Wednesday, September 27, 2017

Norway – The Largest Sovereign Wealth Fund in the World- exception to the pension crisis.




QUESTION: Martin,
There are several news stories this past week reporting that Norway’s pension fund has reached $1 trillion dollars, or $190,000 per citizen. Are there some countries like Norway that will survive the coming pension crisis?

Thank You,

Alex
ANSWER: Not many. They are far and few between because Europe, Asia, and North America (USA/Canada) as a whole have only made promises rather than funding. Norway is the largest Sovereign Wealth Fund in the world.  Norway has gotten where it is because they do NOT follow the brain-dead crowd of government debt is safe. Norway’s sovereign wealth fund has been one of the earliest to shift investment from public sector bonds to equities. They have risen to the largest fund in the world for recognizing the shift from public to private sector investments. Norway is the exception to the pension crisis.

Monday, September 25, 2017

Quantity of Money theory is simply not correct. Govt always seeks to turn people against one another in order to retain power – DIVIDE & CONQUER.

Is There a Way Out of This Financial Mess?


We need to open the door to the future but that is only possible by understanding the past. Paul Volcker back in 1979 in his Rediscovery of the Business Cycle said:
“Not much more than a decade ago, in what now seems a more innocent age, the ‘New Economics’ had become orthodoxy. Its basic tenet, repeated in similar words in speech after speech, in article after article, was described by one of its leaders as ‘the conviction that business cycles were not inevitable, that government policy could and should keep the economy close to a path of steady real growth at a constant target rate of unemployment. … But it was not until the events of 1974 and 1975, when a recession sprung on an unsuspecting world with an intensity unmatched in the post-World War II period, that the lessons of the ‘New Economics’ were seriously challenged.”
It gives me no pleasure to point out all our problems. My objective is straight forward. If we understand what is unfolding and why, then we can apply the correct solutions rather than turn toward more government authoritarian control – which will be the preferred solution. Make no mistake about this, we are in a battle for our freedom. This era of “New Economics” was set in motion by Karl Marx who advocated that government could control the economy and thus create Utopia. While Russia embraced the Communism of Marx, the West adopted his position trying to be just a little bit pregnant. We rejected everything that Adam Smith discovered and the Invisible Hand, rushing into Socialism for it empowered government rather than the private sector and Laissezfaire. Government always pointed to the rich to justify raising taxes to help people, but like fake charities, the bulk of the money goes directly to government.

