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notes on Martin armstrong: FSN radio show June 2012
Flight to quality is not over
In the Depression: capital flows from one place to another. weak countries default one after the other over time until it gets to the US.
Now they have to put it in US debt-flight to quality is still there
Govt.'s will become more aggressive in taxing and collecting fines.
Gold is in consolidation phase now, feels 2017 is the real high on gold. Will really rally when people realize that the US is also really in trouble. Right now the US is still seen as the best place in a really bad Lot - Japan is in a worse position than Greece. Right now US has the biggest economy to support the debt.
Int rates will start to rise when everyone realizes that the debt is going to take off
Greenspan is saying int rates will rise as people will realize that the public debt will continue to rise
so as capital moves away from public sector debt to equities, real estate, gold, commodities, wheat again
then
int rates will rise
and the debt then moves up exponentially as int rate effect kicks in
fed can only really effect everyone by monetizing debt or outright printing
right now fed is purchasing 61% of all US issued debt
which is inflationary under a normal circumstance
but
since we are in a deflationary time this doesn't have an inflationary impact right now--balancing off each other
when that ends-- it will then be inflationary
still deflationary trends now --tax alot now,
everything is rigged to occur after the election, bush tax incentives fall away and automatic budget spending cuts kick in
tax rate on investment going from 15-40%
So from 2014 to 2017 sees inflation starting in earnest
where is the safest place ? Likes Southeast asian countries and some former communist bloc countries that have no debt now.
NJ now has an exit tax ! if you move to Florida...you have to pay an exit tax
Hoover's memoirs were privatized -- so only 500 copies printed --- Martin's new book will explore Hoover's memoirs and newspaper articles at the time which all indicate that the problem was much bigger than a stock market crash
wasn't just a stock mkt crash -- which was only a "normal" 60% correction at first
it was then that the foreign govt's starting to default on their bonds after that-- that's what then destroyed the banks and the rest of the equity mkt
they had sold bonds in small denominations to the retail investors--and many families got wiped out in depression because of the sovereign defaults and the bank defaults due to sovereign bond defaults
not just a stock mkt problem
armstrong economics . com
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