Where Are We?

Martin Armstrong, Jim Willie and Harry Schultz on the Economy: Where Are We?By Greg Hunter’s USAWatchdog.com 

Yesterday, the Dow was up more than 300 points, and gold hit another all-time high before dropping nearly $100 an ounce.  You would think the stock market was back and the gold trade was over.  Wall Street is excited about recent bad economic news that just may force Fed Chief Ben Bernanke to start a third round of quantitative easing (QE3).  I hate to break it to Wall Street, but QE3 is already underway in the form of 2 years of guaranteed near 0% interest rates. 

That’s the close up of the economy.  The wide shot reveals something much more profound and dangerous for anyone who does not know which direction the giant economic cruise ship is turning.  The problem the world faces today is crushing debt.  In America, it is at the local, state and federal level.  On top of that, there have been many promises made in the form of retirement and health care.  In Europe, the same thing, except there the problem is more immediate and dire.  The fate of the European Union hangs in the balance.

There has never been a time in history when debt problems globally have been this monstrous.  At the beginning of the year, I quoted 87 year old Harry Schultz.  He is now retired but is widely respected for his economic and market calls.  In his last newsletter, Schultz summed up the calamity we face by saying, “Roughly speaking, the mess we are in is the worst since 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We’ve gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in U.S. leadership, where the problems were hatched & where the rot is by far the deepest.”  (Click here to read my original post from January 2011.)  

David Knox Barker, who wrote “Jubilee on Wall Street: An Optimistic Look at the Global Financial Crash,” echoes Schultz.  Enormous problems will usher in equally enormous changes.  Barker said this week, “The final plunge of this long wave winter season is now underway. The international political economy, which has lost its moorings in individual accountability, responsibility and purpose, is breaking up. Socialism in all its forms, including the global banking system that is dependent on the government dole, is collapsing from the weight of its internal contradictions. Socialism is going through an extinction event in the final years of this long wave, receiving its just reward from the crushing long wave forces that it has magnified around the globe.”  (Click here to read the complete article by Mr. Barker.) 

The socialist state would not be possible without sovereign debt.  One of the best examples is the good old US of A which spends about 43 cents more than it collects in taxes.  According to economist Martin Armstrong, the prospects of fixing the problem before it blows up are small.  Last week he wrote, “The threat we face in a Sovereign Debt Default scenario is more of the destruction of capital and that is DEFLATIONARY rather than inflationary. So people cheering the downgrade of the US debt had better be careful what they wish for. If the debt structure collapses BEFORE reform (more likely than not), this will wipe out the pension funds, insurance companies, and banks. The debt will be suspended and at that point the challenge will be putting it back together before CIVIL WAR.” 

Martin Armstrong invented something called the “Economic Confidence Model.”  He discovered the economy and politics move in specific cycles.  He has made many spot-on market timing calls based on his mathematical calculations.  He has had legal problems that put him in jail for a number of years, but this makes him no less brilliant.  (Click here to read more about this complicated case and what has been called unfair imprisonment.)  Armstrong consults for the ultra-wealthy.  Some of his clients manage $1trillion in assets.  He is a real player who knows what he is talking about.  Armstrong goes on to say, “We are headed into an economic storm where the sun doesn’t shine on the horizon. For all the conspiracy theories that convince the world some brilliant men are planning everything, when my phone rings, why are they asking me what’s happening? The sad truth is far worse. When you pull the curtain back, you suddenly find smoke and mirrors with nobody in charge and the whole thing is really just a runaway train and there is no conductor. That is much more dangerous than some enlightened group with a plan.”  (Click here for the complete Armstrong post.)  Armstrong contends in either inflation or deflation, gold will offer the best protection.

What is happening is nothing short of a reevaluation of money, and thus we see gold breaking new all-time highs.  In his latest post, Jim Willie of Goldenjackass.com gives this warning to the common man about the perils of holding cash.  Willie said, “Prepare to protect your personal wealth during the grandest transfer of wealth in modern history, from toxic paper to reliable hard metal with no counter-party risk. Money is in the process of being invalidated and redefined. The Paradigm Shift continues at work.” (Click here for the complete Jim Willie post.) 

So, we are at the edge of a cliff in this grand cycle.  It is said, it is not the long fall that can kill you, but the quick stop.

