Join Us at the 2023 World Economic Conference in Orlando, Florida!

? Dates: November 17, 18, and 19 ? Location: Orlando, Florida, USA (or tune in from home with our virtual ticket options)

Are you ready to unlock the future of economics and finance? Prepare for an unforgettable World Economic Conference experience in sunny Orlando, Florida! This premier event is your gateway to insights, networking, and valuable resources that will supercharge your understanding of the global economy.

?️ What’s Included for In-Person Attendees:

1. Event Admission: Enjoy reserved seating assigned based on the order of ticket sales, ensuring you have a prime view of every presentation.
2. Presentation Slides: Gain access to the presentation slides from all speakers, allowing you to delve deeper into the topics discussed.
3. Video Recording: Can’t make it to a session? No worries! You’ll receive access to video recordings of all conference presentations, so you can catch up at your convenience.
4. WEC Event App: Connect with the conference on a whole new level. Access presentation slides, bonus reports, recordings, and more via the official WEC Event App.
5. Bonus Conference Materials: Get a package of bonus conference-related materials, including exclusive bonus reports and videos (as provided by Martin Armstrong).
6. Morning Information Sessions: Don’t miss out on important morning information sessions, screened on-site in the meeting room on Saturday and Sunday.
7. Networking Opportunities: Exclusive access to the Event App Networking Feature allows you to connect with fellow attendees, both in-person and virtual, fostering valuable professional relationships.
8. Culinary Delights: Savor delicious breakfast and lunch on Saturday and Sunday, prepared to keep you energized throughout the day.
9. Cocktail Reception: Kick off the conference in style at our Friday evening cocktail reception. Meet and mingle with fellow attendees while enjoying refreshing drinks.
10. Swag Bag: As a token of our appreciation, each in-person attendee will receive a swag bag filled with goodies, including an Armstrong Economics notebook, pen, and an event collector’s mug!

Unable to travel? We also have two different ticket options for those wishing to attend virtually! 

Don’t miss this opportunity to be part of a global gathering of economic and financial minds. Secure your spot at the World Economic Conference in Orlando, Florida, and gain the knowledge, connections, and resources you need to thrive in the world of finance and economics.

Space is limited, so act now and reserve your seat! Visit our Events page to register and join us in sunny Orlando this November.

Now available at all major retailers!

The eBook will be available shortly.

The second edition of “The Plot to Seize Russia – The Untold History” is now available for purchase in paperback and hardcover on Amazon and Barnes and Noble. The ebook will be available shortly.

Book description:

“Take care of Russia,” Boris Yeltsin said as he departed his presidency in August 1999. These words were directed at current Russian president, Vladimir Putin. Yeltsin specifically picked Putin as his predecessor to prevent the takeover of Russia.

So, who was Yeltsin warning against? Newly declassified documents from the Clinton Administration prove that there was a plot to rig the Russian election of 2000. These never-before-seen documents confirm numerous attempts to implement pro-Western policies using the Russian oligarchy headed by Boris Berezovsky.

On the other side were the communists who desired a return to the glory days of the Soviet Union. As one of the largest international hedge fund managers, author Martin Armstrong found himself in the middle of perhaps the greatest espionage, or attempt at a regime change for Russia, in modern history.

The Plot to Seize Russia pulls back the curtain to expose the most extraordinary attempt to seize power in modern history, but with the pen rather than armies. These declassified documents reveal a plot that has altered our thinking about the relations between the United States and Russia. The thirst for power comes seething through every line of these papers that alter our perception of reality, change the course of history, and now threaten us with World War III.

The United States has reached a point where the government is spending more than $1 trillion annually simply to pay interest on money it has already borrowed. The Treasury Department reported that the federal deficit reached $1.99 trillion for fiscal year 2026, an increase of $217 billion from the previous year. Total government spending climbed to $7.4 trillion while revenues amounted to only $5.4 trillion. Yet the most alarming figure is buried within that enormous spending bill. Net interest payments reached $1.05 trillion, while gross interest costs climbed to $1.36 trillion. Washington is now spending approximately $2.9 billion EVERY DAY in net interest, and that money does absolutely nothing to reduce the outstanding principal.

The interest expense alone has surpassed the entire national defense budget. Net interest is now the third-largest federal expenditure behind Social Security and Medicare, exceeding spending on Medicaid, veterans’ benefits, and numerous other government programs. Interest costs increased 8% over the previous fiscal year, while federal revenue increased only 3%. Washington collected more money from taxpayers, yet the cost of servicing its accumulated debt rose nearly three times as fast. Approximately 19 cents of every dollar collected by the federal government is now consumed by net interest payments. That money cannot build infrastructure, improve education, or provide additional services because it is being transferred to creditors for debts incurred by previous administrations and Congresses.

This is precisely what I have explained about the Sovereign Debt Crisis. Governments have absolutely no intention of repaying their debts. They continually roll over existing obligations while issuing additional debt to finance current spending. The politicians pretend that borrowing is a permanent source of revenue, but every bond eventually matures and must either be repaid or refinanced. When interest rates rise, the cost of refinancing becomes increasingly expensive. Washington became accustomed to artificially low rates during the pandemic and behaved as though that arrangement would continue indefinitely. The average interest rate on outstanding federal debt has now reached approximately 3.53%, more than double its 2021 level. Even that average understates the pressure from newly issued securities carrying higher market yields.

