blog/Energy Re-Posted Oct 29, 2021 by Martin Armstrong

China has begun to ration fuel amid the ongoing energy crisis. As reported by the BBC, trucks in China may only fill their tanks with 100 liters (10% capacity) of diesel, with other areas reportedly only allowing 25 liters. The city of Fuyang is limiting purchases and charging drivers a surcharge of up to 300 yuan to fill up their tanks. The fuel shortage will affect both domestic and international goods as trucks simply cannot drive to their destinations. Despite surging demand, all fossil fuels are in tight supply and have seen drastic upticks in price. Jeremy Stevens, Chief China Economist at Standard Bank, told the BBC from Beijing that companies have already begun using diesel generators to maintain factory operations. World leaders are urging this instant switch to renewable energy and net-zero emissions, but the technology does not currently exist to power the world. The energy crisis will contribute to supply shortages worldwide.

The Chaos of Climate Change – Just Add Nuclear


Armstrong Economics Blog/Climate Re-Posted Oct 28, 2021 by Martin Armstrong

California Gasoline Exceeds $8 a Gallon


Armstrong Economics Blog/Energy Re-Posted Oct 21, 2021 by Martin Armstrong

Maybe when it hits $20 they will stop voting Democrat.

Meat Prices on the Rise


Armstrong Economics Blog/Agriculture Re-Posted Oct 22, 2021 by Martin Armstrong

(Image from Statistics Canada: Prices for meat products rise year over year in September)

Canada’s CPI rose 4.4% YoY this September, according to Statistics Canada. Every major sector saw gains, but meat prices spiked 9.5%, marking the fastest pace of growth since April 2015. Canada’s Food Price Report for 2021, released in December 2020, predicted that meat prices would rise 4.5% to 6.5% in 2021, a drastic underestimate. Dr. Sylvain Charlebois, project lead and Director of the Agri-Food Analytics Lab at Dalhousie University warned people that they should develop “immunity” to rising prices. “Immunity to higher food prices requires more cooking, more discipline and more research. It’s as simple as that.” Gaslighting the people to believe they need to change their lives, rather than government change their policy, is at play once again.

Let me remind you that Bill Gates and others have been advocating for a move to 100% synthetic beef. But his logic only applies to the “rich” countries such as the US and Canada. “Weirdly, the US livestock, because they’re so productive, the emissions per pound of beef are dramatically less than emissions per pound in Africa,” Gates said in an interview in February 2021. “So no, I don’t think the poorest 80 countries will be eating synthetic meat. I do think all rich countries should move to 100% synthetic beef. You can get used to the taste difference, and the claim is they’re going to make it taste even better over time. Eventually, that green premium is modest enough that you can sort of change the [behavior of] people or use regulation to totally shift the demand.” This ties into the climate change agenda and the idea that starvation can help us shift to zero CO2. I should mention that the article added a disclaimer that Bill Gates is an “investor either personally or through Breakthrough Energy Ventures in several of the companies he mentions below, including Beyond Meats, Carbon Engineering, Impossible Foods, Memphis Meats, and Pivot Bio.”

Biden and Trudeau have made it known that they are on board with the climate change agenda, so that could be a preview of what is to come. Back to Statistic Canada’s December report – the forecast lists COVID-19 restrictions and the oil price war for rising food prices. Perhaps a certain pipeline could have assisted the fuel crisis. Yet, Biden rescinded the permit early in his presidency, and Trudeau feigned disappointment but did not push back on the matter. Basically, the two main components that the report notes are somewhat within government’s control.

How will this affect Canadian families? So far, the average food expenditure for a family of four is C$13,907, a 5% increase of C$695 compared to last year.

Viewing Inflation Through Rose-Colored Glasses


Armstrong Economics Blog/Inflation Re-Posted Oct 18, 2021 by Martin Armstrong

Once “we get the pandemic under control, the global economy comes back, these pressures will mitigate and I believe will go back to normal levels,” Treasury Secretary Janet Yellen stated, echoing “transitory” sentiments by Fed Chairman Jerome Powell. Powell believes supply chain bottlenecks are the main culprit for inflation. Well, the Biden Administration appointed the secretaries of Commerce, Agriculture and Transportation to create a supply chain task force to fix the influx issues.

Sameera Fazili, a deputy director of the White House National Economic Council, stated, “Our approach to supply chain resilience needs to look forward to emerging threats from cybersecurity to climate issues.” Is climate change the issue here? Is this an indication of where the government will misdirect resources once again? Fazili further displayed how out of touch the government is with the current crisis by saying inflation due to supply shortages is “kind of [a] good problem to be having,” as it indicates demand. The countless number of businesses and consumers currently paying for basic living expenses at up to 30-year highs may not see the glass half full at the moment.