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  1. MasterLuke

    There may not be one entity in control – but there are many powers that are all trying to control. This is the problem I see with the world right now, lots of fighting for control/power and noone working together. You see it in the white-house, you see it internationally, and its bullshit.

    Greg was right, we should have let the banks fail because we would already be headed towards greener grass. If you don’t try to correct a dog from shitting in its own house its probably going to continue shitting in its own house.

    • Greg

      Master Luke,
      Point well made and well taken. Thank you.

  2. joe

    Sad and scary stuff! I sincerely hope that those responsible (politicians and bankers) will be held accountable by the confiscation of their assets and its redistribution to those in need. Otherwise, the moral of the story will be that “crime does pay.”

    • carmen

      Kind of comunism, like marx predicted 🙂

    • MasterLuke

      It is a sad reality. The politicians who get cancer get world-class treatment. While the little person who struggles to pay rent gets chemotheropy and has to continue to work their job to pay bills. Imagine that. Your dieing but you still have to work. I’ve seen this.

      At the end of the day – we can talk about the demise of America all we want. I think its really a moral demise. The rich get richer and most don’t care. The poor stay poor and sick. I’d like to see real rich people on T.V. really helping poor people. I don’t care about the next I-Pad when we still fight wars over oil. There is no future in repeating the same mistakes. Its half Limbo/Half Ground Hog day.

  3. Art Barnes

    “All governments turn against their people WITHOUT exception!” What a profound statement by Mr. Armstrong. Mr. Armstrong’s article was an eye opening experience for me. The battleship in my mind is turning and I kind of always kind of thought there was no one at the helm so to speak. If the prediction of Mr. Armstrong comes true about the future it is no wonder the powers that be continue to try and “kick the can” because they are afraid for themselves and everybody else but in reality they know they have no say as to which direction the ship turns. The external and internal forces directing the ship are so powerful and out of control themselves that they all know that there is nothing to do but watch and wait while gathering the life boats and jackets. Frankly, it might be better to pull the curtin and see the puppet master at work, at least we would have someone to grab or blame for the upcoming shipwreck.

  4. To QE or not

    So, Greg, are you saying there will be no more money-printing by Helicopter Ben? No more QE’s? And that will be announced by the weekend?

    • Greg

      To QE or not,
      Not, I am saying it has already started and I expect more but not by Friday.

  5. Matslinger

    People like Martin, Jim , and Bob Moriarty have given us all the time we needed to prepare, we’re rapidlay approaching a crescendo
    that divides us from “what we can do” vs. what “what we have done”.
    You cant throw a stick without hitting a scnook these days, and yes
    the matter is no longer in the hands of the elites, unless you consider their efforts to reverse this nightmare, which amount to
    “nill”. The world is decending into “natural entropy” which is dissasebling all the “stable disequalibrium” set up in 1913…
    what will follow is “extropy” , though mankind may or may not be a part of it.
    It’s time to get right with God and your own soul, and pray for
    devine intervention.

    Mat – [email protected]

    • Greg

      Amen to that brother!

  6. josh

    “When you pull the curtain back, you suddenly find smoke and mirrors with nobody in charge and the whole thing is really just a runaway train and there is no conductor. That is much more dangerous than some enlightened group with a plan”

    i couldn’t agree more. the mess we are in is the cumulative result of our society’s personal greed. there are a lot of small conspiracies but no one is really driving this train.

    as to what’s happening in the market this week, it reminds me of the subprime mess. there were a few market shocks that were quickly forgot until the lehman brothers crash. the sovereign debt crisis is around the next corner but gold is falling today and the s&p 500 is up.

    a lot of people are starting to run to gold the way they used to run to treasuries at the first sign of trouble. when volatility in the market quiets down the sell their gold. but enough of it is held onto that the price it settles down to is a little bit higher than the last plateau. five years ago, this strategy would have been considered crazy by the same people who are now doing it. gold is not a commodity. gold is money and even wall street is waking up to this fact.

    i think gold etf’s are a game changer. i know a lot of the readers of this site don’t trust them. fair enough, but by creating gld, the gold council created a very liquid form of money that can’t be manipulated by the central bankers.

    • Greg

      You may be right Josh but I like and recommend gold you can hold.

