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.

QUESTION: You said the Senate can flip to the Democrats and that will signal the start of this decline and fall into 2028 where we could see the rise of a third party. Will this flip be significant and not 50/50?

Paul

ANSWER: Because the Democrats closed the last election precisely on our number, this suggests that exceeding that could be significant where Vance could not break a tie and that would encourage the Democrats to impeach Trump especially if they go after Kushner. I think Kushner can be a serious threat to the entire Republican Party.

Americans have never been this pessimistic about their finances:

A record 41% of US consumers expect their financial situation to be worse over the next 12 months.

This figure has more than tripled since Q2 2024.

By comparison, during the 2008 Financial Crisis, this metric… pic.twitter.com/tDGQRNFtLb

— The Kobeissi Letter (@KobeissiLetter) October 30, 2026

Americans have never been more pessimistic about their personal financial future. According to figures highlighted by The Kobeissi Letter, a record 41% of US consumers now expect their financial situation to deteriorate over the next 12 months. That figure has more than tripled since the second quarter of 2024. During the 2008 Financial Crisis, the same measure peaked at only 23%. Even during the inflationary crises of the 1970s and 1980s, when inflation exceeded 10%, Americans were not this pessimistic about their financial prospects. Another 31% now expect to be financially worse off five years from today, roughly double the proportion recorded during the 1980s. These are extraordinary figures, and they expose the growing disconnect between the economy presented by Washington and the economy experienced by the average American.

The University of Michigan’s October Consumer Sentiment Index fell to 48.0, compared with 53.6 one year earlier. Its Current Economic Conditions Index dropped to 46.7, a decline of more than 20% from October 2025. Inflation expectations for the coming year have risen to 4.7%, compared with 3.4% before the Iran conflict began in February. Consumers are not imagining the deterioration in their purchasing power. They are living through it every time they purchase groceries, pay their insurance premiums, renew a lease, or attempt to finance a home. Yet politicians continue pointing to economic statistics as though the public simply does not understand how prosperous it has become.

The politicians celebrate when inflation declines from 9% to 3%, but they conveniently neglect to mention that prices have not returned to their previous levels. The consumer is still paying the enormous increases accumulated since 2020, and another 3% simply adds to that inflated base. Americans have experienced roughly a 30% increase in the general price level since the pandemic, with certain necessities rising substantially more. A family that required $60,000 to maintain its standard of living before the pandemic may now need approximately $78,000 to purchase the same basket of goods and services. Unless wages have risen proportionately, that family has experienced a genuine decline in its standard of living regardless of what the government claims about economic growth.

There are now two distinctly different American economies. Those who accumulated assets before the pandemic, particularly real estate and equities, have generally benefited from the enormous increase in asset prices. Those dependent upon wages have been forced to absorb rising living costs without receiving comparable increases in income. A homeowner with a mortgage locked in near 3% is living in an entirely different financial environment from a young family attempting to purchase its first home at today’s prices and financing costs. The same applies to younger Americans whose parents can provide a down payment or transfer family assets. Their opportunities are vastly different from those who must build everything from their wages alone.

This is also why the unemployment rate cannot explain the condition of the consumer. Someone may be employed full-time and still be falling behind financially. A second job does not necessarily represent prosperity when it is required merely to maintain the same standard of living. Households can continue spending while exhausting savings, increasing credit card balances, or postponing essential purchases. The appearance of consumer resilience can therefore conceal a serious deterioration in household balance sheets. People do not suddenly stop consuming because they are pessimistic. They continue purchasing necessities until they simply cannot afford them.

The savings figures are particularly revealing. The US personal savings rate fell to 4.2% in September, its lowest level since October 2022 and well below the five-year pre-pandemic average of 6.2%. Personal income increased 4.1% from a year earlier, while personal consumption expenditures rose 6.3%. Spending is expanding faster than income, and the difference must be financed through reduced saving, additional borrowing, or other resources. This cannot continue indefinitely. A household cannot perpetually spend more than it earns, yet the federal government has spent decades operating under precisely that assumption.

The government continues accumulating debt while demanding that taxpayers surrender more of their earnings to finance its expanding obligations. Washington can borrow, refinance, and create additional liabilities, but the average American does not possess that luxury. Credit cards eventually reach their limits. Mortgage payments come due. Insurance companies demand their premiums regardless of whether wages have increased. The government can point to rising nominal GDP, but that statistic does not tell us whether households are actually enjoying a higher standard of living. Inflation itself increases the nominal value of economic activity, creating the appearance of growth even when purchasing power is deteriorating.

What is especially concerning is the collapse in confidence about the future. Consumer expectations influence actual economic behavior. A household that believes its finances will deteriorate is less inclined to purchase a home, replace a vehicle, start a business, or undertake another long-term financial commitment. Businesses respond to weakening demand by reducing investment, postponing expansion, and eventually cutting employment. This is how declining confidence can become a self-reinforcing economic contraction. The public’s expectations matter because the economy ultimately depends upon millions of individual decisions about spending, saving, borrowing, and investing.

