Because as China is reducing its purchasing of debt, I just look at it
this way. If other countries are not going to buy the debt because of
our geopolitical positions, then they can sell the debt, so their interest rate
has to go up. So it's really you know, he may have started
this on the inflationary idea, but it's taking on a life of its own.
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I'm your host, Carry Lutts. Hey. It's August third, twenty
twenty three, and there's so much going on the world in the world that
we had to get Martin Armstrong back. Martin, you got a new book
coming out called de Dollarization, and that's got a hyphen in it. I
didn't know that it was spelled that way. But we should start there first
with everything that's happened with a dollar. You know, the dollar was trading
it near records, then it pulled back, had a substantial pullback down to
under a hundred. Now it's back going back higher. De dollarization fact fiction,
fancy, and de dollarize great, But what do you wind up with
then the bricks currency. You know, it seems to me that the whole
bricks currency is getting created because their currencies are collapsing as well, and they
got to come up with an alternative otherwise they're going to be even more stuck
with a dollar. Well, yeah, I mean the whole problem is that
the main I would say the real backing of the dollar is the fact that
the United States is kind of like Britain was before World War One, that
everybody was issuing bonds in China, United States, even in British pounds,
because that was the financial center of the world. If you wanted to raise
money, sell bonds, you had to go to London, you know.
After you know, World War Two, that simply became United States. So
the real problem with like bricks or anything else replacing the dollar is kind of
absurd because they're not going to be the ones financing the world. You know,
so, I mean countries they'll go to Goldman, Sachs, et cetera,
Greece, you know, Malaysia or whatever. You know, you really
think they're going to go to uh India and Brazil and China for launching systems
and stocks and stuff. I mean, you know, you have to look
at this from what is really the backing of the dollar, and that is
the deep financial markets that we have today. That doesn't mean it lasts forever.
I mean Britain lost it, we will lose it too, but it's
not to the bricks for anything of this particular nature. Most of this has
turned on the fact that since the Biden administration, the neocons have gotten controlled
basically everything, and so they made the stupid mistake of removing Russia from SWIFT
and in doing so, you basically choreographed to the rest of the world.
Hey, you either do what we say or we will remove you. So
then you have China setting up chips, you have Iran setting up one,
and so now the threat of removing a country from the SWIFT system doesn't carry
what it used to. And you know, effectively, what they did was
they divided the world economy. So globalization is really pretty much dead. And
that's the real problem. So the de dollarization thing that it's got nothing really
to do with our deficits or anything of that nature. It's due political.
You can't be out there threatening China and Russia and then go to them and
say, oh, gee, okay, fine, you know, will you
lend us one hundred billion dollars so we can buy some bullets to shooget,
you know. I mean it's just you know, at some point, you
do not buy the debt of your enemy. And that's really you know what's
taking place. Who China has been selling off us that every month, and
you can't blame them. I mean, if we're going to continue this nonsense
of attacking the people that actually buy the bonds, then they're not going to
buy them, right, all right, So that leaves us with a banking
crisis. All right. We've seen four banks fail, one bank being taken
under I think it was called Is this banking crisis going to be as bad
as O eight? O nine? More so in Europe rather than in the
United States? And the primary problem is that they kept interest rates artificially low
for too long. Europe was the worst. They went to negative rates in
twenty fourteen, and then you require the banks to have collateral role and reserves
and they have to be in government bonds. So you look at Europe and
I mean pension funds and banks, I mean they've lost thirty forty percent of
their of their capital because as interest rates go up, you know, the
negative bonds, I mean, you have to reduce the price to compensate for
the current interest rate. And that's really what took down the few banks in
the US that um. I mean, as you know, I've I've dealt
with governments and corporations for forty years and the problem is most of these boards,
um, they don't have the expertise, right, and you know a
lot of them are simply you know, being counters and lawyers. That's it.
They don't. I mean look at SVB, I mean effectively, there
wasn't anybody on the board a hand any banking experience. Well, at least
with signature you had Barney Frank, right, he was very confidence inspiring,
wasn't it. Oh yeah, I mean, I mean this is the problem.
They appoint people to boards mainly because they have some sort of a political
connection and not that they have any expertise in what the subject matter really is.
