What does Trump have in Common with Emperor Nero? Fake News & the Deep State?

Posted Jun 8, 2017 by Martin Armstrong

As we approach what is being touted as a Super Bowl of politics with Comey’s testimony people are making bets will end Trump’s Presidency for good, it is curious how one Roman Emperor was taken down by the Deep State and declared a public enemy driving him to suicide. The Roman Emperor Nero (54-68AD) gets a bad rap from history. The popular one is his burned Rome so he could build a palace and played the fiddle as it all unfolded. During July of 64 AD, a great fire ravaged Rome for six days, destroying 70% of the city and leaving half its population homeless. The fakes news created by his enemies was that the decadent and unpopular Nero, “fiddled while Rome burned.” That story was crafted by his enemies who today would be CNN and the Democrats along with the Washington Post and New York Times. It was clearly the ancient fabrication of fake news.

For one thing, the fiddle didn’t exist in ancient Rome since it only made its appearance during the 11th century. There is no such evidence that Nero played anything during the great fire. The Roman historian Publius Cornelius Tacitus (c. 56–120AD)  wrote that Nero was rumored to have sung about the destruction of Troy while watching the city burn; however, he stated clearly that this was unconfirmed by eyewitness accounts. That was the origin of the saying. When the Great Fire broke out, Nero was at his villa at Antium, some 35 miles from Rome.

Nero’s unpopularity developed originally from his mother, Agrippina, Jr., who was a dominate mother and a power hungry woman with many attributed of Hillary Clinton. Agrippina, Jr. was the first woman whose portrait appeared on gold coins during her lifetime. She was first banished by her brother Caligula for being suspected of a plot against him to take the throne. She was very lucky to escape that one with her life. She the connived to marry her uncle, Claudius. The plot then thickens for Claudius’s heir, his son Britanicus, is then poised. Some attributed this to Nero, but it seems more likely the deed of his mother. Upon Claudius’s death, which she also may have aided with poison, she really rules the empire in her son’s name who was still a teenage boy.

Nero fought with his mother who was really ruling the empire and dominating him in the process. Eventually, Nero broke free by having his mother at last killed. He stages a death by drowning to make it look like an accident when her barrage sank. But she swam ashore and he ordered her killed on the spot. Her last words were to stab her in her womb from which he was born.

These stories clearly circulated in Rome and resulted in Nero being very unpopular. His father Gnaeus Domitius Ahenobarbus (c. 2 BC–41 AD) had a dreadful reputation that stained the image of Nero from the start. His father was known for cheating bankers for purchases he made and for cheating refusing to pay the prize money of victorious charioteers. He was also a major womanizer and the Emperor Tiberius charged him with treason, adultery and incest with his sister and also with adultery with another noblewoman. He was saved only by Tiberius’ death and the ascension of Caligula, his brother-in-law.

The true story of Nero, not the fake news version crafted by his enemies as we see going on by CNN and others today with respect to Trump, was that Nero immediately returned and began relief measures to help the people. They still didn’t trust him for his reputation preceded him. His enemies started the rumor that Nero had ordered the fire started, especially after he used land cleared by the fire to build his Golden Palace and its surrounding pleasure gardens. That was not a good decision, which only created conspiracy theories.

Nero himself blamed the Christians for the fire, and had many arrested and executed beginning the Christian persecutions when he was not executing them for their religion at that time. The real source of the stories against Nero are identical in human nature to those spun by career politicians and mainstream media against Trump today. The issue was reforming the corruption in the Senate.

There were many people complaining about the corruption of the tax collectors and this began Nero’s battle against the Deep State – sound familiar? Nero took on the fight clashing with the bureaucracy that set in motion his own demise. Tax collectors were accused of being corrupt and too harsh with the poor. Nero championed the little guy and transferred collection of tax authority to lower commissioners. Nero banned also any magistrate or procurator from exhibiting public entertainment for fear that the venue was being used as a method to sway the populace to support their corruption behind the scenes. Furthermore, Nero then impeached many officials for corruption and removed them from government as well as having many arrested for extortion and corruption.

As further complaints arose from the people that the poor were being overly taxed, Nero attempted to repeal all indirect taxes. The Senate convinced him this action would bankrupt the public treasury. As a compromise, taxes were cut from 4.5% to 2.5%. He also began the first debasement of the silver coinage whereas the average fineness pre-64AD was 97.5% as this was reduced to 93.5%. The weight of the silver denarius was also reduced from 3.63 grams to 3.36 grams in 64AD.

