My warning from 2014 | Armstrong Economics
In an interview on May 11, 2014, I explained to USAWatchdog that Confidence always outweighs reality. “Basically it’s what you believe. There have been all sorts of studies on the fundamentals that say that if interest rates go up, stocks go down. It’s just not true. The stock market has never peaked in interest rates twice in history. If you think you will earn 25% on the market, you will pay 10%; but if you really think the market will only go up 10%, you won’t pay 10%. So there’s always a difference between what you believe and reality.”
The people have lost all confidence in the government. We’ve heard rumors of a soft landing by the Fed last year, but things continue to get worse. Washington claims that everything is stable as banks continue to fail and inflation rages. There can be no price stability when there is a war. Biden has just unveiled his latest budget plan, which no reasonable person would agree with. In 2014, I explained that all great empires collapse because of huge debts. People believe that hyperinflation will trigger such a scenario, but debt is a major player. Once a government accumulates huge debts, it aggressively targets its citizens. This is what we see today.
So where should you put your money? In 2014, I said, “One of the number one questions I get asked all the time is where do I invest my money? If the banks can now just take whatever they want, there will be not salvation, but salvation. People are afraid. What do you do with cash? So people are buying things like real estate and stocks just trying to get money out of the banking system.” This sentiment persists, and the latest CPI report even showed home prices rising at the fastest pace since June 1982. The smart money has been trying to run away from the banks for years. Until recently, there was no incentive to keep money in banks due to artificially low rates.
I also explained that the Fed would only bail out deposits and asked institutions to change their models. “Everyone knows that I advise some of the big institutions, and I can tell you that they directly told me that the Federal Reserve came to them and told them they will not be saved for the proprietary trade. Will only be on tanks. That’s allI said. “The Fed was telling them, ‘Hey, you better change your models.’ They don’t think it will be a flight in quality like it used to be. You buy long term (treasury bonds) and it saves you. They don’t think it will happen. It’s pretty interesting. . . . It looks like long-term (treasury bonds) will eventually start to rise.”
Sound familiar to the current situation? People have moved from the public sector to the private sector. We are already in a private wave, and the public will not return to the public sector for many years to come.