QUESTION: Interest on savings instruments (i.e. CD) for 1 yr terms is non-existent at <= 1.0%. Why would interest rates increase in a digital currency system/world?
IS
ANSWER: The only reason rates would rise is by simultaneously converting the debt to perpetual. They have to end Keynesian Economics. They cannot raise rates as long as they have to buy the debt as in Europe. Therefore, we see most countries preparing for the real BIG BANG which is the default on dent by converting outstanding debt to perpetual, then they no longer need to artificially suppress interest rates they cannot raise if the debt is still issued.
I tend to get called in because they know I will say the truth. I do not take funds from any group and we pride ourselves on independence. It is a club because unless you have been called in by one government you will not get into others. Very interesting criteria. Nevertheless, I believe you will see this simultaneously. A digital currency swap will allow then the perfect excuse to change the debt structure and then they do not have to outright default.
Big Bang began in 2015.75 within about one year of them moving to negative interest rates in 2014. The next crack is due 2021 and the big break post-2024. We are now entering the next phase and we are running out of time. That is what these lockdowns are really about. They know civil unrest will rise when the public realizes that the old financial systems are collapsing.Categories:Bonds
QUESTION: Marty, you mentioned several times now, that the ECB MUST convert to a digital Euro. I have done speeches about that based on a paper from the IMF (Christine Lagarde) last year, in which they too discuss how to do it. But I have a serious question regarding timing.
I live in Germany and I would say that WE (the country) are not ready for such a move yet. Let alone many people. I have people in my family who still don’t have smartphones (just plain mobile).
I am completely with you that this move is coming (I am also part of a crypto community but as a critical member (I am the party spoiler there)).
But how can they move to a digital Euro to prevent bank runs, when I can’t see the infrastructure in place to do so.
Especially in such a short amount of time rg. the date you mentioned. They can eliminate cash withdrawals, yes, but paying with my smartphone reguires technology .. ?
Thanks a lot,
A
ANSWER: We are talking about bureaucrats. They only think in concepts much like Klaus Schwab’s Great Reset. The practical application of what they are doing is not there. They lack even the infrastructure, as in California, to force all cars to be electric. They do not have the power grid to support that.
I was in meetings where they actually told me with a straight face that they had to take trading the Euro away from Britain. I asked if they were going to take it away from the USA, Japan, Hong Kong, Singapore, etc? They looked at me puzzled, and said no! Just Britain. I asked if they really wanted to control the Euro just convert it into the old Soviet Union ruble. No free market at all.
Then there was all the rage that in London the big banks all threatened that they would move their trading to Frankfurt if BREXIT took place. But again, neither Frankfurt nor Paris has the telecommunication capacity of London. They could not possibly set up shop in Europe. There is no infrastructure to match London.
The problem that is the hidden crisis is that they have DESTROYED their own bond market. The ECB cannot even allow its balance sheet to shrink as debt matures. The Federal Reserve was not rolling over the debt they bought back in the 2007-2009 crisis. As it matured, they cashed it in.
The ECB is trapped. It cannot shrink its balance sheet for there is no market for the debt. They have finally agreed to fund this Coronavirus destruction they organized by creating combined Euro Debt for the first time. That is because nation-states cannot raise the capital.
They lack the infrastructure on every front. That does not mean they will not try. They have run out of opinions. They are desperately trying to revive their debt market, but they have wiped it out with negative interest rates since 2014.
This is what I keep warning about. INFLATION has nothing to do with the money supply any longer. Those are an old idea from the time of Gresham’s Law in advising Queen Elizabeth not to debase the currency as her father did.
We must understand that the exchange value between the various currencies back then was the metal content. Therefore, inflation was a factor of the exchange rate rather than the money supply. The more the coinage was debased, the more people hoarded the old currency. Hence, Gresham’s Law became that bad money drives out good. As this process takes place, the money supply DECLINES because of hoarding. This forces the state to debase even more to create money to pay its expenses. Roosevelt confiscated gold in 1934 for the same reason – people were hoarding gold. The German hyperinflation was the result of the 1918 Communist Revolution which scared people and they converted their money to foreign currencies and hoarded precious metals. The greater the hoarding, the more the money supply shrank, which in turn forced the government to print more.
We find hoards of Roman coins during the 3rd century in particular after Valerian I (253-260AD) was captured by the Persians. That broke the confidence of the Roman people and other barbarian tribes in the north saw the weakness and began to invade.
The coinage collapsed in metal content in just 8,6 years. We find hoards of even the debased coinage because people lost confidence in the government. We see the very same patterns in human behavior over and over again.
This is a hoard of Arab gold dinars. We see always the same pattern of hoarding when there is a decline in the confidence of the government in power at that time.
