Economic News

https://www.armstrongeconomics.com/wp-content/uploads/2020/06/1987-Larry.mp4   COMMENT: Marty, I have been with you since 1987. I have watched your Economic Confidence Model blow everyone out of the water, and your critics are just idiots who are either genuinely just stupid or they are paid by the “club” to try to prevent people from listening to you. Anyone who criticizes you is not trustworthy. The world should take notice of what you discovered. I saw your ECM predict the 1987 crash to the day. The Japanese Crash. The 1998 July 20th high in the markets. The 2002 low. There are so many events on the exact day that there can be no dispute that this is not your opinion, yet people try to ignore you, and others hate you. Now, May 15th was the exact day for the peach talks, and June 2nd was Russia’s Pearl Harbor. Everyone should send letters demanding that you get the Nobel Peace Prize for humanity’s sake. L REPLY: I understand what you are saying. Yes, I can see that a Nobel Prize might help focus attention on the reality of cycles. However, the Economic Confidence Model is something I bumped into, and I had assumed it would be an average. Never in my wildest imagination did I ever expect that such a model would work precisely to the day for countless geopolitical events, like 911, to the very day, and the same exact frequency picks the events here in May to June 2025. I just do not know. Do I deserve a Nobel Prize for something I myself cannot entirely explain that exists when all the conventional thinking says that it can’t be? I am working diligently on my next book, the Economic Confidence Model. Perhaps then let the world judge. How many coincidences does it take to prove there is a hidden order lurking behind the appearance of random chaos?

COMMENT: Dear Marty! These are original advertising posters for war bonds from 1914-1918 from the former monarchy. I thought this might be of interest to you. I took the photos myself here. I hereby grant you all rights for publication on your blog. Many people all over the world owe you and your tireless efforts an enormous amount. I am Austrian. We, my wife and sons of military age, their friends, and our first grandson, are going to Paraguay in South America. We’ve had permanent residence permits since 2017. Very few people here in Europe want to know or acknowledge the terrible things that await them. Even if there is no war, the economic misery will be bad enough to make Europe a poor continent for a long time to come. Young people will have a very hard time building something for themselves here in Europe after 2030. I saw how people in the Eastern Bloc lived in poverty before the opening and even long after. Back then, they could go to Germany and other wealthy European countries. Germany and other formerly prosperous European countries will not be wealthy after 2030. The prosperity and opportunities for development that you and I had in our youth will no longer exist here after 2030. I live near Melk Abbey. Whenever you are in Austria, it would be a great pleasure and honor for me to show you the inside of the abbey and other historic sites in Austria. My old family connections within the monarchical system still work. Who knows for how long… In deep gratitude for everything you do for us ordinary people and the burden you have placed on yourself. Many thanks, GB REPLY: Thank you. I see that we are all in this together. I the town I grew up, my grandfather had Germans who migrated to the US before the war for they saw what was coming. Down the street from my mother was another German couple who also migrated before the war. I remember listening to their stories and how they saw the political trend and tried to warn friends but they thought they were extremists. I think growing up with those German neighbors exposed me to the horrors of war and how they had to leave their homeland when many thought they were nuts. I spoke with an attendee of the OSCE Vienna Peace Conference last week. He said they were not talking about peace, but that everyone needs to start drafting people for war with Russia. The Neocons have used Zelensky as their puppet to start World War III, just as the Greens used that 16-year-old Gretta. I have heard from others now in Europe that the press ONLY talks up war, and anybody who speaks against war is just Russian propaganda. These forecasts have come from the computer. It is the only fully functioning AI system in the world with more than a 40-year track record. At the 2011 WEC, I warned that the war cycle would turn up in 2014. In 2013, I posted a post saying this would start in Ukraine. Nobody speaks to me in the middle of the night. I am not clairvoyant. Nobody has a track record that can match the forecast I have done over the decades. This is why they made the movie The Forecaster, and the sequel should be out soon. Then they are making a Hollywood movie about my career with class A actors like the Big Short, all to show that there is order to this chaos. If it were just me, then there would be a shot of being wrong. It is not something I want to pound my chest and say, see I was right. I’d rather be wrong. My lawyer tells me I have to create a 501 (c) (3) to put Socrates into for if I died, the government would claim it’s worth several billion and demand inheritance taxes on such a value. My heirs would not have that type of cash so the government would seize it in the end. To a large extent, this has been my burden. So, to those people who think it’s just my opinion, they remind me of Bob Dylan’s song “It Ain’t Me Babe.”    