Our current crisis, therefore, originates with government not the private sector or the hated rich (defined as anyone who earns more that the person listening). Of course we need government which provides a stable rule of law and provides a benevolent administration truly FOR THE PEOPLE & BY THE PEOPLE rather than authoritarian, which assumes we are stupid and only they know best.
This is a battle to the death of Marxism, which in all its various flavors, empowers government that always seeks to turn people against one another in order to retain power – DIVIDE & CONQUER. Because government is really a tornado that just keeps growing consuming an ever larger portion of GDP that surrounds it, we are faced with sharply reduced economic growth which is now colliding with the new age of technology further reducing employment because of taxes.
Constantly arguing class warfare and pretending that government can raise the minimum wage as if this will somehow benefit society rather than eliminate their taxes, only furthers the dangers we face ahead. The rising taxation upon labor creates the incentive to replace workers with robots. Even the government is trying to replace soldiers with robots. This is a trend that is on all sides. Russia has its robot soldiers, and the USA has been following suit. Using drones carrying machine guns is a dangerous development for they can be turned against the people in civil unrest. Those who think that would never happen need only look at Barcelona where the Madrid government just sent in 16,500 soldier to invade Catalonia  and stop any Independence Referendum or the Bonus Army of 1932 that the USA sent troops in killing civilians.
Unfortunately, we are in a battle for our freedom and that of our posterity. Governments are broke. Everything is moving against them from every possible angle. They borrow with no intention of paying anything off and are blind to the trend they have been caught up in. How can we make them see that this is not going to work nor will it end nicely?
We need to stop the borrowing, we need to drastically reduce the size of government and various departments should be PRIVATIZED because government is incapable of managing anything for its own self-interest always stands in the way. At least then any pensions offered would actually be there for private companies cannot default and then refuse to prosecute themselves as does government. There are simply no checks and balance when prosecutions are a political decision and judges are political appointments.
When paper money first began after the Revolution during the Civil War, it paid interest to entice the people to accept it. Then we adopted the idea put forth in this New Economics was that government could “stimulate” by borrowing and that would be less inflationary than printing. This became the Quantity of Money Theory, which has been proven to be complete wrong.
While Draghi has expanded the money supply for almost 10 years, deflation has prevailed proving once and for all that the Quantity of Money theory is simply not correct.  This entire idea of borrowing would be less inflationary is just insane. There was once upon a time when you could not borrow against government debt and that was the entire foundation of borrowing was less inflationary. Since then, we have reached at times 70% of the entire national debt was composed of accumulative interest expenditures. So the money never went to build roads, schools, or help the poor as politicians pretend. Now government debt can be posted as collateral for anything so now debt has become money that just pays interest. So we are only fooling ourselves. Taxes have risen as deficits expand because government thinks inflation is the evil danger as Merkel has championed in Germany. All that governments have been doing is to systemically reduce the standard of living and job creation. Nobody will even look at what is unfolding before our eyes and ask – What is going on?
Until we are ready to review this theory of “New Economics” and the Quantity of Money Theory and deal with it, our future is doomed. If we cannot start a dialog, there is no hope. The press is bought and paid for and is no longer truly free to protect our rights. The media is not there in our corner anymore. They are part of the entire problem.

Sunday, September 24, 2017

Climate change

Identifying Complexity



QUESTION: Hi Martin,
I was wondering why a cold period would result in a commodity rise?
Thank you in advance for your time.
MG
ANSWER: When the climate turns cold, that is when food shortages takes place. When the climate turns warm, that is when economic activity starts and empires expand. The cold period we are entering will be on time for the shift in empires going forward.
global-warming-cyclical
All the great empires expanded during warming periods – not cold.

Wednesday, September 20, 2017

After Rome fell, the financial capitol of the world moved to Constantinople in Turkey, Byzantine Empire then to India.

