Thoughts about Martin Armstrong

Question:
You mentioned [Martin] Armstrong in your analysis in the past. I was reading your Thom Beecham articles and you referred to his work. Do you still rely on his ideas?

Answer:
After gold took a huge dump earlier this decade I searched the internet to find people who were correct in anticipating the historic drop ahead of time. This is how I stumbled upon Martin Armstrong and his work.

Previously, I never heard of him. I am not saying that he had the gold market totally correct, but he was close. I referred back to his prior blog posts at the time and he always allowed for wiggle room in case he was wrong, but for the most part his sentiment was bearish.

I found his work appealing at the time and it influenced some of my macro predictions, because his investment thesis was congruent with my analysis;

  • The hyperinflation that the majority of investors thought would appear from QE never would surface. The debt load would be deflationary.
  • The dollar would continue to receive a bid and get stronger as the global debt situation got more tenuous.
  • This would knock the wind out of commodities and especially gold and silver. (Notice gold has held up better vs. other commodities)
  • Dollar-based assets would continue to receive a bid, especially equities.

We see how this has worked out. The whole argument listed above hinged on a strong dollar. Without that one premise it is difficult to imagine this scenario playing out. Keep in mind that we don’t need a strengthening dollar, per se, but we need one in which the dollar is well-supported.

Why is this? Since the dollar is the reserve currency and there are so many more of them around the world, they would naturally seek dollar-based assets. As long as the dollar was supported in the global currency markets investors would feel safe parking them unhedged. This is what we see over five years later. It has helped to support the US economy at the same time.

In some respects, I disagreed with his analysis on real estate, which is why I invested heavily in rental properties earlier this decade. I am glad I did.

Where I disagree with Armstrong is when it comes to the talk of conspiracy. He rejects conspiracy for the global government on an a priori basis. I know this as I actually asked him back in 2015 during his Princeton conference. He holds everything up to cycles, and these current circumstance are like a repeat of history.

I agree with his premise in this regard; people are always the same, regardless of the period in history. I study behavioral economics and know that the boom/bust cycles in the markets will always persist. This is how I make money. People are rationally irrational and making rationally irrational investment decisions.

If you are reading my blog then you probably already know that this period in history is totally without precedent and that there is a conspiracy for world government and that there is a guiding hand that is moving us into a militarized new world order. But the populace are very complacent. I don’t seeing any uprisings. I am still waiting for the riots in the streets that many in the alt-media are predicting. I have been waiting for those since 2003 when I stumbled upon the conspiracy for world government.

Moreover, I publish everything freely and do not use scare tactics to get people to come to my site. I think I provide a valuable service for those looking to get wealthier over time. This is important to consider; if you and I are to persevere and help others in the remnant we need to become more financially self-sovereign. Don’t listen to those who say money is the root of all evil. It’s the love of money that causes all the maladies we see today. Last time I checked the pastors I gave donations didn’t ask me where I got my money from.

October 28th Update – Recommendations and Commentary; The US Fed dilemma may take care of itself if the US economy slows

I have uploaded a podcast for October 28,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Gold COT report normalizing and someone is trying to keep it below 1,250, but I think it will take it out. It is still oversold even with the large specs buying back their shorts. Fortuitous market volatility adding to its chances.
-10 UST futures not nearly as oversold as before. 10-year UST catching bid on volatility. This shows that the markets are not losing its glue. There is still logic and the USD is still the go-to asset. Short-term USD assets are up year over year.
-Major market 10-year sovereign yields fell over the past month.
-Keeping perspective; the major US stock indexes are still up year over year. The anglo-based stock averages are still doing better than elsewhere.
-The DJIA could test its 200 week mva and things will be fine. That is still higher than 20,000.
U.S. ECONOMY HAS ‘PEAKED’ AND WILL SLOW DOWN, ECONOMISTS SAY, DESPITE TRUMP’S PROJECTIONS. So says Newsweek.
-Blast from the past – Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020
-Be careful shorting a “sure” thing. If the Fed comes out and says anything that might be dovish anyone shorting the markets would be taken out to the woodshed. I have lived through 4-5 asset cycles in my 30 years as student and investor and have seen it all.
-Dollar-based assets continue to shine as I have been recommending since February 2013 on henrymakow.com. Why change now?
-Life is not like the Big Short. In order to short a market an investor needs money and if they continually lost money in their other investments over the past decade how much capital do they have to short?
-WTI touched its 50-week MVA. It could test the 200-week mva of 52.09. The XOP is leading the way. I got out of my XOP a little over a week ago (I said so last week) after research indicated that the shale plays continue to raise debt levels even with a higher oil price. The sell-side and investment banks are painting a rosy picture for the frackers, because they constantly need investment banking services. Their cost of capital is rising at the worst time.
-A background to my articles on Henry Makow’s site going back to February 2013.  Anyone taking my advice would have done well, but the articles were not popular. It was not what his readers wanted to see.
-There are so many opportunities to make tons of money in busted out sectors. Why take a high risk secular trade like shorting the stock market? Follow what the Carlyle Group does. Get involved in the busted out sectors when they appear. It’s best to wait for the opportunity.
-Cash is still king, as it has been since the last week of January.
-Below is a copy of an email response I sent out to a blog follower (former follower?) who thought I was foolish for not shorting the markets and perhaps a disinfo agent, since the others in the alt-financial media said that anyone telling the listeners to stay in the markets and not shorting were probably co-opted. I didn’t realize how prescient I was 5 1/2 years ago.

