Martin Armstrong has released several global market reports. Be sure to read the How to Use The Global Market Watch to understand the charts.
November 4, 2013
September 10, 2013
Click here for Martin Armstrong’s latest blog post entitled Confiscation of Pensions dated September 9, 2013.
groovygirl says: even though Syria may or may not happen, Martin illustrates an excellent point. Some crisis will cause our creditors to stop buying US debt and sell what US debt they are holding as a consequence of ridiculous US foreign policy. Since you, individually, can not change US foreign policy, make sure your retirement money is protected.
August 15, 2013
August 6, 2013
Many people point to the Fed’s take over of currency-issuance in 1913 for the decline in the standard of living. This, of course, is a concern. But we have been through 3 economic depressions: two deflationary and one inflationary in the last 100 years. It is a slow erosion.
There are some other reasons for the place families find themselves in today: set up for failure.
Click here for 40 Percent of US Workers Make Less Than What a Full-time Minimum Wage Worker Made in 1968. This state of current US Workers is directly related to deflation of purchasing power of fiat currency and the movement of US jobs oversee without a plan (especially in the higher education industry) to create a new industry to replace medium wage (middle class) jobs.
First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country.
Click here for Trying To Stay Sane in An Insane World Part 2. There are several excellent economic charts in the link. But one of the best is the consumer credit chart. Total consumer credit in 1968 was under $2 billion dollars, it is now over $2,800 billion dollars. This is how people are keeping up with the decrease in purchasing power of the US dollar and the decreasing availability and decreasing of wages of middle-America jobs. The most current segment of society to use credit to live, a result of the recent surge on the chart, is the college student.
Debt steals two things from the debt-slave: current spending freedom and future spending freedom:
Must have higher monthly income streams to service (old and new) debt interest payments. You might need to stay in a job you hate, move to an area you don’t like, get into a field that you have no passion for. Recessions, unemployment, and depressions force people down for the count instead of allowing them to just dial back spending for a while. This is a big difference in the long-term health of the economy and health of society.
Debt is not just debt, but negative savings: compound interest makes use that your purchase on credit is at least 2 and a half times the original cost if it is not paid off right away. With payday loans it can turn into 1000% the original cost very fast. Your money is going to interest instead of savings for future needs, like emergency funds, retirement, new car, unemployment savings reserves, down payment on a house, college education, etc.
Debt keeps people trapped long-term. This is the birth of the debt-slave, chained to a cubicle.
Side musing: it is ironic that everyone is talking about taxes (government wants more, people want less). When if people didn’t spend half their paycheck on debt service, they wouldn’t be so upset about current or higher future taxes. Government policies created their own demise.
So what can you do about this? Well, you can’t do much about jobs moving overseas and you can’t do much about the Fed, but…. you do have power.
Pay down current debt and do not acquire more debt. Will it be easy and quick, nope. Will it bring you and your family more freedom, yes!
From the link above:
The citizens, formerly known as the hard working American middle class, must accept their share of responsibility for the desperate circumstances we face. Some are guiltier than others, but we only need look in the mirror to find the culprits in allowing the bankers, politicians, military industrial complex, mass media and vested corporate interests to gain control over our country. The introduction of the credit card by Wall Street bankers as a must have for every citizen in the early 1970s coincided with the inflationary demons unleashed from Pandora’s Box by Nixon and the Federal Reserve, along with the peak of cheap U.S. oil production. Thus began four decades of real wages declining and consumer debt soaring. A nation of people that believed in saving before purchasing were given the freedom to spend money they didn’t have. The statistics paint a picture of a society gone mad:
Credit card debt grew from $5 billion in 1971 to $856 billion today, a 17,000% increase in forty-two years. GDP rose from $1.2 trillion to $16.6 trillion, a mere 1,400% increase. Real GDP only grew by 300%. Wages have grown from $600 billion to $7 trillion, a 1,200% increase. Real disposable personal income per capita grew from $17,200 to $36,800, a 200% increase.
Non-revolving debt (auto, student loan) grew from $127 billion in 1971 to $1.98 trillion today, a 1,600% increase.
There are over 600 million credit cards in circulation within the U.S. and Americans charged over $2.1 trillion last year.
Over 40% of Americans carry a balance on their credit card from month to month, with an average balance of $8,200 and an average interest rate of 13%.
40% of all low and middle income households must rely on their credit cards to pay basic living expenses like rent, mortgage, utilities, groceries, real estate taxes, income taxes, along with their “needed” iPhones, HDTVs, bling, stainless steel appliances, and tattoo artwork.
Wall Street banks have written off over $300 billion in credit card debt since 2008 (and passing the bill to taxpayers), while bilking their customers out of $60 billion per year in late fees and overdraft fees.