    • David


      GLD is the vehicle that was created to dilute the physical gold market with a paper market – they created so much paper gold that it’s now easier for them to manipulate the price and replace price discovery with price fraud.

  7. brian

    I think we as Americans have already lost most of what was left of the wealth we thought we had in our money in 2008, it is only now that we are going to begin to find out how much wealth we really lost.

    To buy gold and silver with absolutely no intention of ever converting back into dollars is a scary thing to be doing, but it is what I am doing now…..I just don’t care about the price of real commodities in dollars anymore.

    I noticed some of the coin dealers are offering copper bullion now, is that a sign of how much demand there is for SOMETHING, ANYTHING affordable and tangible?

    • Greg

      Thank you for the reporting from the front lines of real life!!

    • Tyson

      I have purchased a few copper rounds, Its is interesting that one in a copy of a 1933 $20 SA Gold coin. Does not say “copy” on it. Wondered if someone would accept it as $20? And, still cant figure out how this is any different than what The Liberty Dollar. Go to coin-rare.com or providentmetals.com to see what I mean.

  8. g.johnson

    awwww gawd!! newbies can be such a pain in the ass. especially those just awakened solely by the staggering realization that their portfolios are turning to dust before their very eyes. raised and indoctrinated to be all in to the patently false and sinister paradigm of “it’s all about money!” they can’t bring themselves to extrapolate out of the morass of stinking crap that has been poured into their brain pans since they first began to experience the realization of their own existence. mommy and daddy did not mean to set them of on the wrong foot. it’s just that they have been compromised themselves. they just didn’t know any better. since the day they began to crawl a myriad of “authoritarian” institutions have been at them, cajoling, demanding, rewarding, threatening and virtually dictating every move and every thought. media, government, law, commerce, education, medicine and religion. (there’s your 7 headed beast of the apocalypse). all working overtime to insure that sovereignty never got a proper foothold. working overtime to make sure that you and me became quiet, go along to get along, producers of tax revenues. (tithing, interest, tuition, consumption, etc., etc.) personal liberty was never an option only the color of liberty was aloud. sovereignty is the greatest enemy of the sociopath conqistador. ergo, this is not about money, this is about the abolition of sovereignty. america, the great experiment in human freedom must fall for the evil empire to take hold. sound like a bad movie? i wish.

    so, mr. baker. you need to step back a little further. there is a conductor. he is not in the room with the smoke and mirrors. he is behind the damn curtain! didn’t you see the movie?

    • Greg

      G. Johnson,
      Love your comments, Keep em coming.

  9. Pat

    Greg,Excellent article and 100% right on. Main stream media can really learn a lot from you. Thank you for your great work. Pat

    • Greg

      Thank you Pat for the kind words and comment.

  10. M SMITH

    I want to add to Martin’s & Jim’s content from todays news from, http://www.news.goldseek.com/InternationalForecaster/1314194940.php.

    Greg, our MSM Keynesian’s economics experts are at it again with gold. Just wait until it shoots up $200.00 or $500.00 a day or more. How will they spin all their crap then? I cant wait to when I can cancel my TV services, I my take the one time hit so I may get more insurance because the day of reckoning is not far away!

    Thanks for the great content, if only the rest of Americans knew the truth, they will soon & it wou’t be pretty to watch!

    • Greg

      Thank you M Smith!
      I think by the end of the year a lot more people will know how screwed we really are, and by the end of 2012 the masses will be fully onboard. That’s when it will get scary.

  11. Rob

    Hi Greg!

    The masses lust for things and money and so become bondservants to the bankers.

    The bankers lust for money and power and so they become bondservants to the Federal Reserve, ECB, and the IMF.

    The FR, ECB, and IMF lust for power and control and so become bondservants slaves to the Elitists.

    The Elitists lust for control and world dominance and so become bondservants to satan.

    Satan lusts for world dominance and souls and so was, is and will forever only be a bondservant of the Most High God.

    The Most High God created this world to raise up sons who would reject being a bondservant to anything but Him and paved the way through His first Son Jesus.

    If you would like to know more about freeing yourself from being satan’s bondservant through his chain of command check out our web site http://www.unleavenedbreadministries.org

    In CHRIST! Rob

    • Martin Nichols

      Give it a rest mate. I mean, believe what you like, but who can take this irrational drivel seriously?

