Economic News

  COMMENT: We are toast !? Hello Armstrong, I could not resist to make a comment in regards of the freaking Tariffs war that is going to begin on this coming Tuesday between Canada and the USA . The future looks bleak and as always the working class would see their lives going from bad to worse. I feel the world just need to go kaput !?Now! Gemma REPLY: The 2025 Canadian Report will be available after next weekend to everyone after Mike Campbell’s Conference in Vancouver. No doubt, the attendance after these tariffs will be a hot topic in addition to the resignation of Trudeau. Trump posted a message that there may be some pain, but the end will be fantastic. He tells them to build it here with no tariffs. So you will cause unemployment outside the USA to which you will be unable to sell anything to them. Sorry, we are headed into a recession for some places and a depression elsewhere. This was not a smart move. Trump has just made our model correct once again. The world economy will now shrink and decline going into 2028. By the time this cycle is over, he will be blamed for much, contributing to when the government will collapse, feeding into the end game – 2032. – The computer seems to have predicted Trump’s antiquated economic theories, for it had a Directional Change on the yearly level in the C$. Trump is acting on the old theories inspired by Karl Marx that he and everyone else are still taught in school to this day. I was just having a discussion with an economic professor in Italy who can see what has been taught is just wrong. This is all wrapped up in the theory of labor and the nonsense that the company will move if someone works for $5 less than someone else. That is just not true. – – There are so many factors involved that I had hoped Trump would have reached out and at least talked to me rather than his cronies who keep preaching the old theories that died with Bretton Woods. I was going to have a World Economic Conference for the next generation, where I go over all of these nonsensical theories that have failed and explain how the real-world economy functions. Trump won’t attend, but he should. He has just initiated what I warned about – he will go down in history not much different from Herbert Hoover. I wrote about the role of tariffs during the Great Depression. I suggest you read it and send your senator and congressman a copy. – This asinine theory of tariffs and currency manipulation all for trade is beyond being just lamebrain. This dates back to when money was gold and silver coin, and even Sir Thomas Gresham’s law that bad money drives out good money has been so distorted, along with the theory that the quantity of money tied to inflation no longer stands the test of time. This was when foreign exchange was entirely based on the metal content of the coinage, for there was still no dominant financial capital of the world coming out of the Middle Ages. Then came John Maynard Keynes, a mathematician, not an economist. What he observed was the essence of a recession or depression. As uncertainty arises about the future, people will hoard their money and NOT spend it. This is what Gresham observed: debasing the coinage under Henry VIII, people hoarded the old coinage and spent the debased. The money supply shrinks with the velocity of money. I have been buying hoards of coins over the years, generally from the 3rd century AD when the political situation of the Roman Empire was in chaos. People buried the money in times of uncertainty. This is a fundamental human nature aspect. – I had sold Athenian Owls, which were also a hoard, during the uncertainty of the Peloponnesian War when Sparta defeated Athens. I had also offered a hoard of Roman Republican victoratii that also was a hoard from the uncertainty of the Punic War. We do not tend to find hoards from the good times. I would love to find a hoard of the Julio-Claudian period, but this was generally a stable period in Roman history. The amount of hoards from that period is limited. But hoards are also a snapshot of what was in circulation at that moment in time. When the eruption of Vesuvius buried Pompei, one of the most common coins discovered was still the Marc Antony legionary denarii from about 100 years prior. What Trump does NOT understand, nor does any of his economic advisors, is that inflation can also be caused by asset shortages or a speculative boom and currency declines causing inflation. What Trump is going to be slapped in the face with is currency inflation. A number of reasons can cause a decline in a currency. What Hoover did not understand was the 1931 sovereign defaults in Europe sent the dollar higher. This was MISUNDERSTOOD and led to the tariffs because foreign wheat was then cheaper than domestic. What Trump fails to comprehend is that the political turmoil in Canada, mixed with 25% tariffs, can send the C$ down to new lows and test even the 46-50 cents level. That would be a 27.5% decline in the C$, negating his idea of tariffs. Neither Trump nor RFK will call me in until a crisis. Once in power, nobody admits a mistake until there is no choice! This will be just one day dealing with how the world truly works. We won’t have the typical gourmet food or the cocktail party that hotels charge just $100 a head for cocktails. We are trying to reduce costs so the next generation can afford to attend and make like-minded friends perhaps for life. But we will also have live streaming worldwide. They can watch even from China and Russia. It seems

