Saturday, April 15, 2017

Strong Dollar Could Cause Bond Market Crash

By Greg Hunter’s
Renowned financial expert Martin Armstrong says the biggest risk out there is the effect a strong U.S. dollar has on the global bond market. Armstrong explains, “There’s these people who keep saying the dollar is going to crash.  If the dollar crashes, the world is happier and basically celebrating.  You have half the U.S. debt equivalent in emerging market debt issued in dollars.  If the dollar goes up, they are in trouble.  Then you are going to see sovereign defaults. . . . The U.S. is not going to default, but as you start defaults elsewhere outside the country, it makes people begin to get concerned about sovereign debt.  Sovereign debt is the worst of all.  It’s not secured.  If the U.S. government defaulted on its debt, what would happen?  You cannot go down to the National Gallery and start lifting Picassos.”
So, a bond market crash is a distinct possibility? Armstrong says, “Yes.  All these things are contagions. . . . The real risk is coming from Europe and Asia.  That is the real risk. . . . There is no place to go but the dollar at this point.”
If and when a global collapse comes, it will come from China or Europe. Armstrong says, “Yes, because you don’t collapse the core economy.  It’s always the peripheral coming in.  It was the same thing in the Great Depression.  It wasn’t the fact that the U.S. defaulted.  The problem was the first bank that went down was in Austria, and it happened to be owned in part by the Rothschilds.  When people hear a bank owned by the Rothschilds went down, people started to sell off all other banks.  Then all the countries defaulted.”
Armstrong says there is going to be a major “monetary reform” in the not so distant future, and the U.S. will end up with a dollar for domestic use and a dollar used for international trade, sort of like a “domestic dollar” and an “international trade dollar.” Armstrong says, “Yes. All it is doing is replacing the dollar as the reserve currency.  That would satisfy China and Russia, and it would simply be maintained by an international board.  I strongly advise against the IMF.  It’s way, way too corrupt.”
So, is gold a good asset to have with a coming currency reset? Armstrong says, “Yes, at that point, you are talking about a hedge against government.  When you go through these monetary crises, effectively, all tangible assets rise in price, not just gold and silver. . . . Tangible assets have a value to everybody globally.  The downside is on real estate.  I would never put 100% of my money in real estate because it is not moveable.”
Fast-forward to now, and Armstrong predicts, “The economy is not going to come back. We are not going to see economic growth.”
Where is all this taking the world? Armstrong, who is an expert on economic and political cycles, says, “You have to understand what makes war even take place?  It does not unfold when everybody is fat and happy.  Simple as that.  You turn the economy down, and that’s when you get war.  It’s the way politics works.”
Join Greg Hunter as he goes One-on-One with economist Martin Armstrong of
(Programing note: Because of the Easter weekend, there will be no Weekly News Wrap-Up and no Early Sunday Release.  The nearly 60 minute interview with Martin Armstrong will air instead.  Regular programing on USAW will start again middle of next week.  Happy Easter-Christ Has Risen.)