I mean, I'm going to board meetings and it's just I feel like,
you know, I'm teaching kindergarten. It's really bad. Yeah. Yeah,
well that's for sure. So so interest rates. Though, at what
point? How far can Powell take this? How far is he going to
go? Actually he's got no choice. Is out of control. Yeah,
because as China is reducing its purchasing of debt. I just look at it
this way. If other countries are not going to buy the debt because of
our geopolitical positions, then they can't sell the debt, so their interest rate
has to go up. So it's really you know, he may have started
this on the inflationary idea, but um, it's it's taking on a life
of its own. And because you have, like I said, in Europe,
you know, negative rights since twenty fourteen, the more the losses um
you know, the higher they can't afford to buy anymore bonds. Right.
So I mean that's the whole crisis that we have U and only the banks
that are more sophisticated in least hedging their their um their portfolios, you know,
can really survive. But I mean you look at SVB. I mean
they basically, you know, this woke agenda is absurd. Oh you know,
they're hiring people because they're a woman, or their color or this not
the expertise, you know, Um, it's it's it's really pathetic. But
you know you're supposed to hire the most qualified person, not the least.
Yeah, it's supposed to be a meritocracy at least. That's when we grew
up. That's what they taught us. You work hard, you know,
you study, you get good grades. So they might worn't that best,
but they were okay. And then you go and you start a career and
that's your that's your pathway to the American dream. And now it's to be
a favorite class and get benefits bestowed upon you by the by the ruling class,
right. I mean it's kind of been stood on its head. So
yeah, I mean I have clients that have sent me emails that their um
sound is going through MBA and everything else and they can't get a job because
they're right color or you know it's you know, they don't fill the slot.
Yep, yep. Yeah. So all right, so we got a
lot of problems. What about the stock market. It seems to be laughing
in the face of all of these all of these major issues, even higher
interest rates, so that we haven't seen that before. Actually you have if
you if you don't listen to the propaganda about interest rates in the stock market
and just step back and look at it. The Federal Reserve started raising interest
rates as soon as Trump came to office. They were going up throughout his
entire you know, administration, Yet they called it the Trump rally. Would
basically when I was writing The Greatest Bullmarket back in nineteen eighty six, which
we will republish because but I found it fascinating that the thinking process before nineteen
twenty nine was completely opposite. As long as interest rates were going up,
people were cheering because it meant that there were still a demand for money.
And when you go into a recession or a depression, interest rates collapse because
nobody's willing to borrow. That's why, you know, the ECB went to
negative rates to try and punish people for saving. But if you don't know
what tomorrow is going to bring, you don't go out and spend lavishly.
And you know, I've published studies on our site. I mean, you
can Google. You know, call money rates back to eighteen ninety nine and
you'll see that. You know, the stock market has never peaked with the
same level of interest rates twice. What it is is that if you think
the stock market will double next year, you'll pay twenty percent, But if
you think it's not going to go up one percent, you won't pay one
percent. So it's it's really a combination of expectations and whatever the rate is.
So right now, Um, you have to also ask yourself, okay,
fine, I mean I've gotten some people say, well, gee,
you don't think the stock market is going to completely crash? And then what
do you do with the money? You run to bonds? Do you really
want to buy government bonds in this atmosphere? And then they look at well,
no, okay, so what are you going to do? Um?
Question? You know you you you go to cash and to keep bundles to
cash in your house and they cancel it. Uh. It's it's so you
have a lot of people that are diversifying. That's why the real estate market
is up. Um. Antique coins are stuff like this, uh, pretty
much anything off the grid as long as well as the stock market and even
gold. Uh. These are all tend to be tangible assets so to speak.
Um, whereas the traditional flight to quality, as you know, you
sell the stocks and buy the bonds. Well, this time that's not working.
Yeah, nobody wants them. So what about real estate? You know,
we're still having a real estate boom in Florida. Prices are up five
percent year over year, and so far high interest rates have not killed off
the market here and in many other markets. Is that going to continue or
yeah? I mean I spoke to a local realtor that that I know here
in Florida, and he says, the houses that are like one to five
million dollars, people are paying cash. They're not they're not getting mortgages.
They're just paying cash for this stuff. And I would say, really,
what you have is if you look at the data on the Census and everything
else, you'll see there's a massive shift, uh since COVID from the north
to the south. I mean, I had a friend who was, you
know, a an executive VP up at one of the major banks in New
York, and he gave me a call and he says, hey, you
want to go to dinner? I said, oh sure, I thought he
was down here on vacation and so I moved. I should you move?
