Sunday, July 17, 2011

Martin Armstrong Editorial

We received this editorial today from a European reader regarding Martin Armstrong's call that a return to the gold standard would create a great depression and we thought it should be shared with all of our readers.
Perhaps those who think they have a better understanding of money, currency, and debt than Armstrong should examine the man's track record.

"Money has always fluctuated. I worked at the Bundesbank when Europe was calling upon Armstrong for help to design the euro.
This man's knowledge he attributes to his clients, but it rises from his computer model that was truly a major discovery. We gave him inside information because the politicians were playing politics. He persuaded the prevailing opinions that at least each country would have its own interest rate for the politicians wrongly believed that should also be equal. This man's understanding of money and debt is most assuredly still not appreciated today. Everything he warned would happen did because Europe failed to listen [to Armstrong] that all the debts had to be consolidated into a single national debt in order for there to be a single currency. The politicians would not listen because politically they assumed it would have been a bailout of the lessor states that they could not sell to the people. They were wrong. We are now reaping what they sowed.
What Armstrong is saying about the gold standard idea is that money is never a constant and it fluctuates in purchasing power rising in depression and declining in booms. Those who cannot see what he is saying are making the same mistake as Karl Marx assuming that there can be a perfect world without a business cycle where gold as money is a magical constant value. No single person's knowledge was consulted more by the central banks and the biggest corporations around the world than that of Martin Armstrong. What he has not written about is this is the man that helped restructure even the German car industry.
He taught the Japanese to sell their product in local currency and take the foreign exchange risk home. That was how the Japanese car manufacturers beat the German car manufacturers in America. What is not known it seems, this is the man that got Mercedes out of their losing trades on hedging Britain selling the pound before the launch of the Euro. He saved them at least $1 billion and instructed them also to create a hedging desk. This man was so much to so many and still people fail to understand fundamental principles of money and debt he taught behind the curtain as he has put it."