—————————-
Response-
Go to henrymakow.com and do a search for Thom Beecham. He suggested I use the pseudonym as most his writers do. Since I was correct often Henry suggested I start a blog. I then started writing under my real name as I don’t really care anymore about being targeted for anything.

2/21/2013 article (gold was $1,610 when I wrote the article)
https://www.henrymakow.com/2013/02/What-is-Ailing-Gold.html

At the time in early February 2013 when I wrote this article I still owned several hundred ounces of gold. Read the excerpt below.

excerpt:
Early this past Sunday morning, I noticed that a collapse in gold and silver was in the works. There was a wall of sell orders at $1,650, right around the release of Thursday’s US unemployment numbers. The wall was huge – indicating official-sponsored activity. Once the $1632 support was taken out I fully hedged my physical gold and silver with several front month futures contracts. I still have them in place as of this writing.

Here is the April 8, 2013 article (gold was $1,573)
https://www.henrymakow.com/2013/04/Goldbugs-Can-Expect-More-Losses.html

excerpt:
Joel Skousen is probably the most astute man I have come across regarding the New World Order. I agree with his assessment that this financial Ponzi scheme can be maintained for at least another 3-4 years, and war will be averted until the end of the decade. This will be the war that will provide the US Treasury with its force majeure to cancel debt.

Can you maintain your patience that long? Can your assets hold out that long? Can you survive $15-20 silver and $1,200 gold? [Silver was about $28 and gold was $1,573 when I wrote the article]  Do you need these assets to live? I am not saying it will get that bad, but it could. I know it will get a lot worse over the next several years. The worst aspect of all this will be the globalist-controlled media “gas-lighting” those who understand the truth, trying to get you to lose your sanity and convince you that the law of gravity has been repealed.

We all know what happened a couple days later

April 12, 2013 article – Henry asked me to keep writing… I wrote it as gold was just above $1,525 (I just happened to be 150% hedged and made more money in my commods account than I lost on my physical. Financially speaking, it was the luckiest day of my life. I rode those shorts down to the upper $1,300’s, by which time I was already out of 50% of my physical).
https://www.henrymakow.com/2013/04/the-precious-metals-massacre.html

excerpt:
What the globalists are doing to Bitcoin, they are doing to gold. Gold just hit, but held the important 1,525 support level this morning. If gold breaks 1,525 it will fall to 1,410 within weeks.

My open short position is much greater than my long physical. This means I am profiting more when gold and silver fall. I locked in higher prices and ride the outsized short to even more on the downside profit.

July 2015
https://www.henrymakow.com/2015/07/Cabalist-Deception-Invades-the-Markets.html

September 21, 2015 (DJIA was 16,510 at the time.) and the Fed hadn’t yet raised rates
https://www.henrymakow.com/2015/09/no-relief-in-sight-for-gold.html

excerpt:
Eventually, the FED will have to raise rates. I am of the opinion that it should have raised them up to two years ago.  They will have to raise them lest it be blamed for causing the upcoming US domestic stock market bubble. I only vouch for the US stock market. Based on short interest, put buying, investor sentiment, and situations similar to this in the past (1920s), I have to conclude we have a 50-60% shot of hitting Dow 20k sometime by end of 2017.

Was Jerome Powell, former Carlyle Partner and current US Fed Chair, selected for the upcoming bust?

This kayfabe wrestling match seems too well-scripted

The whole dynamic between the Trump regime and the US Fed’s Jerome Powell has the feel of a scripted show. Both sides seem to be at odds with one another and I have to conclude that this cannot be by chance. The opposing sides of this kayfabe match are being willfully ignorant and the match does not seem genuine.

In professional wrestling, kayfabe is the portrayal of staged events as “real” or “true”, specifically the portrayal of competition, rivalries, and relationships between participants as being genuine and not of a staged or predetermined nature of any kind. Kayfabe has also evolved to become a code word of sorts for maintaining this “reality” within the direct or indirect presence of the general public.