We can work virtual now. Goldman Sachs moved its most profitable division to Boca
ratan largest fund manager hedge fund manager in New Jersey. Left, I mean
across the states, a couple hundred million dollars in taxes. They're all coming
here, I mean from California. They've been going off to Austin, Texas
mainly. So how are these states where we came from, New Jersey,
New York, how are they going to survive in the future. They have
to do a massive scaling back, a massive cutback, or they're waiting for
another bailout like they got during COVID from the FETs. Yeah. They look,
you're dealing with politics Stians who have no understanding of markets the future.
To them, it's just like they need money. We'll just take us,
turn us upside down and shake everything out of our pockets. That's about it.
You know. There's no fiscal responsibility at all. And that's why the
federal Reserve is in trouble. All right. They can raise rates and we
say, oh gee, that'll make the stock market go down. It doesn't.
Why because they raise rates as supposed to stop us from borrowing. All
right, does it have any impact on the government. This is the exact
opposite. Politicians don't sit there and say, oh, gee, the Fed
raised the rates so they want us to spend less. They don't even pay
attention, you know. They continue down their journey spending and spending. And
because you raise the rates, this is the first time. Now you're going
to have interest expenditures for the United States hit a trillion dollars. I mean,
I remember Ronald Reagan. Everybody got upset of the national deadhead a trillion
dollars back then. Now we're talking about the annual interest rate is a trillion.
Yeah, it's just absurd, the whole thing. Yeah, it certainly
is. So hey AI. We hear about AI every day. I even
use it to take notes on my podcasts and my video cast now, and
it's a big time saver. Basically, it does eighty percent of the job
I used to pay somebody to do. Now I do the extra twenty percent
in a couple of minutes of where do you see all this ending up?
Um? Well, it would be very nice if we've replaced judges and the
government with a high exactly voice it can't be bribed, you know. But
you know, you have to understand, you know, there are some of
these people that you know, talk about AI is like, um, some
major threat like the matrix or something along those lines. Um. It depends
entirely upon what you're going to plug into it. I mean we've been you
know, I've developed AI, you know, from the nineteen seventies, and
our computer is fantastic, but it's limited to the database that we gave it,
which is the world financial markets of all the different countries. It's not
plugged into the Internet. It's not going to answer, Gee, what's Lady
God, God's dog's name or anything of that that nature. But I mean
AI, uh, you know what they're doing, like with the the you
know, the chat type things. I mean, it's it's impressive to somebody
that doesn't really understand the coding behind it. Um. But you know,
it's not really as much of a threat as long as you don't go,
you know, turning it into as far as being in charge of stending missiles
and things of that nature. All right, So uh, but you know
they're using it with drones now. You know, one of the alarming things
I find most alarming about the Ukraine War is these use of drones where you're
going along minding your own business and you know, the thing hits and bum
you know, basically basically they just blow you up. And they could do
these swarms clear out whole cities. I mean, you know, obviously the
sociopaths are running everything and nothing is off the table here Martin, No,
it's not. I mean that's um you have to understand. This is why
they're after Trump so much. And they also would not allow um, you
know, Kennedy to come in. They have control, all right. And
I mean I've met most of heads of state, you know, in the
course of my career. I went to Marl Largo back in March of twenty
and it was the first time I would say that Trump actually impressed me.
He said that he wanted to pull the troops out of Afghanistan because he was
sick and tired of writing letters to families to say their son died for you
know, Goden country. And he actually said, he says, what are
we doing there? They've been fighting over boarders for a thousand years. What
difference, you know, are we going to make? And you know,
John Bolden came out. Oh, this is outrageous. You know, you
know Bolton would basically invade Canada to get one rushing. I mean, you
know, that's basically what they These people always want war, and both Trump
and jet and Kennedy or against war. Uh So when Trump, I mean
that that drone that Iran shot down was unmanned, and Bolton wanted to launch
an attack against Iran and Trump said no, it was an unmanned drone.
Bottle airplane. Yeah, And he said, I'm not going to start a
war because they shot down a drone. But this is what these people want
to. Trump starts firing these uh neo cons and as soon as soon as
Biden came in, they're all back. Victoria Newland is the queen of them.
I mean, she's the number two in the State Department. Now you
just had her loss blinking come out and I couldn't even believe it. I
put it on my blog. He says, well, nuclear war is not
that really big of a deal. It's no worse than climate change. I
mean, I'm like, what, very well, you're not in the area
that's targeted, right, I Mean, this is what these people say.