August 3, 2013
August 1, 2013
Click here for a link to the most recent Thunder Road Report. It is about 58 pages. Good charts. This report comes from Europe. This issue focuses on the effect or non-effect of Central Banking actions around the globe. They also have a section on inflationary deflation.
July 24, 2013
The SEC is issuing warnings about the money market fund industry.
There are a few conclusions to draw here.
- This was a very quiet warning on July 17th. Quiet means we want to have the record we warned you, but we don’t want to start a panic.
- Too late, gg suspects we start to see the “quiet panic” around August 7th? Just a guess
- Money Market Funds collapse because investors need liquidity to cover another collapsed market that is underwater in debt. (i.e. they do not have the capital, assets, or even cash flow, to cover the debt needed to continue business or sustain the market.) This is the way the mortgage crisis moved to completely freeze credit in the US market in 2008-2009 and thus effected every business and market in the US and around the globe.
- Money market funds are used by all business like a revolving credit card. If it drys up, business and banks must be bailed out to keep normal daily business going, for things such as payroll.
- If those businesses do not have enough cash to hold them for six months to a year without adequate cash/credit, they go bankrupt, and lay off employees. We saw this in 2008-2010.
- There will be no bail-out this time around. Your funds will disappear, it will be a bail-in. If you remember, money market funds delayed cash withdrawal requests for up to 6 months the last time around. The only reason it was only 6 months….bail outs, free loans from the government to keep the game going and the sheeple asleep.
- Notice the time line from the 2007 crash. Stocks/housing market start to decline in fall of 2007, fully clear to all in 2006 that it was coming/in process. Contagion starts to be felt by everyone and all markets by 2008-2009 as major companies/banks go under or require major bailouts. This doesn’t happen over night. It just seems to because the insiders’ panic is not announced or acknowledged or covered-up.
- We do not know what the catalyst will be this time, but we have several options: muni bond markets, continued European debt implosion, slowdown in China, derivatives from any one of these markets, war/terrorism/Arab Spring, change in law for one of these investment markets, old derivatives from 2008 mortgage crisis that have not been realized. Take your pick.
- All of the above-mentioned markets (actually all markets tied to debt/margin) are VERY FRAGILE. They will all be severely effected by whatever the catalyst is this time around. That will make this coming collapse in 2015, as suggested by Martin Armstrong, much worse than 2008.
Beware and be prepared. Groovygirl is not suggesting have absolutely no cash in money market funds, just don’t have it all in that type of investment. You are responsible for making the decisions for your own investments.
Side musing: regarding Martin Armstrong’s 2007 turning point. Groovygirl thought it very interesting that major national security websites and data systems were hacked in 2007. Just now being admitted. This could be point the history books point to as the fall of the American Empire (foreign hackers are the Barbarians at the Roman gate) and the official start of the new war: cyber warfare. very interesting. Although it was announced that the Pentagon was hacked. Apparently several other private and government infrastructure sites were hacked including electrical and water infrastructure and NASA, as well as national security sites. The hackers were downloading information and able to view current information for six months before discovery. And they aren’t even sure if it was all the Chinese. This is the new war.
July 15, 2013
Peak Prosperity interviews Bill Black. Good one from July 13, 2013. Click here.
From the transcript:
And we have not even discussed derivatives to this point. Which is the not-800-pound gorilla, but the $8-trillion-ton-gorilla that is out there. So we already have the insanity of derivative trades in which both of us book a gain because we have different evaluations for the asset. So we have phenomenal paper gains that cannot be true. When the markets no longer trust each other, then those kinds of transactions do not work anymore, and there is no liquidity, and you are in the equivalent of trying to sell minority shareholder interest in a privately held corporation. How is that going to work out for you? Ever tried to do that?
So all across the globe, all across history, minority shareholders get completely screwed in that circumstance, when liquidity dries up. Well, the same thing can happen to much broader markets, including in particular the derivatives markets.
And if it does, when trust is interrupted, much less eroded, in the ways I have talked about it in the derivatives market, liquidity completely dries up. Anything that functions like a market-maker collapses, and you get whole financial systems that grind to a halt. And they do not happen just a few times. It can happen in thousands of markets roughly simultaneously.
You asked me earlier about Dodd Frank, and I said it had no coherent strategic vision. And a couple of the areas in which it had no coherent strategic vision we have talked about. It did not deal with the international competition-in-laxity. It did not deal with “too big to fail.” And it did not deal with derivatives. So I would say that was strike one, strike two, strike three.
June 27, 2013
June 26, 2013
The news out of China the last week seems to be going from bad to worse (first capital controls, now a credit freeze). If true, that Chinese banks are putting on a credit freeze and there is no lending, the globe will have a major problem.
Ladies and Gentlemen, all our (US) products are produced in China. Anything actually made in the US, the raw materials come from China. That is on top of the global investing funds in China.
However, the flight to safety may be to US and Europe markets and currency. All part of the long-term cycle, the breakdown of the global debt market.