ACT LIKE AN INDIAN
Even if you don’t have a doctorate in history or read the invaluable lessons of Martin Armstrong, which are predicated upon understanding cycles, following the money, and observing the predictable passions of man; you should be able to assess what lies ahead, if you simply step back and connect the dots. Capital always concentrates with individuals, market sectors, and nations. In 1981 the bubble was in interest rates. In 1985 it was the dollar, and in 1989 the bubble was in Japan, followed by SE Asia in 1994 and Russia in 1998. The next bubble was in the tech sector in 2000, followed by real estate in 2007, and the latest and biggest bubble that is in the process of popping is govt bonds.
Going back further in time, the Great Depression was caused by capital fleeing Europe due to WWI, which created the roaring 20’s, and culminated in the stock market doubling in the last year before crashing in 1929. The 29′ crash was exacerbated by the fact that east coast banks and insurance companies had shipped large amounts of capital to San Francisco to rebuild after the 1906 earthquake. Thus, it was not around to thwart the bank runs. Everything is connected, if you just follow the money. To explain what is interconnected today, and how it will impact our future is not a simple task, but Rome was not built-in a day. So, grab a bottle of wine and not a gun, as we look behind the curtain and peer into the future.
The heart of a healthy economy and prosperity are confidence, trust, and maximum freedom. If consumers and businesses feel confident, they spend and invest. However, if ideas and capital can’t flow freely, businesses and value are not efficiently created. The most feeble economies in the world are those with rampant govt corruption and little confidence, which can’t attract the capital needed for growth. When you have an anemic economy run by career politicians, the result is less freedom and ever-increasing taxes, fees, and asset forfeitures to maintain govt jobs, perks, and power.
Step back and put your ear to ground like the Indians used to do and ask yourself, is govt coming or going? Is trust, confidence and freedom on the rise? One must also be able to think globally, and realize that because everything is connected it’s not a linear world. The media, talking heads and politicians tell us that employment, the stock market and dollar are up because of Trump’s policies, and if interest rates rise the economy will decline, or if the dollar declines gold will rise. All of these “if this/then that” statements are meant to manipulate us, as they are certainly not true over time. What if stocks and the dollar are up because of the chaos in the EU, Japan, the Middle East and South China Sea, causing global capital to seek the relative safety of dollar-based assets? The establishment doesn’t debate these topics because they are either ignorant or want to keep the facts from you.