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Martin Armstrong: Sovereign debt crisis underway - fuse lit in Europe

fxstreet.com  ( Original )
JUN 9, 2015

Famed Forecaster and developer of the Economic Confidence Model Martin Armstrong @StrongEconomics and The Forecaster movie Director Marcus Vitter @BukeraPictures came to the FXStreet Live Analysis Room and shared ideas about the economic and political situation.

Marcus Vitter commented how the idea to do a movie about Martin came to him, and how was the 10-year work to have the final product.

Martin Armstrong shared his experience during his whole legal process and his 12 years in prison. Dale Pinkert remarked on Martin's strength to be back to markets and to make research again. Armstrong said that governments are losing their power enforcing draconian measures. He commented that the debt market is arriving to a tipping point and sooner governments will have to make tough choices.

Sovereign Debt Crisis Underway; Euro is a disaster

Regarding debt and reserve currencies, Martin talked about the US debt and China's idea to replace Dollar as reserve currency. He said that the US debt is big; but the US Dollar is the only real reserve currency that the world has; and it is why the Euro is a fail.

Martin remembers that he advised Euro proponents that it wouldn't work unless the Eurozone consolidates debts. However the European Union never got around it despite they understood the reasons. The arguments were political consequences and that people wouldn't never vote for it.

They decided to go for the currency first and then for the debt consolidation in second, but the first people left the office and the new people never did it. The results are tangible now.

So, Martin says: Euro is kind of a disaster in the sense that there is not a single bond that represents it.

USD could go to excessive highs

Armstrong explained that a larger problem will take the market in a couple of years with the Dollar going to excessive highs like the ones economy saw in 1931. And then, market would need to look for a new type of reserve currency; but before that, you should create a certain damage first.

The Forecaster,  a Marcus Vitter's moview

The Movie The Forecaster is about Martin’s life and model. It is now screening in different festivals around the globe. If you want to watch the movie online with a discount for FXStreet users, please read here the information