The ECB can cut rates to try to stimulate and that failed. People are hoarding cash in Europe and that creates deflation. There is NO AMOUNT of money that can be created to offset the DEFLATION when people lack any confidence in the future. Then they are imposing this “New Norm” of lockdowns and destroying jobs and they actually expect to sell debt and keep interest rates at negative and somehow this will stimulate the economy they have worked so hard at destroying? The increase in the money supply of all these central banks is still less than 20% of the economic contraction globally.
QUESTION: Hi, Mr. Armstrong I noticed that the national news agency in my country had an article about a local digital currency in Maricá, Brazil. It is called Mumbuca. What I read about Mumbuca sounds good and all that, but I am curious if the news is just conditioning people to a new age of digital currency. Do you have any comments about Mumbuca? Thank you for your time and what you stand for. Best Regards AA
ANSWER: It is important to highlight that Mumbuca is a local digital currency whose name is a reference to the main river and to one of the native peoples of the city. A unit of Mumbuca is equivalent to R$ 1.00 (US$ 0.19). What is interesting is that this is a local city currency much like the Depression Scrip of the 1930s. This is really an experiment of guaranteed basic income. Increasingly, customers in the city don’t pay with cash but with this digital currency. They receive it as part of the town’s basic income program. They pay with a quick scan of a QR code, using their phones. So far, just over 42,000 inhabitants can pay local merchants with Mumbuca.
This is Brazil’s first big experiment with digital currency. Those without smartphones can pay using a card, which has a scannable barcode. They are way ahead of the game and, actually, it is being followed closely internationally.
This year’s World Economic Conference, which Nigel Farage called “the alternative to Davos,” will be held in Orlando on December 4 & 5. We had to cancel Shanghai and Frankfurt this year, but our arrangements with the hotel here in Orlando and politics have opened doors. We will not be able to accommodate the usual 1,000 attendees. This will be a limited in-person session, but it will be more intimate.
Since so many people from overseas may not be able to fly in this year, we have made arrangements to have a virtual conference option for everyone to participate globally. We still have to limit that to a max of 20,000 attendees simply as a matter of technology (sorry, we cannot handle more than that).
From the outset, I have explained that not only did Socrates begin to pick up what has turned into this COVID scam in August 2019, but our HIGHLY RELIABLE inside sources were also already warning that strategic players were selling as early as December of last year, and telling people a “virus was coming.” There are clear warnings within the global economy that we are facing serious upticks in civil unrest in Europe. However, we now have ANTIFA overturning statues of even Abraham Lincoln. Obviously, this has migrated from toppling statues of racists to just pulling down statues of any president which is anarchy.
(Click on Image to see World Markets)
The WEC has been the only truly international conference held since 1985. To see the future of any country requires us to look at the world. As you can see, not every market has been making new highs. Capital flows are ABSOLUTELY critical. We have the ONLY such model gathering the global information of ebbs and flows from all countries and Socrates is writing reports on over 1,000 instruments around the world. This is not about my personal opinion or gut feelings. We have to look at the world objectively and call the shots as the data requires.
o truly see the future this cannot be done on a gut feeling. Nobody is going to be consistent on this one. Our only shot is to see this through the lens of Socrates. What will be critical here is looking at this from a global perspective. Those attending in-person will receive their mug and their autographed copy of “The Cycle of War and the Coronavirus.” Virtual attendees will receive all the digital copies of reports being provided and videos. We have countless separatist movements brewing in Europe, Canada, the USA, and even Australia.
This is going to be obviously an important WEC. We have so much from rising civil unrest, international tensions, governments trying to lock people down, and they are already proposing this as the “new norm,” for lockdowns may be necessary to stop climate change, which has been the real agenda from the start. They think we are stupid. Granted, there are a lot of fools out there who just follow whatever they are told. We have billionaires trying to change the system to socialism to prevent people from ever making what they did to cut off any competition.
Even Schwab’s movie launched in 2019 was skewed to climate change as he was preparing this agenda for the Great Reset. This has been a grand plan.
We are fighting against the fools who think this is just something like a ship that will pass in the middle of the night. The global markets are revealing the trend. It is time for us to listen to the whole and not just one market.
QUESTION: I thought big police forces are malinvestment just like big government. doesn’t returning to hard money reduce malinvestments?
BF
ANSWER: These people can no longer fund themselves by borrowing. I have been advising in Europe that the Euro could never become a major reserve currency without a single debt. They are now looking at that option and the European Commission is expected to sell consolidated debt into the bond market this month for the first time on a large scale to fund its coronavirus-relief programs. Meanwhile, the European Central Bank on Friday took a step closer to issuing a digital version of the euro. Even Goldman Sachs admits that Biden’s tax plan will hurt the economy. We already have the IRS being investigated for using your location data to tack you for possible hidden assets. Do you really think these people would EVER return to hard money that they cannot spend whatever they want? Socialism would have to end under hard money. This is not a rational expectation from people embracing MMT because they are running out of other people’s money to spend.