Additionally, secret government tax records were now ordered to become public, similar to the $2.3 trillion in missing funds handed to the Pentagon that 911 covered up. To lower the cost of food imports, Nero also directed that merchant ships were declared tax-exempt. None of these measures were Draconian to say the least, but were efforts to weed-out corruption far more than modern governments are willing to carry out. The Deep State was getting very angry at reducing their corruption.

Nero not only reduced taxes, he also gave slaves permission to file civil complaints against unjust masters, which was very shocking to many. Now the elite really got angry. Nero also imposed a tax of 4% on the sale of slaves that was to be remitted by the seller. Nevertheless, purchasers typically found that the tax was merely added as part of the price in a European VAT fashion.

Seneca the Younger (c. 4 BC – AD 65), was a Roman Stoic philosopher and statesman. He was a tutor and later advisor to Emperor Nero. Seneca had a hand in financial reform to improve the financial administration of the Empire. Governors were actually being prosecuted for extortion rather than the modern version of too-big-to-jail. The emperor by an edict forbade any magistrate or procurator in the government of a province to exhibit a show of gladiators, or of wild beasts, or indeed any other public entertainment. This was typically the method Governors bought favor from the people to cover-up the extensive bribery and extortion.

Nero also established retirement colonies of veterans in Italy. There were simply many deed he enacted prior to 64AD that reveal a decent administrator of the Empire. Nero even attempted to promote free trade by removing all indirect taxes. However, this proved too difficult to administer due to the pervasive corruption.

The Deep State conspired to kill Nero for his reforms. Some sources state that Seneca may have been innocent, but he was also implicated and forced to take his own life for alleged complicity in the Pisonian conspiracy to assassinate Nero. The conspiracy of Gaius Calpurnius Piso in AD 65 was a major turning point for it was clearly the Deep State rising up against Nero. The plot reflected the growing discontent among the ruling class of the Roman state with Nero’s increasingly attack upon corruption. Piso was a leading Roman statesman who it was said intended to have Nero assassinated and replace him as Emperor through acclamation by the Praetorian Guard. He was joined by many prominent senators, equestrians, and soldiers. The conspirators were said to have varying motives. Some wished to replace Nero with a better emperor, others wished to be free of emperors altogether, and restore a purely Republican form of government. According to the Roman historian Tacitus, the ringleaders included a Praetorian tribune named Subrius Flavus, and a centurion named Sulpicius Asper, who helped Piso devise the plot, which was discovered when a woman named Epicharis tried to solicit Proculus, a fleet captain in Campania, to join the conspiracy. Instead, Proculus turned her in, but she committed suicide. Another named Milichus discovered the conspiracy and reported it to Nero’s secretary Epaphroditos. When arrested, many conspirators quickly ratted everyone else out to save themselves. Nero ordered Piso, the philosopher Seneca, his nephew Lucan, and the satirist Petronius to commit suicide.

There is clearly the same plot to overthrow Trump. History repeats because human nature never changes. We have all the elites on Capitol Hill plotting to get ride of Trump and to justify some sort of impeachment trail. Surely, neither Trump nor those who conspire against him on Capital Hill and in the media will commit suicide.  Nevertheless, they are fighting tooth and nail for the very same issue – to maintain the corruption behind the curtain. They too are creating fake news to justify their actions today as they did back then.

Ah – how history repeats. Just follow the money

Taxes & Disasters – Always Repeat

Posted Jun 5, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong; You wrote that the 1906 San Francisco earthquake resulted in the Panic of 1907 and laid the foundation for creating the Federal Reserve. I was also told that the Kobe earthquake in Japan is what resulted in the Barclay’s loss. Is this why you also input natural disasters into your model? Has this been a pattern throughout history?

Thanks

PD

ANSWER: Absolutely. It is certain that when the eruption of Vesuvius started on the morning of August 24th, AD 79, it caught the local population utterly unprepared. The Emperor Titus has just taken the throne following his father’s death on June 24th, 79. Like Presidents will visit some disaster like Katrina, Titus visited the Pompeii area, announced a state of emergency and set up a relief fund. He then created a fund for the victims by collecting all property of those who died with no heirs. He convert this into a join fund. He then provided for assistance in rehousing survivors. The Christians attributed this to God’s retribution for the destruction of the Great Temple in Jerusalem in 70AD.