Then, the Biden Administration met with the workers at the Port of Los Angeles this week, where it was agreed upon that the port would operate 24/7 to address issues. Ports in Los Angeles and Long Beach, California, account for 40% of all shipments into the US, which seems to be a good start. Even Walmart, FedEx, and UPS have agreed to unload their shipments at non-peak hours to help the process. Oh, wait, the ongoing worker shortage. Companies are begging people to apply, and it remains to be seen whether the ports will be able to maintain proper staffing to run at full capacity around the clock. Then the need for a sufficient number of truck drivers becomes an issue as well. Even if the ports do reach full capacity, what about the spike in fuel prices? Energy prices have caused the price of transportation to skyrocket, which is then passed on to the consumer. The US government is approaching this issue from a domestic standpoint as well and not factoring in the reason why inflation and supply shortages are not limited to the US.

Socrates indicated that inflation could rally into 2034, and based on the current solutions, the computer will likely be correct once again. Perhaps we should all view inflation through rose-colored glasses and view the 5.4% YoY spike in September as “kind of a good problem to be having.”

The Psychology Behind Consumer Spending and Hedonic Adaptation


Armstrong Economics Blog/Behavioral Economics Re-Posted Oct 18, 2021 by Martin Armstrong

Consumer debt in the US reached $14.88 trillion in 2020, according to Experian’s consumer debt study. That is a $3 trillion increase in the past decade, and spending in 2021 has only amplified. Nearly 42% of US adults have reported falling deeper into debt since March 2020, and according to a survey by BankRate.com, 2,400 of 1,297 adults had credit card debt of which 47% contributed that debt to the pandemic. Credit card debt is difficult to crawl out from, with the average APR well above 16%. Even more alarming is that 54% of adults hold on to their credit card debt for at least a year, and with that rising interest, it will take years to pay it off (if ever).

Inflation is not deterring retail sales in the US. I have stated that other countries line up to sell their exports to America, making the US the top consumer economy, and the top economy overall as consumer spending accounts for two-thirds of GDP. Even with inflation up 5.4% YoY in September, retail sales spiked 0.7% despite analysts’ at the Dow predicting a -0.2% decline. Why?

Of course, people must spend to meet their basic living expenses, and those expenses have spiked in every area from food, energy, to real estate. However, there is additional spending occurring post-pandemic as optimism rises. People hoard when they fear the future. Without taking into account other factors, people are beginning to spend again because the easing restrictions and vaccinations has led them to believe that their future financial situations will brighten.

A study on the psychology of consumer spending points to interesting aspects of human nature (Carter T.J. (2014) The Psychological Science of Spending Money). “There is obviously the direct monetary cost, but also the opportunity cost: all of the other ways that one could have spent this money must now be foregone. Thus, a more psychological definition of the psychological act of spending money would be a simultaneous loss (of money and opportunity) and gain (of some good or service) for oneself and/or someone else that one chooses to undertake based on some beliefs about future hedonic states,” as noted by a 2014 study on consumer behavior (Bijleveld E., Aarts H. (eds) The Psychological Science of Money. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-0959-9_10). The study found that the act of spending itself is “hedonically neutral,” and they used the analogy that “dropping $20 down a storm sewer would feel worse than finding $20 on the street would feel good.”

However, anticipated v anticipatory emotions come into play before acquiring new physical possession, be it a stock in your portfolio or a new iPhone in your pocket. On anticipation, we may feel a natural high as “we decide whether and how to spend money based on how we anticipate the various courses of action will make us feel.” (Mellers et al., 1999 ; Shiv & Huber, 2000). Anticipatory emotions are what we experience when we actually acquire the purchase (e.g., we may feel happiness after purchasing equity that we expect to profit on or guilty after buying a candy bar).

The study dissects consumers into different categories, but for the sake of keeping the blog post a reasonable length, let’s go right to the source – hedonic adaptation (e.g., after positive (or negative) events (i.e., something good or bad happening to someone), and a subsequent increase in positive (or negative) feelings, people return to a relatively stable, baseline level of affect (Diener, Lucas, & Scollon, 2006). “Focusing only on the immediate spike in happiness and ignoring the subse-quent [sic] decline means that the anticipated experience—the one on which people base their expectations, and thus, their decisions—may be quite different from the actual experience, increasing the chances of disappointment.” So, we may experience a short spike in dopamine after a purchase, but that high may wear off. The pain of payment affects all consumers, but interestingly, paying with a credit card temporarily mitigates the negative feelings associated with a payment:

“Cash payments are immediate and visceral—the money literally leaves your hands and becomes some-one [sic] else’s possession. Credit cards, on the other hand, are abstract and distant; they allow you to put off the pain of paying until next month, often while enjoying the benefit immediately. Spending money this way may seem painless, and almost certainly does reduce the negative anticipatory emotions that might prevent one from making a purchase, but it only forestalls the inevitable. When the end of the month rolls around and the credit card bill comes due, that pain may actually be magnified because the pleasure you experienced is already in the past.”

