Quick Disclaimer

The following is a transcript of recorded content. Please note, these transcripts are not always perfect and may contain typos. If you notice any major mistakes, please feel free to report them by opening a Technical Support ticket under the Help menu at the top of the screen.

Full Transcript

Chris Martenson:    Welcome, everyone, to this Featured Voices podcast. I am your host, Chris Martenson. And it is July 11, 2019.

Today, we are going to be discussing economics, macroeconomics, monetary policies and the future. Just yesterday, the Chairman of the Federal Reserve, Jerome Powell, spoke in front of the House Financial Services Committee and all but promised a rate cut, or maybe two. Financial assets, stocks and bonds did what they were supposed to do; they rose in price. Made the wealth gap a little bit wider, a side feature of current monetary policy that Mr. Powell disavows. He waffled about that when asked directly, denied it and went on from there.

Today, we have a very special guest that many of our listeners have been asking for and whom we’ve been seeking to get on the program for a while. Martin Armstrong is an economic forecaster, former hedge fund manager, monetary and foreign exchange currency expert and a deep student of history. He’s advised central banks, powerful political leaders, and testified before Congressional Committees on economic cycles, monetary issues, currency issues, things like that.

Mr. Martin Armstrong is the developer of the Armstrong Economic Confidence Model, which we’re going to talk to him about. Best known, perhaps, for calling the crash of 1987 to the very day. The model then went on to do a lot of great things, including pegging the June 13 – 14, 2011 moment as the start of a long term upward trend in the market. The market obliged by notching its very first weekly rise right after that. And, hey, here we are many years later.

He’s had remarkable success at calling major turning points in his model and ability to communicate really clearly in writing and in person has brought him world renowned. Mr. Martin Armstrong, welcome to the program

Martin Armstrong:    Well, thank you for inviting me.

Chris Martenson:    Martin, let’s give our listeners a solid grounding for the rest of the interview. Could you please explain for us what the Economic Confidence Model is and how its output might be interpreted and used?

Martin Armstrong:    It’s really a worldwide business cycle. And effectively, what really happens is behind the curtain. Everybody knows that it’s confidence to buy things. So you can every crash, for example, 1929, Hubert Hover comes out and says, “Oh, everything’s fundamentally sound.” Reagan said the same thing. They always do. Why? Because, can you imagine if the President came out and said, “Oh, you know, this thing is really going to crash. It’s going to go down 90 percent. Hide underneath your bed.” I mean, everybody would just absolutely panic.

So, it’s always a confidence situation where they are trying to get everybody to believe that something’s going to happen. This is really the way central banks operate. They know it’s really a confidence issue. So that’s why I named it the Economic Confidence Model because that’s really what happens.

As a trader my whole life, I mean, everybody’s always said you buy the rumor and you sell the news. It doesn’t really matter what even the fundamentals are.

I was called into the ’87 crash into the Brady Commission, et cetera. They always start with the same thing. They say, “Oh, we’re going to find the guy that shorted this market.” And I just looked at them and I said, “Do you realize that every investigation has begun that way since 1907? And nobody’s ever found that mythical fixture of a player.” And he looks at me and he says, you know, this is a professor who taught at Harvard at the time, and he says, “Well,” you know. I said, “Let’s put the accolades aside. What is the issue? How is somebody going to overpower the market” He says, “Well, I borrow a stock from this guy and I sell it to this guy.” I said, “Correct. So the first guy’s the long and now the second guy’s long. So how can somebody outnumber the longs?” And he just looks at me, you know, and I said, “Take the future’s market. Every contract’s got to be matched.” And he just looks and he says, “What makes it go down?” I said, “Very simple, you’ve never traded, have you?”

Really what happens is the majority of the people are long. Something happens, it scares them, they try to sell and what happens? We call it no bid. And that’s what you get these huge gaps for. And, unfortunately, people in government and academics, they have never traded. They don’t know what this is about, yet they stand up and make regulations, et cetera. It’s just absurd.

The ’87 crash, I mean, I really didn’t even want to get involved, but friends were saying you got to go, otherwise they’re going to take our computers away. They were blaming computer trading. And the investigation, what it revealed, was that yes, a lot of people were starting to use computer models, and the computers were correct – they said sell. But the traders, they’re looking at this, they say, “Well, the Dow’s already down 500 points. I can’t sell – there’ll be a bounce off of a bounce.” And they did not believe the computers and they unplugged them. The market crashed.