The while Titus was viewing the Pompeii disaster, a fire ravaged Rome for three days. Once more the emperor provided generous relief to the victims. And then a third disaster struck – plague. This was one of the worst epidemics of plague on record that hit Rome. Titus tried his best to combat the disease with medical support, and also staging extensive daily sacrifices to the gods. The economy went into a financial panic. As the Empire State Building had begun construction before the 1929 Crash, here too the Colosseum had been begun under his father. In both cases, the Empire State Building and the Colosseum were opening in an economic depression in hopes of raising spirits.

It was a tsunami that wiped out Tokyo in 1923. Then there have been huge earthquakes that sank Alexandria, Egypt, which spawned a huge tremendous tsunami that devastated Sicily and Greece on July 21st, 365AD. Edward Gibbon wrote in his Decline and Fall of the Roman Empire:

“In the second year of the reign of Valentinian and Valens, on the morning of the twenty-first day of July, the greatest part of the Roman world was shaken by a violent and destructive earthquake. The impression was communicated to the waters; the shores of the Mediterranean were left dry, by the sudden retreat of the sea; great quantities of fish were caught with the hand; large vessels were stranded on the mud; and a curious spectator ^1 amused his eye, or rather his fancy, by contemplating the various appearance of valleys and mountains, which had never, since the formation of the globe, been exposed to the sun. But the tide soon returned, with the weight of an immense and irresistible deluge, which was severely felt on the coasts of Sicily, of Dalmatia, of Greece, and of Egypt: large boats were transported, and lodged on the roofs of houses, or at the distance of two miles from the shore; the people, with their habitations, were swept away by the waters; and the city of Alexandria annually commemorated the fatal day, on which fifty thousand persons had lost their lives in the inundation. This calamity, the report of which was magnified from one province to another, astonished and terrified the subjects of Rome; and their affrighted imagination enlarged the real extent of a momentary evil. They recollected the preceding earthquakes, which had subverted the cities of Palestine and Bithynia: they considered these alarming strokes as the prelude only of still more dreadful calamities, and their fearful vanity was disposed to confound the symptoms of a declining empire and a sinking world.”

That event sent the empire into crisis and necessitated the biggest tax increase in Roman history up to that point in history. To pay for the disaster and the rising costs of the military efforts required during his time in reconstruction and defense, Valentinian saw himself forced to introduce the highest, and most oppressive Roman taxes in history. He was keenly aware how bad this was and raised the taxes reluctantly. He then made a interesting sincere effort to protect the poor. In an attempt to share the financial burdens more justly he made great efforts to ensure that the privileged few would no longer avoid paying their taxes. He also created the office of ‘Defender of the People’, the role of which was to assist the poor. In every town such a Defender was appointed, empowered to protect the interests of the poor from infringements by the privileged classes and to ensure they were not bankrupted by the taxes.

Here we have a weight (exaqium) for measuring gold solidi for taxes. Because of the large number of under-weight and false solidi in circulation, financial reforms were instituted by Valentinian i and Valens whereby gold collected in taxation was to be melted into ingots and tested before acceptance. Coins ceased to be legal tender (acceptable for taxation). The few gold ingots that have survived from antiquity are found with official counterstamps and the present example illustrated here bears the inscription “melted by Proculus”.

So you see, history repeats because the passions of man never change. Emperors created relief funds and visited disaster sites in ancient times and they do today. It is just standard operational procedure

Dictators need money to pay troops to maintain control. When the money runs out, so will their support.

When Does Buying Gov’t Bonds Support Corrupt Governments?

Posted May 31, 2017 by Martin Armstrong

The president of Venezuela’s opposition-run Congress led by Julio Borges came out and accused Goldman Sachs of “aiding and abetting the country’s dictatorial regime” after a report that Goldman had bought $2.8 billion in bonds from the cash-strapped country at 31 cents on the dollar. They paid $865 million.
There have been two months of opposition protests against President Nicolas Maduro in which almost 60 people have been killed. The collapse of the country’s socialist economy has left millions of people struggling to even eat. This is the problem with “socialism” that it is incapable of managing the economy from any centralized government. They hate people who make money, but government is just incompetent to manage anything. It takes an individual on the front lines to manage any operation.
I personally experienced this in my own company. When I first began to open offices overseas, it was a disaster. It was impossible to manage the offices from the United States. I had to switch to partnerships where people had to put up money and run offices in different countries. When their own capital was on the line, then they managed their local operation efficiently. Even the same centralized planning does not work in corporations. This is why big corporations die. They become inefficient and too bureaucratic just like governments and die.