The numbers reveal how this process feeds upon itself. Federal debt held by the public increased by approximately $2 trillion during fiscal 2026, reaching $32.4 trillion, while total gross federal debt surpassed $40 trillion earlier this year. The government must borrow to cover its annual deficit while simultaneously refinancing trillions in existing securities as they mature. A one-percentage-point increase in the average interest cost on $40 trillion would eventually represent approximately $400 billion in additional annual interest, assuming the entire debt stock were affected. That increase would not occur overnight because existing fixed-rate securities retain their coupons until maturity, but the arithmetic demonstrates why the Treasury has become so sensitive to movements in the bond market.

Treasury Secretary Scott Bessent understands this problem because he comes from the world of global macro trading. He knows perfectly well that the Treasury cannot simply dictate what investors must accept as a return. The government can conduct buybacks, alter the maturity structure of its borrowing, and attempt to improve market liquidity, but none of those operations eliminates the underlying debt. Meanwhile, the Federal Reserve under Kevin Warsh can influence short-term rates, but it cannot command the 10-year or 30-year Treasury yield. If global capital demands higher compensation for inflation, currency risk, and the enormous supply of government securities, Washington must ultimately confront those market conditions.

Japan provides an important warning because it has spent decades attempting to manage an enormous sovereign debt burden through artificially suppressed interest rates. Japanese institutions are also among the largest foreign holders of U.S. Treasury securities. As Japanese government bond yields rise, those investors have a greater incentive to keep capital at home rather than finance Washington. This does not mean Japan must suddenly liquidate its American holdings. Even a reduction in future Treasury purchases matters when the United States must continually find buyers for enormous quantities of new and refinanced debt. Washington is competing with Japan, Europe, corporations, and private borrowers for the same international pool of capital.

The situation becomes even more absurd when politicians discuss cutting government spending. They argue endlessly over relatively small discretionary programs while interest costs are growing into one of the largest obligations in the entire federal budget. Interest payments are not optional expenditures that Congress can simply eliminate during budget negotiations. Treasury must honor its obligations if the United States intends to preserve the credibility of its debt. The more revenue consumed by interest, the less flexibility the government has to finance other commitments without additional borrowing or taxation. The political establishment has spent decades accumulating obligations, and now an increasing share of federal revenue is required merely to maintain the existing financial structure.

Consider what this means for the American taxpayer. The government collects income taxes, payroll taxes, corporate taxes, and numerous other forms of revenue, yet approximately one-fifth of federal receipts is now absorbed by interest on past borrowing. Americans are already confronting higher prices for housing, food, energy, insurance, and transportation. Washington continues demanding revenue from an economy where households are struggling to maintain their standard of living, and an increasing portion of that money is required to service the debt rather than provide any new public benefit. Politicians speak about the need for additional taxes, but the underlying spending problem remains untouched.

This is also why the notion that the Federal Reserve can rescue Washington simply by lowering interest rates is absurd. The Fed could reduce its overnight target, but that would not automatically lower long-term Treasury yields if investors remain concerned about inflation and fiscal sustainability. Attempting to suppress yields through massive bond purchases would introduce another problem by expanding central bank support for government financing. The United States already experienced the consequences of extraordinary monetary expansion during the pandemic. Americans are still paying the accumulated inflation bill, and repeating those policies would carry serious risks for purchasing power and confidence in the currency.

The most revealing aspect of the latest Treasury figures is that Washington is accumulating nearly $2 trillion in new deficits during a period when the economy is not experiencing a conventional recession. Revenue has reached approximately $5.4 trillion, yet the government still cannot come remotely close to balancing its books. Spending rose 6%, roughly twice the growth rate of revenue, while interest costs continued climbing. The political establishment keeps treating every new tax dollar as permission to spend even more, and nobody wants to confront the fact that the government has made itself increasingly dependent upon perpetual borrowing.

There is a fundamental difference between a government borrowing to finance productive infrastructure and one borrowing merely to maintain existing obligations. The latter becomes increasingly dangerous as debt servicing consumes a larger share of national resources. America has now reached the point where more than $1 trillion is spent annually on net interest, with no reduction in principal and no guarantee that refinancing costs will decline. The politicians will continue arguing over which party is responsible, but the debt has accumulated under both Republicans and Democrats because neither side has been willing to confront the long-term arithmetic.

The Sovereign Debt Crisis has never been about the government suddenly running out of dollars. The United States can create dollars, but it cannot create unlimited real purchasing power or compel international investors to hold its debt at whatever interest rate Washington prefers. The crisis emerges as confidence deteriorates and the cost of financing government becomes increasingly burdensome. We are watching that process unfold as interest payments consume more revenue, deficits expand, and the Treasury becomes increasingly dependent upon the willingness of global capital to finance its obligations.

The United States is now borrowing trillions annually while paying nearly $3 billion every day in net interest on its existing debt. That is an extraordinary financial burden for a government that continually promises the public more spending, more programs, and more benefits without explaining how any of it will ultimately be financed. The politicians have created a system where yesterday’s borrowing demands today’s taxes, and today’s borrowing guarantees an even larger interest bill tomorrow. They are not solving the debt problem. They are financing the cost of refusing to solve it.