COMMENT #1: Thank you for your private blog. I can see that the turning points laid out in Socrates are indeed pressure points that then cause people to react as Trump just did. You were right. The 7th held. These people get hysterical and blab out forecasts on emotions, as you said. Thank you for the training. WY COMMENT #2: My Dear Mr. Armstrong much can be said and argue about these Tariffs you can write endless post about it but the bottom line is Trump and his advisors choose the WORST time in history ?to implement them -is like all hell broke loose ! Regular working class will pay the price already here in Ontario company are starting to fired people blaming guess who ? Unfortunately that how the game is play somebody has to be blame You must be very busy ,but don’t neglect your well being please ! GR REPLY: You are correct. We are all human and will respond to similar events in the same way and in the same amount of time, regardless of the country. The computer gave us the timing months in advance. The “fundamental” does not matter. My concern is that we are heading into a recession that started May 7th, 2024. I agree that the Democrats and media will blame Trump and his tariffs when this is part of the business cycle that will move into 2028. We are facing a sovereign debt crisis that will wipe out all debt by 2034. However, we are facing significant economic stress that pushes the Europeans to seek an external distraction, and that is Russia, to avoid dealing with the crumbling EU structure. They stripped Hungary of a right to vote and changed the rules that unanimous votes were necessary. Once you establish a centralized government,  they will always see more and more power. This is also why no government has ever survived long-term. Thrasymachus warned that JUSTICE is the same in every form of government – it is only the will of those in power. He said that more than 2000 years ago, and nothing has changed ever since. It is never a question of IF something will occur; it is merely a question of TIME – WHEN it will unfold. It is not a question of whether a society will rise against its oppressor; it is only a question of how much time it will require to move the majority of people to action. This is the same formula that governs when a market will crash. You may be able to raise your arm, but you cannot keep it up. You will run out of energy. So will markets or politics.   As I explained on the private blog, you can raise your arm but not keep it there. You will run out of energy, and it will become so heavy that you have to let it down. Markets are no different. As the white rabbit in Alice in Wonderland kept saying, “I’m late. I’m late.” It is the last frontier – It’s Just Time. As Margaret Thatcher said at our World Economic Conference   https://www.armstrongeconomics.com/wp-content/uploads/2020/05/thatcher-cycles.mp3  

I have been warning that we are approaching World War III as a distraction from the collapse of sovereign debt in Japan and Europe.  The total outstanding government and corporate bonds globally have now exceeded $100 trillion in 2024, as reported by the OECD. As I have also been warning, the central banks have been neutered. They can no longer fight inflation by raising interest rates because government debt just explodes. Governments have NO INTENTION of ever paying off their debt. They think there is no end to this game. https://www.armstrongeconomics.com/wp-content/uploads/2021/02/Lockdowns.mp4 COVID pushed most governments off the edge. You have the World Economic Forum pushing for lockdowns as wonderful because they were really about keeping people home and stopping their commuting to work to stop climate change. In the process, they undermined commercial real estate and sent debt levels soaring all for the planet. Then you have the Greens in Europe cheering World War III to destroy Russia because they are the biggest producer of fossil fuels. So, we now risk nuclear war to save the planet? This is like someone punching you in the face first and calling it self-defense because they knew you wanted to hit them first. They had two idiots listening to their nonsense: Biden, who would have asked if we get enough of the bastards to save the planet, and King Charles, who seems to be thoroughly brainwashed into the green movement. While central banks are cutting interest rates, borrowing costs remain much higher than before 2022’s rate hikes because the ECM, in particular, went to negative interest rates in 2014, which only encouraged governments to issue more debt. This all comes at a time when the EU wants to fund an army and prepare for war as a distraction from their inevitable collapse by 2029. In Germany, Mertz refused to form a normal government with the #2 party AfD. Instead, he chose to bring in the two parties that wanted war and were voted out. She said, “The corks are popping among the election losers, the SPD and the Greens.” Weidel appropriately added: “And accordingly, this is the death knell for the euro.” Mertz has abandoned the debt restraint of Germany to retain power. Germany is heading into a very serious debt crisis for 20-26, and this does not bode well for Europe or the Euro. Nearly HALF of ALL outstanding government debt among OECD countries and emerging markets and around ONE THIRD of corporate debt will mature by 2027. Our computer is showing PANIC Cycles in 2026 around the globe. The defaults come when you cannot sell the NEW debt to pay off the old. There are people who are repeating our forecast, pretending they are theirs. Nobody on a human level can possibly account for all the variables around the world. That cannot be done except by the only fully functioning AI system that has discovered the secret of time. No individual has the track record to back up their statements. This is not about “I think” nonsense. It is not my personal dream to have to live through my own computer’s forecasts. They think they can be in the limelight pretending these are their forecasts, but they are ill-equipped to actually see how and when this unfolds. On top of all of these, many emerging markets, including China and now even Canada, are issuing debt denominated in US dollars. The older issues have also lost on the foreign exchange. Carney in Canada has just demonstrated his true lack of understanding of financial markets. He dumped US Treasuries but then issued Canadian debt denominated in dollars. As the C$ declines, he will lose on the return of the foreign exchange as well. Even the OECD report found that the costs of borrowing through dollar-denominated bonds had risen from around 4% in 2020 to more than 6% in 2024, rising to more than 8% for riskier, junk-rated economies nations. The funding of NET-ZERO projects has been a huge loss. The OECD said funding the net-zero emissions would face a $10 trillion shortfall to meet Paris climate agreement goals by 2050. There is no way they can fund this, plus World War III and they never consider that everything is coming to the point of a major Sovereign Debt default that the government will not survive. Add the trade wars and what our model shows a major recession globally into 2028; it is hard to see how many countries can even make it to 2029.