“Goldman Sachs’ financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country,” wrote Julio Borges in a letter to Goldman Sachs President Lloyd Blankfein.

“Given the unconstitutional nature of Nicolas Maduro’s administration, its unwillingness to hold democratic elections and its systematic violation of human rights, I am dismayed that Goldman Sachs decided to enter this transaction.”

Julio Borges is absolutely correct. But this is not unique to Goldman Sachs. Everyone who buys government debt is helping to sustain the socialistic agendas of the major Western countries and will pay dearly for this support since historically they are the one who are wiped out in the end. Goldman may think it is getting a great deal at 31 cents on the dollar. They assume if there is a revolution they will still get paid. They are dead wrong. You can buy plenty of government bonds that were defaulted on. They make great reminders that government debt is UNSECURED and becomes worthless.
Venezuela has been a country that historically has been a serial defaulter. Defaults have taken place in 1826, 1848, 1860, 1865, 1892, 1898, 1982, 1990, 1995–1997, 1998, and 2004. The likelihood of another default is EXTREMELY HIGH.
Goldman assumes they will have access to the White House to freeze Venezuelan assets in the USA to get paid. If there is a revolution and the the army finally switches sides because they see their own future is doomed, then everything will change. Dictators need money to pay troops to maintain control. When the money runs out, so will their support.

Every Administration has wanted a lower dollar to increase exports.

Shari’ah Standard on Gold to Replace the Dollar? Really?

Posted May 29, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong; I have read where some people are claiming this “Shari’ah Standard on Gold” will become the new “reserve currency” and this seems really just nuts. I understand there are 2 billion Muslims in the world, but they seem to forget that this is once again wild speculation. Any thoughts?

OP

ANSWER: No. This is really rather absurd. First of all, not even the Euro could displace the dollar now the Japanese yen, Chinese yuan and yet some meager 2 million average citizens will do so? I really hate to burst these people’s bubble in La-La-Land, but I have been in meeting and there are people in Washington who are trying to figure out how to get the dollar to be replaced somehow. The last failed attempt was the Plaza Accord in 1985 intended to push the dollar down and the Euro was born there and then. This is when James Baker encouraged Europe to create a single currency to “PLEASE”compete with the dollar. Every Administration has wanted a lower dollar to increase exports. Trump is no different. Sorry – they ALL HAVE FAILED!!!!!!!!!!!!!!!!!!!

Secondly, this is really nuts and the very same hype I recall from 1975 when Americans were for the first time legally going to be able to buy gold starting January 1st and that is when gold futures began as well in New York. What happened? The hype drove the price of gold up to nearly $200 and on January 1st, 1975, it began a crash by almost 50% into 1976 for 21 months. They said the same thing about China and how the Chinese demand would make gold soar. Then they said the same thing about India and now its the Muslims. They keep switching groups to sell people gold like some used car salesman. In any other field it’s called consumer fraud.

Gold will rally ONLY when people begin to see that governments are failing. I am not talking about my readers. We all see what is coming. I am talking about the AVERAGE person on the street. Then you will see the gold breakout. We are getting closing. Patience is required when it comes to gold.

Catalonia - we should see the separation is by 2022.

Catalonia to Separate from Spain?

Posted May 26, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong, when you were here in Barcelona, you said that Catalonia would vote to separate from Spain. Most thought you would be wrong. I myself confess I was not sure you would be right. Well you were right, or your amazing computer was correct, and the fever to separate only grows bolder. Do you still see this and the ultimate end of the EU?

ANSWER: Yes, but this is a process that is slow. The speed will being to pick up next year and it appears to be increasing in velocity between 2018 and 2022. El Pais ran a story: “Catalonia to immediately declare independence if no referendum held” with the leaked excerpts from what appears to be the Catalonian regional government’s road map to independence. The secret document included a plan where the region would unilaterally break away from Spain if Madrid tried to prevent its citizens from holding a referendum on independence in the fall. The proposed question is straight forward:

“Do you want Catalonia to be a state that is independent from Spain?”