We have run out of other people’s money. They are hunting money like a starving animal. They see Modern Monetary Theory as the answer – create money at will under the new theory that there will never be inflation.
QUESTION: What do you have to say about Trump’s taxes?
GS
ANSWER: Let me explain something. Let’s take one of the richest men in the world — Bill Gates. He achieved that station by co-founding and then leading Microsoft. Most of his wealth came not from his salary, but from the Microsoft stock that he owns, which was equal to about 10% of the company’s outstanding shares. Wealth gained from stock price appreciation is NOT taxable until you sell the shares. By holding most of his shares since the company’s founding, Mr. Gates DELAYED paying any tax on those capital gains. Then by donating the shares to the Bill and Melinda Gates Foundation, that wealth was NEVER taxed!
Why do you think all these people create foundations from the Clintons, Gates, to John McCain. You get to play with the money tax-free while you are espousing economic equality. There should be NO income taxes. It should be a consumption tax (retail sales tax). Donating money to a foundation that you control should be illegal, but its not.
The central banks have been digging deeper and deeper into their monetary toolboxes in a vain hope of cushioning the COVID-19-induced shock, which has been orchestrated by this global effort to CRUSH the economy and redesign it in their image of a fossil-free world. The fake pandemic aside, the notion that the banks were already beyond hope since the ECB lowered rates to NEGATIVE back in 2014 and Keynesian Economics has failed. What has emerged is that the central banks have accelerated their transformation of monetary policy, which was once focused on defending and controlling inflation, into “Guardians of the Galaxy” combating inequality, climate change, inflation, and anything else they can think of. This decreases the possibility of ever returning to the existence of central banks pre-2007.
For the first time in post-1916 history, the US Federal Reserve has bought a wide variety of corporate debt issued by blue-chip borrowers such as Apple Inc., as well as junk bonds from riskier companies. As I have stated before, when the Fed was originally designed, its elastic money creation made sense because they bought private debt, which is paid off compared to government debt which never ends. The Bank of Japan has been what some call the petri dish for central banking since after more than two decades of expanding the money supply with no inflation, this has added to the rise of Modern Monetary Theory where these people assume that they can print money with no end and no inflation.
The central banks have lost control of the economy and the markets. There is no return to normal – they have now become the Guardians of the Galaxy.
QUESTION: Mr. Armstrong,
If this “Great Reset” movement pushes gold underground, what would that mean for gold producers? I recall reading on your blog that when gold was confiscated in the United States to devalue the Dollar, gold producers were happy because governments started buying their product at a fixed price which allowed the producers to avoid market risk. Do you see a similar pattern emerge from those wishing to enforce a digital currency? Is there a risk that producers would be forced to shut down? Certainly, the closely-linked copper production industry is too valuable for them to sabotage?
Thank you as always for the great insight that you provide. Looking forward to the full gold report.
JR
ANSWER: This time it will be different for they have no intention of backing any currency with gold. To do so means they cannot enjoy the objective of this New Green Socialist World Order. They need to be able to create money as needed, hence MMT. They are doing this because of (1) the Sovereign Debt Crisis since they can no longer borrow at absurdly low rates which means there is a threat where they will be unable to roll the debt perpetually as they have been doing, (2) there is the Monetary Crisis Cycle also coming into play.
They believe that if they cancel all currency and force everyone into digital, then that will not only end bank runs, but it will end the black market from working under the table, tips that are not declared, to drug dealing and prostitution. As I have reported before, in Rome, they passed a law that said you could not pay a prostitute with a coin that had the image of the emperor – which they all did. The solution was to create prostitute tokens. You bought the token, paid the prostitute with that, and later she redeemed the token for coins.
There is always going to be some black market. I would suspect it will be primarily built on barter. There is also the possibility that private money will emerge as it did during the American Civil War, German hyperinflation, and during the Great Depression known as Depression Scrip.
I will be detailing these changes in events in the upcoming Gold Report.
QUESTION: What did Martin mean by gold having a 21 year high. I simply can’t see how it is possible for it not to go up from here as sovereign debt collapses and printing presses are on turbo
I’ll be getting the gold report when it’s out but…. I’m about to get my hands on a few million pounds and I just want it to vanish into the ether so they don’t tax it, gold coins seemed the obvious option
Cheers B
REPLY: The major low was 1999. We have to be concerned that this agenda does not seek to also regulate gold once again. They are manipulating the currencies and several countries are starting to buck the trend. The question becomes this assumption that they are trying desperately to retain power using this fake virus to justify suppression
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