Gold – The Hedge Against Government – NOT Inflation
COMMENT: Marty, one of the comments on the Mises Institution site says it all. You are never wrong. I have to admit. I was a goldbug and listened to the bullshit as you call it. Yet this action in gold has proven not merely were you correct in saying gold would pop, it has nothing to do with QE, inflation, or any other weird theory they use to sell gold. You are correct because everything is connected as you say. To be right on the peg collapse, as you even wrote on here stating that pegs cannot last back in early 2012, you had to be correct on gold.
You are revealing not that you are always right as an individual, but that there is a whole new way of looking at the world. I must say you are the man that steps forward in history when society needs people the most. The fact they are making this movie about you proves this point. You are indeed the greatest asset we have in trying to make that step forward rather than backward. You are the forecaster and the only such person to ever have a movie made about him for his forecasts.
Fantastic. Thank you so much for your perseverance. In the face of adversity you have stood your ground when many would shrivel in seconds.
MT
REPLY: Thank you for the flattery. I sure hope I am not the lone individual history produces in its darkest hour. It would be nice to have some help. This is my DISCOVERYrather than my theory. Running around the globe I would meet the same top brokers who were dealing in Geneva with members of OPEC in the early 1980s moving to Tokyo in the later 1980s post-1986 reforms. The talent followed the money flows and so was the demand for our services. It was this tremendous diversity of clients that forced me to see the light. I looked upon myself as a simple trader. It was Milton Friedman who came to listen to my speech in Chicago that forced me to see what I was observing was important to the world. So this was NEVER my assumption from the outset, It became my DISCOVERY from working globally.
It is strange that everything I have been through has been about trying to suppress this discovery because the ramifications are massive. Politicians cannot run for office proclaiming vote for me and I will do this or that when the free markets internationally dictate the trend. Everything changes right down to the core assumptions of how to run a government once you see the light.
All I can do is try to help others turn on the light that still others are trying so desperately to suppress. It is our future at stake. I can personally retire. But what about my posterity. What will we leave behind for them unless reform takes place? I do know this is a serious point in history. A real crossroads that we face.
The Euro/Swiss Peg would Go “and they’re not going to be able to do much about it”
Here are transcripts of the WEC since the Movie Producers filmed everything since 2011. They had transcripts made and can search a topic and come up with the time I discussed it.
4:11:02 “Alright, I’ll pay more, but he’s paying 75 so that makes it ok.” This is what’s going on. Every time in the cycle when you look at this stuff, you’re in the same position, always the same position. They get much more aggressive. As that happens the economy is just simply going to implode. When we look at Switzerland, everything that we have on this particular cross rate is pointing down at this stage that – sorry, we’ve got to, if you look at the lows on this, it comes all the way back down to these third lows and then we’re just going to take out and the euro’s going to go down. I’m sorry, that’s just the way it is. The peg’s going to go and they’re not going to be able to do too much about it.
The Euro/Swiss Has Been Warning The Peg Could Not Hold
At the Berlin World Economic Conference I delivered the same forecast we gave to the Swiss – the EURO/SWISS PEG COULD NOT HOLD. Indeed, its lasted about Pi3.14 years before the pressure really built and 3.3 years it cracked. Who is to blame? The Swiss? Or does the blame belong to Brussels and stupid traders/investors who hopelessly just believe whatever government and the non-free political-correct press that allows society to be destroyed by politicians they fail to keep in check?
The Euro collapsed against the Swiss falling to 8517. This was a historical decline and at first glance one would think this was a bad tick gone way out of bounds. So how do we analyze such a new historical move? You cannot approach this with a view of the whole.
Here we have the Euro/Swiss recreated back to 1984 when the just before G5 began in New York at the Plaza Accord. You always need a map even in markets. How can you figure out where you are going if (1) you do not know where you have been and (2) you do not know where you are right now? This pattern shows that we have now broken the double bottom I warned had to give-way. That has now been accomplished. So yes, the Euro/Swiss collapsed to historic lows and the Swiss ought to run out and buy whatever they can while the Swiss in strong.
