Where Can We Flee to This Time?
One question a lot of people ask – where can we go this time?America was the place people fled to from Europe and the economic abuses. This is why the American people were such isolationists for World War I and II distinct and apart from its politicians. The politicians did everything to get Americans to support a war. Roosevelt even went to Boston to promise their sons would never go to Europe, just arms. The Irish were not very tolerant of defending Britain when they saw the English as the oppressors of the Irish that sent them fleeing to the States.
Asia may present some problems for any kind of a mass exodus. That really leaves Africa and South America. One of the best kept secrets was the fact that many Southern Confederates fled the USA upon losing the war and they took off to Brazil. To this very day they still celebrate the American Confederacy in Brazil.
Confederate leaders had their eyes squarely on Brazil during the 19th century as was the case for Mexico. Confederate president Jefferson Davis made sure the Confederate constitution included the right to expand, and he filled his cabinet with men who thought similarly. Davis even hinted that the slave trade could be revived in“new acquisitions to be made south of the Rio Grande.” Brazil was not just the land for fleeing Nazis, it was also the destination of American Confederates.
Prior to the outbreak of the Civil War, U.S. Naval Academy founder Matthew Maury dispatched two Navy officers to the Amazon basin, ostensibly to map the river for shipping. Instead, they were secretly plotting domination and collecting data about separatist movements in the region. When the South lost the war, Maury refused to abandon his plans. Instead, he helped 20,000 ex-rebels flee the South to Brazil, where they established the Confederate colonies of New Texas and Americana. To this day, hundreds of descendants of these Confederate refugees, known as Confederados, still gather outside Americana to celebrate their shared heritage of rocking chairs and sweet potato pie. In Brazil, the Old South still lives on in culture and tradition.
So perhaps the only place left will be south of the border. Where American’s called Mexican’s swimming across the Rio Grand “wet backs”, they may apply the same term to Americans fleeing the new draconian America if the direction we fall is authoritarian rather than freedom – cómo está.
A Broken Clock is Correct More Than Government
It is sad to say but a broken clock is still correct twice a day and that will be more accurate than anything government gets its hands on. The entire economic statistics are just wrong. In GDP, they count total government spending and then they count total personal income. Nobody bothers to back out government workers. So if government hires someone, in never-never-land quoted by top socialist economists, GDP grows. True, because the statistics count government workers twice.
Take trade, here the system still reflects the fixed exchange rate mechanism of Bretton Woods. There is nobody there counting the number of cars coming in at the port. All they measure is currency. When currency was fixed, then obviously if you spent more, this meant you got more. Once the floating exchange rate system was born, that method of measuring trade has been totally erroneous. Take the Swiss franc that suddenly rose 30% overnight. You did not get 30% more goods, you just paid 30% more for the same goods.
We seriously need to revise the entire would economic statistical methodology. As I just wrote about using debt to GDP ratios, this is completely irrelevant. If GDP drops, even if the debt is not increased, the debt to GDP ratio will rise making people think spending is increasing when it is not.
We have so much to straight-out, it is totally insane. We really need the crash and burn just to realign the whole nightmare and start over. Our greatest risk – which way will we go. More authoritarianism or freedom?
Great Depression & the Correlation
QUESTION:
Hello Mr. Armstrong,
I am reading Hoover’s memoirs to get a better handle on how he saw capital move during the Great Depression.
I understand the Great Depression began its crash in October of 1929, affecting global markets for the next ten years.
If this is not too much to ask of your time, I would like to ask if you could please explain what happened during that time period, 1929-1933 and what catalyst caused the foreign sovereign bonds to default on Americans causing massive bank failures. Did rates rise during that period as well? How did the dollar react? What were the 3 waves of panic?
Today we see that bonds are rallying and stocks are falling, as occurred on 1929. How will we know that the stock market will not crash when bonds do?
Thank you again for your wonderful service.
Best,
T
T
ANSWER: Hoover’s 1931 chapter has all the letters going back and forth between heads of state at the time. The Greatest Bull Market will be released in its new form. I added about 500 pages (50% charts) on just about everything. This is how the dollar soared. Although the Dow crashed from 386 to 42 between 1929 to 1932, there were many other factors involved. Adjusted for currency, the Dow really fell to about 72 in international terms.
The default of Credit Anstalt in Austria which set off the sovereign debt default cascade failure was partly owned by the Rothchilds. This shook the very foundation of confidence. They capital turned against Germany and kept on going hitting even Britain. Each government was forced into default. This drove capital into the USA as we are witnessing to a modest extend right now thanks to the Euro.
We will see the stock market rise as bonds decline only after capital begins to smell the crisis in government bonds. Much will be lost and trapped. Nevertheless, the smart money will begin the shift. We can see how things shifted whereas the spread or premium of corporate debt over government declined illustrating the shift in capital flows.
As long as the stoke market does not make a spike high into September, then we should see the rally unfold AFTER 2015.75 As the market rallies, the Fed will break ranks and raise rates becoming more concerned about a domestic bubble. Of course raising rates will only draw in more foreign capital and the rise in the dollar will set in motion more sovereign debt defaults in emerging markets who borrowed in dollars. They will find themselves in the same position as Greece, Unable to repay loans that have appreciated.
The wave formations and lot more are explained in the new version of the Greatest Bull Market in History. We hope this will be out by the end of the summer.