Legendary financial analyst Martin Armstrong says the world is going to be hitting a major “turning point” this fall. Armstrong says this is the end of a 300 year cycle and contends, “This appears to be a peak, as far as governments and bond markets are concerned, and from there, we are going to be turning down. We are in a lot of trouble with most of these governments. Our models say that by 2020, the amount of interest we pay . . . will exceed the entire defense budget. So, this is pretty serious.”
Armstrong says his model marks the actual turning point on October 15, 2015. So, what’s in store? Armstrong says, “First, you get the deflation, and then, you move to the inflation. It’s kind of like a pendulum–it swings to the extreme to both sides.”
So, when the government bond bubble pops, what happens to people getting a government check? Armstrong says, “That’s the big problem. They’ve wiped out pension funds all over the place. That’s the danger of civil unrest, and that’s what our computers have been warning about as well as very serious sharp riots and third party activity for 2016. . . . When governments are broke, they come after us.”
Will the Fed finally raise interest rates? Armstrong contends, “The Fed will have no real choice. . . . The Fed will come under significant pressure to raise interest rates because the newspapers and Congress will blame them and say they are creating a bubble with low interest rates. The more they raise interest rates, the higher the stock market will go. I know that sounds crazy . . . historically, interest rates bottom with the markets. I mean, you lose confidence and people won’t borrow.”
Will rising interest rates kill the bond and housing markets? Armstrong goes on to say, “The bond market, yes, it will accelerate the problems as far as other foreign countries that have issued dollar based debt. The emerging markets will get like Greece. So, we have a serious worldwide problem going on here.”
So, when the Fed starts raising rates, will some currencies collapse? Armstrong says, “Sure, this is what’s pushing the dollar up. Most people don’t realize that the dollar is the only real game in town. In Europe, you see the difference in the mentality there compared to the United States. In the United States, we are still in a fog; over there they feel the pain. What are they doing? They are basically selling all the euro debt everywhere, and they are buying the German debt. It’s not that they think Germany is fantastic, but they are assuming that the euro is going to fail.”
On gold, Armstrong says, “Gold rises when people lose confidence in government. It has nothing to do with inflation. So, when you start to worry about government is not going to survive or who’s going to win, that’s when gold rises. Short term, we still have the risk of it going under $1,000 per ounce. It’s going to flip when everything is right. It will probably max out at $5,000 per ounce. . . . You are really talking about a major reset coming. 300 years ago, that was the revolutions against monarchy. Today, it’s going to be revolution against . . . pretend democracy. We do not have a democracy.”
Armstrong says you can forget about the U.S. dollar crashing in value. Armstrong contends, “No, that’s absurd. The euro is in terrible shape. The yen is in terrible shape, and honestly, you can’t park money in yuan or Russian rubles yet. I mean, let’s be realistic here, but eventually– yes.”
In closing, Armstrong says just a few percentage points in rising rates are going to cause big losses and big changes. Armstrong predicts, “People will be losing huge money. We are looking at a few percentage points, and you are going to blow the national debts of all these countries way out of whack, and that’s what’s going to force political change.”
(There is much, much more in the video interview.)
After the Interview:
On March 28, 2015, Martin Armstrong put on a conference where he talked more than three hours on multiple issues he sees coming. If you would like to buy the video presentation of the conference, you can do so by going to ArmstrongEconomics.com.
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