Americans are increasingly financing the basic necessities of life because their paychecks are no longer stretching far enough. Buy-now-pay-later financing has exploded into a $160 billion industry, according to research cited by the Associated Press, with the use of short-term pay-in-four loans increasing nearly 80% since 2023. What began as a convenient way to purchase electronics or clothing is now being used for groceries, transportation, household bills, and even rent. We have reached the point where people are borrowing against their next paycheck to purchase things they need to survive today.

The Federal Reserve’s latest household survey found that 16% of American adults used buy-now-pay-later services in 2025, compared with only 10% in 2021. Among households earning between $25,000 and $49,999, the participation rate reached 23%, compared with 12% among those earning $100,000 or more. The Fed also found that 30% of users identified affordability as the single most important reason for using installment financing. Another 20% reported using these services for groceries or food delivery. Think about what those numbers are telling us. Millions of Americans are dividing relatively small purchases into installments because paying the entire amount upfront would place too much pressure on their finances.

The situation becomes even more alarming when examining repayment problems. The Fed found that 26% of buy-now-pay-later users made at least one late payment during 2025. Among users earning less than $25,000, that figure reached 40%, while 33% of those earning between $25,000 and $49,999 fell behind. Compare that with only 11% of users earning $100,000 or more. These are enormous differences that demonstrate how lower-income consumers are increasingly struggling to manage even short-term obligations. Of those who paid late, 64% reported being charged additional fees. The people least able to absorb another expense are often the very people being penalized for falling behind.

The Consumer Financial Protection Bureau uncovered another troubling pattern. Its study of 2022 borrowing found that approximately 63% of buy-now-pay-later borrowers had multiple simultaneous installment loans, while 33% borrowed from more than one provider. The average borrower originated 9.5 loans during the year, and roughly one in five borrowers took out more than one loan per month on average. This is how relatively small obligations accumulate into a serious financial burden. A consumer may believe that four payments of $25 are manageable, but what happens when that person has ten separate payment schedules running simultaneously? The money has already been committed before the next paycheck even arrives.

The Federal Reserve’s October 2026 Survey of Consumer Finances reveals that this financial deterioration extends far beyond installment purchases. The share of American families reporting that they were behind on loan payments increased from approximately 12% in 2022 to nearly 20% in 2025. Families devoting more than 40% of their income to debt payments increased from 6.5% to 8.6%, the highest share since 2013. The median debt-payment-to-income ratio climbed to 15.4%, while the overall debt-to-income ratio reached 94.9%.

The Fed reported that real median family income increased 7% between 2022 and 2025, reaching $82,200, yet median net worth increased only 2% after adjusting for inflation. The bottom quarter of households experienced a staggering 50% decline in net worth, while the wealthiest households continued benefiting from appreciating financial assets. Among families holding stocks, median stock holdings increased 36% to $77,400. This is why the stock market can continue making new highs while millions of people struggle to pay their bills. The financial press looks at rising asset prices and declares prosperity, but a family with no meaningful investments receives absolutely no benefit from that rally.

We must also understand what inflation has done to the average household since 2020. Prices surged during the pandemic, and those increases were NEVER reversed. The politicians continue discussing inflation as though a decline in the annual rate somehow restores purchasing power. It does not. A family that was spending $1,000 on necessities before the pandemic may now need approximately $1,300 to purchase a comparable basket of goods and services, depending on the items involved. Another 3% or 4% inflation increase comes on top of that already elevated expense.

The latest retail sales figures provide another example of how misleading the economic statistics have become. September retail sales increased 0.8%, but gasoline station sales surged 7.1% as energy prices rose. The retail sales control group used in GDP calculations increased only 0.1%, below expectations. Retail sales are reported in nominal dollars, meaning that higher prices can inflate the sales figures without consumers purchasing additional goods. When gasoline becomes more expensive, Americans still have to drive to work. The government records higher spending, but the consumer has less disposable income available for everything else. This is hardly evidence of improving living standards.

Bank of America Institute reported this week that nearly one in five households using buy-now-pay-later financing had repayments exceeding $500. Its analysts did not characterize the overall trend as an immediate crisis, but the growing reliance on installment financing deserves attention when combined with weakening labor conditions and rising household delinquencies. A person who uses credit strategically to avoid interest is in a very different position from someone who must finance groceries because there is insufficient money in the checking account.

We are developing two entirely different consumer economies. Those with substantial assets, investment income, and mortgages locked in at 3% can continue spending while benefiting from rising markets. Those dependent upon wages face higher rents, expensive vehicle financing, mounting insurance premiums, and increasingly difficult choices about ordinary household expenses. The latest Federal Reserve data show that nearly one in five families have fallen behind on loan payments, while the use of installment financing continues expanding. These people are not purchasing luxury yachts or speculating in the stock market. Many are simply attempting to maintain a standard of living that their income no longer supports.

The financial industry has discovered how to divide an unaffordable purchase into four manageable-looking payments, but it has not solved the underlying problem. Every installment is a claim against future income, and when enough of those claims accumulate, the household loses the flexibility to absorb even a minor emergency. Americans are being encouraged to finance the present with money they have not yet earned, while Washington continues spending money it must borrow. The numbers reveal an economy where financial pressure is building beneath the surface, and the people experiencing that pressure are increasingly the ones who can least afford another setback.