I reported back in 2015 that Barcelona was preparing to issue its own electronic currency. Since then, the city is still moving forward with a plan to introduce its own currency, despite warnings from Spain’s central bank. The new so-called “social currency” would be used to buy local goods and services at a discount while having a one to one parity with the euro. This is plan B in order to set up for separation. Catalonia is the richest region in Spain and is supporting the rest of the country. So it is very much like Margaret Thatcher once warned, that Socialism works until you run out of other people’s money. That is exactly what is taking place in Spain. They have been bleeding Catalonia dry.

The real question is what will Spain do? Spain is the Eurozone’s fourth largest economy. It is distinctly on the verge of breaking up. Spain and the EU seem intent upon not letting that happen. If there is any attempt by force from Madrid under the pretense of a police action, then the gloves will come off.

Madrid will take drastic actions, including that will most likely first attempt to invoke article 155 of the constitution, which will effectively put an end to all forms of Catalan self governance. Will the people tolerate that? This will not merely strengthen the resolve of Catalan separatists, it could very well lead to a civil war erupting between 2018 into 2020, but the latest we should see the separation is by 2022.

The previous Spanish Civil War took place between 1936 and 1939 lasting about 3 years. It broke out when the Spanish army in Morocco led by General Francisco Franco, rose up against the democratically elected Republican government, presided over by Manuel Azaña. Typically, there will be a divergence and split within the military. That is how these things erupt. We may see this in the USA also around 2022, which may be a contagion at that time. The potential for the collapse of the EU looms on the horizon for 2022.

You MUST always have the false move first.

Gold & the False Move

Posted May 19, 2017 by Martin Armstrong

QUESTION: Dear Marty, could the current ongoing deleveraging in China cause Gold and Silver to fall beneath 1000$ (Silver under ?) or is this currently no big deal what`s going on in China? Keep up the good work!

Best regards,

B

ANSWER: There are so many fundamentals out there is hard to predict which one causes what. Combined, they are all a nightmare. What is essential, is if we are going to really rocket up in a major phase transition, you MUST always have the false move first. These are just minor swings creating the false move which is always counter to the ultimate trend. To swing down under the December 2015 low will cause people to capitulate and then you will make a run and swing out to new highs.

With the stock market crash into 2009, this was the PERFECT storm, which was a FALSE MOVE. EvenBarrons as last of 2011 ran a story saying tongue in cheek how I was forecasting new highs. They thought it was a joke. That’s because these people have never been traders or students of the market. The chart patterns are always the same regardless of the instrument because you are plotting human emotion – not really that instrument.

The most powerful move up for gold requires a false move of a slingshot proportion

Fund fees have been reduced to an almost nothing, with money managers taking just 20bp

Dying Shopping Malls and Wealth Managers

Posted May 16, 2017 by Martin Armstrong

People talk about the changing environment. In the financial world around us, things are also changing dramatically. What use to be is no more. There are no real ticker-tape parades any more and future pits are closing opting for online trading. What is changing and why can we not see it? 

The internet has changed the way people shop around the world with the retail sector currently dominated by Amazon, accounting for almost 65% of online sales.   Amazon pasted Walmart (in market cap) back in 2015 and within the past two years has grown in value to be worth twice as much. Large department stores and the more traditional malls are closing but this is happening as retail spending continues to grow. Admittedly, online merchants have made it far easier, tap a button and our goods arrive at the doorstep the next day, but obviously at the expense of shop staff. The more comfortable we get with online retail the more intelligent we are shopping around and doing it ourselves. 

Is having the ease of service and renewed confidence a major influence upon why we are turning to index trackers and ETF’s rather than pay a money manager 2% to do it for us?

The ETF market has ballooned since the early 2000’s and is now worth approximately $2.5tn. With this “online” competition, the rumours are that the fees have been reduced to an almost nothing, with money managers taking just 20bp on the fund in the hope that they can make additional returns on the bid/offer spread. One of the problems we could face however, is that the derivative (ETF) becomes more liquid than the underlying. The relationship will work fine in an orderly market but will be tested in extremely or volatile conditions. The concern should be when will Market-Makers widen their spreads so just ensure you are not the last one to see the problems.