Posted Dec 5, 2014 by Martin Armstrong
While I clearly understand your reasoning for deflation in the US allied to a very strong dollar; does the opposite apply to those countries, like the UK and European economies where their currencies are likely going into freefall?
Keep up the brilliant work. Is the movie coming to the UK?
ANSWER: Yes. Britain abandoned the Gold Standard (austerity) first during the Great Depression, which then revived its economy ending the deflation becoming the first to recover. This was one of the very arguing points of George Warren to devalue the dollar made to Roosevelt in order to re-inflate the economy. Germany has imposed deflation on everyone really tearing the European economy apart because they do not understand why they even went into hyperinflation.
The rise in the dollar in the US as other other economies were defaulting pushed the USA into a deflationary depression. This then set in motion protectionism as they failed to understand the mechanism unfolding.
It is important to understand the mechanism. The collapse in currencies that will force the dollar up will then turn the US economy down hard and unemployment may indeed truly reach 25% since it is now 12% on a good day.
This was our old forecast for unemployment from 2010. Nothing has changed. Once you realize that this is not some PERSONAL OPINION of what I would like to see happen or what I “think” will happen, then there is hope that you will grasp the way to zig and zag if you at least comprehend your opponent.
The decline in other currencies is NECESSARY to relieve the economic pressure. The negative side today that did not exist during the Great Depression is the crisis in pensions. This is why I warn we are in the collapsing trend of socialism. All the unfunded promises will evaporate. Government will not print money to cover them, they will prefer war to eliminate obligations. Just look at Ukraine. The people rose up and now the new western installed government tells the people that reform will come AFTER they win the war. Government NEVER go into hyperinflation when they have an established economy. That unfolds in revolutionary governments as was the case in Germany, Russia, France, and even the USA. In with the new government that defaults on the obligations of the previous. There is absolutely no case of an established government with a police force and a bond market deliberately moving into hyperinflation. That would be intentional suicide. Just open you eyes to the policies of Germany and the IMF.