QUESTION: Mr. Armstrong, you have publicly warned the EU about this looming debt crisis. You have explained it as a trader on numerous podcasts. I find it incredible that the WSJ, Reuters, and Bloomberg do not interview you, which only confirms they have become fake news. Reuters quotes people who were not there from the beginning or even in 2010. They claim banks have diversified, suggesting the risk of a banking crisis today is minimal compared to 2010. They even concluded:

“Proposals to strip government bonds of risk-free status or impose concentration limits have so far failed. But the EU Commission has included a further diversification of sovereign bond portfolios among steps needed to strengthen the banking sector, and will present its proposals in early 2027.”

Because you were an analyst and a trader and were called in at the formation of the euro, you are the only one truly qualified on this subject. Am I correct that you frame what is happening as a threat to the Eurozone’s survival rather than a mere banking crisis?

Hal

ANSWER: Thank you for that question. I will be glad to do a video call with the board. Yes, you are correct. This is like the mouse trying to get the cheese oblivious to the fact that the house is burning down. The 2010 European Debt Crisis took place precisely to the day of the Pi Target. It was kicked off by Greece applying for an IMF bailout. That was the CONTAGION risk, NOT a Eurozone crumbling because of the politics, but the question of insolvency of the banking system. This was before the Sovereign Debt Crisis itself, and first focused on the sovereign debt held as reserves. What I warned that the failure to CONSOLIDATE the debt meant that this was the vulnerability that one could take take the rest of the Eurozone.

The GoldBugs were NOT happy with me when I forecast that gold would peak in 2011 and would decline into the next major target on the ECM of 2015.75. Gold then bottomed in December 2015. They would constantly call for the demise of the dollar as they too were oblivious to any fact outside of the USA. It always had to be the demise of the dollar. Gold rallied from the European Debt Crisis of 2010 and peaked in 2011 and the CONFIDENCE began to return.

That aligned with the cycles calling for a low in gold in 2015.75, which I called BIG BANG – the start of the Sovereign Debt Crisis. That was the turning point on CONFIDENCE in government worldwide that has steadily eroded and is on track for the 17 year decline into 2032. That target was correct – the beginning of the Sovereign Debt Crisis. They thought I was nuts for the long-term forecast that Gold would hit $5,000. That was explicitly stated for the first time publicly predicting gold would reach $5,000 per ounce on November 7, 2009. It is always easier to forecast long-term with Socrates than the closing price tomorrow because the near-term tend to be just noise. The long-term is the trend.

The official timeline shows that Greece requested financial assistance from the IMF in April 2010, The week of June 28, 2010, was a period of acute market stress focused squarely on the health of European banks, driven by a looming European Central Bank (ECB) funding deadline. The ECB Loan Deadline was the impending expiration of the ECB’s €442 billion one-year lending facility. European banks were required to repay this crisis-era funding by Thursday, July 1, 2010.

The fear was that many banks, particularly in fiscally vulnerable countries like Greece, Spain, and Portugal, would struggle to raise funds in the open market to repay the ECB. This raised the specter of a renewed liquidity crunch and evoked painful memories of the 2008 financial crisis.

August 2010 was a Period of Contagion and escalation. In August 2010, the crisis spread significantly to Italy and Spain and we see the Crash Here is Paribas. At that time, the yields on 10-year government bonds of Italy and Spain climbed to new highs (6.16% and 6.26%, respectively), triggering market panic and prompting the Italian finance minister to rush to Luxembourg for emergency consultations. This indicates that the crisis was deepening and spreading.

In November 2010, the crisis escalated significantly when Ireland officially requested international financial assistance. This was triggered by the massive costs of bailing out its banks, which had grown too large relative to the economy. The Irish government subsequently agreed to a bailout package, leading to political turmoil and the collapse of the government.

The events of November 2010 were widely reported at the time as fears that the “Irish debt crisis” could spread to other vulnerable economies like Portugal and Spain, rather than being the start of the crisis itself. We can see here in the Spanish Bank Santander that November was the retest of the low and there was no recovery to speak of as this bank share decline into July 2012 before CONFIDENCE began to return.

What we face THIS TIME is the flip-side. Now there a proposals to strip government bonds of risk-free status insofar as holding them for reserve status or impose concentration limits which have failed. But the EU Commission has included a further diversification of sovereign bond portfolios among steps needed to strengthen the banking sector, and will present its proposals in early 2027. What this means by stripping the European Sovereign Debt itself of risk-free status, is an acknowledgement that this nonsense that government debt is risk free because they cannot default will mean the market has won. Government debt is the riskiest of all because they always default and NEVER pay their debts.

Here is the rule of the Medici. There is more risk in lending to the state than there is potential profit. Nothing has ever changed. The first sovereign debt was 400BC on the ancient quasi-central bank, the Temple of Apollo on the Island of Delos. Governments are ALWAYS the greatest risk because they are fiscally irresponsible historically – that is just a fact that has NOTHING to do with partisan politics.

Margaret Thatcher was, in my opinion, the smartest head of state I ever met. She understood economics and the socialists refused to ever surrender their ideas of robbing the rich to pay for their lifestyle. It has never worked even once

In the late 3rd century BC, kings Agis IV and Cleomenes III attempted radical reforms ibn ancient Sparta that resembled socialism, canceling debts and redistributing land to create a larger citizen body. However, these were emergency rescue attempts to reverse the damage already done by DEBT CRISIS as always. Agis was killed by the civil unrest, and Cleomenes was ultimately defeated in war. To PREVENT capitalism insofar as a true market economy, Sparta NEVER issued coinage. The “inequality” had to do with land ownership for the economy was effectively close to 95% agrarian.