When I was called in by the Central Bank of China because of the Asian Currency Crisis in 1997, we were stating that the capital flows had shifted and were heading back to Europe in anticipation of the new Euro in 1998. We produced charts of the capital flows and recreated the Euro synthetically to show what was going on. There were members inside the Bundesbank at the time who were leaking to us anything to do with the construction of the Euro because they too read out analysis and were bearish of the idea of creating the Euro – today, they have been proven right. Yet because Princeton Economics was really the only major forecasting firm in the world who was NOTpolitically-correct and call the shots as they stood, the press has touted the analytical forecasts of the big banks, but the really players relied upon Princeton. By doing this, the media empowers politicians and the truth never surfaces until the crisis unfolds.
Now look at the channel created by the break-line. The steepness of this channel has been warning that such a move was REASONABLE because the manipulation trying to keep the Swiss down at 120 was insane. Clearly, the fault belongs to Europe – not the Swiss. The Swiss have been trying to prevent the inflows fleeing Europe. Pegging to the Euro was not very smart. This could not possible survive and this chart proved that conclusion. The Swiss kept trading at the peg with no BOUNCE. This made it a perfect trade for anyone who was smart. I could swap Euros for Swiss and if I was wrong they gave me my money back. If I was right, then I would make a fortune. It was like going to a casino and gambling. Every time I lose, they give me my money back until I win. Pegs are the child of academics and lawyers who do not understand that free markets ALWAYS win in the end. The free markets wiped out Communism and they are now destroying socialism. As always, the politicians only seek to defend themselves and not the nation or the people.
There was ONLY one possible way for Switzerland to have prevented this. They had to create a Financial Swiss Franc for foreign capital to park since the problem was the flight from Euroland. A two-tier currency was the ONLY possible solution to hold the capital inflows. Milton Friedman criticized the Fed during the Great Depression for not creating enough money. The inflows were in the form of gold bullion and without coining it or using it to issue more paper, they created by default a two-tier currencyand propagated domestic deflation with the shortage of money. Gold became a second currency that was not monetized and just sat in reserves. The Swiss needed to create such a currency to deflect the inflows from their domestic currency supply.
Hundreds of cities in America began to issue their own local money because of what we would call today – austerity policies. Had Switzerland adopted a two-tier monetary system where capital could park, then we would not have had the move we did this past week. Nevertheless, the fault is NOT Switzerland, it is the stupid idea of trying to create a single currency without a singe debt that has produced the fictional land we call Euroland.
We have been warning that January was a major target in TIME. It has been showing up for the last 9 months. Here is the Array on the Euro/Swiss from last September. We can see the long-term pointed to January 2015, but then look at the distinct rise in volatility implying the PEG would not last. June 2015 has been showing up as a Panic Cycle in many markets. The start of a new trend in volatility has begun. More and more serious money will start to look closely at Euroland. This is the start of Big Bang.
So sorry – the fault does not lie with the Swiss. The fault lies with Euroland. As for those banks complaining they lost a fortune, well that’s what yuo get for listening to bullshit.
Mises Institute – Interview of Armstrong by Jeff Deist
MISES WEEKENDS with Jeff Deist and the interview of Martin Armstrong on Black Thursday – January 15, 2015. Jeff was the former Chief of Staff of Capitol Hill for Ron Paul. He now heads the Mises Institute.
The Euro – Here We Go
The whole idea of creating the Euro without consolidating the debts was the BRAIN-DEAD idea of academics with ZERO trading experience and lawyers. We really cannot afford these types of people making financial decisions about how to run the world. Whatever Brussels could have done wrong, they did.
The EU politicians have assumed that they can dictate to the free markets by decree and suppress the right to freedom of choice, vote, and to just live un-harassed. The EU politicians have disregarded the people with the arrogance that they know what is best. The EU politicians are helping to destroy the world economy because they have tied the bank reserves to their own folly and then exempted them from mark-to-market to hide their track record. These politicians can hide their head in the sand to pretend they have not yet failed. However, the free markets ALWAYS win.
Well the free markets have voted. The Euro has crashed to the 1.15 level so far. A monthly closing BELOW 1.18 is a long-term sell signal; and support lies at 1.1375 A monthly closing beneath this level confirms the Euro is dead and should fall back to the 1.03-.96 area.
You just can’t make up this stuff. There should be a law against UNQUALIFIED people taking office. Enough is enough. These people create wars to cover up their mistakes. We have an ABSOLUTE right as a people NOT to be economic slaves to fools.
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