Wikipedia – Kayfabe

The alt-media and MSM have bought front row tickets

If the US Fed followed its mandate in a disingenuous way it has every reason to continue tightening monetary policy. Unemployment is at 50-year lows and economic growth is above trendline by at least one full percentage point. The new fiscal stimulus and tariffs are helping to build inflationary forces. But the current expansion is perhaps the longest in modern history, so any monetary policy restrictions could cause an asset market correction and/or recession.

The same critics of the US Fed in the alt-financial media who have been dispensing terrible financial advice for over a decade and were excoriating Ben Bernanke’s QE programs for creating the asset bubbles are now criticizing the Fed for tightening and perhaps causing future market crashes.  The difference this time is that President Trump has joined in and much of the alt-financial media supports President Trump.

“Every time we do something great, he raises interest rates,” President Trump declared, referring to Fed Chair Jerome Powell. “I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates.”

Trump also said it was “too early to tell, but maybe” he regrets Powell’s nomination.

Trump Steps Up Attacks on Fed Chairman Jerome Powell Wall Street Journal (October 23rd)

To those supporting Donald Trump in his “fight” against the US Fed, please understand why Trump is criticizing the Fed.  Trump doesn’t want to get rid of the Fed, he wants the zero rates that President Obama enjoyed. Trump hopes that the party continues. Essentially, the alt-media and compromised market shills like Jim Cramer want the US Fed to continue its dovish policy.

Is it America First or NWO First?

Here is the bottom line. Nothing can be done to reverse the effects of seven years of zero percent interest rates without asset price adjustments. The asset bubbles are now enormous and must reverse. The more time that goes on the worse the conditions will become. President Trump has only exacerbated the dilemma by creating about $500 billion a year in new and ongoing fiscal stimulus at the worst time.

Had President Trump not embarked on such an ill-timed fiscal stimulus program the US Fed’s job would be much easier as it would not be as motivated to tighten monetary policy. So, I submit that Powell is the fall guy for the US Fed and Trump has once again helped to turn monetary and fiscal policy into a pro-wrestling match.

In a pro-wrestling match, the handlers on both sides need to know about the fix. The Former Fed chairs, especially Janet Yellen, would not have been up to the task as they would have asked too many questions, but Powell seems willing and capable. Furthermore, the audience needs to suspend the reality that the match is fixed.

A background to the conspiracy

The elites know that power and wealth are consolidated during market busts and perhaps are ready to pull the plug once again. Maybe the elites have new types of QE programs on tap to enslave humanity, but a  diversion was needed to help politicize the problem. Enter Donald Trump.

Chris Pirnak

Let me lay the groundwork as to why I think that a conspiracy of epic proportions is under way right now that will strip much of the population of its wealth. Moreover, the fallout from the scenario I describe below will also help the elites to hoist its next monetary system on humanity. None of what is going on is by chance. Let’s connect the dots.

First, the elites know that they have exhausted all current avenues to boost the economy through central bank monetary policy.  The major central banks, headed by the US Fed, have embarked on unprecedented programs to help kick start the global economy. It assisted on the margin, but the quantitative easing programs only prolonged the inevitable under the current system.

The elites know that power and wealth are consolidated during market busts and perhaps are ready to pull the plug once again. Maybe the elites have new types of QE programs on tap to enslave humanity, but a  diversion was needed to help politicize the problem. Enter Donald Trump.

Second, the Trump regime embarked on a massive counter-cyclical fiscal stimulus program, and it’s effects are coming at the height of the asset market cycle and during a period of prolonged economic expansion. Normally, the federal deficit should be shrinking as tax revenues increase and social spending falls. This has resulted in much higher US Treasury issuance at a time of low unemployment and rising prices from higher tariffs and economic growth. The concerns over the estimated $1 trillion deficit this fiscal year is pushing up longer-term bond yields and mortgage rates.

Third, The whole irony is that the rising yields on US sovereign debt caused by the artificially juiced economy are putting upward pressure on the value of the US dollar. This is causing growing economic dislocations in many of the emerging markets as many entities in these areas borrow in dollars. The logic of this straightforward as financing in US dollars tends to lower debt service costs and can often provide better terms. However, anyone borrowing in dollars is effectively shorting the US dollar, thus a stronger dollar is causing emerging markets to unravel. Trump’s platform is truly an America First policy.

Fourth, Enter Fed Chair Jerome Powell, a person that has suddenly turned hawkish at the worst time. This is why I find the selection of Jerome Powell somewhat peculiar. However given his background and President Trump’s proclivity for hiring Bush and Clinton retreads I shouldn’t be that surprised. If Trump truly wanted a dovish Fed he would have been better served if he kept Janet Yellen on as head of the Fed. Until last year, Jerome Powell was known for being slightly dovish or neutral. He certainly was not known for being an inflation hawk. Something has changed since he was selected as head of the Fed….