The European Union has refused to look at reality. They have dictated their stupid policies of allowing the migrants and even subsidizing them to come to Europe all to ensure that they would secure their power with new voters who would support them for a free lunch. They have sacrificed their indigenes population for their personal power and that is the difference this time – it is crack in the CONFIDENCE of government rather than the banking system which has taken a more practical view to holding sovereign debt.

It’s a crisis in the European Union that is causing the stress. The migrat crisis has the potential to creat a civil war. This was all orchestrated by the LEFT to sure up their crumbling economic policies.

The capital flows reveal the future as always!!!!

War Will Not Save the EU

PRIVATE BLOG – European Bond Crisis

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PRIVATE BLOG – Middle East Broader Regional Conflict into 2028?

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The meme going around is that Macron is pictured with a bottle of Russian vodka and blaming the riots on Putin. Macron has called  President Donald Trump, among others, for using the situation in France for their own ends. Republicans, including Vice President JD Vance and House Speaker Mike Johnson, have pointed to the unrest in France, warning that Democrat policies on immigration would raise similar tensions. On his Truth Social, Trump blamed the unrest on “migrants, jihadists, and Communists” and told Europe to close its borders. That is something the European people have been saying for months, and it has contributed to the rise of AfD and Le Pen in France.

France has FREE health care, paid parental leave, paid family leave, FREE child care, FREE preschool, 5 weeks paid vacation, a 35-hour work week, generous unemployment and housing benefits, and heavily subsidized higher education. None of this seems to have satisfied the migrants.

This data comes from INSEE’s definitive annual national accounts, and is consistent with the forecast published by the Bank of France in December 2025 (0.9%). Specifically: Quarterly trends: GDP grew 0.1% in Q1, 0.3% in Q2, 0.5% in Q3, and slowed to 0.2% in Q4

France cannot even reach 1% GDP growth. According to the final official data from the U.S. Bureau of Economic Analysis (BEA), U.S. real GDP grew by 2.1% for the full year of 2025. The socialistic policies of France added to the influx of migrants, has undermined France as a viable nation moving forward.

Charles Martel, the Frankish leader, defeated an invading Muslim army from Spain near Poitiers/Tours in 732AD in what is now France . That was 1294 years ago. The year 2028 will be the 18th cycle and this does not look good. The socialistic policies have undermined the economy. This victory at the Battle of Tours is widely credited with halting the northward advance of Muslim forces into Western Europe and preserving Christianity as the dominant faith there.

This is NEVER my personal opinion. Even our models of French Real Estate had a Directional Change here in 2026 and it shows that CONFIDENCE is declining long-term and volatility will rise substantially into 2031. My job is EXCLUSIVELY to report what the computer is projecting. Not my personal views on the fate of any country.

While the neocons remain obsessed with Russia and Iran, President Erdogan has been steadily positioning Turkey to become the dominant military power in the Middle East. Reuters has now reported that Turkey is preparing to seek parliamentary authorization to deploy military personnel to Saudi Arabia under a new defense agreement with Saudi Arabia and Pakistan.

This is an extraordinary development that deserves far more attention than it is receiving. Turkey is a NATO member with the alliance’s second-largest military by active personnel, yet it is now constructing a separate military arrangement in the Middle East that could fundamentally alter the balance of power.

The Mecca Joint Defence Agreement was signed in August 2026 by Turkey, Saudi Arabia, and Pakistan. Ankara submitted the agreement to parliament for ratification on October 20, and officials are preparing a separate mandate permitting Turkish personnel to operate in Saudi Arabia. The agreement treats an external attack against one member as an attack against all three, creating a mutual-defense commitment outside NATO. Turkish officials insist that the initial deployment will involve technical specialists, air defense systems, electronic warfare, intelligence sharing, and other defensive capabilities rather than offensive combat operations.

Nevertheless, we are watching Turkey establish a formal military presence in Saudi Arabia while simultaneously joining a Saudi-led effort to secure navigation through the Red Sea. This is no insignificant military cooperation agreement. It is the beginning of a new regional security structure.

The Ottoman Empire ruled much of the Middle East, North Africa, and southeastern Europe for centuries before its final collapse following World War I. Its formal dissolution was completed with the abolition of the sultanate in 1922. Erdoğan has repeatedly invoked Ottoman history and promoted Turkey as a leading power within the Islamic world. Turkey was positioning itself to reassert its influence over regions that had once been governed from Constantinople.

Saudi Arabia is particularly significant because it is home to Mecca and Medina, the two holiest cities in Islam. The Ottoman Empire once exercised authority over the Hejaz, and Turkish military personnel returning to Saudi Arabia under a mutual-defense arrangement carries enormous historical significance. Erdoğan is not sending an invading army to conquer Arabia. He is obtaining influence through military cooperation, weapons systems, and security commitments. That is how regional powers expand their reach without immediately resorting to territorial conquest. Saudi Arabia gains access to Turkish military technology and expertise, while Ankara gains a much stronger position in the Arabian Peninsula and the Red Sea. Pakistan’s participation adds another dimension because it possesses nuclear weapons, although this agreement does not automatically extend a nuclear guarantee to either partner.

