COMMENT: Marty, As you know I worked for _____________ in NYC. We all know you were innocent back then. I have followed you for probably 30 years. Everyone knew that the bankers told the CFTC that you had to be silenced. Your forecast cost them a lot of money when they assumed they could control the market.
It is no longer a mystery why the mainstream press refuses to ever even talk about your Economic Confidence Model and how it has always been right. The press is on the payroll of George Soros who hates your guts for his biggest losses were always against you.
I am passing this article on because I think it sheds light on who is on Soros’ payroll.
All the best
REPLY: Thank you. I have heard that from many sources. The CFTC wanted to stop our forecasting at the request of the bankers. They thought they could manipulate markets for “the” perfect trade. They always blew up and blamed me because we had more than $3 trillion under contract back in the ’90s – the equivalent of 50% of the US National debt at the time.
Soros is manipulating the press to press for the destruction of Russia to further his one-world government. Perhaps making that much money causes mental illness whereby you become a demigod to redesign the world. I have ZERO respect for Soros, Gates, or Schwab. They should all be thrown into a padded cell, handed a game of monopoly, and let them try to manipulate each other.
The entire theory of the Petrodollar dares back to the collapse of Bretton Woods and the subsequent oil embargo protesting US support for Israel and the price shock of raising prices. Those were the days when everyone was obsessed with gold and the whole idea of a floating currency that was popular to say will crash and burn for money had to be backed but some commodity. Those were indeed the days when that theory was very popular and it dominated the thinking process of the 1970s.
Here is an advertisement from my past days as a market maker in gold during 1970s to about 1983. I too believed in all those theories until the crash came in 1975. I too had bought into all that nonsense. Gold was going to be legalized in the United States in 1975 for the first time since 1934. Being a very large dealer domestically and internationally, all my European clients were talking up the scenario that gold was going to $500 if not $1000 once Americans could buy.
Because Teddy Roosevelt was an ancient coin collector, when Franklin Roosevelt, who was a stamp collector, recognized that gold coins existed from ancient times thanks to Teddy, he confiscated gold on deposit at the banks but exempted collector coins. That was the reason why we have rolls of $20 gold coins trading to this day.
As a result, those who were really believers in gold would buy common date American $20 gold coins by the roll in those days. So when the Europeans were talking themselves into gold was going to explode in 1975 as soon as it was legalized in the United States, as a dealer, I never got a single call about buying gold from anyone other than those who already owned it. The gold crowd was only looking at gold and had no idea that any American who wanted gold bought it in coin form. They were cheering gold without understanding the reality of the marketplace.
I went short gold in January 1975 not using even technical analysis. The hype was so much and I knew that there was no line standing at the door to buy gold. My gut feeling was that gold was going to decline – not rally. I saw that in 1970 when the two-tier gold market they created in 1968 saw gold drop below the official price of $35 in 1970 – something that was not supposed to happen.
Even the Senate of New Jersey came to me and I wrote the law on sales tax regarding gold in 1974. Gold peaked in December 1974 at $197.50. It fell to $97.70 while inflation continued but economic growth declined and they called it STAGFLATION. I learned back then that all the scenarios and theories that gold rises with inflation and the dollar would not survive without some backing. I was confronted by the reality that exposes all these theories to be a throwback to times long since passed. This all only inspired me, even more, to investigate everything in detail. By 1979, I published what I called the WHY REPORT. I later republished this in 1981 and again in 1983.
To explain the survivability of the dollar since it rose between 1972 and 1976 against the British pound, with the collapse of Bretton Woods, the rise in gold, and the entire oil embargo, that is when they came up with this idea that the dollar was backed by oil. They had to explain why their theories were wrong just as they changed global warming to climate change to explain away global cooling.
All the theories were wrong. The dollar rose, and inflation soared, as did gold. None of this made sense under their theories. Something had to be done. It became obvious that it was impossible to make investment decisions based upon these theories that people just made up to sell gold which are still being used today. I also remembered that in January 1970, gold fell in the London market to $34.70. Gold was not supposed to sell below the Bretton Woods fixed exchange rate of dollars to gold. It was like being smacked in the face and told to wake up!
Without question, the dealers could not sell gold if it did not rise with inflation and against the dollar since it was no longer backed by anything. They had to invent something new. That is when the sophistry specialists stepped in and boy did they succeed in bullshitting everyone.
The explanation was ah ha – the dollar is really backed by oil because it is priced in dollars. That’s it. It is really the Petrodollar! Suddenly the dollar became de facto-backed by oil. They needed an explanation to explain why all the old theories were wrong. They sold this theory and it made the front cover of Newsweek. Everyone said YES! That must be the reason. OPEC priced oil in dollars! Naturally, everything was priced in dollars because, under the fixed exchange rate of Bretton Woods, everything from wheat and corn to copper and gold was all priced in dollars.