And so, it wasn’t the computer trading. It’s the simple fact that if everybody’s wrong and they’re trying to sell, and nobody has the courage to step up and buy a falling knife, to catch a knife, unless you are short. So, effectively, you have all these governments; they always want to outlaw short selling because that’s what makes the market go down, but they’re the only people that buy during the crash. So, you have all that, and it gets worse.

The Great Depression, basically what was happening, the Senate had investigations. They were calling everybody up to testify before Congress, you know, from Rockefeller on down. “Are you sure you do this?” They turned it almost into as if you were a trader. So the market sells 90 percent because nobody was short. If you shorted you were afraid you were going to be called into the Senate and, “Why did you sell against the country?” It’s just absurd.

But you have Europe doing the same things right now, all short selling on bond unless you actually have the bonds you can’t do anything. They think this is what supports the market, and it doesn’t. It destroys free markets, and it makes Europe absolutely a disaster.

Chris Martenson:    Well, let’s talk about the free market. You have a lot of great points in here, and I want to get to the computerized trading, also, what we think of that word markets now and whether it deserves one or maybe two sets of quote marks around it given all that’s happened monetarily.

But your economic confidence model, then, is looking for cycles, and you said fundamentals don’t really matter. If I interpret that correctly, is that because your study of history and what the model has projecting is that there are cycles that are going to come and go regardless of things like fundamentals or even monetary policy?

Martin Armstrong:    Yeah. Look, people act in anticipation. So what happens is – it’s very interesting – is that if you think the stock market is going to go up 20 percent, you’ll borrow and you’ll pay five, maybe even ten. If you think the stock market’s not going to go up even one percent, you will not borrow at one percent.

We’ve done studies on this. The stock market has never peaked with the same level of interest rates twice because markets trade in anticipation. And that’s what I mean that with the ’87 crash. One of the things that was found – the market’s down – the worst possible thing happened, even professionally, they called the broker on the floor and they said, “What is going on? ” And the broker said, “I have no idea.”

When there’s no information, now basically everything that you could ever possibly imagine runs through everybody’s minds. I mean, there were rumors that the President was shot with a bullet dipped in cyanide. That Russia just invaded Europe with a news blackout but somebody understood. So, when you get these kind of crazy things then what’s a professional going to do. If he has no idea what’s happening, the conservative thing is you get out.

If the Fed raises interest rates, lowers interest rates, as a professional, okay, fine, there’ll be a kneejerk reaction. Nobody panics. But markets always trade in anticipation. If you think there’s going to be – take the dot.com bubble. “Oh, this is going to be the greatest thing ever since.” And you get the cryptocurrency thing and the bitcoin. People buy on anticipation, not the fundamental. I mean, if you look at the fundamentals in both cases, they’re kind of crazy. dot.com back then, they were anticipating profits coming for the next 20 years, not correctly. So that’s what people don’t understand.

But markets run on anticipation. So, if you – it’s a confidence issue. If you believe in the future, you will buy. If you do not, you will not. So this is why quantitative easing has completely failed. For ten years they’ve lowered interest rates. They tried to punish people going negative, et cetera. It has not worked. Why? Because they don’t believe in the future.

Taxes in Europe are way too high. I go to Europe often. I go to Zurich and I buy a Starbucks. It cost me $10. The same thing in the United States costs me $5. You’ve got a 20 percent sales tax on everything, and that’s minimum. I mean, it’s just crazy. There’s studies out not that show the Germans, yes, Germany’s the strongest economy – the German citizen has less net worth than an Italian because the taxes are so high.

Chris Martenson:    Let me ask you a market structure question then. I do have a lot of trading in my background. And I discovered sometime around 2007 or 2008, these trading strategies that I learned very carefully were getting blown to pieces. And it took me a little while to figure out that I was trying to trade against computers that had much better access to information and obviously a much faster execution speed. So things became untenable. I couldn’t quite work it out, and I had to back away.

