Armstrong Economics Blog/Dow Jones Re-Posted May 30, 2022 by Martin Armstrong
COMMENT: I just wanted to comment on your “Endless Propaganda Behind the Dollar.” I attended your 2011 WEC in Philadelphia. I bought the stock market using the Dow stocks when it was 12,500. Gold was about 1600 and your forecast that the high was in place was amazingly correct as it fell to nearly 1000 after that.
You have opened my eyes to the real meaning of Adam Smith and the wealth of a nation is the productive capacity not this archaic view of commodity-based money. I know friends who even lost their marriages over gold.
Some of us goldbugs do listen.
Thank you so much.
REPLY: The wealth of a nation is its people and their productive capacity. Russia is the wealthiest nation in raw materials, it does not make them the #1 economy. Germany has kept its old-world economic model of export which is also a throwback to the olden days. Germany has been obsessed with the Quantity Theory of Money because of the hyperinflation they totally misunderstood. As a result, they keep their taxes very high and the German people are among the poorest in Europe despite the fact they are the #1 economy in the EU.
It’s not just the goldbugs who have lost, but these theories have screwed up the world economy. The central banks employ them to stimulate or suppress our demand, which has also failed. We have had negative interest rates in the EU since 2014 and economic decline. They have increased the money supply with NO impact on inflation at all post-2008. The inflation wave now is ONLY because of the lockdowns and shortages. It is not DEMAND driven and the dollar is rising, so it’s nothing to do with these old theories.
It does not matter. There are people who will fight what I say until the end. On the close of January 1980, the euro equivalent was 12285 and on the close of January 2022, it was 11236 so the dollar has risen not declined. Gold was $653 at the close of January 1980 and $1796 at the close of January 2022 which was a gain of about 175%. Crude oil closed in January 1980 at $20.18 and in January 2022 it was $88.15 which was about a 340% gain. Wheat for the same period was up 65%. But the Dow Jones Industrial Index was 875 at the close of January 1980 and 35,131 at the close of January 2022 posting a gain of 3914%.
Facts mean nothing to the diehards any more than facts mean anything to the climate change zealots. Will gold rise? Yes! Does it have a place in one’s portfolio? Yes. Silver coins may be better for small transactions when there is no power. But what will happen is that governments, in a desperate act of self-survival, will shut down communications, seize the internet, and seek to oppress the people before the government falls in the end. The German Hyperinflation had nothing to do with the quantity of money. In December 1922, the government seized 10% of everyone’s wealth and issued bonds that they defaulted on. That “forced loan” began the hyperinflation. People kept tangible assets anything but cash – coins, stamps, art, real estate. That is what 2032 is all about. We get to redesign a new government from the ground up.
The Democrats claiming that Blacks are too poor and too stupid to have ID to vote is all about creating fake votes so they can win. Even in Mexico to vote everyone has a voter ID with a photo and a fingerprint with a hologram to prevent forgery. So Mexicans are smarter people than American blacks? You can not travel without an ID. You can’t say gee, I’m poor and black, but I need to get on this plane even if I have no ID. This is all total BS and it is a desperate act by the Democrats to rig the game to ensure they can stuff the boxes with fictitious people who vote for a living and probably do not exist otherwise. I have blacks who work for me and it is a matter of law they too must have a SS# so the government gets their taxes from them.