  12. Glenn

    Hey Greg, still the battle between deflation and inflation persists. I believe first deflation as billions if not trillions evaporate from world markets and then inflation as the world’s central banks’ printing presses ramp up. Either way, the picture is an ugly one. You’re absolutely right in saying that QE3 has begun with ultra-low rates over the next two years, but don’t expect more money printing this Friday. Ben will address that later this year when all panic hits and he will be seen as less an evil force to the inflationary side of the arguement.

    • Greg

      This sounds totally correct but actually we have inflation and deflation occurring at the same time. However, in the broader sense I think you are correct!

  13. james

    when you here safety and peace is hapening in the world. then over night the bottom falls,and everything collapses.its like a woman having a child.one day shes fine as frog hair the next hour shes screaming for dear life.
    it good to walk in light, thanks greg.

    • Greg

      Good stuff James. It is good to walk in the light no matter what is illuminated.

    • Tyson

      Funny, where’s Martin Nichols is his rude comments? James is quoting scripture, just modified. Rob was pointing out the condition of the world with his interpretation of scripture. Christian and Jew haters are a sad bunch.

  14. Tim Wulff

    Unfortunately, I do not believe this is entirely random and I do believe there is a plan.

    If Socialism has failed, then Totalitarianism will replace it.

    That and a highly stratified economic society. The rich and powerful domineering over the impoverished majority by means of a police state.

    It is already in place.

    • Greg

      Fair enough Tim. It is probably a little of both.

    • MasterLuke

      I think its a reactionary plan.. This happens, so then then they a reaction happens etc, all in all protecting the overlords.

  15. Ken

    Thanks Greg for that link to Mr. Armstrong’s site. I recommend people going there and reading the whole article, it was very interesting and I have added him to my list of favorite economic authors.

    His statement that, “All governments turn against their people…” is very profound and true. It’s something that kids should be taught from a very early age; and taught often so that they don’t forget it.

    Something else that should be taught is that governments always think it’s their business to intervene, and they only know force and money. Which means that in any crisis the government will come roaring in with lots of guns and lots of (debt) money.

    Force destroys liberty, which capital needs to flow freely and efficiently, and debt money simply prolongs the crises by propping up bubbles and loading debt (and the austerity that goes with it) on people who weren’t responsible for the problems in the first place.


    • Greg

      Thank you Ken for the comment and continuing the analysis!! It is good.

  16. JEHR

    Socialism defined:


    “Socialists generally argue that capitalism concentrates power and wealth within a small segment of society that controls the means of production and derives its wealth through a system of exploitation. This creates a stratified society based on unequal social relations that fails to provide equal opportunities for every individual to maximize their potential,[13] and does not utilise available technology and resources to their maximum potential in the interests of the public,[14] and focuses on satisfying market-induced wants as opposed to human needs. Socialists argue that socialism would allow for wealth to be distributed based on how much one contributes to society, as opposed to how much capital one holds.”

    Socialists hold that capitalism is an illegitimate economic system, since it serves the interests of the wealthy and allows the exploitation of lower classes. As such, they wish to replace it completely or at least make substantial modifications to it, in order to create a more just society that would guarantee a certain basic standard of living.[15][16] A primary goal of socialism is social equality and a distribution of wealth based on one’s contribution to society, and an economic arrangement that would serve the interests of society as a whole.”

    Please try to use the word the way it was originally created. It is not a dirty word but an enlightened one.

    • WildernessVoice

      If you say so, Mr. Socialist.

  17. nm

    Greg Said:

    “QE3 is already underway in the form of 2 years of guaranteed near 0% interest rates”.

    Sorry to keep asking what may seem like the same question all the time, but I think this QE3 procedure is something that most people are not getting.

    The people I work with are looking at the stock market and worrying about their 401K’s with no clue about what QE3 is, what it means or how it’s done.

    So, again, 0% interest to the banks who are then what? trading it and giving it back to the Fed, which then does what with it?

    • Greg

      The banks borrow money at 0% and turn around and buy Treasuries at 2-4%. It is a no risk trade and the government sells it’s debt. This is unsustainable in the long term and destroys the buying power of the dollar in the process.