So, my theory is that market prices today are really principally the output of computer algorithms, not humans. Greed and fear mostly replaced today by statistically driven, risk adjusted and essentially emotionless, programmatic lines of code. What do you make of the idea that markets today area not really subject maybe to the same forces as in times past? In other words, are prices today delivering maybe less useful information than they have in the past?

Martin Armstrong:    No. I mean, in fact, it might sound a bit strange, but this type of intraday trading back and forth, it actually increases the risk of a crash. Because what happens is, yes, they can outperform you on the trading back and forth, but they don’t hold positions. So, the real danger here is that they’re in and out, correct; however, if they get trapped, they are not position oriented.

So, what will happen is that these algorithms will suddenly leave these people long or short in the middle of a complete crisis and they can’t get out. So, it all depends. You know, if you’re looking at intraday trading and these types of algorithms that are simply looking at scalping back and forth, that’s very nice, it will add some liquidity to the market, but it will not change trends because they’re not position trades.

So if you’re looking at a major crash type thing, they really increase the risk because they can get trapped. And the computer is not – those types of programs are not oriented to actual position trading. So that’s a different type of thing.

The biggest problem we have is that the liquidity has been shrinking. So you have a lot of the banks having curtailing proprietary trading. So that’s been shrinking dramatically, like Deutsche Bank, for example. And then you have the whole situation of – you know, you have all these people constantly saying, “Oh, the stock market’s going to crash,” all this, and they’ve been utterly, completely wrong. Why?

Mainly, if you look at it, the retail participation in the stock market is still about 50 to 60 percent of what it was in 2007. So the retail market is still not back in this thing yet. Now we believe the rally, the vast majority kept – every new high, oh that’s it, it’s going to crash any day. And they have not understood what this market’s about.

Chris Martenson:    Well, what is this market about?

Martin Armstrong:    It’s much more on a global scale now. You take what Powell said – you have really understand what he said yesterday. He emphasized not that the US economy is in trouble. Yes, unemployment, things of this – and the economy is still strong. Why? Because the rest of the world is imploding.

So, if you look at the capital flows, everything’s been moving into the United States. If you just look at France, take Germany, those two stock markets, where were the peaks? 2000. They still have not exceeded the 200 dot.com bubble high. You know, the markets are telling you something.

The same thing over in Greece and Italy, et cetera. That they have been bashing, basically, the free markets all along. You have people saying, “Oh, well Trump’s creating a trade war, et cetera.” Not really. It’s right he has been trying to negotiate. He negotiated with France. He says, “All right, fine, I’ll tell you what,” with all of Europe, “I’ll drop all tariffs. You do the same.” France immediately said no way.

It’s more than people really understand. I mean, the capital flows have been moving into the United States from Europe dramatically, and also from China. I mean, that was the whole issue behind bitcoin. The Chinese government, more than 80 percent of the volume was all coming out of China because the Chinese figured out, hey, okay, fine, there are currency restraints, I can’t get my money out of the country so I’ll buy bitcoin, and then I’ll sell in on another terminal outside the United States and voila. Or outside of China, and I got my money. That’s what’s been going on.

Chris Martenson:    Let’s talk about the global flows for a second. So we had the December lows, and Powell did his famous double cave, right, both on the balance sheet and also the interest rates. But let’s look at this from a global standpoint. I look at that, and today we have people saying, “Oh, my God. Bonds are saying this, stocks are saying that,” and what they’re talking about is an inverted yield curve in the United States. They’re talking about 13 trillion dollars of negative yielding debt, most of it sovereigns across the world and saying, “Look at that, that’s pointing to weakness.“ But I say, look, we saw stocks and bonds go up. I’m detecting lots of financial easing and new liquidity. I think that’s what I’m seeing in this. And then it sloshes around the globe a bit.

But I don’t think that’s possible – here’s my theory – I don’t think it’s possible unless there was significant new liquidity added to the marketplaces by the central banks. Is that a plausible idea, or do stocks or bonds have it wrong there?

Martin Armstrong:    No. What’s happening is it’s a shift. And the real serious money is beginning to realize, hey, there is a major problem here. The central banks are trapped. You see, the Fed was yelling at Draghi and saying, “We have to raise interest rates.“ And Draghi, “No, no, no, no,“ et cetera. And so the US is the only one to raise interest rates, and they’re getting bashed by the IMF, by everybody, “Oh, you’re pushing everybody outside.“

Draghi took interest  rates down for more than ten years and nothing has happened. You would think that somebody would, at some point, wake up and say, hello, maybe this doesn’t work.

