I wrote on Quora:
The SCS move seems to be politically shrewd and astute. It is known that China would have to go through a difficult period of reforms to SOEs and adjustment of the economy from export to consumption based. And that a global economic correction much worse than 2008 would be coming as the ZIRP plays out as a short dollar vortex sending the dollar rising (as it has been) while interest rates rise to save the bankrupted Western pensions while collapsing the global economy due to rising cost of egregious debt load servicing.
So China will need nationalistic fervor to make it through this phase. After ~2024, the Trump bounce ends, and the West falls into the abyss while Asia can grow its way out of the problem (the West can’t and is toast). So we are headed into a very tumultuous transition and so it is necessary both for China to step into the power vacuum to provide leadership in SE Asia (see the foreign policy shift of Philippines towards China and now new railway projects being awarded to Chinese companies) and also to maintain political power support for the leadership in China.
Here is follows what I wrote in email today to supplement my comments above:
SUBJECT: Re: 70% tax rates coming to the USA?
Armstrong elaborated on this subject:
Raising Taxes by Redefining Who Are the Rich
Worldwide Real Estate Crash & Why
Robert,
cc: Martin Armstrong
I want to elaborate on this for the benefit of everyone here, and anyone can find any fault in my logic, please respond.
The unavoidable inertia in play in the USA:
Huge public debts and the servicing of those debts will be more than all current tax collections as interest rates rise back to 7+%.
Huge student debts (which Clinton made non-dischargeable in bankruptcy!) which will cripple any spending from the Millennials as the economy turns down again in a few years.
Huge ($100+ trillion) actuarial liabilities in the form healthcare, unemployment compensation, and pensions for the McFat/McHFCs and aging boomer population. The actual expenditures from these liability will mushroom over the coming decade as the boomers are entering end-of-life zone and the fatty liver and substance abuse epidemics are accelerating
now.The underbelly of the population (which has every incentive to steal from the "rich", i.e. from the productive middle-class) is producing more offspring than the productive middle-class. Also that underbelly is immigrating and this immigration is increasing as the strong dollar phenomenon underway causes Latin America to economically implode. This is why Trump’s base is drawing a line-in-the-sand on the border wall (also because of the massive drug epidemic problem being supplied through the Mexican border), but it is impossible for the USA to stop this inertia. Also as the economy turns down as it did in 2008, more of the citizenry turns towards an incentive to steal from the "rich". Thus the Democrats of course will take back control of the government and steal from the "rich" (which really means destroy the middle-class and drive the USA into a third world country status similar to what happen to Spain... this is what decadent, multicultural societies do). The only solution for the white middle-class will be separatism from the USA. This is why eventually the USA will break away into separate regions and no longer be a united country of 50 States. This is coming and Armstrong’s computer predicted this a long time ago. On top of this, Millennials have been indoctrinated by the boomers into a social justice worker attitude about life, which will drive the push towards leftist politics as the economic shit hits the fan. The Millennials will blame everything except the truth.
The last vestiges of USA superiority on the economic front such as software and Internet technology are undergoing a shift to Asia. We see now that Taiwan (as the fab for AMD) has displaced Intel in the lead for producing server and desktop CPUs. Asia was already ahead on ARM mobile phone CPUs. And now that shift is beginning to take form for social networks too with WeChat, Line, etc.. being globally used and Asian developed. Within about a decade, there will be a rapid collapse of the USA technology sector and the economies-of-scale will shift to Asia and that will further exacerbate the economic abyss that the USA is sliding into in a few years.
The strong (rising) dollar and interest rate phenomenon is the death of the Western debt bubble system and their concomitant economies. The artificially low interest rates that the Western central banks employed to keep their bankrupt economies afloat after the 2008 economic downturn caused investors to seek yield in foreign (govt and corporate) issued
bonds that had higher yield (i.e. higher interest rate paid to the investor). So this has now the entire world betting short the dollar, because they have to repay loans in dollars as the global economy crashes due to rising interest rates. The interest rates must rise because the
Western pensions went bankrupt due to the very low interest rates over the past decade. So as interest rates rise, dollars for repaying bonds become more difficult to obtain because the economy is declining. This is a spiraling self-reinforcing effect that will drive investors into the
dollar. Like ducks they follow each other because a trend in motion is how speculators make money. So the dollar will shoot up skyhigh while the economy collapses. Yet Asia comes out of this stronger because they do not have all those problems I listed about. Asia can grow their way out of the problem, whereas for the West the problems will multiply and continue to grow for decades as the West slides back to Third World banana republic status.So yes, the West is coming after your wealth. Be forewarned. Have a plan.
