COMMENT: Mr. Armstrong, we by no means met. I used to be launched to Socrates on the insistence of a pal at one other certainly one of our divisions. There was no 80% Crash on April 29. The entire de-dollarization appears to be one other hype, as we’ve got witnessed ourselves. Your system permits you to plot something in any forex. I simply should remark that you’re clearly a extremely skilled dealer, for it takes somebody who has thrown their hat within the ring to really give you one thing helpful fairly than concept. Plotting the S&P throughout numerous currencies confirms the bull market, as you may have persistently stated. A bull market requires development in all currencies.
I perceive you’ll be doing a Subsequent Technology convention to show the subsequent era how the world actually works. I do know our firm has used you for a few years. I’m a latest addition. I simply wished to say that you’ve got opened my eyes and reworked my profession into one thing thrilling.
God bless you, Mr. Armstrong, and thanks.
Robert
REPLY: Thanks very a lot. I do know what you imply. When issues are all the time evolving, it retains you in your toes. Lillian Smith put it this fashion:
“Whenever you cease studying, cease listening, cease trying and asking questions, all the time new questions, then it’s time to die.”
My father took the household to Europe for the summer season again in 1964. That taught me forex, for we traveled throughout Europe, and again then, you needed to change currencies at each border. That journey taught me greater than something at school, for not solely did they by no means speak about forex as a result of every part was at a hard and fast fee, however economics was not even a science. It was all actually Marxism and Keynes projecting that authorities was fantastic, our savior, who would remove recessions and depressions, creating the trail to financial utopia.
It was forex that dragged me world wide and had firms and governments knocking on my door. It has been my shoppers who’ve taught me, not academia. I discovered early on {that a} bull market is one thing that rises in all currencies – not simply your native forex. In case your forex declines by 50%, your personal belongings will rise in proportion as a result of every part has a world worth.
Not solely does classical economics utterly fail to maintain up with the occasions, nonetheless entrenched in theories from the fastened change fee interval, the place they NEVER thought-about forex, however every part relies solely on home evaluation, void of worldwide capital flows. Here’s a chart of the well-known 1989 Crash in Japan. Everybody will act out of their very own self-interest, and that’s measured by the eyes of their home forex. Observe that the excessive occurred in yen and {dollars} concurrently.
I rapidly realized that what I used to be being taught at school was all lies and propaganda. I needed to learn Galbraith at school and got here throughout Hoover’s Memoirs. It rapidly surfaced that Galbraith was only a socialist who portrayed companies as evil and the federal government as strolling on water. He omitted every part in regards to the Sovereign defaults of Europe, South America, and Asia. The LEFT rewrote historical past to assist Marx. Nothing has modified. Formal schooling is a detriment. The Shah of Iran paid for the schooling of Iranians, despatched them to one of the best universities within the US and UK, they usually returned with a Marxist agenda blended with Islam and staged the Revolution in 1979. It was that very same LEFTIST hatred I noticed at school that has led to the loss of life of tons of of hundreds of thousands and counting.
An actual bull market is one thing rising in a broad basket of currencies. Then and solely then do you see how markets really reply. This 80% crash is nonsense. To attain that, which is a repeat of 1929, so many issues must be totally different. The US had a balanced finances in 1929. There was a money scarcity as a result of the Fed feared inflation. Over 200 cities issued their very own cash as a result of money scarcity, Milton Friedman identified.
The market went down as a result of the greenback rose to file highs and different international locations defaulted on their debt. The Fed was terrified that the greenback could be subsequent on the record of currencies to default, and it tried to maintain the availability tight, inflicting deflation.
I had a dialogue in regards to the enterprise cycle with Paul Volcker again in 1999. He, too, noticed Keynesian Economics fail throughout the Nineteen Seventies. He additionally agreed with my Financial Confidence Mannequin and stated he believed that the enterprise cycle was about 8 years.
It was Milton Friedman who got here to hearken to me communicate, I imagine it was a COMPUTRAC convention in Chicago. I used to be talking about forex and capital flows, and once I was finished, Milton got here up, shook my hand, stated that was one of the best speech he had ever heard, and that I used to be doing what he had simply dreamed about. To say I used to be shocked is placing that mildly. I noticed myself as only a dealer.
What Milton meant was that I used to be doing what he had simply dreamed about, as he had seen in his thoughts a floating change in 1953, virtually 20 years earlier than it materialized. In 1953, Milton Friedman printed a seminal essay titled “The Case for Versatile Alternate Charges,” the place he strongly advocated for a system of floating change charges. On the time, the worldwide financial system was dominated by the Bretton Woods framework of fastened change charges. Milton argued that such a “pegged however adjustable” system was inherently unstable. He proposed versatile change charges as a superior resolution, primarily as a result of they might mechanically alter to financial shocks, serving to to take care of each inside (e.g., full employment) and exterior (e.g., steadiness of commerce) balances for a rustic.
Milton’s case for versatile charges was so influential that it presaged almost all the key arguments that later students would make in favor of floating change charges. It was Milton who inspired me and stated what I used to be doing was necessary not only for buying and selling, however for economics and the political world.
I’m making an attempt to complete these 4 books as my last reward. That with the subsequent couple of flicks (1), documentary (1), Hollywood movie, I can say mission completed. I’ve all the time believed we’re despatched right here for a function, and if we don’t stare that future sq. within the eyes, then what’s the function of being right here?
