The Majority Must Always Be Wrong

QUESTION: Mr. Armstrong, I am new to your blog. My friends here have been on my case to listen to you. Our government has fallen, and I have observed one thing. Your forecasts are correct because nobody here will ever make a bold forecast, and they all seem to preach the same scenario. You have been accurate on Germany against the herd of analysts here. One by one, European nations are falling, and I can now see your 2032 and the collapse of governments unfolding before our eyes. What do you see in 2025 for Germany? You have a solution for the United States. Could you save Europe from itself?

Thank you

DT

ANSWER: Because I am not an academic, what I speak comes from experience and direct observation. The only economic theories that have survived are exclusively from those who have been traders – not academics. John Law traded on the Amsterdam exchange and gave birth to Supply and Demand. He articulated his famous water vs diamond analogy, which stated that water was vital to society. Still, water had little value compared to a diamond that had no true utility value yet was worth more than water. Even David Ricardo was involved in trading and saw the implications of international capital flows. He expressed that a nation should focus on its comparative advantage – something Trump must understand.

Sir Thomas Gresham also traded on the same Amsterdam exchange and saw that debasement drove out the older coinage from the money supply. Gresham’s Law became that bad money drove good out of circulation. We saw this even during the 3rd century AD when people hoarded the old silver coins and spent the debased. Even Albert Einstein, I was told, got his idea of general relativity from moving up and down in an elevator. Albert’s special theory of relativity appeared to be incompatible with the gravitational force as described by Newton’s law of gravity.

Most analysts espouse the same old nonsense and project the future based on what the central bank will or will not do. These analysts are not real, for all they purport is the same Keynesian theories they were taught in school. Sorry – that was an academic theory inspired by Marx and no longer works. Even Paul Volcker, former Fed Chairman, delivered his speech – the Rediscovery of the Business Cycle, in which he stated that the “new economics” ultimately failed. Any analyst who points to the Fed has never read the memos. Here, we have the thinking process before Keynes. The Fed raised rates in May 1928 and continued into the 1929 high with no effect.

Here is a chart of call money rates from the NYSE. Just look closely. We see that 1929 was the biggest stock market rally but the lowest level of interest rates, all because of the capital inflows. The Panic of 1899 saw rates rise to virtually 200% because of the capital outflows. There is no such theory of stock market up interest rates down that can be verified whatsoever.

The market functions like a pendulum. It is its own weight that pulls it back in the opposite direction, and so forth. When everyone is bullish, and you scare the herd, they all try to sell, and then what you get is panic and NO BID. ONLY a trader understands this – never an academic with no experience. It’s like a guy trying to write a book on how it feels to give birth – IMPOSSIBLE! This is why the MAJORITY must always be wrong. A good trader looks at the bullish, bearish consensus.

You are correct. Europe is imploding one nation at a time. As I have said many times, the creation of the euro was a compromise, and it could never rival the dollar, forcing institutional investors to still pick and choose between member states lacking a national debt market. Mr Scholz is a disaster. He lost a vote of confidence by 394 to 207, with 116 members of the Bundestag abstaining. Scholz’s last-ditch attempt to retain power with promises of massive spending fell flat on its face. This will send Germany to an election in February, precisely when our computer has been projecting a Panic Cycle in advance. Leaders from several major parties have since agreed to move up the parliamentary election to February 23, seven months ahead of schedule.

I would gladly fly to Brussels to address all members at once. But you must understand the computer forecasts that my best efforts will not succeed. Each member retained its debt. If Germany listened, it would pressure others to follow or be left behind. But politicians have been brainwashed by the NEOCONs and NATO and are preparing for a third World War, which the computer forecasts that they will lose. This will be the demise of the West. I suppose historically, we all have our minutes of fame.

In 800AD, Pope Leo III crowned Charlemagne (768-814AD) Holy Roman Emperor. Today, Charlemagne is referred to by some as the father of Europe. From that date, the EU is not likely to exist after 2029. Europe is heading in the wrong direction, and NATO is pushing for World War III, and there is not a single government even willing to negotiate. That makes it very hard. In all reality, I suspect they would only listen to me in 2029 and beyond.