A survey of 30 economists in March 2017 noted that Powell was slightly more of a monetary dove than the average member of the Board of Governors. However, The Bloomberg Intelligence Fed Spectrometer rated Powell as neutral (i.e. neither a hawk nor a dove). Powell has been a skeptic of round 3 of quantitative easing, initiated in 2012, although he did vote in favor of implementation

Jerome Powell – Wikipedia

This kayfabe match is much more complex than what goes on in the ring and the main players may not even know their roles. However, their handlers (the elite of the NWO) do, and they place their players in positions of power and let the game play out to their liking.

Jerome Powell, makes a perfect kayfabe opponent

Throughout history the elites consolidated their wealth and power during market crashes and asset cycle busts. If the elites want an upcoming catastrophe, the elites could not have picked a better Fed Chair than Jerome Powell.

First, let’s take a look at the highlights of Jerome Powell’s professional background.

  • A pick of President George H.W. Bush for Under Secretary of the Treasury for Domestic Finance
  • Powell oversaw the investigation and sanctioning of Salomon Brothers and was also involved in the negotiations that made Warren Buffett the chairman of Salomon.
  • From 1997 to 2005, Powell was a partner at The Carlyle Group, where he founded and led the Industrial Group within the Carlyle U.S. Buyout Fund.
  • Based on public filings, Powell’s net worth is estimated to be as much as $112 million. He is the richest member of the Federal Reserve Board of Governors

Between 1990 and 1993, Powell worked in the United States Department of the Treasury, at which time Nicholas F. Brady, the former chairman of Dillon, Read & Co., was the United States Secretary of the Treasury. In 1992, Powell became the Under Secretary of the Treasury for Domestic Finance after being nominated by George H. W. Bush.

During his stint at the Treasury, Powell oversaw the investigation and sanctioning of Salomon Brothers after one of its traders submitted false bids for a United States Treasury security. Powell was also involved in the negotiations that made Warren Buffett the chairman of Salomon.

In 1993, Powell began working as a managing director for Bankers Trust, but he quit in 1995 after the bank got into trouble when several customers suffered large losses due to derivatives. He then went back to work for Dillon, Read & Co.

From 1997 to 2005, Powell was a partner at The Carlyle Group, where he founded and led the Industrial Group within the Carlyle U.S. Buyout Fund.

Jerome Powell – Wikipedia

Once you join The Carlyle Group you never leave

The Carlyle Group is well known for its connection to the Bush/Clinton cabal members and neocons. Carlyle was founded in 1987, just in time to make billions off the commercial real estate bust. It seems the Carlyle Group has a knack for capitalizing on distressed asset markets and it is during these periods that Carlyle’s expertise excels. Perhaps he was selected to be the fall guy for the increasingly criticized Fed. Perhaps his role is to continue raising rates and tightening policy until the system finally breaks. If this is the case then his hawkish policy moves make perfect sense.

I am not proclaiming that Mr. Powell is intentionally pursuing a tighter monetary policy on purpose to collapse the economy, but it seems odd that he has decided to embark on a monetary policy without interacting with President Trump. Perhaps his elite handlers are demanding this course of action. After all, the great wealth is created when there is blood in the street.

A warning to those who think that shorting the market is a sure thing

Many of the alt-financial prognosticators who got it wrong all decade long are advising their readers to short the markets. The problem is that this strategy is becoming an increasingly lopsided plan of action by the ticket holders to this kayfabe Trump/Powell performance. The same people who were buying bitcoin last year now believe that shorting the markets is the next sure thing.

Ask yourself these questions. What happens if the US Fed reverses course? What if the Fed comes out and says they may hold off raising rates? What will happen to your short position? Your trading accounts will instantly become insolvent. What if the economy and many asset classes collapse, but the Dow rises to 40,000? It could happen if the dollar receives a safety bid.

In any kayfabe match the outcome may already be determined, but the members of the audience are the only ones in the dark.

October 25th Update and Commentary – Keeping perspective and staying focused on the big picture

I have uploaded a podcast for October 25,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Do not get diverted by partisan politics and hard-wired biases
-The central banks are trying to tighten despite tepid data. The only country looking OK is the US, but the tighter Fed policy will ripple around the world.
-The ECB is disappointed in the economic data, but is trying to tighten. It is following in the Fed’s footsteps
-The upcoming bust was planned in advance and the relaxed policy after 2012 sealed its fate.
-Cash is king. Interest rate increases and tighter policy always cause every bust under the private central banking system
-An analysis of the system over the past few decades
-Stay in cash as much as possible. I have been saying this since Steve Mnuchin opened his mouth on January 26th, yammering about a weak dollar, and Greenspan’s famous 1/31 unwinding long-term bond bubble interview.

