World headed into another crash of GDP no later than 2025. Trump may provide a bounce interim to 2020 or so, but this aforementioned short-dollar vortex will be setting up the sustained collapse of Western Europe and the socialist countries, as Asia rises from 2020 forward to take the financial capital away from the West by 2032. Also appears we’re headed for negative world GDP growth trend low at some point over next decade(s), before a positive trendline can begin. This low will be the confluence of the collapse of socialism and the coming Maunder Minimum mini-Ice Age.

Reality of Being a Chief Economic Advisor

Trump is the counter-trend reaction. Reagan was the same reaction to hard economic times [which Trump referred to specifically in his first presidential debate]. You can see here that world GDP peaked in 1973. I remember the recession into 1976 very clearly. People were openly talking about another Great Depression. You get these counter-trend reactions which slow the decline down. Even Diocletian (284-305AD) instituted monetary reforms, wage, and price controls, and revised the political system creating the Tetrarchy whereby he was the first Emperor to actually retire and pass on the reigns of power. Trump will not reverse the trend. He will at best mitigate the fall during his term.

Left v Right – Why the Western Society is Really Collapsing

QUESTION: […] it seems rather likely to have the socialist agenda gain power. I know you say it is coming to an end. I trust you are correct. Socialism does not work and people might notice at some point. But it seems to be in a quite distant future still. Could you elaborate on that? Will Immigration finally win and move Europe and Germany into a new societal form? Finally, the European left-wingers are actually importing authoritarianism. Which very ironic since they probably think they are importing voters.

ANSWER: Oh yes. I do not think most people outside of Germany understand that. Merkel lost control. To keep power, she had to create a Grand Coalition with the SPD, which has been the Northern socialists with origins that go back to the Weimer Republic and the Communist Revolution. The SPD took power for both they and the CDU of Merkel realized that going back to the people would result in both parties losing even more ground. This is highlighted particularly after the Italian election. I have NEVER been asked for a meeting by anyone in the SPD. They have always fundamentally been opponents of anything my computer has forecast. They have NEVER been interested in what is economically best for the people – they are only interested in imposing their will upon the people because they do not see the same light they do.

Most people have no idea that Lenin was more of a dreamer who at least thought he was benefiting the people. It was Lenin who warned not to allow Stalin to take power after him. He said: “Comrade Stalin, having become Secretary-General, has unlimited authority concentrated in his hands, and I am not sure whether he will always be capable of using that authority with sufficient caution.” Stalin did everything he could to take power. This has been the curse of the left. They see themselves in a war against the producers and whatever action they take, it is always for the good of the people. This attitude marks the left who always seek to subjugate the right. They never believe in human rights other than their own and have historically always taken an authoritarian position painting themselves as the victim being exploited by the right. The official state records showed that Stalin killed about 2.9 million people. However, this does not include those who died from famine in places like Ukraine for example, which stand at about 7 to 10 million. In Ukrainian, they coined a term for what Stain did – Holodomor (Голодомо́р) meaning “to kill by starvation” has remained at the core of why Ukrainians want independence from Russia.

[…]

The left will make a major stand to seize control globally. They will be VERY OPPRESSIVE and this is what will end up destroying the West as we see the economic epic center move to Asia with China becoming the dominant financial capital of the world.

World economic growth (GDP) peaked in 1973. We are looking for the final low to form during 2035.8. The next low will be in 2025 and this will be a Cycle Inversion from a high producing a low. However, you can easily see from this chart of world GDP, socialism is dying. The Pension Crisis will be a major event and the failure of that system will spark not just civil unrest, but the left assaulting the right. The left will look to plunder the wealth of the right and justify it in their minds as they are entitled to this because the right got rich by exploiting the left. This may become excessive between 2029 and 2032.

When Rome turned against the producers under Maximinus, this is what really began to destroy the Roman Empire. Informants were rewarded to turn in anyone with assets they believed was hoarding wealth. They turned everyone against everyone else and that broke the bonds of civilization. Even after Maximinus was killed by his own troops and his head was sent to the Roman Senate, capital investment NEVER returned. The producers began to invest less and continued to hoard more. Confidence was simply lost and people did not trust one another anymore.

This is simply how human nature responds given the same set of circumstances. The more the left seeks to raise taxes and punish the producers, the greater the producers will hoard and not invest and we will see a continued decline in economic growth rates. We can see that we really cannot get world GDP above the 3% level. The decline post-2007 has been profound and 10 years of Quantitative Easing has only caused wealth to contract. Negative interest rates sparked more hoarding of cash even among the middle class.

Draghi is holding on for dear life. He has no prayer in hell to restore the economy of Europe. All he has done is kept the governments on life-support. When they cannot sell their bonds, they will raise taxes drastically to try to stay afloat. This is how history repeats. The same circumstances will emerge, but like a Shakespeare play, it can be acted out over the centuries with the only change being the actors.

Will US Companies Repatriating Cash Home Create Banking Crisis Outside USA?

QUESTION: Mr. Armstrong; Do you believe that if American companies do repatriate dollars to get the low tax rate in the USA, will this impact foreign banks as capital withdraws?

ANSWER: […] Let us assume that U.S. corporations will repatriate at least 25% of their estimated US$2.6 trillion of offshore funds to take advantage of a one-off 14% tax holiday. It will not matter if they are selling euros, yen, pounds, or yuan. Switching their fund from the offshore dollar funding markets to domestic dollars will have a similar impact to the same trend that took place between 1980 and 1985 that drove the dollar to all-time record highs.

American corporations moving capital sends a powerful impulse through global finance system. Despite the rise of China and the creation of the euro, the world has never been so “dollarized” as it is today. The euro is a complete failure for there is no single market with a centralize debt to compete with the dollar as an alternative. China is rising, but it is not ready for prime time. There is no alternative to the dollar.

[…]

The Bank for International Settlements (BIS) says offshore dollar funding has risen fivefold to US$10.7 trillion since the early 2000s, with a further US$14 trillion of global dollar debt hidden in derivatives. BIS research also confirms that the rise and fall of the dollar is the major cycle of dollar liquidity which is driving the world’s investment appetite and global asset prices. This liquidity spigot is clearly being turned off. The Fed is not only raising rates, it is also reversing bond purchases

[…]

The BIS is warning that China, Canada, and Hong Kong all have the risk of banking failures that are greater than that of Europe. Apple Inc. said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and spend tens of billions on domestic jobs, manufacturing and data centers in the coming years. That is more than a quarter-trillion. The answer is YES – ABSOLUTELY. US companies will bring back a substantial amount of that money and this will reduce deposits overseas and that will increase the risks of bank failures outside the USA

[…]

Mario Draghi will NOT stop Quantitative Easing and he WILL NOT raise rates until he can get out the door. His term at the ECB is for 8 years […] until October 2019. The question will be can he really keep up this insane losing position that much longer or will the entire house of cards come crashing down.

So look first to bank failure on the rise in Asia, and they will spread to Europe. Nonetheless, there is deep concern about Italian banks and that may be the spark which ignites the next catastrophe.