Gallup’s April survey found that a record 55% of Americans believed their financial situation was getting worse. Inflation and high prices remained the leading financial concern, while 62% worried about having sufficient money for retirement and 60% feared being unable to cover major medical expenses. These concerns extend far beyond a temporary increase in gasoline prices or a disappointing employment report. Americans are questioning whether they will be able to maintain their standard of living throughout their working lives and into retirement. That represents a much deeper deterioration in economic confidence.

The political establishment continues treating the economy as a collection of statistics that can be manipulated through monetary policy and government spending. But the consumer measures prosperity through purchasing power, financial security, and the ability to plan for the future. An economy in which asset owners accumulate wealth while working families struggle to afford basic necessities will eventually experience a profound loss of confidence in its institutions. This is not simply a question of which political party controls Washington. Both parties have participated in the expansion of government debt, spending, and policies that have contributed to monetary instability.

The American consumer is sending a warning that should not be ignored. When 41% expect their finances to deteriorate over the coming year, exceeding even the pessimism recorded during the 2008 Financial Crisis, something fundamental has changed. The public no longer believes that tomorrow will necessarily be better than today. That loss of confidence is far more significant than another monthly adjustment to the inflation rate or another optimistic government press release. You cannot restore prosperity through statistics while the purchasing power of the people continues to decline. Eventually, economic reality catches up with political promises, and the people who have been paying the bill demand to know where their future went.

I recently wrote about the extraordinary cyberattack in France where hackers remotely manipulated supermarket refrigeration systems, raising temperatures to 50°C (122°F) and destroying enormous quantities of food. Now the same attacks have spread across Europe. Ireland, Sweden, Belgium, Luxembourg, the Netherlands, and Estonia have reported similar incidents. Someone sitting behind a computer can destroy thousands of dollars in meat, dairy, and frozen products without ever entering the building. They do not need to bomb a warehouse, blockade a port, or interrupt a supply route. They simply manipulate the temperature controls and wait for the food to spoil. We have entered an entirely different era of economic sabotage.

In France, approximately 150 Intermarché stores were affected, along with dozens of Carrefour, Monoprix, and other supermarket locations. Refrigeration systems that should have been preserving food at freezing temperatures were remotely instructed to heat their contents instead. Some systems reached 122°F, and fires were reported. Entire inventories had to be discarded. The damage was not confined to a single retailer, and investigators discovered that thousands of refrigeration controllers remained exposed to potential attacks through internet-connected systems. The French government launched an investigation, but the vulnerabilities were already widespread.

Now consider what happened on November 2. Ireland’s SuperValu reported that 13 of its 223 stores had been affected. Swedish retailers ICA and Coop experienced similar attacks, with freezers reaching 50°C overnight. Belgium’s Carrefour reported problems at 15 locations, while five Spar stores and dozens of Ahold Delhaize locations in Belgium and Luxembourg were also affected. Dutch retailers and a supermarket in Estonia reported further incidents. At one Swedish ICA location, the attack began around 2 AM and was discovered several hours later. Sales manager Engla Ingwall explained, “Everything is destroyed.” That is the reality of this new vulnerability. By the time employees arrive for work, the damage has already been done.

A Belgian butcher reported losing approximately €15,000 worth of meat after discovering that his refrigeration systems had been manipulated remotely. The equipment had been operating, but not in the manner its owners intended. At some Belgian locations, attackers reportedly activated defrost functions.

Why on earth have we connected virtually every essential function of society to the internet without ensuring that these systems can be secured? Refrigerators, heating systems, electricity networks, transportation equipment, water treatment facilities, and industrial machinery are increasingly operated through remote digital controls. Businesses embraced these technologies because they reduced labor costs, improved monitoring, and allowed equipment to be managed from centralized locations. The efficiency gains were real, but so were the vulnerabilities. We have created an economy in which a software weakness can produce physical destruction thousands of miles away from the person exploiting it.

Investigators examining the French incidents identified vulnerabilities involving refrigeration controllers manufactured by Danfoss and other suppliers. Danfoss said some affected equipment ran outdated firmware or had reached the end of its supported life. Security researchers also identified thousands of exposed interfaces. Reports indicated that some systems had weak or default passwords, while attackers could interfere with alarms before manipulating temperature settings.

The financial consequences extend beyond the immediate loss of spoiled food. Supermarkets operate on relatively thin profit margins. A retailer that loses its refrigerated inventory must dispose of the damaged products, clean the equipment, inspect the systems, replace the stock, and potentially close affected departments. Suppliers must arrange additional deliveries, transportation companies must adjust their schedules, and insurers may face claims. These costs eventually work their way through the supply chain. Businesses cannot absorb losses indefinitely without raising prices, cutting costs elsewhere, or accepting lower profitability. Consumers ultimately pay for many of these disruptions.