October 23rd Update – Too many are calling for a crash; Market analysis; China yields to US sanctions

I have uploaded a podcast for October 23,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Another reason to be a dollar bull; European banks have been underperforming US banks all decade. While the US banks wrote off bad debt and recapitalized, European banks have been on an IV drip.
-More Trump tax cuts coming? I don’t even think Larry Kudlow saw that one coming.
-The central banks have decreased balance sheets slightly. The rising Fed funds rate and the higher long-term yields in the US have more to blame for the volatility.
-The central banks could crank up the press again if things fall apart. They will get the blame here if things drop, but continue to tighten. We are overdue and the banks need to tighten.
-The increasing US federal deficit spending is forcing the US Fed to tighten. It all looks manufactured.
-The resulting fallout of the Trump spending and US Fed tightening, with its hard hit to the emerging economies, will increase the call for an international overseer to manage domestic monetary policy
-China yielding to US sanctions on Iran. The major powers are not ready for war.
-Staying in cash all year has been the right choice. Being an objective observer and listening to the Fed puppets have been the best decision.
-Gold receives a bid as gold bears race to cover. More coming.
-Oil looks terrible here. Next support is 64.50. Frackers not making money at higher prices. I though they were more efficient. Analysis proves otherwise.

October 21st Update – Analysis and predictions; The global economy and capital flows, the financial markets, and geopolitics

I have uploaded a podcast for October 21,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-I am still short-term bullish on gold and silver. Despite massive short covering in the gold and silver markets, the large speculators have more to go. The commercials are now net short.
-A 10-year UST yield of 3.2% seems to be the equilibrium for now. The large specs have been covering some of their shorts. They need to cover more if yields are going to rise further. Of course, yields will rise in the intermediate term. Plan accordingly.
-Discussion of ZeroHedge article with analysis of Goldman’s US Fed predictions. I agree more with what Goldman is saying. If that is the case there is going to be more pain in the emerging markets. Trump will be upset.
-US GDP consensus growth of 3.3% (Goldman 3.5%) is too high with rates this low. This is the huge surprise that has the Fed hamstrung.
Atlanta Fed President Bostic said yesterday he sees that Fed policy is for continued tightening amidst strong economic growth and low unemployment.
-The tax cuts, fiscal stimulus, and the $500 billion dollar repatriation of corporate foreign dollars are hiking inflation concerns in the US. Plus, the dollar repatriation is helping to cause a scarcity of overseas dollars at the same time the Fed is tightening.
-A global dollar crunch is in the cards as the Fed continues to tighten. Neutral rate is about 75 bps higher. The Fed needs to tighten and that means at least four more rate hikes.
-US dollar well-supported here and dollar-based assets should continue to outperform.
-Despite rising mortgage yields, the US residential real estate market still provides better opportunities than in the former commonwealth, European, and Asian markets. This is based on income yields and IRRs.
-Italy won’t wander off the plantation and its sovereign yields will fall back again. The ECB and elites use the fear of higher yields to keep compromised governments from leaving the EU. The threats get so tired, but are effective.
-Oil finding support here in the trend channel. XOP looks good here. Economic growth supports price even as short-term supply builds. Oil prices fell with stocks. Downside is limited.
-India’s sovereign debt is in trouble as their yields continue to rise. The same goes for a number of other emerging economies. Investors are selling their debt and parking it in USD assets.
-Russia is the 12th or 13th largest economy; hardly a formidable long-term war foe. Putin is all-hat and no cattle as the alt-financial media gets it right in this sense; Putin has a terrible hand, but is coming off like a tactical genius. Russia is still centrally-managed, corrupt, indebted, and its economy is too reliant on oil.
-ChiCom knows the US still has the leverage. So what if China sold off its UST hoard?  It currently holds about $1.2 trillion of US government obligations.  The US Fed could easily buy them all up in the market.
-The Chinese debt bubble looks insane and the tactics the ChiCom government are employing to hold it up look like they are doomed to fail. But if we contemplate that war is coming it all makes sense. The Chinese government needs to build up their domestic economy as fast as possible. Russia will be thrown under the bus after WWIII starts.
-More disinfo; RT and ZeroHedge at it again as they are talking about Russia’s answer to the SWIFT payment system. I have been reading these articles for at least a decade.
-Analysis of an article, This Marketer Reveals 10 Psychology Truths That Brands Use to Influence Your Buying Decisions
-We all suffer from hard-wired biases, but recognizing this fact provides us the difference. Be careful of the hard-wired biases to hate the Fed, the US dollar, while supporting Putin and our manufactured adversaries. Think long and hard about supporting Trump. This is especially true with the churches.