When the economy turns down hard into the abyss as the rising dollar and rising interest rates choke off the global economy, the politics will likely turn towards "99% vs. 1%" again as it was after 2008. But the next downturn is going to be much worse and more permanent than 2008, and thus the politics will be much worse and more damaging. The rising cost of servicing government debts (State, City, and Federal) along with rising cost of public welfare as unemployment skyrockets is going to drive the increase in taxation.
Circa 2024.
...
NOT going to happen at least for the short-term.
But, the Ds will get control of the Congress and President sooner (or more likely) later. Then they will take their crack at raising the income tax. They may very well succeed.
On Mon, Jan 7, 2019 at 4:38 AM Shelby Moore wrote:
Alexandria Ocasio-Cortez Proposed to Raise Individual Tax Rates to 70%
SUBJECT: Chaos and brutality coming to the West:
https://www.armstrongeconomics.com/world-news/civil-unrest/the-hatred-from-the-left/
You can feel it in the air. We are heading into the collapse of government and a violent civil war because hatred is rising dramatically. The government is no longer capable of even functioning. The State of the Union was just an example. It did not matter what Trump said. The Democrats will not break party rank and will refuse to comply with anything. The government never acted like this until Hillary lost. Neither side will accept the election in 2020.
Western society will crumble by 2032.There is no going back. This is how all empires, nations, and city-states have collapsed throughout history. The rule of law vanishes and what emerges is just hatred.The entire purpose of civilization is people coming together and working together for a common goal. We have lost all such common ground and both extremes are demanding subjugation of their opponents. This is why revolution unfolds. Neither side is allowed to exist. Each demands the other conforms to their ideas. This is why direct taxation destroys all civilizations for it allows one side to exploit the other.
Here is one example of a person filled with such hatred who always sends hate mail to me. This is just a prelude to what is to come:
The American white male lives in the American past, is ignorant of world history and revolution and glorifies his gun ownership like some cartoon cowboy but doesn’t really know what to do with his guns. He is totally devoid of ideas and lacks the depth to analyze true injustice and would rather go out and commit horrendous mass shootings because he has been brain-washed to support the actual people who are doing him harm. So kills innocent people or supports a Trump.
The Yellow Vest anti-government movement (#YellowVests, #GiletsJaunes) began in France on November 17, 2018, when over 300,000 people across France protested a carbon tax on fuel. President Emmanuel Macron claimed the French were leading the world in the battle against climate change. The Yellow Vest protests evolved rapidly into an all-out general anti-government movement that was supported by 70% of the French population. When Macron was forced to back out of the tax […] Now, the Yellow Vest Movement has gone worldwide, spreading at first to Belgium, where Brussels riot cops had to deal with them for week after week of protests blocking an oil depot. Then on December 8, 2018, the Belgians attempted to breach a riot barricade while calling for the resignation of Prime Minister Charles Michel, resulting in around 100 arrests
Trump has rejected the climate taxes and lowered tax rates, moving directly opposite of all the other countries on the list. Nevertheless, the future for the United States is looking very bleak. The budget will force a rise in taxation as more and more government workers retire, thereby dramatically increasing the cost of government. The New Democratic Socialist Party, headed by Schumer and Pelosi, is advocating dramatic increases in taxation following the same course as the other countries on the list below. Our model shows that the Trump Tax Cuts were merely a reaction within a broader bull market trend. That means we should be looking for the next peak in tax rates in 2026. We should begin to see the Yellow Vest emerge in the USA in 2020.
See the attached photo for shock value.
RE: Countries Vulnerable to Economic Devastation Soon