What’s Coming After 10/1/15?

Anyone that has followed the forecasting ability of Martin Armstrong’s models knows that his projections should be taken seriously. What adds to the respect for his work, beyond the accuracy of the results and effort/cost to assemble the world’s largest database of economic-relevant data, is that it all makes sense to anyone that appreciates nature (human and non-manmade), physics, thermodynamics, and to put it more simply – reality. There is a reason an Asian country offered $500 million for his model/database, and the US govt threw him in jail for so long without charges.

Slide from Armstrong’s 1998 World Economic Conference

1998 WEC

A Vision for the Youth

Any young person that wants to take back their future from the generations before them that economically raped them and stuck them with the bill, should read the two short post from Armstrong below:

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Climate Change: 7 – 8 Indisputable Facts

Propagandist prey on people’s beliefs and biases. Just as patriots can be sold the liberty-killing Patriot Act or believe the NSA’s data gathering is all about finding terrorist; anti-capitalist (that conflate it with crony-capitalism) find it easy to blame the earth’s cyclical temperature fluctuations on man’s selfish desire to improve his standard of living, while simultaneously wanting to pollute his community.

People also tend to believe what they want to believe and ignore the rest. The human brain finds it difficult to process a multi-variant problem, choosing instead to rely on simple linear, if this then that explanations. For example, those that believe that exponential growth of the world’s population will produce overpopulation and starvation due to the depletion of the earth’s resources, conveniently believe that exponential growth in debt is somehow sustainable.

The other flaw with man’s lazy and self-important logic is the belief that trends continue forever in the same direction, and that man can manage or manipulate the trend. This hubris infects Central Bankers, who think they can manipulate the business cycle, the same way it leads people to believe that man can manipulate the earth’s climate; or that factors like war, diseases, and weather-based famine don’t curb the growth in population. Sorry, but man is helpless against the powers of mother nature and her desire to find equilibrium, which must be quite confounding for naturalist.

One of the seven undisputable facts about climate change is that temperatures have actually declined over the last 18 years, while CO2 increased, which has had an estimated benefit of $3.2 trillion over the last 50 years due to the ancillary aid of CO2 on increased agriculture output. They could add an 8th fact – the Artic ice has expanded hundreds of miles in the last three years, despite the propagandist claims that the ice should have disappeared by 2104.

GloBull warming/cooling (climate change) is and always has been about a new tax to save govt jobs, perks, and power; and the money to be made from trading carbon credits. One of the economic beneficiaries of carbon trading has been Al Gore. Luckily, many of his investments, like the Chicago Climate Exchange (CCX), have lost investors millions, as Cap and Trade legislation has luckily failed to pass. Don’t worry about “Inconvenient Al” though, as he has profited handsomely from his families long standing relationship with Occidental Petroleum and the sale of Current TV to Al-Jazeera (funded by oil-rich Qatar).

The fact is the sun is in the process of taking a nap, which will have people living north of Georgia praying for global warming in the decades ahead. This cooling cycle has happened many times before, just as it did during 1776 when Washington was crossing the frozen Delaware river.

GW crossing the Delaware

Since the majority of the believers in man-made globull warming also despise the wealthy, why aren’t they in favor of it, as it would surely flood the coastal homes of the people they hate? I’ve got an idea, why don’t all the warming believers move north. An entrepreneur should set up a real estate site where the warming wackos could sell their southern homes to the cooling crowd, and vice versa.

Lastly, remember that panics are caused by the majority being on the wrong side of a particular view. When that view changes, whether in a stock or an idea, the masses that are trapped in the biases of their own mind provide the fuel for the stampede.

Spotify Just Got Real Creepy With YOUR Data

Many naïve souls might say they don’t care if Spotify, cell phone providers like AT&T, or the NSA are collecting the data that defines their lives. They argue that “I have nothing to hide. I am not breaking any laws, etc., so why are people so paranoid?”

Spotify wants to be able to access the sensor information on your phone so it can determine whether you’re walking, running or standing still. It wants to know your GPS coordinates, grab photos from your phone and look through your contacts too. And it may share that information with its partners, so a whole load of companies could know exactly where you are and what you’re up to.

What these people fail to grasp is the reason there is a hunt for data (actually money), and the impact it has on capital – you know, that critical ingredient that is required to start and grow businesses. The reason the velocity of money is at 1950’s level and the world economy is contracting is due to capital getting off the grid because broke govt’s are on the prowl for anything that can be converted to cash. The abuse of the Constitution and our privacy has little to do with stopping terrorism, and everything to do with tracking money and the loss of trust and confidence, which is the foundation for a strong economy.

First they came for the Jews

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Good News – 2 Months Until Govt Peaks

There is little doubt that higher taxes, fees, tickets, and penalties will be headed our way, as this is always govt’s “solution” for mismanaged budgets. Chicago’s “solution” for rampant debts (that have caused credit downgrades) is a steady increase in taxes, which have caused people and businesses to leave the city and state. Now they are proposing a 30% increase in property taxes, and “appreciation bonds” that pay no interest, a ploy that even Puerto Rico deemed too risky. Cities and counties across the nation will be targeting property taxes to fund the ever-increasing public sector and public pensions. As previously discussed, raising taxes on illiquid real estate during a cycle of higher interest rates that will last for decades will certainly reduce the demand for real estate. Since real estate is the biggest investment for Americans, Europeans, and Asians, the global deleveraging process is going to be very painful for homeowners, resulting in many walking away from their homes, just as they did in Rome.

