Martin Armstrong: Get Ready For a Stock Market Bubble

Posted by Money Talks Editor

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Armstrong-Painting-1024x851Michael Campbell interviews Martin on this Saturday’s Money Talks.

Martin Armstrong is a controversial market analyst who correctly predicted the 1987 crash, the top of the Japanese market, and many other market events … more or less to the day. 

Three years ago, Armstrong was laughed at when he predicted the Dow would exceed 25,000. Since that prediction the Dow has gone steadily up closing at 22340 Wed Sept. 27th. The push behind US stocks is the steady decline of Europe, which is driving huge amounts of capital flooding into the U.S, creating a giant U.S. stock market bubble. The rush of cash into the US has little place to go but equities. The bubble would be indicated when we exceed the 23,000 level on the Dow. 

Armstrong has also predicted that the government bond market has peaked.  Armstrong said it’s better to move out of government debt and into private debt. Specifically, when governments default, you get nothing.  But when private companies default, there are still some tangible assets to be divvied up. He suggested buying AA or AAA blue chip corporate debt

Martin does not see a 1929 type crash. That is when the private sector melts down. This time it will be government that melts down. That is why most analysts have been wrong. They keep preaching the same scenario, gold up, stocks, down, dollar to zero.

They do not understand that sometimes governments go bust and when that happens, you get strange results that do not mirror 1929.

In terms of Brexit and the EU, Armstrong said:
 
While all the hype how Britain will fail because it has left the EU, there is absolutely no evidence that such a result will unfold.  The EU is in a major crisis and the system cannot possibly work … the only way Britain will not be dragged down with Europe was to exit the EU. Their own data shows that GDP growth annually peaked in 1973 PRIOR to joining the EU. So much for this idea that [trade blocks] are everything.
 
On the push for eliminating cash, Armstrong said:
 
Their theory is that cash is what’s preventing them from completely controlling the economy. The propaganda is “cash is for criminals”.

They have this view that if they can eliminate cash, they can get whatever they want in taxes out of you. You have no way of doing a bank run … there’s no money.
 
In terms of negative interest rates in Europe, Armstrong said that  European banks just sent cash to their American affiliates, who then parked excess reserves at Fed. So European banks weren’t subject to negative rates. Instead, they got paid by Fed to park their money.  

And Armstrong says that the economic system is broken because politicians are motivated to ignore the real world so they can continue manipulating things for their own benefit:

The bottom-line crisis that we face is a crisis in philosophy. There is no interest in studying HOW the economy actually functions. Where’s the fun in that?

Economists line up with their hands out looking for money and spin wonderful stories about how government can manipulate the world to its benefit.  Whatever the governments pays them to suggest!

Government has no interest in Laizzez-faire economics for that maintains that the economy is far too complex for government to interfere. Governments embrace Marx and Keynes because they gave politicians the idea that they can manipulate the world for their political gain.