Submitted by Taps Coogan on the 27th of June 2018 to The Sounding Line.
Legendary investor and forecaster Martin Armstrong recently gave an wide ranging interview in which he argues why the next financial crisis will be a government debt crisis not a private sector one.
“You can go back hundreds of years… a lot of people have heard of Andrew Jackson fighting the Bank of the United States and shutting down the central bank… and they cheer. Well what happened was instead of a central bank where you parked your money, they parked it in all the state banks and that just led to corruption. You can go on Ebay and buy what’s called a ‘broken bank note.’ Every bank issued its own paper money, every single bank, and then they start going bust. So then the states started to bail out their local banks and then the states went bust. So the sovereign debt crisis of the 1840s was all the states going down… A number of the states just defaulted on their debts permanently. Then in the 20s (1920s), we had the European governments default. You had Asia default. Britain even went into a moratorium; eventually they came out of it… It’s like a Shakespeare play. It can be played out for hundreds of years. It’s always the same plot but the actors change. Sometimes it’s the sovereign debt as far as federal (government) is concerned and other times it’s the private sector. Then other times it’s the municipal level… This time we have municipal and federal both in trouble. It’s not the corporate side. This is why the stock market has been going up and it’s going to go up higher. The problem isn’t in the equity side, the problem is government (debt).”
There is much more to the interview so enjoy it above.
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