Cycle of Knowledge

QUESTION: Hello,
I am a French Astrophysicist and I end up watching with great interest a TV story about Martin Armstrong. As a scientist I am really curious and keen to build new connection between our way of describing the Universe and the bias introduced by our own vision and history. Hence I was wondering if the algorithm that Martin has developed was ever tested on human knowledge discovery or if this is something that could be interesting to do.
Kind Regards,
IA
ANSWER: Absolutely. There is cycle to knowledge that I have also encountered and found fascinating. We reach period of knowledge and then we seem to lose it all and reboot. Society before the Dark Age knew the Earth was round and not flat.  For example, if we look at the ancient Greeks, the knew the Earth was round and not flat. They burned people like Giordano Bruno (1548–1600) alive at the stake for claiming the world was round and it revolved around the sun instead of the other way around. The Greek philosopher Aristotle (384-322 BC) argued in his writings that the Earth was spherical, because of the circular shadow it cast on the Moon, during a lunar eclipse. Another reason was that some stars visible from Egypt are not seen further north. Aristotle wrote:
 The evidence of the senses further corroborates this. How else would eclipses of the moon show segments shaped as we see them? As it is, the shapes which the moon itself each month shows are of every kind — straight, gibbous, and concave — but in eclipses the outline is always curved: and, since it is the interposition of the earth that makes the eclipse, the form of this line will be caused by the form of the earth’s surface, which is therefore spherical.
    Again, our observations of the stars make it evident, not only that the earth is circular, but that it is a circle of no great size. For quite a small change of position to south or north causes a manifest alteration of the horizon. There is much change, I mean, in the stars which are overhead, and the stars seen are different, as one moves northward or southward. Indeed there are some stars seen in Egypt and in the neighborhood of Cyprus which are not seen in the northerly regions; and stars, which in the north are never beyond range of observation, in those regions rise and set.
    All of which goes to show not only that the earth is circular in shape, but also that it is a sphere of no great size: for otherwise the effect of so slight a change of place would not be so quickly apparent. Hence one should not be too sure of the incredibility of the view of those who conceive that there is continuity between the parts about the pillars of Hercules and the parts about India, and that in this way the ocean is one.
(Aristotle, “On the Heavens,” Book II, Chapter 14, The Works of Aristotle, Oxford University Press; pp. 297-298.)
Aristotle, on the other hand, disagreed with the Atomic theory developed by Democritus (460—370 BC) in 465BC. He believed that instead of being matter being made of tiny particles (atoms) that they were all fundamentally air, fire, water, and earth. The Atomic theory was actually first proposed by Leucippus (c 5th cent. BC), and was then adopted by Democritus. The Atomic theory stated that “The universe is composed of two elements: the atoms and the void in which they exist and move.” According to Democritus atoms were miniscule quantities of matter, which he believed could not be destroyed, differ in size, shape and temperature. They were also in constant movement yet could not be seen with the naked eye. He believed that there are an infinite number of atoms.
Then there was the Alexandrian philosopher Eratosthenes (c. 276BC–195/194BC) who actually estimated how large the Earth was. Eratosthenes learned that on midsummer day (June 21) in the town of Syene in southern Egypt, the noontime Sun was reflected in a deep well for it was directly overhead on that one day. Eratosthenes in Alexandria which was about 5000 stadia north of Syene. In Alexandria the Sun on the corresponding date did not quite reach zenith (perfectly overhead), and vertical objects would cast a short shadow. Hence, Eratosthenes calculated that the direction of the noon Sun differed from the zenith by an angle that was 1/50 of the circle, that is, 7. 2 degrees. With this realization, ,Eratosthenes estimated the circumference of the Earth to be 250,000 stadia.
 I have stated before that after Rome fell, the financial capitol of the world moved to Constantinople in Turkey. After the Byzantine Empire fell, that financial capitol moved to India. It was because of the importance of India that Columbus set sail on a mission to India based upon a wrong calculation of the size of the earth. Columbus relied upon the calculations of the earth from Ptolemy. Ptolemy influenced Strabo who in turn reduced the 250,000 Stadia of Eratosthenes to 180,000, and then stated that half of that distance came to just 70,000 stadia, making India reachable by sailing West. So India has played a very important role for Europe bumped into the Americas by trying to sail to India.
This is only one example of how there has been a cycle to knowledge. It is by no means linear. Knowledge is built from experience. Thus, we have to go through the business cycle to advance. This was in part included in Schumpter’s explanation of the business cycle that there are waves of innovation. He did not see what I see studying history that there is also a peak and then a decline to the level of knowledge as well and it is not linear as Schumpter imagined from a small data set.

Sunday, September 17, 2017

Trends are defined by a group of markets that all are interlaced and confirm one another.

Canadian Perspective

QUESTION: Hello Marty. I so appreciate your blog and Socrates, which is helping me steer through these crazy markets. I’m a Canadian taking care of all my family’s investment accounts, and knowing what’s coming down the road, I’m very concerned I’m going to take a misstep, especially with my children’s accounts. I haven’t been doing this long enough to have experienced a monetary crisis anywhere. What I can’t get my head wrapped around is what to do longer term from the Canadian perspective. We all have both USD and CAD funds in our accounts. I plan to increase the USD portion while the CAD is down. I’m also buying US investments in CAD (unhedged) to catch the rise in currency. But when the USD peaks and the crash and burn begins, my assumption is Canada has a boom in metals commodities while oil crashes due to lack of demand and we also go into recession due to lack of exports to the US and so lower employment. So what is a Canadian’s smart move when the USD peaks……cash out our USD investments and turn back to CAD and invest in commodities, etc. or would I be better off staying in the USD and buying inverse etfs and commodity stocks/etf’s that aren’t available on the TSX? Just trying to get a handle on what ultimately happens to Canada in all this. Thanks so much for any insight you may have on this topic.
ANSWER: We are in the staging process right now and that means we must push everything to the limit. In the case of the C$, that major point remains well above the market at 8840 level. It will require a monthly closing above that level to reverse the trend creating a bull market for the C$.

