Posted  Originally on Aug 25, 2026 by Martin Armstrong |  

QUESTION: Mr. Armstrong, I am new to your services and I attended the Tampa Conference. You have opened my eyes to see the world as a whole. A famous analyst just said and it is becoming a glaring issue that they are only domestically focused as you said blind to everything outside the United States. ________ said:

“We want long-term interest rates to go lower, but that’s only gonna happen if we can get inflation under control by reopening the Strait of Hormuz, and that’s a tall order,” _______ said. “The Treasury Department’s attempts to get this under control I think have only made investors more nervous.”

My question is with Trump’s tariff war and his war against Iran and we have Bessent imposing sanctions on Iran while trying to support the bond market, your track record record and computer puts everyone to shame. I am not an international hedge fund manager as you were. But I can see that they are trying to defend a view on tariffs, sanctions, and bonds that are a losing ticket. Why doesn’t Bessent call you in?

EK

ANSWER: Besides the Neocons who try to keep me away from Trump and I believe are now intercepting my letters to him, then there is the old rumor that those who lost big on the Russia collapse and the failed regime change blackmailing Yeltsin and expecting the IMF would never allow Russia to collapse, are the ones who blamed me and told the CFTC we had to be shut down. I wrote to Bessent, but got no response. They say beware a woman scorned for she knows no limit to fury, that appears to apply to sore losers in high-stake finance. They never believe in my forecasting. They always claimed I had too much influence which was greater than all the influence that they could bribe for their guaranteed trades. When the forecast that Russia would collapse made the front page of the London Financial Times, that was the icing on the cake. It wasn’t that my computer was correct, it was I had too much influence and had to be taken down so they could manipulate markets without interference.

In August 1998, during Russia’s financial crisis (ruble devaluation and debt default), George Soros’s Quantum Fund / Soros Fund Management group lost approximately $2 billion in Russian markets. Contemporary reports (including The New York Times) attribute this to the fund under chief investment strategist Stanley Druckenmiller. The positions were described as mostly equities, with some exposure to Russian GKOs (short-term ruble Treasury bills) and dollar bonds. Druckenmiller publicly acknowledged the losses at the time.
Bessent’s role at Soros

Bessent joined Soros Fund Management in 1991 and worked there through roughly 2000 (first stint), including as head of the London office. He is well-documented as a key member of the team on the famous 1992 Black Wednesday trade that shorted the British pound and generated roughly $1 billion in profits for Soros. I was advising the British government then and warned them what the “club” was doing. So I believed in free markets, they believed in manipulating markets. Bessent later returned as Chief Investment Officer (2011–2015) and is credited with profitable trades such as shorting the Japanese yen.

The danger here is that after stepping in and doubling the purchases, the risk is that new lows will shatter the confidence in Bessent and the ability of the government to manipulate the bond market. As I have said before, in February 1987, there was the Louvre Accord where they said that the dollar had fallen enough. When it continued to make new lows, that was it. Confidence in the central banks collapsed and that led to the 1987 Crash. That is the risk we now have. Rates will rise thanks to geopolitical chaos and there will be no way to prevent long-term rates from rising. Germany is already blaming the US for their own warmongering that sends rates higher.

Bessent’s latest sanctions on Iran and going after any bank that has contact with Iran will fail. It just makes him look authoritative. Sanctions have NEVER worked even once the same as Marxist Communism/Socialism, which tries to eliminate the business cycle and create utopia void of any recession or depression. The US put sanctions on Cuba in 1960, they are still there. The sanctions on Russia did not end the Ukraine War against Russia.

Our computer has been projecting rising long-term rates since 2020. With the rising trend in geopolitical insanity with this need for war, there is no possible way that rates would decline long-term. This is far more that the Strait of Hormuz. The Madman Zelensky has attacked Russian energy to the point that they now must import refined products. Zelensky and Netanyahu belong in prison. Neither cares about the world and they only look at their own personal hatreds and to hell with the world.