COMMENT: I watched a pretend analyst who claimed the 1987 Crash was nothing. It is amazing how these people claim to be analysts yet do not understand the first thing about what took place behind the chart. I was there at your WEC in Princeton the weekend of the crash. I don’t remember if it was videoed. If so, you should post that.
See you in Orlando.
REPLY: Your statement is a sad epitaph on analysis these days. The “pretend analyst” is a Fed watcher who never looks beyond the shore. There is nothing you can do with these people. If they cannot look beyond a domestic economy, they are not analysts – plain & simple. Because I warned them back in 1985 that they would create a crash within 2 years by manipulating the dollar down 40%, when the Crash Came in 1987, that is when they were forced to call me.
When they began to realize that lowering the dollar by 40% also created a bear market in US assets for foreign investors, including US debt, they held the Louve Accord. Yet, look closely at the chart. The dollar had already begun its decline. It had nothing to do with the central banks. Those in charge know less than the average investor. They proceed, always assuming they have power – but over what they do not comprehend.
They then announced at the Louver Accord that the dollar had fallen far enough. When the dollar continued to decline, that is when the market realized that the CENTRAL BANKS COULD NOT CONTROL THE WORLD ECONOMY. Once that took place, that is what unfolded as the 1987 Crash.
My biggest accomplishment was to persuade the Brady Commission not to impose restrictions on the market when the formation of the G5 created the crisis. But the government will NEVER blame itself. The most significant accomplishment I was able to do was to get the Brady Commission to at least imply that foreign exchange had something to do with it.
The lesson of 1987 is NOT in the chart. It is behind the chart. Once the public realized that the central banks were not actually in control, that is when the panic took place. Today, when interest rates rise without the Fed’s actions because the Neocons are constantly threatening the world with war in Europe, the Middle East & Asia, including China over Taiwan, that is when panic will strike. It all goes nuts once people realize that the government is just a ship of fools with ZERO sailing experience. That is when gold will break out. It is that CRACK IN CONFIDENCE that will cause the panic.