Posted May 29, 2014 by Martin Armstrong
QUESTION: Marty, I want to thank you for saving me from the nonsense of the goldbugs. They go on and on about one-world governments and manipulations and that is their excuse for being wrong. They cannot understand even what is a reserve currency or that it is merely the economic language as you say. They are really dangerous people who keep saying you are some idiot because money has to be backed and enforced beyond all rational thought. They only see their point of view and their crypto-currency that will dominate the world, yet the point is the free markets are the enforcer. I am correct?
ANSWER: Yes. They are totally delusional and specialize in sophistry. Nevertheless, these type of people have never had a single day of experience in anything they rant about, yet nobody is right but them. A reserve currency is just that. There is ZERO enforcement upon individual nations that is why the euro is failing. They federalized Europe rather than letting nations retain their sovereignty. The free market does the heavy work and that includes busting their communist attempts at fixing the value of money yet lettering your assets and wages rise. How can anything rise if money is a fixed constant? If assets and wages rise, then money cannot be fixed in a constant value. Dah! They are really delusional.
Politicians postwar ran on the fact their currencies were rising against the dollar in Europe and that proved they were doing a good job. They cheered the euro was worth more than the dollar but failed to notice the rising taxes and unemployment. These myopic people judge the world solely from their tiny crack in the wall. No American politician will run based upon the dollar strength or weakness against foreign currencies. Absurd!
The free market will sell a currency and then it will impact the politicians if their fiscal spending gets out of hand. That is what a free market does. They are fixated with this idea money has to be a constant or it is fiat. They fail to comprehend what that means economically. In the USA the dollar is not measured against anything else and commodities are priced in dollars so Americans have no risk. Price international commodities in the reserve currency and everything changes. You cannot FORCE discipline upon a nation – that is the people’s job driven by free markets. These people are dangerous communists but do not realize what they are even saying.
I really am sick of these people who claim to know everything and have never left their bedroom. There is NO single conspiracy because each agency fights for its own survival at the expense of another. The SEC and CFTC have their own lobbyists in Washington. I warned back in 1985 that both agencies had to be merged or they would force capital offshore. That happened – the hedge fund industry. In 1985 the biggest fund was $100 million. I myself retired from US fund management because if you obey the SEC you went to jail with the CFTC. Then they said you could only use futures to hedge up to 17%. I turned down $60 billion to manage in equities onshore because if my computer said crash, I could not hedge. This is all because of too many agencies – not because there is a single all knowing mind in control.
Why do you have so many funds that specialize in narrow products? OVER-REGULATION. You could not hire a fund manager to decide your asset allocation because of too many regulators rather than one. Where is this single controlling dark force when you need them? In the minds of the crypto-currency conspiracy buffs I suppose. Yes they are highly dangerous because they mislead people steering them into losses based upon theories from their tiny crack perspective in the wall..
I worked on trying to save Social Security and transform it into a national wealth fund with real money and managers. They wanted to replace managers when politics changed. There was NEVER any single one-mind agreement.
These people have never stepped out of their bedroom yet they know everything. Just amazing. I have tried to reason with someone to make a decision long ago – there isn’t anyone. They are all out for themselves. That was why they tried to create Homeland Security to require all the various agencies to work together.