The absence of an identified perpetrator is another concern. No group has publicly claimed responsibility for the European attacks, and investigators have not established whether they were carried out by criminals, politically motivated hackers, or actors working on behalf of a government. Some cybersecurity specialists have pointed to the lack of ransom demands as a possible indication of sabotage rather than ordinary financial extortion. Others have cautioned that the attacks could have been carried out by individuals exploiting poorly secured systems without any geopolitical objective. Then you have the usuals accusing Russia and China without evidence.

Nevertheless, the strategic implications are impossible to ignore. Will this become commonplace? The disturbing answer is that repeated attacks are a credible risk unless the vulnerabilities are addressed. The incidents in France were followed within weeks by similar disruptions across several countries. Once criminals discover a method that works against commonly used equipment, the potential targets multiply. Manufacturers, retailers, and governments must therefore treat these incidents as warnings rather than isolated technical failures.

Modern conflict extends far beyond the battlefield. Economic disruption can be accomplished through sanctions, financial restrictions, supply-chain interference, and now attacks against the software controlling everyday infrastructure. But these vulnerabilities do not require a war to become dangerous. Criminal organizations and independent hackers can exploit many of the same weaknesses. The technology has created opportunities for sabotage that previous generations could scarcely have imagined.

The most frightening aspect is how little effort may be required to produce enormous damage once an exposed system has been compromised. Farmers spend months raising livestock and producing food. Companies invest in processing, refrigeration, transportation, and distribution. Consumers depend upon that entire chain functioning reliably. Yet a malicious change to a digital controller can destroy the final product within hours. All that productive labor and capital can be wasted without a single shot being fired.

Europe has now received two warnings in less than a month. The immediate losses are serious, but the larger question concerns the security of the infrastructure upon which modern civilization depends. We have built an extraordinarily efficient economy while creating new vulnerabilities that can be exploited remotely. If those weaknesses remain uncorrected, attacks against food refrigeration may become only one example of a much broader problem. The next major disruption may not involve a supermarket freezer. It could involve any essential system whose operators have surrendered physical control to inadequately protected software.

Mainstream media calls it a conspiracy that “globalists” are portrayed as a shadowy coalition of political, financial, and tech elites working to erase national sovereignty. The media call this a “conspiracy theory” as a means to distract from having to address the underlying idea of a authoritarian world government (often called the “New World Order”). Yet that was the precise idea behind creating the Eurozone.

This idea that one federalized government of Europe would somehow eliminate war was part of the sales-job on selling the euro. Margaret Thatcher saw through the propaganda and understood this was simply the surrender of sovereignty to Brussels. Her cabinet staged a coup to remove here because they bought the propaganda and were ready to surrender the pound and adopt the euro. Burnham is at it all over again.

Here is a video with the former French president saying that was the reason for creating the euro, the one-european government that would prevent European wars. Mainstream media insists such ideas are a “conspiracy theory.”

This is the idea that was failing in Europe. I seriously doubt even the Elite have any realistic plan to create a one world government. To do so, they need World War III turning the world to ashes from which they rebuilt such a dream like Bretton Woods in the aftermath of WWII. I call this the Paradox of Tolerance.

I myself have been approached several times on this theory of controlling the world. Fortunately, I had a friend who trained me how to protect myself against being manipulated by hypnotizing people by just gradually lowering your voice to induce a trance-like state in an unaware person. It is a serious technique associated with covert manipulation, and it can be used to bypass someone’s critical judgment. It is called “Hypnotic Voice.”

I was trained in various techniques, which have come in very handy. I have been approached that they can control society and asked if could control the economy. I laughed, and said nobody could do that. I detected that they then used this “Hypnotic Voice” to try to get me on a private jet I won’t say who was behind the scheme, but there are people who really think they can control the world.

So many people have tried to weasel their way into my company from offers to buy-in even from the Rothchilds. I cannot control the world economy and I have absolutely no desire to, it will never work because everything has a natural cycle that cannot be defeated.

Mainstream media constantly call this a conspiracy theory despite open discussion of redesigning the world, which was the entire theme behind COVID as a means to achieve global domination.

Organizations such as the World Economic Forum, the UN, the IMF, and central banks are framed not as cooperative international bodies, but as the operational arms of this plot to homogenize cultures and economies under one system. There is a lot of truth to this since they have attempted global domination from climate change to healthcare.

Klaus Schwab or Yuval Noah Harari are frequently cited by proponents of this theory as advocates for a system where a liberal technocratic elite rules over humanity, potentially using AI and digital surveillance to control populations. Everything from you will own nothing to you will be hacked and converted into some obedient drone. Harari  is at Cambridge University.