October 18th Update – It doesn’t matter what the US Fed does at this point

I have uploaded a podcast for October 18,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-I answer a few email questions I received over the past couple days
-The US Fed kept the Fed funds rate near 0% for seven years. If the Fed tightens further and higher from here the downturn would happen faster and would probably be less severe than if policy was more relaxed.
-If the Fed listens to President Trump and the asset bulls then the asset boom could last another couple years, but the down cycle would be much more severe.
-I am concerned about the US government’s fiscal standing when the next bust comes about
-Take your pick; I prefer to raise rates faster and get the bust sooner
-The next bust is already baked into the cake and there is nothing that can be done to unwind the prior policy moves. It was all done by design and intent.
-I continue to stay liquid and pay off debt. I want to be as liquid as possible for the next cycle. My goal is to have as little debt outstanding, so if a bust occurs I can leverage my assets to buy more.
-I prefer holding my liquid position in my home currency
-Should I own gold and/or silver? What about owning mining shares?
-Is holding money in bitcoin or any other cryptocurrency keeping money liquid?

How to survive financially in the new world order

Understanding why asset prices go up more than inflation

I received an email observation from a reader and listener of my blog and wanted to pass it along to you.

Observing here in Toronto how the city has changed where back in the 70s and 80s the majority of the population was middle class. The middle class has totally shrunk here. With the extreme high cost of living the majority of the people are working class poor.

There is a new breed of ultra rich foreign money here too. The divide here is growing every year. I believe a lot has to do with technology and a large chunk with real wages after inflation have declined in the last 40+ years.

The items you need to survive; housing, food, transportation have increased the most.

[I] Was talking to my friend’s 84-year old dad. He bought his bungalow here in 1969 for $ 14,000. They both made $ 7,000 together. [The house cost] 2x income. Now it’s 14x in Toronto and 23x Vancouver. Crazy.

-email from a subscriber in Toronto, CA

That is a grim, but increasingly common assessment. While the residents in Toronto may be experiencing one of the sharpest rises in asset and real estate inflation, a similar story has unfolded in most populated areas around the globe.

If we are to understand why asset prices continue to balloon despite muted general inflation rates we need to understand how the financial and economic systems of the New World Order work. Keep in mind, we are already in the NWO; we don’t have to wait for some future event.

Recall former Vice President, Dick Cheney’s famous quote that “deficits don’t matter.” Most people who heard that were astonished, since it ran counter to conventional wisdom. However, for those who know how to game the system it is somewhat accurate. I will go one step further and say that deficits do matter; they are necessary for the NWO to consolidate its power.

-Chris Pirnak

The large deficit spending of the develop nations and now China and Asia is causing asset prices to balloon. The sovereign debt that’s generated from the fiscal deficits become financial instruments of marketable value that can be used to leverage other assets. I discussed this concept herehere, and here a couple years ago with my explanation on Bushonomics and its legacy of large peacetime deficit spending that has persisted for over 35 years.

Recall former Vice President, Dick Cheney’s famous quote that “deficits don’t matter.” Most people who heard that were astonished, since it ran counter to conventional wisdom. However, for those who know how to game the system it is somewhat accurate. I will go one step further and say that deficits do matter; they are necessary for the NWO to consolidate its power.

In order for the NWO elites to destroy the middle class they needed to expand government fiscal deficits, so that the generated sovereign debt could be used to increase the prices of assets. This would result in the creation of a wealthy class of individuals and a wage-slave working class.

How come assets prices rise faster than general inflation?

While the growing deficit spending continues to generate marketable securities that can be used as collateral to bid up asset prices, the promulgation of open borders policies, the arbitrage of production input costs between rich and poor nations, and the free movement of capital have decimated the wage earner. Open borders are necessary to keep the general inflation rate lower than the rise in the money supply. The trend has been in place since at least the late 1970s when the US began to offshore production to Asia and Mexico. Essentially, the developed nations export inflation and import deflation.

This trend will not reverse in our lifetimes. So don’t get upset about mass immigration. Just know that it is designed to mask the true rate of monetary inflation.

Look at the global asset inflation in the wake of the 2008 economic collapse. The rise in stocks and real estate prices have been phenomenal. This was only possible from the massive generation of sovereign debt that was issued as a result of the the trillion dollar deficits in the US, the former commonwealth nations, and Europe.

Most of the Trump supporters want loose monetary policy. I say, let them have it. I have no opinion one way or the other, but I am sure my assets will continue to go up in price. I will benefit more than most of his voters with their hard-wired biases to support whatever he says. Just keep in mind, it all comes at a cost. Asset prices will continue to rise faster than inflation and wage growth and real estate and other assets will move further out of reach of the average wage slave.

Keep in mind that all of the social spending programs that are designed to make things more affordable result in higher prices and tighter government control. Healthcare, education, and housing are just some examples  of sectors that no longer have stable supply/demand dynamics. Government intervention has only driven up the cost as the “benefits” were arbitraged into the system.

