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World Economy Melting Down

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Global-Political Economy

QUESTION: Mr. Armstrong; You have indeed sparked my curiosity. With both the velocity of money and the trading volume declining since 1998, this seems to be a very dangerous position and your work is really eye opening. I read your Transactional Banking and it seems that this has changed everything for the worse. Your Big Bang seems to have been on target starting with 2015.75 as that was the peak in government and we have seen a further decline in economic growth. With trading volume bottoming in 2014 and your War Cycle turning up also in 2014, the picture is starting to come into focus. Your warning of a Phase Transition building is also starting to make sense for the volume is at the lows not the highs and it appears you are forecasting a big rush out of government debt into private. I think I am beginning to see the future and this looks crazy indeed. Am I on the right track?

Thank you so much for the most thought provoking blog on the web.


ANSWER: Yes, you are on the right track. We are caught in a riptide of events that we cannot escape from. The bigger picture connects all these models together. Our political models and war cycle, as well as the transactional banking evolution and sovereign debt crisis, are lining up to reshape the future in a way I had hoped would be wrong. We held the Solution Conference to show the way out. It gives me no pleasure in bringing all of this together. I cannot simply reduce this to a single cause and effect. This is not even about one country; it is primitive to talk about the dollar and how it will crash and burn without any comprehension of the real trend in motion on a global scale. Politicians are doing whatever they can to make this insanity worse. Merkel is allowing a cultural invasion of Europe and she will not stop. The G20 as of January 1, 2017, will track every dime globally and share info on everyone for taxes.

USA Net Cap 1960-1990 Annotated

From 1983 onward, the capital flows have shifted in preparation for this private wave. This is what made the dollar reach record highs in 1985 with the British pound dropping to par. Of course, this also made our Capital Flow Models world famous, and now even China has publicly stated they use capital flow analysis to manage monetary policy. What made the world economy recover following World War II was that USA ended up with 76% of the world gold reserves, which made the dollar the reserve currency. Americans invested outside of the USA and restarted the world economy. Now we have FATCA and Americans cannot even have a bank account outside the USA, no less start a business. Capital is contracting into the USA. Now the G20 will make that contract even more. With tax havens destroyed by the IMF’s threats to unplug them from the SWIFT system to stop money going in or out of their countries, the only place is the United States for Americans, by law, and the rest of the world once again as was the case for World War I and II.

This is why we will be putting this all together at this year’s World Economic Conference. It is an amazing picture, no doubt. Whatever could go wrong is going wrong. The vast majority of people will lose everything — that is just the way it goes. The model is designed to give us the CONFIRMING points (e.g. if this happens, then this will occur). So when you approach this globally, only then will the trend make your eyes pop open. It appears 2017 is opening the door. Nobody has ever lived through such an event, so I do not understand how it is even possible to do this from an “opinion” perspective. To survive, we need a comprehensive global model you can see.