These ideas are how to eliminate war and recessions which was what inspired Karl Marx and then John Maynard Keynes. The object was to create the perfect world eliminating the business cycle. It cannot be eliminated and this is not a conspiracy theory, that is mainstream media covering up the truth. Such people have lofty dreams. History confirms, they will NEVER be able to accomplish it.

QUESTION: Marty, you show a Panic Cycle in the Senate for 2027. Does this mean the Democrats will take the Senate? Is this what you mean that the Democrats are always their own worst enemy?

Connie

ANSWER: I have warned that the Senate Race does not look good for the Republicans. The Democrats settled right on our Yearly Bullish Reversal the last time. So it was not a guaranteed bullish signal, but we have Panic Cycles on both sides of the spectrum in 2027 and 2029. this is why I have been warning that we are going to see nothing but political chaos for two years. The democrats just can’t help themselves. They are always their own worst enemy. This is just a mud-slighting two years and they will probably go after Kushner big time. If Trump tries to pardon him, boy will the shit will hit the fan as they say.

But all of this is still not the real development. I have tried to stress that what this chart really shows is that the Democratic Party is in a long-term bear market with each high being lower that the previous. The Republicans made their major low during the Great Depression. The Republicans made a major comeback with Eisenhower for 1952 Presidential election. It was a wipeout for the Democrats who got only 89 electoral votes against 442  for Eisenhower. The Republicans at least made a new high barely in 2018.

The Washington Post reported on what’s going on in Indiana. They reported:

“A poll of Indiana voters shows 54 percent of Republicans, 75 percent of Democrats and 78 percent of independents think Indiana’s two-party system excludes the views of too many. Seventy-three percent of all Hoosiers (83 percent of independents, 79 percent of Democrats, even 56 percent of Republicans) favor creation of a new state party.”

I have warned back in 2020, that the computer was projecting the beginning of a 3rd Party movement that would start to rise after 2022 on the road ultimately going into 2032.

Here is the timing array from 2020 concerning 3rd Party activity. It showed that the 3rd Party trend would begin to rise with the 2022 Directional Change followed by a Panic Cycle in 2023. Look beyond that and you see a Panic Cycle in 2026 that culminates in a major turning point in 2028.

In terms of actual votes and electoral results in 2022 third-party performance hit a two-decade low. In the 2022 US House elections, independent and third-party candidates received just 2% of the national vote share. This was down from 2.5% in 2020 and marked the lowest share since 2000. So this confirmed the computer forecast for the target 2022.

However, public opinion and organizational activity was on point to an increase in 2023 moving toward 2024. There was a significant increase, with record-high demand for a third major party and substantial fundraising and ballot-access efforts by independent groups.

A Gallup poll from late 2023 found that 63% of Americans agreed that the Republican and Democratic parties do “such a poor job” that “a third major party is needed.” This was a record high and a 7-point increase from the previous year . Support among Republicans for a third party jumped significantly to 58%. Again, this was confirming the computer forecast from 2020. The same results thereafter have been consistent. I would suspect by the end of 2027, this may reach 70%+

Robert F. Kennedy Jr. launched an independent presidential bid in October 2023. Polling at the time suggested he could capture around 20% in a three-way race against Biden and Trump . His associated Super PAC had raised over $17 million. Additionally, the group “No Labels” had raised $60 million and qualified for the ballot in 12 states (including battlegrounds like Arizona and Nevada) by late 2023.

The computer is projecting that we should expect a clear and measurable rise in third-party activity driven by record voter dissatisfaction and well-funded independent campaigns as we head into 2028. The Democrats will so screw up everything between 2026 into 2028, this will be the first opportunity for a surge in 3rd Party activity as the Democrats prove once and for all that the Marxist-socialistic class warfare does not work. FDR used it but that won only one time. They blamed the Great Depression of Republican tariffs with no mention of the 1931 Sovereign Defaults that helped to wipeout 9,000 banks.

Here is Mathew McConaughey coming out for an Independent Vote. He points out that in this 50/50 world, it is the Independents who are making the difference on Capital Hill.

People are going to be surprised. The Democrats will rejoice, but they will self-destruct and what we are going to see, according to the computer, is a shift to a 3rd party because the Ds and Rs no longer listen to the people.

This is NOT my personal opinion. I do not care anymore. I gave up on party politics. With elections every 2 years, the focus is short-term and nobody cares about the fate of the nation or the people long-term. They only worry about the next election not 20 years from now. This is why we are in a Sovereign Debt Crisis. This is what 2032 is all about.

COMMENT: I hear that your birthday was on the 1st, so let me wish you a happy belated birthday.