Erdoğan has become one of Israel’s most vocal critics, and the two countries have competing interests in Syria and the broader Middle East. Turkey’s growing military cooperation with Saudi Arabia and Pakistan will inevitably be examined in Jerusalem because it changes the strategic environment surrounding Israel. We are no longer dealing with the same regional balance that existed when Israel could concentrate primarily on Iran and its allied militias. Turkey possesses a far larger conventional military establishment than many of the regional actors Israel has confronted, along with an expanding domestic defense industry capable of producing drones, missiles, armored vehicles, and naval systems.

The NATO implications are equally important. Turkey controls the Bosporus and Dardanelles, providing access between the Black Sea and the Mediterranean. It occupies a geographical position that NATO cannot easily replace, and its military manpower exceeds that of every other NATO member except the United States. Yet Erdoğan has repeatedly demonstrated that Turkey will pursue its own national interests even when they conflict with Washington or Brussels.

Ankara purchased Russia’s S-400 air defense system despite American objections, maintained relations with Moscow during the Ukraine war, and has increasingly pursued independent diplomatic and military arrangements. I discussed the possibility of Turkey breaking with NATO as far back as my writings on the 2026 geopolitical turning point. That remains a possibility worth watching, but Turkey has not announced that it intends to withdraw, and its new agreement with Saudi Arabia and Pakistan does not itself require such a break.

In fact, Erdoğan may find that remaining inside NATO while developing alternative alliances gives him considerably more leverage than leaving the organization. Turkey benefits from NATO’s security guarantees while possessing the military strength and geographical importance to negotiate with both Western and non-Western powers. Washington cannot simply treat Turkey as another minor ally that will obediently follow American foreign policy. European governments depend upon Ankara for migration management, Black Sea security, and access to important trade and energy routes. At the same time, Saudi Arabia and Pakistan now see Turkey as an increasingly important military partner. Erdoğan is placing himself in a position where competing powers must negotiate with Ankara rather than ignore it.

The Red Sea is another critical part of this development. Houthi attacks have threatened one of the world’s most important commercial shipping routes, disrupting maritime trade and increasing transportation and insurance costs. The Bab el-Mandeb Strait connects the Red Sea with the Gulf of Aden, making it essential for vessels traveling through the Suez Canal. Turkey’s participation in a Saudi-led maritime security arrangement gives Ankara a greater role in protecting an international trade corridor that directly affects European and Asian commerce. Control over strategic waterways has always been central to the rise of major powers. Turkey already commands the passage between the Black Sea and the Mediterranean, and now it is extending its military influence toward another of the world’s most important maritime chokepoints.

The West has spent years treating Turkey as a difficult but ultimately dependable NATO partner. Ankara has its own objectives, its own regional rivals, and the military capability to pursue policies that do not necessarily align with Washington or Brussels. Whether Erdoğan eventually breaks with NATO or continues using membership to strengthen his negotiating position remains to be seen. Anyone studying the expanding War Cycle should be paying very close attention to Turkey.

I have heard some astonishingly stupid statements from politicians over the years, but Iran’s former labor minister Hojjat Abdolmaleki has managed to distinguish himself with an economic theory that belongs in an asylum rather than a university. Abdolmaleki, who served under former President Ebrahim Raisi and is supposedly a professor of economics, appeared on Iranian state television to explain that the country’s economy has no serious problems once you disregard inflation. He actually declared, “Set high prices aside and you have no other economic problems… We have no problems, praised be God.”

Iran’s year-on-year inflation has reached an astonishing 89.8%, while the annual inflation measure climbed from 69.9% in August to 73.6% in September. Food prices are rising even faster, with some products such as cooking oil increasing more than 250% compared with a year earlier. Even rents, which recorded the smallest increase among the major household categories, rose more than 30%. What exactly does Abdolmaleki expect the Iranian people to do? Stop eating? Stop paying rent? Pretend their currency has not been destroyed? Perhaps he should explain to a mother who cannot afford food for her children that the economy is perfectly healthy once she ignores the fact that everything she needs has become unaffordable.

The stupidity becomes even more offensive when we examine what has actually happened to Iran’s economy. I recently wrote about the collapse of Iranian petroleum exports, which fell from approximately 230,000 barrels per day at the beginning of September to virtually ZERO under the American naval blockade. Vortexa estimated that 83 million barrels of Iranian crude were sitting aboard tankers, including 43 million barrels trapped west of the Strait of Hormuz. Iran has oil that it cannot freely sell, a government that depends upon petroleum revenue, and an economy desperately in need of foreign exchange. Yet this former minister believes inflation is the only problem worth discussing.

The rial has lost approximately 35% of its value against the dollar since July. That currency collapse makes imported medicine, machinery, food, and essential industrial supplies more expensive, further destroying the purchasing power of the population. The International Monetary Fund projects that Iran’s economy will contract 7.6% in 2026, while Iranian government figures showed GDP falling approximately 10% during the spring. Oil and gas production, manufacturing, trade, and services have all suffered. These are not imaginary problems that disappear because a politician decides to exclude them from his definition of economic distress. Iran is experiencing a contraction in productive activity while the cost of living is exploding, and the people are being crushed between the two.