I don’t think Starter understands. This is not marching into battle like in colonial days. Things have changed. The EU may be counting on fighting until the last Ukrainian, Romanian, and Polish, and then they can walk in and take Russia, but this is not shaping up as Europe thinks. Even North Korea has gained from the Ukrainian War. They are now learning an utterly new warfare game and are now up-to-date with knowledge about fighting a modern war with drones rather than jets flying overhead. According to our sources, North Korea has benefited tremendously from aiding Russia, not just by supporting its technological advances. Still, their troops are adapting to an entirely new warfare model that did not even exist during the Gulf War. North Korea has adapted to the rampant, cutting-edge drone warfare that has defined the conflict in Ukraine. If nobody has noticed, we do not see dogfights with fighter jets in the air. Those are the days of World War I. Russia has developed glid bombs and does not put their planes at risk of Ukraine. Warfare nowadays is different from even WWII or Vietnam. Everyone thinks that nuclear weapons are no longer a deterrent because nobody will push the button. That is just not the case. You cannot move in for the kill; someone will not press the button. I hate to point out, but China will commit any of its military forces to Russia’s war effort against NATO, for they are NOT stupid. Once the West took Russia, they would move against China. It is absurd to think that if NATO got involved in Ukraine, China would not join with Russia. Ukraine has told Newsweek that China is “not stupid.” Let’s get real: Ukraine puts out nothing but lies. They, of course, say to the press that for fear that NATO would not come in to destroy Russia. It is precisely the opposite. Trump has to keep the United States out of Europe’s death wish. There is absolutely no doubt that China and Russia will join together against NATO.  

The war in Ukraine has disproportionately hurt Hungary and Slovakia. To add insult to injury, Zelensky declined to renew a gas line deal that was providing the two European nations with essential energy. Hungarian Prime Minister Viktor Orban and Slovakia’s Prime Minister Robert Fico have once again broken ties with the European Union and shot down the latest Ukrainian aid package. Fico has said that he would not send Ukraine another euro and called “peace through strength” measures “unrealistic.” Furthermore, Fico sees through Zelensky’s victimization and is reportedly “sick” of his games. “He roams Europe begging and blackmailing, asking others for money. This needs to stop,” Fico adamantly said. Hungary’s Orban wrote a letter to Brussels in which he urged for peace. “I am convinced that the European Union – following the example of the United States – should enter into direct discussions with Russia on a ceasefire and a sustainable peace in Ukraine,” Orban wrote to Antonio Costa, who heads the Council of the EU’s 27 member states. Instead of seeing this man as someone who wants to prevent death and destruction, Western media is pinning him as a Russian tool and Putin ally. “If the summit does not respect that there are other views than continuing the war, the European Council on Thursday may not be able to agree on conclusions on Ukraine,” Fico said in a Facebook post. Orban said that the differences in opinion “cannot be bridged” but believes that the EU must vote unanimously on the next aid package. Costa replied to Orban’s letter with a biased anti-Russian stance, claiming that the EU does, in fact, want peace—but they’re unwilling to take any measures to ensure peace. Brussels does not protect its member states. Slovakia and Hungary repeatedly urged Brussels to take their energy crisis into consideration but the EU dismissed their pleas. Now, they’re asking all member states to continually pour money into one of the most corrupt nations in Europe for nothing in return. Brussels is akin to some cult leader begging members for all their funding, promising to protect them from some inevitable threat that will never come before asking them to commit (economic) suicide. The European Union cannot survive for a plethora of reasons, one being that certain nations no longer wish to see their people live through World War III. We will see on March 6 if the EU respects the vote of all member states or if they blatantly move ahead without unanimous support.