They just live for war. Honestly, I you know, our computer on
the twenty twenty four election is it shows there's no way possible that the Democrats
could win. Yeah, that's not something that would stop them though. Hey,
Martin Wine, I grew up the Democrats, where the party the anti
war party, and now you know they wholly embrace it. And the whole
military industrial complex is having a field day at the world's expense or getting rid
of all the old Russian weapons. All right, Basically they're all being sent
to Ukraine to get blown up and u and then they have to rearm and
they're not going to buy Chinese weapons, so they're going to buy Western military
weapons because you know what, the whole thing makes me realize that the Cold
War was a complete scam. You know that Russia we're just really never a
threat because technologically, yeah, they could throw waves of people, waves of
troops, but from a technological standpoint, they were generations behind the West's armament
cycle. Well, well, I think basically um NATO is the real threat
because um and the previous book I published the plot to decease Russia. When
I mean the neocons were against Reagan from even meeting with gorbachof oh, you
can't trust the Russian and they were beside themselves and Reagan said, no,
I'm meeting, you know, and because I think Russia's falling apart, and
it was all right, And they were even proposing at that time that Russia
joined NATO. I remember, yeah, and um, you know, effectively,
you know, that ended up being the coup to take down Gorbach because
they were afraid that the hardliners didn't want him joining NATO. And that's basically
what all that stuff was about. But you know, NATO has no purpose
if Russia is not an enemy, so they have to keep that up no
matter what it is. You know, they threatened, oh, Russia is
gonna invade and take all over Europe. The Russian people don't want to do
that any more than the American people want to go and invade Russia and occupy
that country. Those are old days of empire building. I don't think the
population on either side are interested in invading other countries and occupying. That's head
the states that they do that kind of stuff. You know, it's the
concept of cannon fodder kind of came into the existence late eighteen hundreds when you
started getting these you know, basically, I guess Napoleon, but the Civil
War. But you would have thought we had advanced beyond cannon fodder. But
that's what these troops on the front lines of these war of the war are
their cannon fodder. And they're just throwing people into the mix. I mean,
it's yeah, they don't even care, I know, and these are
like but the people care, the people whose sons are going out there to
fight, they care. And you know, it's I find it really distressing.
We're in the twenty first century, we have AI and all these other
things, and yet we're still blowing each other up, seemingly for no purpose
other than perhaps a misguided ideal of reducing world population. Because when you get
down to it, they view us as just a bunch of eaters that take
up valuable resources and don't really produce anything. Well, you know, it's
it's even worse than that. You take Victoria Newland her families from Ukraine,
you know, and it's I mean, there's so any conflicts of interest here
it's absurd. And then you take the dumb boss. They're all Russias that
live there. Russia was right up to the river there of the Tsars before
USSR. That's why you have so many Russians living in that area that was
their country. I have friends here, you know, there's so many Russians
and Ukrainians in Florida. Oh yeah, I mean friends. You know.
I can name off probably close to a dozen people I know from the region.
The weird thing is, I'll say to one guy, well, so
you're Ukrainian. Yeah, I'm Ukrainian, but I grew up in Russia,
and you know I speak Russian. Oh you're Russian. Yeah, I'm Russian,
but I grew up in the Ukraine. And it's like, what's going
on here? These people? It's literally like brother killing brother. You know,
they're all kind of related here, and just find the whole concept of
this war, man and man. The only thing you could say is that
there's certain segments of the population, of business, of industry, the military
industrial complex. They're having a field day because they get all their weapons destroyed,
so a new rearmament cycle, and they get to prove them in the
battle battle testing, because you know, the observers are there watching to see
how everything performs. It's exactly like World War One. If you remember the
fuses in the artillery shells the English I think sold off to the Germans their
munitions companies, and it was a whole scandal and they just keep leaking it
to one another to keep the race going. Well, Martin, I could
talk to you all day, but we don't have time for that. Armstrong
Economics dot com. Next time, I'd like you guys to send in questions.
I'm going to address a list of questions to Martin if you don't mind,
and keep an eye out for the Dedolarization book. I'm excited to see
it. If you got a question for Martin, myself kl Atcarrelets dot com.
And while you're at the site Financial Survival Network dot com, sign up
for your free newsletter. Martin really appreciate it. You'd be well. You
two, thanks a lot, take care of yourself. Thanks for listening to
carry Lets's Financial Survival Network, your solution to today's trying times. For the
latest, go to Financial Survival Network dot com. Financial Survival Network now more
than ever,