How to survive in the NWO

If we know these basic underpinnings of the NWO financial system then we can carve out a life that will benefit us under the NWO.

I have repeatedly said that if a person goes to college, incurs debt, and works for a wage he or she will continually fall further behind, regardless of how much the salary happens to be.

The only way to get ahead in this system is to procure assets that generate income and will move up in value over time or build a business that can grow income faster than monetary inflation.

Are we being conditioned to embrace an aggressive Fed buying spree?

Never underestimate the US Fed’s ability to support asset prices

I continually come across these types of articles that illustrate a concept we frequently discuss; Never underestimate the US Fed’s ability or desire from embarking on programs that would support asset prices.

The elites need to consolidate as much of the world’s wealth as they can before the next phase of the new world order is implemented. By hoisting assets onto the balance sheets of the central banks these elites gain effective control of these assets.

The Federal Reserve buying stocks? How about financing the federal deficit? Or buying goods?

These were some of the suggestions for combating the next severe recession given to the central bank by former IMF chief economist Olivier Blanchard at the Boston Fed’s monetary policy conference.

There is a general sense the Fed has to re-think its approach to combating recessions given the low-interest-rate environment that is persisting.

Blanchard said the Fed probably has enough tools to handle a run-of-the-mill recession. But if it is another severe recession like the financial crisis, Blanchard urged the central bank to resort to previously unheard of policies.

MarketWatch – Fed should buy stocks if there is another steep recession, former IMF economist says (October 10th)

The next economic downturn in the US

Imagine this scenario; the US economy begins to turn down and zero-bound interest rates are not helping to enhance economic growth. What would the monetary authorities do at that point? I submit that in a dynamic economic environment we must stand ready for any setup, including the most likely one – the situation where the Fed is “forced” to expand it’s QE program and buy assets of all kinds.  Keep in mind, this is not without precedent. The Bank of Japan has essentially been buying everything not nailed down, including domestic stocks.

In his speech at the Fed conference, Blanchard said the size of the balance sheet is not a constraint.

“Yes they are scary. But that doesn’t mean it cannot be done. If we need it, we could clearly double it and nothing terrible would happen,” he said.

At the moment, the Fed can only buy Treasurys and mortgage-related assets.

The best policy would be for the Fed to buy assets with high premiums like stocks, he said.

“This could do the trick and could work even better than buying long bonds,” he said.

If things got really bad, monetary financing of the deficit is something that could work to increase demand, Blanchard said.

“We have this notion that it is only OK for the central bank to buy assets and not goods. But that’s a restriction we imposed on ourselves,” he said.

MarketWatch – Fed should buy stocks if there is another steep recession, former IMF economist says (October 10th)

Asset buying will be the go-to response

I agree with Blanchard’s analysis. As long as inflationary forces stay low, I believe an expanded QE program will be the go-to action in the future. While some at the  Fed say that this scenario is not currently politically feasible, I see it as a very likely outcome when the economy and asset markets turn down again.

We have already seen calls by analysts in the business media for the Fed to loosen up. Many of these individuals are asset bulls and only want to see asset prices increase. Moreover, many in the growing populist movement are attempting to get the central banks to loosen up even more.

After some half-hearted opposition, I see little resistance to an enhanced central bank buying spree. Most myopic investors who would enjoy their growing personal balance sheets would embrace an expanded asset purchase program.  Whether an expanded QE program helps the economy is up for debate. It certainly would lift asset prices, all other things being equal. This, of course, would conflate with the agenda for the elites to consolidate the world’s wealth.

Whether an expanded QE program helps the economy is up for debate. It certainly would lift asset prices, all other things being equal. This, of course, would conflate with the agenda for the elites to consolidate the world’s wealth.

– Chris Pirnak

Could the Dow reach 40,000 after a Fed induced buying spree?

I came across another article titled, Dow 40,000 is coming, but only after ‘a large panic event’ passes, analyst warns, which illustrates a scenario in which a Fed buying program could lift the Dow to 40,000.

Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., is predicting that after a nasty market and/or economic contraction the Fed could step up and be the catalyst for a hyperinflationary asset boom.

Lamoureux predicts that the stock market could lose a third of its value in the coming year, prompting a “hyperinflation of financial assets at an impressive rate” that ultimately carries the Dow all the way up to 40,000 in the years that follow.

But how, exactly? Lamoureux says the Federal Reserve, which President Donald Trump just described as “loco,” will look to prop up markets.

“The Fed most likely steps up early in 2020 and starts buying shares,” he said.

MarketWatch –  Dow 40,000 is coming, but only after ‘a large panic event’ passes, analyst warns (October 11th)

While I do not necessarily endorse his actual market predictions, I do endorse the most likely outcome he theorizes.

