COMMENT: Mr. Armstrong, we by no means met. I used to be launched to Socrates on the insistence of a good friend at one other one in all our divisions. There was no 80% Crash on April 29. The entire de-dollarization appears to be one other hype, as we now have witnessed ourselves. Your system lets you plot something in any forex. I simply must remark that you’re clearly a extremely skilled dealer, for it takes somebody who has thrown their hat within the ring to really provide you with one thing helpful fairly than idea. Plotting the S&P throughout numerous currencies confirms the bull market, as you will have constantly stated. A bull market requires development in all currencies.
I perceive you may be doing a Subsequent Era convention to show the following technology how the world actually works. I do know our firm has used you for a few years. I’m a latest addition. I simply wished to say that you’ve got opened my eyes and reworked my profession into one thing thrilling.
God bless you, Mr. Armstrong, and thanks.
Robert
REPLY: Thanks very a lot. I do know what you imply. When issues are all the time evolving, it retains you in your toes. Lillian Smith put it this fashion:
“While you cease studying, cease listening, cease trying and asking questions, all the time new questions, then it’s time to die.”
My father took the household to Europe for the summer season again in 1964. That taught me forex, for we traveled throughout Europe, and again then, you needed to change currencies at each border. That journey taught me greater than something at school, for not solely did they by no means discuss forex as a result of every thing was at a hard and fast price, however economics was not even a science. It was all actually Marxism and Keynes projecting that authorities was great, our savior, who would get rid of recessions and depressions, creating the trail to financial utopia.
It was forex that dragged me around the globe and had firms and governments knocking on my door. It has been my purchasers who’ve taught me, not academia. I realized early on {that a} bull market is one thing that rises in all currencies – not simply your native forex. In case your forex declines by 50%, your non-public belongings will rise in proportion as a result of every thing has a world worth.
Not solely does classical economics utterly fail to maintain up with the instances, nonetheless entrenched in theories from the fastened alternate price interval, the place they NEVER thought of forex, however every thing is predicated completely on home evaluation, void of worldwide capital flows. Here’s a chart of the well-known 1989 Crash in Japan. Everybody will act out of their very own self-interest, and that’s measured by the eyes of their home forex. Be aware that the excessive came about in yen and {dollars} concurrently.
I rapidly realized that what I used to be being taught at school was all lies and propaganda. I needed to learn Galbraith at school and got here throughout Hoover’s Memoirs. It rapidly surfaced that Galbraith was only a socialist who portrayed firms as evil and the federal government as strolling on water. He omitted every thing concerning the Sovereign defaults of Europe, South America, and Asia. The LEFT rewrote historical past to help Marx. Nothing has modified. Formal training is a detriment. The Shah of Iran paid for the training of Iranians, despatched them to the very best universities within the US and UK, and so they returned with a Marxist agenda combined with Islam and staged the Revolution in 1979. It was that very same LEFTIST hatred I noticed at school that has led to the loss of life of tons of of hundreds of thousands and counting.
An actual bull market is one thing rising in a broad basket of currencies. Then and solely then do you see how markets really reply. This 80% crash is nonsense. To attain that, which is a repeat of 1929, so many issues must be completely different. The US had a balanced funds in 1929. There was a money scarcity as a result of the Fed feared inflation. Over 200 cities issued their very own cash because of the money scarcity, Milton Friedman identified.
The market went down as a result of the greenback rose to report highs and different international locations defaulted on their debt. The Fed was terrified that the greenback could be subsequent on the listing of currencies to default, and it tried to maintain the availability tight, inflicting deflation.
I had a dialogue concerning the enterprise cycle with Paul Volcker again in 1999. He, too, noticed Keynesian Economics fail throughout the Nineteen Seventies. He additionally agreed with my Financial Confidence Mannequin and stated he believed that the enterprise cycle was about 8 years.
It was Milton Friedman who got here to hearken to me communicate, I imagine it was a COMPUTRAC convention in Chicago. I used to be talking about forex and capital flows, and once I was executed, Milton got here up, shook my hand, stated that was the very best speech he had ever heard, and that I used to be doing what he had simply dreamed about. To say I used to be shocked is placing that mildly. I noticed myself as only a dealer.
What Milton meant was that I used to be doing what he had simply dreamed about, as he had seen in his thoughts a floating alternate in 1953, virtually 20 years earlier than it materialized. In 1953, Milton Friedman revealed a seminal essay titled “The Case for Versatile Trade Charges,” the place he strongly advocated for a system of floating alternate charges. On the time, the worldwide financial system was dominated by the Bretton Woods framework of fastened alternate charges. Milton argued that such a “pegged however adjustable” system was inherently unstable. He proposed versatile alternate charges as a superior answer, primarily as a result of they might robotically regulate to financial shocks, serving to to keep up each inside (e.g., full employment) and exterior (e.g., stability of commerce) balances for a rustic.
Milton’s case for versatile charges was so influential that it presaged almost all the most important arguments that later students would make in favor of floating alternate charges. It was Milton who inspired me and stated what I used to be doing was vital not only for buying and selling, however for economics and the political world.
I’m attempting to complete these 4 books as my remaining reward. That with the following couple of films (1), documentary (1), Hollywood movie, I can say mission completed. I’ve all the time believed we’re despatched right here for a objective, and if we don’t stare that future sq. within the eyes, then what’s the objective of being right here?