Distributive bargaining is a competitive negotiation approach where one party aims to maximize its share from a limited pool of resources. This strategy is often called zero-sum negotiation, as the total amount of resources available remains constant. Some call this the win-lose method, as compromise is not the goal. David Honig, an attorney and adjunct professor at Indiana University, has spoken out about distributive bargaining and his belief that this is Donald Trump’s preferred negotiation style. While I do not believe Trump is ill-prepared for the job at hand, I do believe his past experience in business has played a role in the viewpoint that America loses if there is a compromise. Integrative bargaining is a negotiation strategy that focuses on creating win-win situations where all parties feel that they are gaining something of value. When world leaders negotiate trade agreements, international treaties, or economic policies, integrative bargaining is crucial because it encourages cooperation rather than competition. Healthy competition is what we want to see. Everyone wants a leader who fights for domestic interests first. But it is important to realize that international interests often spill over to the domestic side when we are speaking of economic matters. We cannot view the economy through purely domestic lenses. Economies are highly interconnected through global supply chains, international trade, and cross-border investments. Disrupting these connections can and will cause significant economic instability. One cannot use distributive bargaining in economic matters since everything is connected. Tariffs on Mexico and Canada will result in an initial loss for those nations that will spread to America and elsewhere. Below is Professor Honig’s interpretation that has been circulating online: “I’m going to get a little wonky and write about Donald Trump and negotiations. For those who don’t know, I’m an adjunct professor at Indiana University – Robert H. McKinney School of Law and I teach negotiations. Okay, here goes. Trump, as most of us know, is the credited author of “The Art of the Deal,” a book that was actually ghost written by a man named Tony Schwartz, who was given access to Trump and wrote based upon his observations. If you’ve read The Art of the Deal, or if you’ve followed Trump lately, you’ll know, even if you didn’t know the label, that he sees all dealmaking as what we call “distributive bargaining.” Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you’re fighting over who gets how many pieces. In Trump’s world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins. The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don’t have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over. The problem with Trump is that he sees only distributive bargaining in an international world that requires integrative bargaining. He can raise tariffs, but so can other countries. He can’t demand they not respond. There is no defined end to the negotiation and there is no simple winner and loser. There are always more pies to be baked. Further, negotiations aren’t binary. China’s choices aren’t (a) buy soybeans from US farmers, or (b) don’t buy soybeans. They can also (c) buy soybeans from Russia, or Argentina, or Brazil, or Canada, etc. That completely strips the distributive bargainer of his power to win or lose, to control the negotiation. One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you’re going to pay his whole bill or demand a discount, you don’t have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won’t agree to do the cabinets in your next casino, and you’re going to have to find another cabinet maker. There isn’t another Canada. So when you approach international negotiation, in a world as complex as ours, with integrated economies and multiple buyers and sellers, you simply must approach them through integrative bargaining. If you attempt distributive bargaining, success is impossible. And we see that already. Trump has raised tariffs on China. China responded, in addition to raising tariffs on US goods, by dropping all its soybean orders from the US and buying them from Russia. The effect is not only to cause tremendous harm to US farmers, but also to increase Russian revenue, making Russia less susceptible to sanctions and boycotts, increasing its economic and political power in the world, and reducing ours. Trump saw steel and aluminum and thought it would be an easy win, BECAUSE HE SAW ONLY STEEL AND ALUMINUM – HE SEES EVERY NEGOTIATION AS DISTRIBUTIVE. China saw it as integrative, and integrated Russia and its soybean purchase orders into a far more complex negotiation ecosystem. Trump has the same weakness politically. For every winner there must be a loser. And that’s just not how politics works, not over the long run. For people who study negotiations, this is incredibly basic stuff, negotiations 101, definitions you learn before you even start talking about styles and tactics. And here’s another huge problem for us. Trump is utterly convinced that his experience in a closely held real estate company has prepared him to run a nation, and therefore he rejects the advice of people who spent entire careers

  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.