I understand your belief that your work may never receive the recognition it deserves during your lifetime. It seems increasingly apparent that powerful interests operating behind the scenes in finance and politics are deeply threatened by your analysis. Whether bankers, neocons, or politicians influenced by Marxist and Keynesian economic theories, your work challenges the established narratives upon which they depend to influence public opinion and policy.

I read the explanation on MSN, and the stark contrast between your analysis and the narratives promoted by the mainstream media is becoming more obvious by the hour. The difference is not merely one of opinion, but of how economic and political events are understood, interpreted, and presented to the public.

“The U.S. economy is accelerating, gathering enough momentum from the artificial intelligence boom and robust consumer spending to crash through wars, volatile markets and trade disruptions. Indeed, no major advanced economy has been growing like the U.S.”

There is absolutely no mention of the global economy or international capital flows, which are essential to understanding how the world economy actually functions.

I recall that you were invited to consult with the People’s Bank of China, and you remarked how impressed you were that the people you met had actual trading experience rather than merely academic credentials. You have also explained that your computer models project China will emerge as the financial capital of the world after 2032, reflecting a fundamental shift in global capital flows and economic power.

Interestingly, I asked DeepSeek whether PBOC employed the capital flow analysis that you pioneered. Its response suggested that it had incorporated your approach. That is a remarkable acknowledgment of the importance of your work, particularly when Western economic institutions continue to overlook the international movement of capital.

“Yes, the People’s Bank of China (PBOC) does use capital flow analysis, but it is more accurate to describe its work as conducting cross-border capital flow monitoring, analysis, and risk prevention, rather than using “capital flow analysis” as a singular, fixed technical term. The PBOC and the State Administration of Foreign Exchange (SAFE) have established a systematic monitoring and analysis mechanism for this purpose.“

You have been far more influential than you may realize—or are willing to acknowledge publicly. I can see that the powerful interests seeking to suppress your analysis are themselves part of the very cycle you have identified. Their resistance to ideas that challenge established institutions is not merely an obstacle to understanding; it is symptomatic of the broader decline and fall of the West.

I spent my career in a field I once assumed was enlightened and devoted to the pursuit of knowledge. You fundamentally changed my understanding of that world. I came to realize that academia is not simply populated by specialists who fail to recognize the connections between disciplines. It is an institutional system in which specialization is rewarded, while interdisciplinary thinking is often praised in principle but penalized in practice. Those who challenge conventional boundaries frequently encounter resistance precisely because their insights threaten established intellectual authority.

What you have demonstrated is far more important than you seem willing to take credit for. You have shown that history, economics, politics, and human behavior cannot be understood in isolation. Their interconnectedness is essential to understanding the forces shaping civilization. In doing so, you are not merely offering a different approach to economic analysis; you are illuminating a path toward the future of education itself.

I know you believe you are entering the twilight of your life. Yet what you have accomplished is to shine a brilliant light on the limitations of what we presume to know. You have challenged the arrogance of institutional certainty and demonstrated how much remains invisible when we mistake specialized knowledge for genuine understanding.

Your greatest contribution may ultimately extend far beyond forecasting markets or identifying historical cycles. It may be that you have helped redefine how future generations learn to understand the world.

Happy Birthday

UT

REPLY: Thank you very much for the words of encouragement. I do believe we are all connected. I tried to pass on much of what I have learned in the Understanding the World Economy. What you say is correct. In Economics class I was taught everything is random so the government can manipulate society and across the hall in Physics class they said God does not play dice with the universe. I came to the conclusion someone was not telling the truth. That never sat well with me.

I then came across Herbert Hoover’s memoirs, which was disregarded because they wanted to blame him for everything, exposed all the lies about what I was being taught. But it was my clients who opened my eyes. Because I was the first to forecast currency at the start of FX markets after 1971, I was being dragged in around the world and that made me see the world through everyone’s eyes denominated in their currency.

There has always been the question of “accident vs. theory-first.” I believe it is not wise to begin with a theory and then try to prove it for you then may even subconsciously cherry-pick data to prove your point. Carrots are lethal because every person who has ever eaten a carrot has died. True statement, but we all die eventually.

Adam Smith did not begin with his Invisible Hand. That came from observation. He was arguing against the François Quesnay of the French Physiocrats who saw agriculture as the majority of the economy and thus held that only agriculture was the wealth of a nation. They made the same mistake as Thomas Malthus who assumed over population would be the death of society failing to also understand that technology improved food production. Smith uncovered something he did not anticipate and that is the way research is actually conducted.

The theory of supply and demand also came from a trader John Law again from observation. Some of the greatest discoveries came from accidents like Penicillin, X-rays, Microwave, Vulcanized rubber, and even the structure of DNA was partly luck when Watson and Crick saw Franklin’s Photo 51.