Many people are now calling for the collapse of the dollar all because Saudi Arabia has confirmed that they will be selling oil in various currencies. Hence, relying on this old fictitious their of the Petrodolarr from the ’70s, they are telling everyone the dollar will collapse and gold will soar. They never get tired of kicking the same theories down the road without EVER just once being honest and looking if they have any validity whatsoever.
The value of any currency is NOT some commodity. It is the people. You can have all the gold in the world, but if the people do not produce, it means nothing. Indeed, Russia had the largest gold reserve of any nation ahead of the Communist Revolution. They took the gold reserves and hid them so the communists would never find them. They are still missing to this very day. Likewise, Germany and Japan has no gold reserves post-WWII yet they rose to the strongest economies in their respective regions. How is that possible? It is very simple. The true backing of a currency is the total productive capacity of its people. The US became the largest economy in the world NOT because of gold, but because the US had a consumer-based economy built of freedom rather than Marxism as the problem with Europe. China, Japan, and Germany, all focused on the old-world mercantile economic model. Produce to sell to someone else. They failed to follow the strength of the United States in building a consumer economy.
China understands the difference and has shifted to develop that type of economy whereas Germany oppresses its people with high taxes on its citizens to sell manufactured goods to everyone else. That is why they wanted the Euro to expand their European economic marketplace. Germany’s high taxes have put it near the bottom insofar as the German people have less net worth than Italians. The more Marxist the country, the lower the economic standard of living.
The Central Bank Dilemma has become a major crisis in and of itself. I have been warning these past years that the ONLY tool a central bank has is manipulating the interest rates. Quantitative Easing was primarily to influence long-term rates indirectly since the Fed can only set short-term rates. During the past nine months, Fed Chairman Jerome Powell has raised interest rates at the fastest pace of any Federal Reserve chair since the 1980s. While some complain that this has triggered a stock market rout, and caused the housing market to come to a standstill, others argue that he has increased the fears of an imminent recession.
That was the domestic part. The Fed’s raising of interest rates has impacted the emerging markets including contributing to the chaos in the financial markets in China since many banks and provinces borrowed in dollars to save interest rates – or so they thought. It has forced the European Central Bank to raise interest rates and the net result was to unleash a crisis in long-term debt where life companies and pension funds cannot continue to buy the long-term with rates rising and bonds declining the day after you just bought a traunch.
Janet Yellen, who wants to hunt down everyone who sold a used bike on eBay for $600, understands the crisis we have erupting in debt because of rising interest rates and investors are afraid of the long end. Her proposal to buy in the long-term and swap it for the short-term recognizes the fact that we have a major debt crisis unfolding and she has come up with another scheme to keep kicking the can down the road.
Consequently, with inflation hitting 40-year highs, the warning signs are there that the central banks cannot do anything to address the economic crisis. Hence, initially, Fed officials were unanimous that rates needed to rise aggressively. Now, however, there are cracks in that view. These cracks will become fissures over how this type of inflation is NOT speculative but shortages set in motion by COVID and then accelerated by this drive for war with Russia and the insane sanctions they imposed on even private citizens.
While some expect inflation to cool steadily next year and want to stop raising rates soon, the problem is that inflation driven by shortages will not subside with a reduction in demand. Even real estate replacement costs have risen despite the fact that the market has started to pause. The cost to build a home in many areas is already higher than existing homes, which tends to create a floor before prices. Others worry inflation won’t ease enough next year in the face of a war that is escalating, and they defer to the old standard of raising interest rates to temper inflation.
That leaves Chairman Powell struggling in the eternal seas of politics lost in the middle as the arguments get louder on both sides. Powell will be challenged trying to chart a course through war, stagflations, and complete fiscal mismanagement by our politicians. The next stage of interest-rate policy presents very difficult questions concerning how high to raise rates from here, and how long to hold them at that level in this Pyhric War against Inflation.
COMMENT: Thank you for all you do. Your input has guided me well. I suspect my Bank is in deep trouble. _____ bank in ____ CA. They specialize in small business. First red flag was freezing my account for no reason. I then bounced a check because my account was frozen. They could not give me a reason for freezing my account. Then they offered me, according to them, a great investment deal, that was the second red flag. Then I was contacted by a relationship manger. This was the third red flag.
Will be closing all my accounts with ______ next week.
REPLY: There are clearly problems emerging since interest rates have risen and many banks were not in a position to take the losses on long-term investments.
Always keep some cash. A word to the wise should be sufficient