  COMMENT: Mr. Armstrong, I was searching about civil unrest and found that FEMA did a report and cities your models. They even said: ANSWER: Sources are saying that the Democrats, who had planned for a huge protest rally tomorrow, are disappointed again. The crowd is tiny. Our model on political civil unrest, which began with the Kent State Massacre of 1970 against Vietnam, peaked in 2017 with the violent protests in Washington, DC, with Trump’s inauguration. The good news is that the model bottomed in 2021, and here in 2024, it is the first wave up in the next iteration. So, it should be less in intensity, and that is what appears to be unfolding.   https://www.armstrongeconomics.com/wp-content/uploads/2018/10/Trump-protest.mp4   It seems that the Democrats and their propaganda over abortion and misrepresenting the entire issue has led many to be myopic and totally disconnected from the issues. The Democrats are still fighting internally and simply refuse to admit that they went way too far, embracing this like transgender, which represents such a tiny fragment of the population, turn women’s sports on its head while claiming to support women with abortion. https://www.armstrongeconomics.com/wp-content/uploads/2025/01/Trump-Riot-inauguration-protest-1-20-2017.mp4   Let’s see. The double standard in DC and the Deep State imprisoning little old ladies for even walking in the capital building on January 6th and no imprisoning violate protestors at Trump’s last inauguration demonstrates the corruption in DC. The hopes of a significant violent protest to force Trump to call out the National Guard so they can label him a dictator is fading into the wind. The Democrats just oppose whatever the opposition proposes, regardless of whether it is right or wrong. This is the collapse of politics.  

COMMENT: A reader has submitted this which is typical of every economic decline. The money grab by cities which are desperate for taxes is escalating, law enforcement is no longer about protecting but generating revenue. The confiscation of property obtained through illegal means appears reasonable, yet given this is civil forfeiture, no proof is needed. Houses, cars and other property which are suspected to be anyway connected with criminal activity are being seized without having to prove anything, providing an additional source of revenue for law enforcement agencies. Cars are confiscated because an office “smells” something. The cost of fighting the confiscation is often more than the value of the property or is more than the victim can afford. http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_stillman?currentPage=all http://www.forbes.com/2011/06/08/property-civil-forfeiture.html ANSWER:  The reason history repeats is rather simple. Human nature never changes. If you read Edward Gibbon, who wrote in his “Decline and Fall of the Roman Empire,” NOT for the historical event but for the actions, you will see the same patterns in human nature. It is like a Shakespeare play that is performed for centuries. The story and plot remain the same. Only the actors change like Phantom of the Opera on Broadway for 25 years. New people step into the role but the songs are always the same. Gibbon wrote about the bureaucracy: “Suspicious princes often promote the last of mankind, from a vain persuasion, that those who have no dependence, except on their favor, will have no attachment, except to the person of their benefactor.” Edward Gibbon wrote of Commodus: Each “distinction of every kind soon became criminal. The possession of wealth stimulated the diligence of the informers; rigid virtue implied a tacit censure of the irregularities of Commodus; important services implied a dangerous superiority of merit; and the friendship of the father always insured the aversion of the son. Suspicion was equivalent to proof; trial to condemnation. The execution of a considerable senator was attended with the death of all who might lament or revenge his fate; and when Commodus had once tasted human blood, he became incapable of pity or remorse” (Book 1, Chapter 4). If we fast forward to Maximinus I (235-238AD), Gibbons wrote that “The cruelty of Maximin was derived from a different source, the fear of contempt.” He used conspiracy as does the United States today where the crime requires no proof of doing something, it is merely an agreement to do something. You suffer the same fate as if you did the crime, and there are tons of crimes that everyone violates every day, as pointed out in the book Three Felonies A Day.   Gibbon wrote:  “The dark and sanguinary soul of the tyrant was open to every suspicion against those among his subjects who were the most distinguished by their birth or merit. Whenever he was alarmed with the sound of treason, his cruelty was unbounded and unrelenting. A conspiracy against his life was either discovered or imagined, and Magnus, a consular senator, was named as the principal author of it. Without a witness, without a trial, and without an opportunity of defence, Magnus, with four thousand of his supposed accomplices, was put to death. Italy and the whole empire were infested with innumerable spies and informers. On the slightest accusation, the first of the Roman nobles, who had governed provinces, commanded armies, and been adorned with the consular and triumphal ornaments, were chained on the public carriages, and hurried away to the emperor’s presence. Confiscation, exile, or simple death, were esteemed uncommon instances of his lenity. Some of the unfortunate sufferers he ordered to be sewed up in the hides of slaughtered animals, others to be exposed to wild beasts, others again to be beaten to death with clubs. During the three years of his reign, he disdained to visit either Rome or Italy. His camp, occasionally removed from the banks of the Rhine to those of the Danube, was the seat of his stern despotism, which trampled on every principle of law and justice, and was supported by the avowed power of the sword.  No man of noble birth, elegant accomplishments, or knowledge of civil business, was suffered near his person; and the court of a Roman emperor revived the idea of those ancient chiefs of slaves and gladiators, whose savage power had left a deep impression of terror and detestation.” (Book VII) This is the man who simply declared all wealth belonged to the state. This inspired the collapse in the velocity of money as it went into hiding. Hoards of coins buried from this time period are still being found to this day. This is what destroyed Rome. It was not hyperinflation but deflation as the economy simply imploded. This is what happens when government hunts down its own people for money.