Abdolmaleki previously claimed that the war and regional conditions accounted for less than 1% of rising prices. A country cannot lose access to its principal export revenues, experience severe currency depreciation, suffer disruptions to international trade, and somehow remain insulated from the consequences. Oil exports provide the foreign currency necessary to purchase imports and support domestic financial stability. When those revenues disappear, the government faces a growing shortage of hard currency while businesses struggle to obtain the supplies necessary to continue operating. The resulting pressure on the currency and prices is precisely what we are witnessing.

He has also dismissed the consequences of internet shutdowns, claiming that businesses could simply move to domestic platforms and that nobody had lost employment because of the disruptions. Anyone who has ever operated a business understands how absurd that statement is. A company cannot simply replace its customers, payment networks, suppliers, and established commercial relationships because some bureaucrat decides that an alternative platform exists. Commerce depends upon confidence and access to markets. Destroy those connections and businesses lose revenue, employees lose their livelihoods, and investment begins looking elsewhere.

Iranian citizens are now reporting delays of weeks and even months in receiving unemployment benefits. Some have described being unable to purchase food or service existing debts while waiting for payments from the government. Iran’s Social Security Organization has acknowledged enormous financing pressures, including a monthly pension shortfall of at least 170 trillion rials even if it collects all current contributions. Pensioners have protested over delayed payments, and workers in various industries have reported unpaid wages. These are people who have already lost their jobs or depend upon government benefits to survive. Their government cannot reliably meet its obligations, yet a former labor minister is telling them that everything is fine if they simply disregard prices.

I have explained repeatedly that inflation is one of the most destructive forces a government can unleash upon its own population because it destroys the purchasing power of savings and wages. People work their entire lives accumulating money only to discover that the government has destroyed its value. Inflation is particularly devastating to the poor and elderly because they have fewer assets capable of appreciating alongside rising prices. Those who own tangible assets may retain some protection, but the person dependent upon a fixed pension or modest salary watches their standard of living deteriorate with every increase. At inflation approaching 90%, prices would nearly double in a year if that pace persisted. No ordinary worker can plan for the future under such conditions.

This is the mentality that produces economic collapse. Politicians spend their careers manipulating statistics and making excuses rather than confronting the consequences of their own policies. When revenues disappear, they borrow or create more money. When the currency collapses, they blame speculators or foreign enemies. When inflation destroys purchasing power, they announce that everything would be wonderful if the public simply stopped complaining about prices. Abdolmaleki’s comments have been ridiculed across Iran’s political spectrum, including by conservatives who understand that such statements insult the intelligence of ordinary citizens.

Iran possesses enormous petroleum reserves, natural resources, and a population capable of building a productive economy. Yet the country has been driven into a financial crisis by decades of political mismanagement, sanctions, and now economic warfare that has devastated its export earnings. I have explained that the sovereign debt crisis throughout the Middle East becomes particularly severe when governments dependent upon petroleum revenue lose the ability to sell their resources. Their obligations do not disappear when the oil stops flowing. The government must still pay employees, support essential services, finance imports, and service its debts. Eventually the financial structure begins breaking down, and no amount of political propaganda can manufacture the capital required to sustain it.

The Iranian people deserve better than this insulting nonsense from men who have enjoyed positions of authority while ordinary families struggle to survive. An economics professor who believes the economy is healthy once inflation is removed from consideration has demonstrated that he understands absolutely NOTHING about economics. Inflation is the destruction of purchasing power, and purchasing power is fundamental to the standard of living of every citizen. When a government cannot preserve the value of its currency, provide economic stability, or meet its financial obligations, it has failed in its most basic responsibilities. Abdolmaleki may be able to disregard inflation from the comfort of a television studio, but the Iranian people must confront it every time they attempt to purchase food, pay rent, or provide for their families.

The American housing market is deteriorating, and the latest figures from the National Association of Home Builders should concern anyone who believes the economy is doing just fine. Builder confidence plunged to 29 in October, the lowest reading since June 2012, when the nation was still recovering from the 2008 real estate collapse. Economists expected a reading of 31. The index has now fallen to a level not seen in more than 14 years, while the average 30-year mortgage rate has climbed to 7.40%, its highest level in nearly three years. Americans simply cannot afford the homes being built, and the construction industry is beginning to reflect the financial reality households across the country face.

The Federal Reserve kept interest rates artificially low for far too long, particularly during the pandemic, when mortgage rates fell below 3%. That created an extraordinary distortion in real estate. Home prices soared as cheap credit allowed buyers to bid far beyond what they could otherwise afford. Now those same properties are being financed at mortgage rates above 7%, while prices remain elevated.

The NAHB reported that 43% of builders reduced prices in October, the highest share recorded during the 2020–2026 period. The average reduction was 6%, while 65% of builders offered sales incentives. That means nearly two-thirds are attempting to lure buyers with mortgage rate buydowns, closing cost assistance, or other concessions because demand is disappearing. Prospective buyer traffic collapsed to an index reading of just 18, the weakest since April 2012 outside the initial pandemic shutdown. Current sales conditions declined to 33, while expectations for the next six months fell to 32. Builders are sitting on unsold inventory and have little incentive to begin additional projects when the homes already completed cannot attract qualified buyers.