Is this the reason mainstream business is criticizing the US Fed?

Perhaps the mainstream press is criticizing the US Fed for being too tight, because they are conditioning us to embrace an aggressive asset buying spree on par with the Bank of Japan’s program. Perhaps this program is already on tap and its concepts need to be gradually introduced to the populous.

I propose that the likely outcome of rising interest rates and an economic downturn will be a market correction that would force the central banks to step in and begin buying up all sorts of assets. The list could include stocks, bonds, houses, mortgages, skyscrapers, land, businesses, and infrastructure.

If this is the case then the US dollar will once again be the sought-out currency and dollar-denominated assets would be in high demand by global investors. The dollar bears can chalk up another defeat.

So, think about this; the Trump supporters and alt-financial media who are bashing the Fed and who despise the US dollar would end up on the losing end once again – even if they correctly predict an economic calamity.

Of course, the consolidation of the world’s wealth under such a scenario would be breathtaking. But it would fit the agenda for the global financial dictatorship.

 

 

October 13th Update – Why is mainstream business turning on the Fed? Dollar bears have already lost out in a big way

I have uploaded a podcast for October 13,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Keep focused on what really matters; Stay tuned and stay liquid. Why is the mainstream business media now criticizing the US Fed?
-The US announced three years ago that they would begin unwinding the balance sheet and raising the Fed funds rate. The markets took it in stride and was accepted by most in the MSM and alt-financial press.
-We analyzed that the US Fed was behind the curve, given rising asset inflation, lower unemployment, and domestic economic growth. They were just playing catch-up.
-In fact, the Fed is still too dovish and has fallen behind their intended targets on their balance sheet unwind program.
-Many in the alt-financial media who were excoriating the US Fed when it promulgated QE are now criticizing the Fed for its tightening. We can’t have it both ways, but many in the alt-financial world who are too contaminated with their Trump-loving, hard-wired biases will beg to differ.
Reuters reports that the “world’s central bankers feel the heat as populists demand easy fix.” Many in the populist movement are warning that the central banks are way too tight. This includes the Trump supporters, with their hard-wired biases.
-If the Fed loosens up commercial real estate values will continue to balloon.
Jim Cramer is harshly criticizing the US Fed actions. Bloomberg has thrown its hat into the ring, too.
-The US Fed is not causing the problems at this point in the business cycle, I submit it is the reckless and myopic fiscal policies of the US government. The untimely building of the federal deficit is pumping over about $500 billion into the economy. The deficit for 2019 is estimated to be about $1 trillion.
-We may say that Trump is just doing what is politically expedient for his voters, but why are his actions and rhetoric bringing the world closer to war? Perhaps he is just carrying out his part of the agenda as a compromised member of the secret societies.
-This upcoming global conflict will be the force majeure that will usher in the next phase of the new world order. It was difficult to contemplate before Trump took office, but it is looking more certain with each passing day.
-The dog and pony show between Trump and the Fed is highly charged and politicized. This is unprecedented and its results will take time to flesh out. This manufactured drama has engulfed most in the alt-financial media. It will prove costly as the followers of the alt-media will make the wrong financial decisions once again.
-With $1 trillion in new federal deficit spending and legislation passed this fiscal year that will add $445 billion to the deficit next year alone what will the Trump regime do when things fold in on itself?
-Household debt levels in the US are actually very reasonable. 

-Being a dollar basher has been costly. Most of the dollar bashers who are promoted in the alt-financial press are controlled shills and are there to impoverish and disenfranchise potential resistance to the new world order. These sites and outlets include Zerohedge, RT, Daily Reckoning, KWN, Economic Collapse Blog, etc.  Keep in mind that many of the alt-financial sites are only copywriters and get paid for marketing. The shills that impoverish with half-truths and deception include, Nomi Prins, David Stockman, Max Keiser, Peter Schiff, Jim Rickards, Mark Faber, Jim Rogers, Michael Snyder, Paul Craig Roberts, etc. If you followed the calamity talk of these shills you lost a lot of money and it came at a tremendous opportunity cost.

Hating the dollar has its price; it comes at a tremendous opportunity cost.

The amount of wealth added to US balance sheet has been breathtaking. Of course, those listening to the alt-financial press lost out on a once-in-a-generation opportunity.
-Some conspiracy students view Trump as being just a stupid demagogue and not part of the larger conspiracy for world government. They look at the UN Agenda 2030 as part of something else. I submit that Trump will help bring the world to war and the resulting world wreckage will resemble that of a society modeled after Agenda 2030. Agenda 2030 is just Agenda 21 on steroids.
-Gold has some legs here. Buying on the dips proved profitable so far. The bearish bets were too extreme.