London will impose a hefty tax on foreigners that have bought property in the city. Washington just raised the gas tax by 7 cents per gallonFrance is paying informants to confiscate wealth, and the capital controls imposed on Greek citizens to prevent them from taking control of their own assets is grinding the economy to a halt.  How brain-dead does a politician have to be to not realize that people and businesses can move, taking their purchasing power and jobs with them? I guess the answer is – as long as brain-dead voters keep believing that the solution is more govt, which always results in more fraud, abuse and mismanagement. Fortunately, there are limits to the madness, which the world will see as the sovereign defaults start in earnest after 9/30/15.

The Greek businesses discussed in the article above, that can’t pay for raw materials because they can’t get access to their funds, had many months if not years of warnings that capital controls were coming. Only economic ignorance kept these Greek businesses in their banking system. If one does not understand how an economy prospers to raise the living standards for all, then how can they understand the interconnectivity of a world economy and how govt’s desperate need for cash is shutting down global commerce? Maybe they could just ask themselves, once govt has it all, then who will make the goods and provide the services on which they depend?

As business activity declines and deflation sets it, how are govt’s going to continue to spend at an increasing rate? Of course, govt’s incompetence, hubris, and inability to reform will cause it to try to get blood from a stone; but these efforts, as witnessed in Greece and Puerto Rico, only make the problem worse. This is the peak in govt that will start to spread on 10/1/15.

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What Assets Will Crash – Stocks, Bonds, or Real Estate?

Driven by the rise in interest rates, higher taxes, declining home ownership, and the reduction in long-term mortgages, real estate prices should peak with the Economic Confidence Model on 10/1/15, which Armstrong calls the Big Bang (the collapse in sovereign debt and the peak in govt). Since homeowners are only owners as long as they can afford the taxes, the headwinds will convert more and more into renters until the prices reach equilibrium. The only thing that may surprise investors more is the rise of the dollar.

Greece has been the epicenter for the coming sovereign debt crisis, and London real estate looks to be the canary in the coal mine for real estate. The US could continue to benefit in the short-term, because it’s still the best horse on the plot of land where the glue factory resides. However, on the other side of 2015.75, when the economy turns down and declining tax receipts “force” govt to raise taxes (instead of downsizing and reforming), distressed capital will look for a more liquid safe haven that doesn’t have a deflationary tailwind, especially when the cycle has another 17 years to decline.realestate-cycle

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Can Greece Show the West the Way Out?

Greece finally does the right thing by kicking out the debt pushers. They also used a democratic process by using a referendum to let the people decide their fate, instead of unelected bureaucrats or pretend Representatives that have been bought off by donors. Yet, all one hears from the financial media and so-called freedom lovers on FOX is how Greece is full of a bunch of lazy tax cheats.

Those critical of Greece either don’t understand the flawed structure of the euro, are hypocritically talking their book, or failed miserably in history class. First of all, countries that had a currency weaker than Germany prior to the creation of the euro, immediately had their debt increased when it was converted to euros. For Greece and the Drachma, it resulted in Greece’s debt doubling due to a currency event as the value of the euro increased.

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Bernie’s Just Another “Magical Thinker” from GOVT

I will use Bernie’s “10 radical ideas that most Americans agree on” to summarize the problems he does not solve, including climate change, which will not stop changing even if all carbon-producing machines were turned off tomorrow.

Referencing the above article, I have no problem with items 1, 2, 6, 9, and 10, but Bernie whiffs on the other items. If we don’t fix the economy, the other things won’t matter. In general, Bernie believes that socialist policies provide economic solutions that have never worked – even once. I guess people are just determined to get their turn at bat to prove they too can strike out.

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Supreme Court Rightly Upholds Same Sex Marriage

As Armstrong documents, the Supreme Court rightly upholds same sex marriage. However, politicians, judges, and “normal people” still have difficulty applying equal rights to all groups if it does not benefit or align with their self-interest and beliefs. There is nothing more I can add to Armstrong’s brilliant and unbiased insights of the law, and I encourage everyone to reflect on his analysis.

Obama is Targeting Retirement Accts & Mortgages

It’s obvious to most conscious people that Obama thinks govt’s humongous hammer has minor consequences in its hunt for nails and money. What apparently is not so obvious to many are the consequences of Obama’s Marxist actions. The reason I say “not so obvious” is because even those that understand that less freedom means less economic prosperity, don’t seem to understand their rights are being sacrificed daily for the benefit of govt, and at the expense of the economy. The most recent example appears in Obama’s 2016 budget, which targets retirement accounts.

Sub-market returns on you Social Security CONTRIBUTIONS is bad enough, and we are also going to be expected to accept cuts in our Social Security payments. However, now Obama thinks you should be taxed on your retirement savings, which were supposed to be tax-free. Whether it happens through taxation or a govt-induced market collapse, the bottom line is your retirement will get a significant haircut. Why? So those in govt can keep their jobs, perks, and power.

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