We are witnessing two entirely different real estate economies. Those who purchased or refinanced during the pandemic are sitting on mortgages at 2% or 3%, and many have absolutely no intention of selling because replacing that loan would substantially increase their monthly expenses. Meanwhile, younger families and first-time buyers are confronting inflated property values, expensive financing, higher insurance premiums, and property taxes that have climbed alongside valuations. Even those who can qualify for a mortgage are questioning whether purchasing makes financial sense. The market has become increasingly dependent upon existing homeowners who possess substantial equity or buyers wealthy enough to purchase without relying heavily on financing. The average working family is being squeezed out.

The problem extends well beyond mortgage rates. Builders are confronting higher construction loan costs, expensive materials, rising diesel prices, and labor shortages. The Middle East conflict has added further pressure to energy prices, and those costs work their way through the entire construction process. Diesel is needed to transport lumber, concrete, steel, equipment, and nearly everything else required to build a house. Tariffs have also raised costs for certain imported materials. More than one-third of builders reported immigration enforcement activity in their markets during the past month, contributing to delays and labor disruptions. Builders are being squeezed from both directions as expenses rise while buyers demand discounts. There is only so much a company can reduce its selling price before construction becomes unprofitable.

The politicians continue promising that the Federal Reserve will rescue the housing market by cutting interest rates. That demonstrates a complete misunderstanding of how mortgages are priced. The Fed controls the overnight policy rate, not the yield on the 10-year Treasury or the mortgage-backed securities that determine what lenders charge borrowers. Long-term rates respond to inflation expectations, government borrowing, credit conditions, and international capital flows. Washington is running enormous deficits while spending more than $1 trillion annually on net interest payments. The Treasury must continually attract buyers for its debt, and investors are not obligated to accept lower yields simply because politicians want cheaper mortgages before an election. Even a substantial reduction in the federal funds rate would not guarantee a comparable decline in mortgage rates.

Americans are also dealing with the accumulated inflation of the past six years. Every monthly inflation report measures additional price changes on top of the enormous increases that have already occurred since 2020. A household paying substantially more for groceries, electricity, transportation, healthcare, and insurance has less disposable income available for housing. Wage increases have not magically restored the purchasing power lost during the inflationary surge. Consumers are becoming more cautious because their budgets are already stretched, and the prospect of taking on a 30-year obligation at today’s prices and interest rates is increasingly unattractive.

The housing market is one of the clearest indicators of how monetary policy and inflation have distorted the economy. Homebuilders cannot manufacture qualified buyers. They can offer incentives and cut prices, but they cannot force families to accept mortgage payments that consume an unreasonable share of their income. Nor can they continue constructing homes indefinitely when their own financing, labor, and material expenses keep rising. Eventually, projects are postponed, employment suffers, and the slowdown spreads into industries dependent upon residential construction, from appliances and furniture to transportation and building supplies.

The public has been conditioned to believe that the extraordinary mortgage rates of 2020 and 2021 were normal and that the market will somehow return to those conditions once the Fed begins cutting rates. Those rates were the product of an extraordinary monetary experiment, not a sustainable foundation for the housing market. The damage from that period remains embedded in property prices and household finances. Builder confidence at a 14-year low is telling us that the industry has reached the limits of what consumers can afford. Washington can continue promising affordable housing, but it cannot legislate away accumulated inflation, rising construction costs, or the price of capital. The longer politicians refuse to confront those realities, the longer the American dream of homeownership will remain beyond the reach of ordinary working families.

QUESTION: Is it true that Warren Buffett used your analysis from the 1980s, a pivotal decade when he became a billionaire and a widely recognized figure, to start the whole takeover boom? And do you agree with his calls for a crash?

SD

ANSWER: I have no idea. Yes, I was presenting those charts at various conferences, from Cycle Foundation to COMPUTRAC. Granted, that was the ultimate decade for value investing. I think he began looking for value in the ’70s. He didn’t get the idea from me originally. He may have been influenced by my forecasts during the ’80s. But I cannot confirm or deny that claim.

The ’80s were a wild period. I was named the highest paid analyst, called in during the Plaza Accord, and the Presidential Commission on the 1987 Crash. I am sure we were both aware of each other. That is all I can say on this subject. I think his value investing began in the ’70s entirely on his own.

I believe Buffett is more of a domestic investor, whereas I was always international. He and I came head-to-head only on the silver trade he did with Phibro.

As Europe burned, capital moved here. Louis XVI initially failed to grasp the uprising’s seriousness. According to the well-known account, on the night of July 14, 1789 (or the morning of July 15), the Duke de La Rochefoucauld-Liancourt brought the king news of the storming of the Bastille. Louis XVI reportedly asked, “Is this a revolt?” and Liancourt replied, “No, Sire, it is a revolution.”

Cyclically, a revolt should continue into November, since it began in France in mid-September 2026, initially triggered by student protests over poor school conditions, then escalating into nationwide violent unrest with the Yellow Vests and economic issues over fuel costs. Even the 10-yr rate showed an important turning point in September, with a Directional Change. If this continues beyond November, then Europe is in serious trouble.

We will be looking at how capital moves during times of war, but also how the rule of law goes silent during war. Nations were confiscating assets of private citizens all based on the ethnicity or nationality. Most people heard of the Japanese prison camps of 120,000 people. But they confiscated all their property, land, businesses, etc. The government “requisitioned” people to turn over the gold. This report will be part of the WEC. 99% of the people have no idea of the risks with war.