In order to create these big moves, we absolutely must push everything in a counter-trend move to its extreme in order to trap everyone and that provides the fuel for the next great wave. Everyone gets so convinced about any trend with just a brief rally like euro, pound, C$, gold or oil.  This is how markets suck people in to lose money. Trends are defined not by a single market, but by a group of markets that all are interlaced and confirm one another. This is the entire purpose of allowing access to our Global Market Watch so you can visually see the global trend unfolding together.

We are approaching the point-of-no-return when people wake up and begin to lose confidence in government. Until that happens, we remains treading water. The Dow has not broken out until the Phase transition begins. This is also why the metals rally but fail to really make impressive new gains.

Institutionals need income, not storage fees. institutional money.

Where has Outflows from USD gone for the past year ?


QUESTION: Re: Am i certain about the Strong Dollar?
Hi Marty, great blog posts and response. I think after reading this blog posts, the question on everyone’s mind is, what is causing the outflow of capital from the USD? And where is capital concentrating in right now? Is it the Euro? The Bunds? Gold?
And when do you see the outflow will stop and reverse?
Thank you
Regards
Rm
ANSWER: There has been outflows to Emerging Market debt by pension funds in the States for the past year. They have been trying to compensate for the lower interest rate returns by going more risky. We have been call on this issue more than once.

Then there has been the expectation that the ECB will end QE and Europe will boom. We can see that the DAX for the past year has risen in dollar terms. We have seen a tremendous outflow into the European share markets, but not so much into the debt issues.

Gold has been minimal because that is the retail side, not a target for institutional money. They need income, not storage fees. They will participate in gold stocks, but not stockpile bullion.

Thursday, September 14, 2017

The scheme of the Imperial German government had backfired.

German Hyperinflation & What They Do Not Teach in School


QUESTION: Dear Marty
Following your blog is a good way to counter the propaganda in our society.
Today you stated:
‘This was the fate of the hyperinflation in Germany. It was NOT the Quantity of Money theory, it was the fact that there was a 1918 Communist Revolution in Germany where they had even asked the Communist Russians to take over Germany. It was the collapse in CONFIDENCE that led to the hyperinflation.’
Living in the UK, with German friends, I do not know any person who is aware of this and they would not believe that Germany nearly became communist if I told them. This is not taught at school anywhere.
Can you point me to some literature or other sources where we can find out more about what happened with the communists in Germany and elsewhere in Europe? I know they are making a resurgence at present (Think the EU!)
Thanks for all you do
SP
Wilheim II (1914) 20 mark
ANSWER: Curious. I know that in Germany they do not really teach the details of the rise of Hitler. But he was the ultimate reaction to the events of the 1920s. There is a good book on the subject, but it is in German – Die Deutsche Revolution 1918/19I have explained this revolution for this is why Germany overthrew Emperor Wilhelm II who was compelled to abdicate. There are photographs of the civil war that took place at that time.
This was the Weimar Republic, which was the revolution and the end of Prussian emperors. The revolutionary period lasted from November 1918 until the adoption in August 1919. But what also seems to be omitted from many accounts taught in school, is the simple fact that the German government interfered in the Russian Revolution and was instrumental in creating the Russian Revolution.
The German Imperial Government feared that Russia would enter the war. The rising communist movement was anti-war. Germany saw a chance for victory by supporting the anti-war sentiment of the Bolsheviks. Germany permitted Vladimir Lenin to travel in a sealed train wagon from his place of exile in Switzerland through Germany, Sweden and Finland to Petrograd. Since the start of the February Revolution in Russia, Lenin was trying to figure out a way to get back into Russia. Germany aided that assuming he was anti-war and would keep Russia out of World War I. Within months of arriving, Lenin led the October Revolution in Russia and the Bolsheviks seized power and indeed Russia withdrew from the world war. According to Leon Trotsky, the October Revolution would not have succeeded without Lenin.
With the success of the October Revolution in Russia and the Dream of a new Marxist Utopia, the Germans entered into a civil war and invited Lenin to please take Germany. Clearly, the scheme of the Imperial German government had backfired. It not only was instrumental in creating the Soviet Union by turning over Russia’s socialist transformation decisively into the hands of the Bolsheviks, its plan led to the overthrow of its own hold on power. This is all recorded in contemporary newspapers (see New York Times Nov 11, 1918).
Hyperinflation thus unfolded in Germany because those with money saw what Lenin had done in Russia and sent whatever wealth they had to other places, particularly the United States.  The Weimar Republic then just printed money to pay reparation payments and the entire system collapsed