  18. Mauree

    Continued from my previous comment which was submitted before finishing.
    If you can not buy or are not able to store gold and silver and are a little leery about gold etf’s and the great possibilities of banks tottering, what do you do?
    Is there a possibility for the governments to confiscate gold like they did before? I’m wondering if the government are already salivating at the money sat in RRSP’s they must be thinking What They Will Do With All That Lovely Money sat there in full view like sitting ducks. Where else will the government get money?
    I think people here in Vancouver Canada are driving the real estate market up for lack of any other asset protecting ideas.

  19. S.L.C.

    It certainluy seems to me that the Word of God is comming to pass. Ts it is writen that in the end days the whole world will be buying and selling, but with the “mark of the beast” as a necessity. In these States United, most don’t consider the implementation of what the Social Security Card is all about. Socialist Security Papers is more the end result of this scheme, and we are none the wiser due to the public schools intervention in the ways and means of aquiring TRUE KNOWLEDGE. “Train up a child in the ways they ought to go, and they will not depart from them even when they are old” is a proverb that is almost a “NO DUHH” mind set. But this is exactly why we have a populace that as G.H.W. said would be accepting of “A big idea, where we would all work for a common cause… a New World Order! (More could be added, but you can remember what he said!)It plays out like how it did in Nazi Germany, Reichtag (9/11), devaluation of the mark (doller), social unrest (wars and rumers of wars), propaganda by the truck load, and the list continues to grow… just like the Book of Revelation (and the Pentatouch, etc.) says it would play out. I am absolutely amazed at how acurate the Word is, Who other that the Only Who could have written that, The One Who saved my life… Jeshua! Just like the book ‘1984’ depicted, so I think the book of Revelation depicts! I know we all have different opinions of how to interperet the Bible, but as the Holy Spirit reveals to me “So shall it be as in the days of Sodom and Gemorrah, shhall it be as the days of the comming of the son of man” (I’m only going by memory, I don’t have the time right now to make researched and quoted notes) I believe these days are as spoken of by Jeshua, we/I however need to be speaking of His loving kindness to all we meet, just as He said we should/would do! More people need to hear the Word of God than ever before, these are the last days we are in (or so I believe), therefore “If the watch man on the wall doth not sound the trumpet, the blood of those he watches over shall be counted to his life” (again from memmory), I think that’s in Jeremiah. Either way, let us all ‘Sound the Trumpet’, in season or out I must put The Fire (Holy Fire)under my feet to prompt me to witness to all otheres of His ultimate love for all humanty… homosexual, political mischevers, rapeists, theves… etc. Not to say that they will be saved, but as in Jeremiah, I will have done my part in allowing the Holy One to use me in His glorious proclaimation of salvation. Allow Him to flow through your soul that your efforts may bless otheres to Heaven! Amen and Amen.

  20. JiminGA

    The financial chaos now going on is unprecedented. Those with real money are scrambling for places to put it, and it’s all about protecting assets, not investing. When treasury yields fell they ran to the Swiss Franc, then the Swiss put controls in place to stop the hot money. Then they ran to US banks where at least one TBTF bank began charging fees for large deposits, again trying to stop hot money flows. Then they ran to precious metals and the CME raised margins to slow the hot money. Now they have run back to treasuries and accept very low yields because they have no place to put the money (certainly not Europe).

    This partly explains the chaotic conditions in bonds, PM’s, stocks and cash. Nothing is proactive, only reactive, and all have become day traders.

    This will not end well.

  21. sharonsj

    Here’s what’s going on in the real world: I talked to an old friend I haven’t seen in years. She is a retired single woman (like me) with a small house in California. She had something akin to a 401 and said that in the last 10 years, that account disappeared due to three stock market tankings and now she had nothing.

    I consciously do not own stock and didn’t realize there were three crashes that destroyed her savings. Instead of stock, I own “things.” I cannot afford to dabble in gold bars, nor would I ever buy certificates. I do buy second-hand gold and silver whenever I find it at yard sales and flea markets. So I doubt I have to worry about the government trying to confiscate my gold.

    Even so, we are on a fixed income, and price inflation is killing us. Like other seniors, we now have to choose between having a telephone, an internet connection, TV reception, and not using the car. If I was 30 years younger, I would seriously consider joining the anarchists.

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