muses of the moment

February 12, 2013

Latest Blog Post from Martin Armstrong dated February 12, 2013

Filed under: Dollar Crisis, Economic Confidence Model Cycle, Martin Armstrong — Tags: — totallygroovygirlfriday @ 3:47 pm

Click here for Martin Armstrong’s latest post entitled Dollar Bears-Look Out- It’s Buy Time dated February 12, 2013.

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4 Comments »

  1. Hi gg,
    would really appreciate your input on this one.

    Martin says
    “CORE ECONOMIES have historically imploded – NEVER exploded with hyperinflation ‚Äď that is reserved for countries that nobody buys their debt anyway.”
    http://armstrongeconomics.com/2013/01/02/dow-jones-for-2013/

    but 70% of US public debt is held by it’s citizens, institutions, social security, Fed etc, only 30% by foreigners
    http://www.businessinsider.com/who-owns-us-debt-2011-7?op=1

    does this situation somehow translate to “nobody buys US debt anyway”?

    Comment by RM — February 13, 2013 @ 2:23 pm

  2. RM,

    First, Martin has never defined what he means by hyperinflation. Hyperinflation in the Wiemar Republic was 1000% inflation per month. Hyperinflation can be 100% per month or 50% pr month. 50% means prices double every month. The US can not function in its national or international economy with a doubling of prices in a year’s time frame, let alone a month. Fringe economies can go on functioning when they devalue in relation to the dollar (What did Venezuela just do?) So, Martin is correct that hyperinflation at 1000% will not happen in the US because it is the core economy. But that doesn’t mean it will not be effected by 100% or 50% hyperinflation. But MSM will call it “inflation in assets prices” and it is “good for GDP”.

    Martin states that the dollar collapses as world loses confidence in the dollar. But he doesn’t go into detail about how that happens. What Martin doesn’t acknowledge is that a dumping of the all those dollars means some of them must come back to the US at the national level. Foreign money coming into NYC real estate: that’s foreigners trying to get rid of dollars for some sort of hard asset. Foreigners are outbidding American investors in certain real estate areas. Pretty soon, even Africa will clue in and not accept dollars.

    This is where John Williams and Jim Sinclair get cost push inflation in prices in the US (and other places too). This makes it feel like a hyperinflation in the US and it forces the government to “revalue the dollar”, before it completely collapses and crashes the global financial system. Imagine a doubling of gas prices every month? The economy would shut down. the globe would shut down.

    As far as who buys our debt, the shift is happening now. Foreigners do not want US debt. But soon neither will anyone in the US except the Fed. Then confidence in the Fed fails.

    This is about confidence in the systems. You must look at it from that point of view. Right now everyone around the world is agreeing to pretend that the system is working. At some point they will not. Right now everyone in the US is agreeing to pretend that the system is working. At some point they will not.

    Maybe this helps?

    gg

    Comment by totallygroovygirlfriday — February 13, 2013 @ 6:34 pm

  3. GG, thanks for the detailed reply, very informative as always.

    Comment by RM — February 13, 2013 @ 8:27 pm

  4. gg,

    Are the dollar bears really the majority right now? What metric is Martin looking at to come up with this?

    It seems foolish to get back into the stock market especially when you consider how corrupt the financial system is. From where I sit, it looks like the Fed is trying to lure the sheeple back into to the market so they can be sheered again. And why stop at sheering. Once the banksters have fleeced the remaining wealth from the sheeple, the final stop is the butcher.

    No thanks. I think I will stick with Jim Sinclair and the gold bugs.

    Comment by sw — February 14, 2013 @ 10:42 pm


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