Abacus Bank was small enough to jail BECAUSE they did not have the big bucks to pay off the govt.

The Bank that was Small Enough to Jail


QUESTION: Marty; there is another documentary on the Abacus Bank and how they were singled out and charged for the 2007-2009 crash. While they said this was a tiny banks for immigrants that was too  Small Enough to JailI found this offensive that they said it was the first bank to be indicted since 1991. Not even Matt Taibbi ever would report on your case and your film was blocked in the USA because it opened the door to political intervention into Russia by the banksters. I believe HSBC and Republic Bank were charged criminally in your case so there was another banks charged after 1991 but nobody will report it. Am I correct? Has Steve Jame or Matt Taibbi  ever contacted you?
ANSWER: As far as I am aware, neither Matt Taibbi  nor Steve Jame ever contacted me. You have to look at what and how they prosecuted the bank in my case. The bank did not plead guilty, it was the holding company that owned the bank – Republic New York Corporation. Then they steered the case to the only Federal Judge who was blind – Richard Casey (who died shortly thereafter). The judge just listened and could not read the truck load of papers to even know the full story. Republic plead guilty promising to make everyone whole and the government allowed them to buy our notes, pocket the profit differential of almost $400 million that was ours which explains the alleged $1 billion turns into $650 million.
When I realized the government was protecting the bank, I did an interview with the Japanese press and told all the Japanese that they had better file suit against the bank or they would never see a dime. They listened. Then the government ran to court to put a gag order on me to PREVENT me from helping my clients. You just can’t make up this degree of corruption. Nobody in the press ever reported that one. The author of Too Big to Fail, Andrew Ross Sorkin, was a journalist for the New York Times. He came to see me about Judge Owen changing the transcripts and told me he was doing the same to Frank Quatrone. The New York Times did not let him report that judges in New York were changing transcripts which is in itself a crime.
True, the movie was rated a 10 in Europe, blocked in the USA, and has even been shown in Japan. It will appear on German TV in October. Yet, every American newspaper, TV station, and even NetFlix, who first accepted the film and suddenly pulled it, has done everything in their power to suppress the truth from the American people. You just cannot make up this stuff.
Welcome to the land of the free and home of the brave where propaganda is free to prevail over the truth when it goes against New York. The banks pay huge fines and nobody goes to jail BECAUSE the government wants the billions of dollars in fines. It’s either you jail bankers, with no huge fines since the individuals don’t have that kind of money, or you go for the corporate shell and the big bucks. Abacus Bank was small enough to jail BECAUSE they did not have the big bucks to pay off the government.