Monday, December 9, 2013

MARTIN ARMSTRONG'S LATEST BLOG POSTS

Deflation-Inflation-Hoarding-War

QUESTION: Mr. Armstrong. Does deflation  accompany hoarding of cash and the velocity you speak of declines? Is this the trait that you write about and part of the reason gold has declined?
George III Emergency 8Reales
ANSWER: People simply save money in times of uncertainty. This is one aspect we have to watch with the turning up of the Cycle of War next year. This can be caused by several different types of events such as civil unrest that materializes into revolution, economic uncertainty during recessions and depressions, and of course times of war. There was such a shortage of money when the Napoleonic War began that England had to simply counterstamp silver coins of Spain with the portrait of George III because there were no coins circulating. The Bank of England began to issue small denomination paper currency notes because of the shortage of coins.
50cents Postage Currency
During the American Civil War there was also a shortage of coins and we find small denomination currency backed by postage stamps.
EncasedPostage
Private companies issues encased postage stamps with advertising on the reverse. This was because of the chronic shortage in coinage.
War Nickels
Silver traditionally becomes cheaper than nickel for it has no practical use as weapons. We saw during the World War II 5 cent nickels replaced with 5 cent silver coins.
As uncertainly prevails, people hoard money and the velocity declines. As a result, unemployment rises for jobs depend upon capital feeling safe and contented. Nobody will start a business when the future is cloudy.

Taxes Alter Behavior

Row-Homes-Phila
There were two taxes that altered how people lived. There was the Window Taxthat inspired row homes in Colonial America. That simply became the standard and long after the tax was gone, row homes became the norm. Row Homes eliminated the need for windows on two sides of the house.
You will also see some colonial houses had just one step and others two or three. You were also taxed on the number of steps you had. Hence, the saying“taking a step up in life” had its root in the fact that you were rich because you had more than one step and were taxed at a higher rate.
Taxes have always altered behavior. The higher the taxes in a city, the more people moved to the suburbs in ancient times as they do today. WhenMaximinus I had spies seeking people with money in Rome, capital went into hiding. The one way to destroy an economy – keep raising taxes. Unemployment among the youth in Southern Europe is over 60%. Government is destroying their future entirely and altering society by preventing marriage at the same age because there is no job to start a family.
Money today is effectively electronic. Cash forms such a tiny fraction of the money supply it is rapidly on its way out the door. When I park my car in the city, there are only machines to give me a ticket, then to pay and receive an exit ticket, and I see no one. The age of technology is eliminating minor jobs and converting money into simply credit and debt cards. There will be no going back to some gold standard and the younger generation will look at you in amazement as if you are speaking “how for art thou” in some ancient tongue.
USIntAs%Total
We no longer need taxation at the federal level. About 70% of the national debt is simply interest to keep borrowing with no intent of paying anything off anyway. All we need is simply pay for government capping its cost at a maximum of 5% of GDP and prohibit borrowing. State and local government need to tax only because they do not create money. Take this step and we will restore our privacy and freedom. We have once again accomplished “taxation without representation” because we have career politicians who always raise taxes to fund their desires without any regard for society. All we hear about is taxing the rich to help the common man. But the taxes are going to fund the bankers not the poor and the slogans sound nice, but are total bullshit.
I was in Australia when they were proposing the Luxury Tax. They got the people to vote for higher taxes by lying to them. The slogan was they were going to tax the rich with their “Ferraris, Fur Coats, and French Wines.”  Everyone cheered – ya! Get the bastards! When the tax was passed, suddenly the dumb public discovered ALL electrical products were included. You could not buy a clock radio without the Luxury Tax.
People get what they deserve from government – lie, lies, and more lies, and empty pockets to show for it. Like Row Homes, they are altering society reducing our standard of living. Many among the youth no longer have the dream of owning their own home and marriage forever. It is now cheaper to rent and the house may cost more in the long-run. It is hard to find a husband who can even provide for a family at the same age forcing society back to the way it was before Hollywood – the growing age gap between husband and wife and in nearly one-third of marriages the woman earns more than the man.
Hollywood converted lust into love at first sight and created the image of two people meeting in school and marrying for life. Divorce is so high, Mexico is even considering creating temporary marriages that require renewal. The age gap before Hollywood was traditionally 15 years. The man had to go establish himselfBEFORE taking on a wife.If you asked for the hand of someone’s daughter and the father asked what did you have, a response like nothing, but I love herwould have been a good laugh.
The younger generation has watched their parents divorce and the trust in marriage as some institution has declined. Various studies show that the greater the education (really maturity) the lower the divorce rate. But the data also shows that marriage is now at its lowest point in modern history – so much for socialism. Politicians simply ignore the fact that it now takes TWO incomes to support a family when before Socialism – it required just one because there was also no income or payroll taxes.
Girls in their 20s are discovering men in their 20s are still boys. Women simply mature faster than men and this may be the truth within nature. In the animal world, it is the fittest male that gets the female. Among humans, it is the male who is reliable and a good provider, not the one who can down more shots and throw-up more than anyone else because he thinks that’s cool. This change in behavior among humans thanks to taxes has even been promoting studies that show menlive longer when they have younger wives. Taxes are changing everything. It even seems to be divorce declines with the rise in age difference. Perhaps Marxism altered a lot more than we realized. It is time we seriously look at ending the income taxes and stop the borrowing funding government by just increasing the money supply keeping it within 5% of GDP which a central statistical agency calculates for ALL nations eliminating political manipulation.

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