Cash transactions are becoming an ancient relic, and if the government had its way, we likely wouldn’t pay in cash at all. As online buying rises in popularity and people opt to pull out their plastic cards rather than physical paper, the initial cost of the purchase may not resonate. Retail therapy is in itself a hedonic act that may provide short-term happiness but often leads to buyers’ remorse when the purchase cost outweighs the benefits. It is important to note the risks associated with this move into a cashless society. The immediate impact of a purchase may not be felt for some time, at which it may be too late. As they say, when you’re in a (debt) hole, stop digging.

Stagflation is Here


Armstrong Economics Blog/Economics Re-Posted Oct 18, 2021 by Martin Armstrong

QUESTION: When do we talk about stagflation?

F

ANSWER: We are already experiencing it. Normally, the standard definition of “stagflation” has been explained as slow economic growth with relatively high unemployment/or economic stagnation that takes place with rising prices. Some have also defined it as a period of inflation combined with a decline in the gross domestic product (GDP).

Stagflation became a term that defined the 1970s because economic growth was still positive, but the rate of inflation was far greater due to the price shock of the OPEC embargo. Because of the Democrats constantly pushing to raise taxes, they sent corporations fleeing offshore, and it was NOT merely because of the tax rate. I testified before the House Ways & Means Committee on taxation and they wanted to know why NO American company got a contract from China like constructing the Yellow River Dam. I explained that German companies were NOT taxed on worldwide income, and as such, they were already 40% less than an American company because Americans pay taxes on worldwide income, and the ONLY other country to that was Japan. Thus, American companies moved offshore, NOT because labor was cheaper, but so they could complete.

As a result, I provided our analysis that showed when we allocated trade according to the flag of the company instead of where something was manufactured, then the US had a trade surplus instead of a trade deficit. Trump understood that and offered a one-time tax deal to bring their profits home. The Democrats screamed because they wanted 40% in taxes. But they would not bring the money home and so they got 0%.

Currently, as we move into 2024, this entire COVID scam has seriously disrupted the supply chain. Companies shifted to Just-In-Time inventory systems to save on financing an inventory. But then COVID lockdowns came and this resulted in chronic shortages.

So your answer is we are already in a STAGFLATION mode because inflation will surpass economic growth. With the dramatic tax increases the Democrats want to shove down the economy’s throat, all we will see is a decline in economic growth with rising prices thanks to chronic shortages. So we get the worst of two worlds.

The Democrats are deliberately pushing the World Economic Forum agenda and are actively trying to confiscate wealth while simultaneously crushing the economy to Build Back Better. Just like George Bush Jr took the blame for the Iraq war, which was all Cheney, Biden will go down in history as the patsy for this foreign infiltration of the United States to change our economy into a Marxist wonderland.

Lies, Lies & More Lies from the Financial Press


Armstrong Economics Blog/Press Re-Posted Oct 15, 2021 by Martin Armstrong

COMMENT: Marty; the Fed quietly published the banks it was funding in the Repo Crisis. I just wanted to say, you are always right. The press claimed it was tax time, but you said it was the crisis in European banks. Your sources are always spot on. Thanks for the light of truth.

PG

REPLY: Yes, that story that the liquidity crisis occurred because US corporations withdrew large amounts from the banks in order to make quarterly tax payments was the most absurd propaganda I ever heard. Why then do we not see the same liquidity crisis event during tax season?

The bulk of the loans covered foreign banks, as well as Goldman Sachs and JPMorgan Securities. It was all driven by the simple fact that Merkel said there would be no bailout for Deutsche Bank, which was the major derivatives counterparty problem involving Wall Street. Deutsche Bank had a major derivatives book, and if it failed, it would have taken down US banks. Deutsche Bank was in crisis and then it was too big to merge with Commerzbank. They had to lay off nearly 20,000 staff and a major effort was undertake to try to isolate its toxic assets.

That is why the Fed had to step in as the market maker to bail out Europe for US banks all backed off. I really do not know who makes up these stories to try to hide the truth. But they always do in hopes of preventing panics. This time, the game is up.