Never Underestimate the Desperation of a Broke(n) Government

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Editor's Note: Martin Armstrong, a worldwide renowned economist, recently shared his views on a number of alarming trends taking place in the U.S. and around the world. Here are some key excerpts from his recent interview:

"We’re in a situation where the budget deficits are just blowing out, and its going to get much worse. And so what’s happening is that instead of dealing with the issues the government is going to be much more aggressive to tax people, chase them down, and put them in prison. All kinds of crazy stuff. This new act that came in December 19th—effectively they are telling any foreign corporation that they must report any activity with an American overseas. And what they’re going to do to them is what they did to UBS. If they don’t comply, they will confiscate all their assets here. So, honestly, from an international perspective, the best advice I could tell people is to get out. If you’re going to do business in the United States, use an agent. Get your branches out of this country. It’s going to get far worse."

"This is exactly how Rome collapsed. There was a Roman Emperor, Maximinus in 238 [AD], he simply declared all wealth in the Roman Empire to be his. That’s it. And, what happened, is that, and what you’re going to see over the next few years, as you attack the rich, as the Romans did, what happens is that, somebody now hoards their money. They no longer invest it, they hide it, and they don’t keep it in banks. And consequently, that reduces the velocity of money. And as it reduces the velocity that is what creates the economic decline. So that interest rates, even during the Great Depression, fell to 1%, nobody would borrow because they didn’t see an opportunity to make money. And every possible mistake that every government has made before us, we are following step by step."

"We have a conviction rate in this country that is 10% higher than Adolph Hitler. I mean that’s alarming. The only person we haven’t beaten is Stalin, and that’s only because he basically said, 'Take everybody away.' But I mean the most notorious court of Adolph Hitler had a conviction rate of 90%. We’re at 99! I mean, what does that tell you? The federal government can never be wrong about anybody at any time. So it’s pretty scary."

"You can go pretty much down the line. Forth Amendment…gone. The Fifth Amendment…they basically have held that your right to remain silent, that’s only personal. If you work for a company, which basically 99% of the people do, you don’t have such a right because Corporations don’t have such rights. I mean, you go right down the line. You look at this new bill that they just put in, that the military can operate domestically; deny people counsel, lock them up – citizens now – alright. No right to go to court, no right to lawyers, no right to a trial. They can just hold you indefinitely until you die. And all under the pretense, 'Oh, it’s terrorism.' Well, how do you know somebody is a terrorist? You know, you have to have a right to what is called, due process of law...this new bill says that you do not have that. That we can just lock you up; you have no right to lawyers, no right to a judge, no right to a public trial, no right to even find out what they say against you. Nothing. So, we’re the closest we can get to Nazism."

"According to very high sources I have in Germany, if the choice comes between the collapse of the Euro or blinking and letting inflation take place, they will take the latter. They have so much invested in this Euro its pathetic that, there too, they simply will not do the right thing. I mean, as a trader, I warned them back in ’97. If you’re going to leave every country with its own individual bond, if you short the bond you basically have a virtual currency. Its just a derivative, that’s it. The only way to have actually created a single currency was, like the United States, you have to create a single national debt. Can you imagine what the national debt of this country would be if all fifty states had the right to issue federal debt? I mean it would be total chaos. But that’s what Europe has got."

"What we’re really facing this year is, and remarkably no one is talking about it yet, there is six hundred (600) billion Euros that have to be rolled, and that is just Spain and Italy this year. You’re rolling from interest rates that are 1.5% to 2%, to 7%. So everywhere we look the national debt of everyone around is going to go exponentially higher. So this is why the countries are getting very aggressive with their taxation. I believe that historically you’re gonna see more and more people hoard money and not really invest. It’s just everything they could possibly do wrong they are doing."

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About Martin Armstrong

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