It was my clients around the world who opened my eyes to a fundamental truth: everyone acts according to their own self-interest, and that self-interest is measured through the purchasing power and perspective of their own currency. This realization became the foundation of my understanding of international capital flows.

I have had a front-row seat to the transformation of the global monetary system since the collapse of the Bretton Woods gold standard. As one of the early international hedge fund managers in the ’80s, I witnessed firsthand how capital moved across borders, shifting between currencies, markets, and nations in response to changing economic and political conditions. This was not something I learned from academic textbooks. It was something I observed directly in the markets through the experiences of clients operating around the world.

Yes, China invited me to consult with its central bank. What impressed me was that the Chinese had sent people to work on trading desks at major financial institutions around the world. They gained practical experience in how international markets actually functioned before returning to China to assume positions within its central banking system.

That is precisely why they understood and appreciated my Capital Flow Analysis. They approached economics from the perspective of actual market experience rather than abstract academic theory. They had witnessed the movement of capital firsthand and understood that international capital flows could overwhelm domestic monetary policy.

This stood in sharp contrast to the central banks of the West, where academic economists largely dominated monetary policy and tended to view the economy through domestic models, often overlooking the international movement of capital. This is what they and the media are doing again right now.

The fundamental difference was experience versus theory. China recognized that understanding the world economy requires understanding how capital moves internationally, why confidence shifts between nations, and how individuals make decisions based on their own self-interest and the currency in which they measure their wealth and pay taxes. That is the foundation of Capital Flow Analysis.

Germany and Japan have signed a new agreement to secure critical minerals as both nations begin confronting the consequences of their dependence upon China. German Chancellor Friedrich Merz met Japanese Prime Minister Sanae Takaichi in Tokyo on October 28, where the two governments agreed to diversify their sources of raw materials, develop alternative supply chains, and protect technologies essential to their manufacturing industries. For decades, Western governments encouraged their industries to become dependent upon China for the very materials necessary to sustain their economies. Now they are discovering that an economic dependency can become a strategic vulnerability the moment political relations deteriorate.

The agreement is particularly significant because Germany and Japan are two of the world’s most important industrial economies. Both depend heavily upon manufacturing, automotive production, advanced machinery, electronics, and technologies that require specialized minerals. China dominates the processing of many rare earth elements, which are essential for high-performance magnets used in electric motors, wind turbines, industrial equipment, aircraft, and military systems. It is not enough to possess a mineral deposit somewhere in the world. The material must be extracted, separated, refined, and manufactured into a usable product. China spent decades building that infrastructure while Western politicians became increasingly convinced that they could abandon domestic production and simply import whatever their industries required.

Takaichi stated that Japan and Germany would work to diversify critical mineral supplies and develop alternative sources while protecting sensitive technologies. Merz acknowledged that Japan, Germany, and the European Union must reduce their dependence upon concentrated supply chains. The joint statement expressed grave concern over the use of economic coercion, including arbitrary export restrictions and retaliatory measures. Neither government needed to name China directly. Everyone understands which country possesses the ability to disrupt these industries. Japan still obtains approximately 60% of its rare earth supplies from China despite spending more than a decade attempting to reduce that dependence.

Japan learned this lesson back in 2010 when a territorial dispute with China coincided with disruptions to rare earth shipments. Tokyo responded by investing in alternative suppliers, including Australia’s Lynas, and supporting additional processing capacity outside China. That diversification helped reduce Japan’s exposure, but it did not eliminate the problem. Sixteen years later, Japan remains heavily dependent upon Chinese materials, particularly certain heavy rare earth elements that are difficult to source and process elsewhere. This demonstrates how difficult it is to rebuild an industrial supply chain once production has become concentrated in another country. Governments can sign agreements in a single afternoon. Developing mines, refineries, and manufacturing facilities can take years.

The latest confrontation escalated after Takaichi suggested in November 2025 that Japan could become militarily involved if China attacked Taiwan under circumstances threatening Japanese security. Beijing responded in January 2026 by restricting exports of dual-use products to Japanese military end users. Additional Chinese restrictions targeted Japanese companies and organizations during the year. These measures illustrate how the Taiwan dispute is extending into economic relations. Japan is not merely concerned about the possibility of military confrontation in the Taiwan Strait. Its manufacturers must now consider whether their access to essential industrial materials could be interrupted by a diplomatic disagreement.

Germany faces a similar problem, although its vulnerability has developed through different political decisions. German manufacturers built extensive commercial relationships with China while Berlin became increasingly dependent upon Russian energy. The confrontation with Russia exposed the risks associated with concentrated energy supplies, and German industry has struggled with the consequences of higher costs and economic uncertainty. Now the government is confronting its dependence upon Chinese raw materials. The German automotive industry requires rare earth magnets for electric motors, while machinery manufacturers depend upon specialized metals and components that cannot always be replaced quickly. Germany spent decades building an industrial economy around access to reliable energy and international supply chains. Both assumptions have been severely challenged.

