Armstrong Economics Blog/Cryptocurrency Re-Posted May 12, 2022 by Martin Armstrong
COMMENT: Mr. Armstrong, I just wanted to express my thanks. You were the only one who called the high in Bitcoin. You saved my marriage, my home, and my future. I tried to tell a friend who went and took an equity loan to invest in Bitcoin. He may lose his home now. I tried to tell him you warned markets crash when everyone has bought. He would not listen. Your principle applies to everything. Thank you so much. Your WEC saved my life.
See you in Orlando.
REPLY: I know, The NY Post has published how people are losing everything and some are contemplating suicide. This is the normal Boom-Bust Cycle that governs. I know a lot of analysts disagreed with me. All I can say if they did not see this coming, then they were too biased and caught up in the trade for themselves.
As I have said, cryptocurrencies are an asset – not money. They are by no means a safe harbor against “fiat currency” and will NEVER be a store of value because NOTHING ever is. Gold rises and falls. Even during the 19th century, there was inflation and deflation. Guess what? When you are on a gold standard, the value of gold rises and falls just as the dollar does right now.
There are people who REFUSE to ever listen and keep preaching that a return to the gold standard somehow mysteriously will solve all the problems. I think they are smoking their marijuana way too much. I do not know how to explain it any simpler. There is a cycle to absolutely EVERYTHING!. There is NO standard that will EVER work because of the business cycle. Here is a chart of the Gold/Silver Ratio. If there was this fictional world where somehow money never appreciates nor declines, you have crossed the line into Marxist Theory and Communism. That was the whole reason behind Marx – to create the perfect world and end recessions and depressions.
Paul Volcker in 1978 express the harsh reality that nobody listened to. He called it the Rediscovery of the Business Cycle because it always defeated these people who tried to eliminate the business cycle and create the perfect world.
Arthur Burns, who was the Fed Chairman at the time of the collapse of Bretton Woods. He too acknowledged that the business cycle always wins. I’m sorry, but this is reality. Market crashes because EVERYONE who ever thought of buying has bought. Something happens and they try to sell. The market crashes because there I a lack of fresh buying. To survive your own investment decisions, this is lesson #1 – When everyone is talking about that investment as the next exception to reach new heights, it’s time to exit.