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ThePythonicCow
03-21-10, 04:56 AM
Martin A. Armstrong writes the following from "the hole" in prison. He nails it in my view. Wow!

Armstrong Economics From the Hole (pdf) (http://www.itulip.com/forums/attachment.php?attachmentid=2932&stc=1&d=1269161178)

Hopefully His Honorable Highness The Satan has reserved an especially warm spot in Hades for the retards who are trying to silence Mr. Armstrong.

I especially like Armstrong's recommendations to:

convert national debt to equity,
replace all taxes with a retail sales tax, and
have nations print such money as needed rather than borrowing it.

ThePythonicCow
03-21-10, 07:03 AM
Mr. Armstrong has added a Part II to his handwritten notes from the hole. It doesn't upload to iTulip (I guess it's too big) so here's a link to the pdf on my web site: Writing From the Hole Phase II of This Debt Crisis (pdf) (http://thepythoniccow.us/Writing-From-the-Hole-Phase-II-of-This-Debt-Crisis-31310.pdf). It's only one page, but it's in color (blue ink and red rulings) which I suppose accounts for the pdf file's large size.

Jay
03-21-10, 07:16 AM
Haven't read them yet, but thought I'd look for Hoover's memoirs that Armstrong mentions and they are here:

http://www.ecommcode.com/hoover/ebooks/browse.cfm

DRumsfeld2000
03-22-10, 12:45 AM
I like Armstrong but I cannot see how the Dow rises to new heights if there is a debt explosion in the world. As the Dollar rises it makes exports more expensive, ending hopes of employment growth which is what the Obama admin is pinning its hopes on. This will mean greater US borrowings. A higher Dollar helps with raw materials such as oil so maybe commodity prices will fall. I guess gold will rise due to demand from Europe etc. He seems to be proposing a higher Dow, higher Dollar and higher gold: is this realistic?

Armstrong pretty much sums it up that hell is coming. I do not really understand this debt for equity swap he is proposing. Perhaps someone can explain it further. Who would want this equity?

aaron
03-22-10, 01:41 AM
Dow and S&P 500 companies have the U.S. government and military as partner. In addition, most of these companies are global. I believe it is quite possible for the large, well-connected companies to continue to profit in a global economy, even if the U.S. is not itself growing. Not only will they be profitable on a global basis, they will also continue to benefit from EJ's "supply destruction" as other companies close down and new businesses are not started.

ThePythonicCow
03-22-10, 02:18 AM
I do not really understand this debt for equity swap he is proposing. Perhaps someone can explain it further. Who would want this equity?
Let me take a couple steps back first.

Back before the days of chasing asset price bubbles (back in the days of the caveman, I guess) we used to buy houses to live in, bonds (debt) for a specified return of principle plus interest, and stocks (equity) for a portion of a corporation's earnings. Bonds (debt) give you a fixed return (if they don't default), whereas stocks give you a percentage of earnings (as dividends.) If a company was going to do well in the future (large profits) you wanted the stock, because you got more than the fixed principle and interest returned by their debt. If a company was going to do poorly (but not go bankrupt), you wanted the bonds (debt).

Right now, nations have issued debt. You get back a specified amount. In hard times, those payments can be a burden on the nations paying.

If the nations issued equity, it would provide some percentage of their "profits" (their tax revenue or some such.) In hard times, that would be not much. In good times, that could be much more.

When a corporation declares bankruptcy, it is either restructured or dissolved. Restructuring can include exchanging debt with equity. You thought the company owed you $X. After the restructuring you get some shares in the restructured company instead.

We now have some nations that are, if honestly accounted, bankrupt. Nations don't dissolve (unless conquered in war, typically.) But they could restructure their debt, canceling it and issuing "equity" in its stead. Your U.S. Treasury bond (in the case of the U.S.) would turn in to rights to a share of U.S. tax revenue. Unfunded U.S. liabilities such as Social Security and Medicare might need similar treatment, though that requires some more thought.

It's not a question of anyone wanting this new equity. It would be a question of taking that or nothing.

llanlad2
03-22-10, 06:53 PM
Haven't read them yet, but thought I'd look for Hoover's memoirs that Armstrong mentions and they are here:

http://www.ecommcode.com/hoover/ebooks/browse.cfm[/URL]
<!-- / message --> <!-- controls --> [URL="http://www.itulip.com/forums/newreply.php?do=newreply&p=153689"]http://www.itulip.com/forums/images/buttons/quote.gif (http://www.ecommcode.com/hoover/ebooks/browse.cfm)

Great link. I'm reading the third volume now on the Great Depression (didn't bother with the first two) and it is really compelling stuff. Great narrative and fascinating so far.

metalman
03-22-10, 07:22 PM
Dow and S&P 500 companies have the U.S. government and military as partner. In addition, most of these companies are global. I believe it is quite possible for the large, well-connected companies to continue to profit in a global economy, even if the U.S. is not itself growing. Not only will they be profitable on a global basis, they will also continue to benefit from EJ's "supply destruction" as other companies close down and new businesses are not started.

with you on the theoretical vs the 'what might be'.

armstrong doesn't 'get' how it all goes down in the real world.

that's why he's in the slammer.

ThePythonicCow
03-28-10, 05:07 AM
Here's another handwritten page from Martin Amstrong.
From the Hole V -- Probabilities of a Deflationary Depression vs Inflation.
I transcribed Mr. Armstrong's handwritten note below.

Any typos, misspellings and grammatical errors of Mr. Armstrong's were preserved and likely more such were added.

A pdf image of the original note (with date of March 23, 2010) can be found at: http://www.martinarmstrong.org/economic_projections.htm and is attached to this iTulip post below.


Resistance at 10,800. The next key resistance is 11,000 and 11,800.
On the weekly level, technical resistance stands at 11,400 followed
by 12,200, 12,800 and 13,000. The downward channel constructed
frome the Oct 2007 high to the May 2007 high lies at about 10,000-98000
going into April. This is the key support. The uptrend channel from
the March low to the July low 2009, projects out to 11,400 on the
bottom to 13,000 on the top for the first week of April target.
Technical analysis on the daily charts stands also at the 11000-11200
area. The initial support lies at 10,500 area. A weekly close below
this area would warn a retest of support.

Still don't see new lows in the spirit of 1929. We were a creditor
nation not debtor & on a gold standard that forces deflation. Britain
bottomed before USA when it abandoned gold standard & that inflated the
economy. We are NOT headed to a 1929 style depression. This is impossible
under currency circumstances. The ONLY question is inflation. That only
appears to get serious when sovereign debt is questioned. The March 2009
low was 17.2 months and looks to be a good low. Bonds to equity is
still 10:1 investment. Stock crashes DO NOT create depressions! Bond
collapses create depressions! The Health Care passage illustrates the idea
there is an endless pit of revenue to tax. My concern is the aggressive advance
in taxes state/local & Fed will dampen economic recovery and hasten the
sovereign debt crisis. The SEC abandoning analyst reform at NY Banks also
illustrates it is business as usual. They Do Not get it and appear they never
will. They will indict former Lehman people only because it no longer exists.
They will NOT do that to ongoing NY bankers

America's #1 Political Prisoner, Martin A. Armstrong