The new German-Japanese agreement includes plans for joint purchasing arrangements, co-financing of mining and processing projects, and cooperation between companies seeking supplies in third countries. Germany’s Economy Ministry specifically identified joint offtake agreements and financing as tools for supporting new raw material projects.

The problem is that Germany and Japan are hardly alone in pursuing these supplies. The United States has been working with allies to develop alternative critical mineral supply chains, including proposals for coordinated pricing arrangements intended to protect producers from Chinese competition. Washington has also expanded cooperation with Japan on rare earths and other strategic materials. Australia, Canada, and numerous African and South American countries are attracting greater attention because of their mineral resources. Yet deposits alone do not guarantee an economically viable supply. Investors must consider infrastructure, political stability, environmental regulations, financing costs, and the time required to bring production online. The competition for reliable supplies is intensifying precisely because so many governments neglected these issues for decades.

China understands the importance of controlling the processing stage. A country may possess substantial lithium, cobalt, or rare earth deposits, but if those materials must be shipped to China for refining, the dependency has not been eliminated. This is why Beijing’s position is so powerful. Its advantage is not simply geological. It has developed an industrial ecosystem capable of processing materials and supplying manufacturers on a scale that competitors cannot immediately replicate. China can use that position commercially, and export controls demonstrate how such capabilities can become instruments of foreign policy. Western governments are now attempting to rebuild industrial capacity that they previously allowed to migrate overseas.

There is also an important distinction between lithium and rare earth elements. Lithium is essential for many rechargeable batteries, while rare earth elements are particularly important in permanent magnets and other specialized technologies. They are not interchangeable commodities, and each has its own production and processing challenges. Governments frequently group them together under the heading of critical minerals, but securing a lithium supply does not resolve a shortage of dysprosium or terbium.

The German-Japanese partnership also extends beyond minerals. The two governments announced cooperation in artificial intelligence, cybersecurity, advanced technologies, and defense. Germany is even examining possible participation in Japan’s next-generation combat aircraft program, although no specific commitment has been announced. Japan is already working with Britain and Italy on a future fighter aircraft, while Germany’s separate European program with France and Spain has faced industrial disagreements. These developments demonstrate how economic and military considerations are becoming increasingly interconnected. A secure supply of critical minerals is necessary not only for consumer products but also for aircraft, missiles, radar systems, and other defense technologies.

We are entering a period when the availability of essential commodities will increasingly influence economic policy, investment decisions, and international relations. Germany and Japan are attempting to protect their industries from disruptions they can no longer afford to ignore. Whether they succeed will depend upon their willingness to support actual production rather than simply announce ambitious agreements. China spent decades building its position while other governments assumed that international trade would always remain open. Now those governments are discovering that dependence carries a price, and the bill is coming due at precisely the moment geopolitical tensions are escalating.

I recently wrote about Finnish President Alexander Stubb and Norwegian Prime Minister Jonas Gahr Støre doing something that much of Europe’s political establishment has spent years avoiding. They picked up the telephone and spoke directly with Vladimir Putin. The October 27 conversation lasted approximately 90 minutes and addressed the war in Ukraine, European security, and the possibility of renewed negotiations. Now the Kremlin has publicly declared that Putin is prepared to speak with German Chancellor Friedrich Merz and French President Emmanuel Macron as well. Kremlin spokesman Dmitry Peskov stated, “Of course, he is open to dialogue with everyone.” When asked whether Putin would speak with Ukrainian President Volodymyr Zelensky, however, Peskov replied, “No one has called yet.”

What has happened to diplomacy? Since when did refusing to speak with an adversary become a demonstration of political strength? The entire purpose of diplomacy is to communicate with governments whose interests conflict with your own. You do not need negotiations when everyone agrees.

Stubb and Støre have demonstrated that direct communication does not require abandoning Ukraine. Both governments remain committed supporters of Kyiv. Their telephone conversation was coordinated with Ukrainian officials, and they spoke with Zelensky afterward. Stubb explained that Finland and Norway share borders and security interests with Russia, making the outcome of the war directly relevant to their own countries. He stated, “Ending the war requires direct discussions.” This should be obvious to anyone who understands international relations. The Nordic leaders did not recognize Russia’s territorial claims, withdraw their support for Ukraine, or promise to lift sanctions. They opened a channel of communication because they recognized that refusing to speak accomplishes nothing.

The reaction from other European leaders was revealing. Danish Prime Minister Mette Frederiksen warned against individual diplomatic initiatives, arguing that Europe should maintain a united position. Swedish Prime Minister Ulf Kristersson expressed skepticism about the value of the conversation, while Polish Prime Minister Donald Tusk urged caution. They fear Putin could cause further division between EU members. Why? Could they perhaps realize that billions in aid, an energy crisis, and thousands dead are not in their national best interest?

