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August 9, 2023 | People We Should Know: Martin Armstrong

John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What To Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website DollarCollapse.com in 2004 and sold it in 2022.

Martin Armstrong has led a complex and tempestuous life — see this and this. But we’re not going there. His current work is what lands him on the list of People We Should Know.

Armstrong is a consultant and forecaster who uses a prediction model he calls Socrates to identify and extrapolate trends in politics, economics, and finance. And his latest results are terrifying.

A quick personal digression: I’ve been watching this guy for what seems like several decades (though it’s probably more like 15 years) and we’ve been on the opposite side of a bunch of trades, mainly involving me shorting what seemed like an overvalued stock market and him saying that US stocks were the only game in town and global capital would continue to bid them up. He’s been right, I’ve been wrong, and that sucks for my net worth. But it gives his current predictions, many of which are also coming true, extreme credibility.

Some quotes pulled from Armstrong’s recent interviews:

Politics

The volunteer military is collapsing, so they’re going to offer citizenship to illegal immigrants in return for enlisting. If that doesn’t work they’ll just draft them. They’ll also start letting non-citizens vote to flip red states blue in 2024.

Our computer says we’ll be lucky to have an election in 2024, and there’s no chance it will be legitimate. Biden is just a placeholder. The neocons are in charge now. This is their Christmas Day parade, they’re finally at the point where they think they can break Russia and conquer it. Their whole lives have been about this. They will start a war before the election and bank on the fact that no president has ever lost an election in a time of war. They’re not going to accept anyone who’s opposed to war.

Inflation and the dollar

The real rate of inflation is 26%. The CPI has been revised countless times. They replaced home prices with rent, then put in controlled rents from NYC.

[Fed chair] Powell always ends his statements with “We’re also watching international considerations.” War is always a source of inflation, and the neocons do not care about the economy and your investments. They only care about winning. So the Fed will be forced to finance the coming war.

The US made the mistake of removing Russia from [international bank settlement system] SWIFT, and to the rest of the world that means “Do what we say or we’ll remove you too.” The US has divided the world economy.

Globalization is dead. De-dollarization has nothing to do with our deficits, it’s geopolitical. You can’t be out there threatening China and then say can we borrow a trillion dollars? If we’re going to continue to attack people who buy our bonds they’re not going to buy them.

The BRICS currency replacing the dollar is absurd because they won’t be financing the world. Do you think countries are going to go to India, Brazil, and China to finance things? What’s backing the dollar is our deep financial markets.

The number one issue behind the dollar is the American consumer. Everyone wants to sell to the American consumer. The dollar has been going up against China since 2014. In a war, the dollar will keep going up.

Stocks vs bonds and other stuff

A European banking crisis is coming. They kept interest rates artificially low for too long while requiring banks to have government bonds as reserves and collateral. Pension funds and banks have lost 30% of their capital because rising interest rates lower bond prices.

Things are out of control. If other countries aren’t going to buy our debt because of geopolitical concerns [the US] can’t sell the debt so interest rates have to go up. Powell may have started raising rates because of inflation but it’s taken on a life of its own. Banks that aren’t sophisticated enough to hedge are in serious trouble.

The traditional flight to quality is to sell stocks and buy bonds, but that’s not working this time. Right now you have to ask yourself what do you do with your money if you sell stocks? Do you really want to buy bonds? Do you want bundles of cash and then they cancel it? You want stocks, gold, pretty much anything tangible.

Rising interest rates don’t stop the government from borrowing. Interest expenditures for the US are hitting $1 trillion.

Geopolitics and war

We’re now entering a war cycle, 2025 – 2028.

We’re in the midst of a coup. Biden is just a placeholder. The neocons are in full control, and they live for war.

NATO is the real threat. It has no purpose if Russia is not an enemy. So they have to keep up the pretense of Russia wanting to invade Europe.

In 2013 the computer picked Ukraine as the place it was all going to start. The US is clearly the instigator here. In 2014 they installed an interim government which then started the war in Donbas. It’s been choreographed like most of America’s past wars [with false flags and other lies].

Putin is actually the moderate in this story. There are hardliners in Russia who wanted to go bigger into Ukraine. He went into the Ukraine to protect the Donbas. This war wouldn’t be happening if Trump were still president.

The neocons keep saying “Oh, Russia will never retaliate.” They think they can just walk in and take Russia down. But there are people [in the Russian hierarchy] who feel that Putin has been too soft. They see Ukraine as a parallel to the US losing Vietnam, and they want to take off the gloves. Remove Putin and you’re going to see that.

I’ve never seen world leaders act so irresponsibly. People think red versus blue but when it comes to war they’re all on the side of war.

Investment thesis

There’s a lot to unpack here, some of it contradictory. But the resulting investment thesis — which is the only part of this that we can control — is:

  • Don’t short US stocks or the dollar because terrified foreign capital will pour into the US in a geopolitical crisis, even if the US neocon psychopaths are the cause of it.
  • Avoid US bonds because interest rates will have to rise in the face of war-related inflation, which means bond prices will fall.
  • Buy gold, silver, farmland, oil wells, and other real assets that governments can’t make more of.
  • Prep like crazy because the psychos are dragging us into WWIII. [I haven’t actually heard Armstrong recommend prepping, but it seems like a reasonable response to his other predictions] 

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August 9th, 2023

Posted In: John Rubino Substack

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