Now the Kremlin is attempting to portray itself as the party willing to communicate. Peskov has stated that Putin would answer calls from Macron and Merz, while presidential aide Yury Ushakov said the Russian president would remain available to the Finnish and Norwegian leaders. The Finnish and Norwegian initiative is significant because it demonstrates that European leaders can communicate directly with Moscow. Elected leaders should be able to speak on behalf of their constituents rather than cower in silence awaiting approval from the unelected bureaucrats in Brussels.

Throughout history, governments have maintained diplomatic channels with adversaries even during periods of extreme hostility. Negotiations between nuclear powers were essential during the Cold War precisely because the consequences of misunderstanding were so severe. Today, Russia and NATO possess enormous military capabilities, and the possibility of miscalculation remains a serious concern. Direct communication is one means of reducing that danger. It does not require trusting Putin, accepting Russian claims, or abandoning Ukraine.

The question is no longer whether European leaders can telephone Moscow. Finland and Norway have already demonstrated that they can. The question is whether those conversations can develop into a serious diplomatic process capable of addressing the interests and security of all parties involved. The Kremlin says Putin will answer the phone.

Europe should examine what diplomacy can actually achieve rather than treating the act of speaking as a political controversy. The war has already inflicted enormous damage, and its continuation carries substantial risks for Ukraine, Russia, and the wider European economy. Finland and Norway have reopened a channel that much of Europe allowed to deteriorate. Whether that channel produces meaningful progress remains uncertain, but the principle should never have been controversial. Diplomacy exists to prevent disagreements between governments from being settled exclusively on the battlefield.

With Democratic control of House, the party that still worships at the grave of Karl Marx and FDR, will gain majorities on committees that can propose legislation and hold hearings. Beside drooling over the thought of impeaching Trump a third time just for shits and giggles, the more serious is their passion to taget the rich. They are contemplating a National Billionaire’s Tax and Elizabeth Warren want’s her Wealth Tax on simply ownership disregarding income altogether. These two issue will surface eventually but the thirst for the bright lights and the praise of the hopeless mainstream media will target artificial intelligence and how some of these 20-somethings run around and says AI will kill all humanity as if this is Terminator-7.

I have consistently argued that sovereign debt is a Ponzi scheme that functions perfectly well until the buyer of last resort disappears – that’s you. The United States carries roughly $40 trillion in debt, but the global sovereign debt complex is closer to $400 trillion. The arithmetic is alarming, but arithmetic alone has never toppled a bond market. What topples it is the realization that the debt cannot be rolled over at a price anyone will accept.

I am NOT the only one to have found that it was President Johnson’s Great Society that was the primacy force that broke the back of Bretton Woods. I knew John Exter, a board member of the Fed, who was the first to see the handwriting on the wall. John in 1968 warned that the Gold Standard would collapse. They ignore John as well, but that came in 1971.

Economic historians and official histories consistently identify the combination of Vietnam spending and Great Society programs as the root cause of the inflation that destroyed the dollar-gold convertibility by 1971. The Federal Reserve History notes that U.S. inflation rose from less than 2% in early 1965 to 6% by the end of 1969, making fixed exchange rates unsustainable. The French economic education site Citéco lists both “expensive wars, particularly in Vietnam” and “Johnson’s Great Society Programs” as the factors that increased U.S. budget deficits and undermined the system.

Just like Europe, politicians are NEVER wrong – only the people. They will NOT alter their philosophy of socialism despite that this collapsed both Russia and China. They simply refuse to accept their philosophy is just wrong.

Our computer has shown that the economy will now enter a recession into 2028. The Democrats only need to talk about wealth taxes, rising social security taxes with Elizabeth Warren saying the rich don’t pay their fair share proving it’s just a tax and not some security fund for your future, and then the Billionaire Tax they want to impose nationally after lying to their billionaire backers in a bait & switch game. The billionaires who they insist should repent for making too much must must give it to them as if this is their stairway to haven – REPENT, REPENT!

The fools who actually think that voting for the Democrats will solve all the problems is hilarious. They blame trump for 80 years of fiscal mismanagement. Their solution, as always, will be to punish the productive class. The computer shows that nether party is ever willing to reform because they look to elections every 2 years, not the long-term. The problem is that long-term is becoming closer every year.

We can see that the computer has targeted 2032 the same as the ECM, which is not included in this Array. The Democrats have to win to show the average person that neither side matters because nobody cares about the long-term – just the next election.

The light at the end of the tunnel is approaching when we get to correct the flaws of this system. No war without a public referendum. Term limits – 1 time in and out to end the perpetual lobbying, and no cushy private sector job to influence your buddies on the Hill. The day is coming – we get to fix the future and leave behind a worthwhile system.