What has happened? The ECB now owns 40 percent plus of the national debts  of Europe. They have also come out and said, “Oh, gee. Ok, fine.” Unlike the Fed, which said they’re going to allow whatever they bought to mature or just expire; the ECB realizes it can’t do that. If it were to do that, interest rates would rise dramatically. So, whatever they have already bought they have to continue to roll.

And then, to try and stimulate, what are they doing? All they’re doing is buying government debt. So, they have successfully managed to keep the governments on life support, but it’s not filtering off into the economy.

At the same time, you have the fiscal side saying, “Oh, well, gee, you know, we have to – disparity between the rich and poor. And oh, we have to raise more taxes.“ Well, it’s very nice, but it’s also the rich who create the jobs through investment. And then you take the pension funds in Europe, that’s even worse. Some of them have restraints where they must invest 80 percent in government bonds. And the pension crisis that’s coming is just off the charts. I mean, look at Illinois. California. CalPERS used to be the largest and most profitable pension fund in the United States. It’s been losing money.

You have a serious problem here where the government has done nothing but stimulate by buying its own stuff. So, you have to really just look around. What’s been going on? You have pension funds that have been going out and buying farmland. Why? Because they’re renting it out and getting five percent. They need to make money.

Another crisis that’s waiting to happen is they needed yield so they were running into emerging markets, and they only got scared after Turkey.

The whole thing is just one giant mess. And this is not going to end nicely. The stock markets are moving up because it’s the only place to put money. I mean, yes, you can buy gold, but that’s for the retail person. I mean, you’re talking about sizable money of pension funds and institutional. The stock market’s the only place to go.

So that’s why the market has been constantly knocking on heaven’s doors. Look, the Dow, I don’t see it going anywhere but up. I mean, we’re probably looking at least 35,000 or so, maybe by 2021 and if not higher. I mean, it’s a difference at this point between public and private. The Central Banks can’t raise interest rates. If they raise interest rates, they actually start going belly- up.

Now, people don’t realize because they always think – they judge everybody by the Federal Reserve. The Federal Reserve is completely structured differently. The ECB has to go back and get permission to increase debt, et cetera. It’s got all kinds of rules, whereas the Fed does not. So it’s a different structure completely. And the ECB can actually go bankrupt. If the politicians can’t agree to increase its budgets, there you go.

Chris Martenson:    Well, in the EBC, too, if they have a capital call, it’s got to go out to other countries like Greece and Italy, right? So that would be like how do you get money from a place that’s broke to fund a place that’s broke doesn’t – it’s kind of tricky.

Martin Armstrong:    Well, it’s also, I mean, I was actually one of the people involved and called in when they were forming the Euro. And I can tell you, they attended all our world economic conferences in London, et cetera. And I sat down with them and I said, “Okay, fine. If you want to create a single currency, you have to consolidate the debt. Then the Euro will be able to compete against the dollar.“ Why is the dollar the reserve currency? Simply because this institution can call them up and say okay, fine, buy me two billion dollars’ worth of treasuries. No problem.

How can they do that in Europe? They can’t. “Oh, well, let me see. Let me look at Germany.“ Every country, although it’s a single currency, every country has its own credit risk. The same thing as we have 50 states here. Yes, we have a dollar, but that doesn’t mean that every state is equal and equivalent to each other. And that’s the problem in Europe.

They would not consolidate the debts. And on top on top of that, that’s why you had bail-ins. Because suddenly Germany said, “Oh, gee, we can’t – we’re not going to put in money to bail out Italian banks.“ So, they wouldn’t consolidate the debts. They want to pretend they’re one happy big family, but they’re not. The don’t trust each other. So, they won’t put in any money if the Italian banks go down.

So what do they do? They come up with the new policy, oh, bail-ins, that’s a good idea.

Chris Martenson:    Well, we’ll see how that works now.

Martin, a view I have is that markets do need price discovery, price discovery needs markets; two sides of a coin. Therefore, if you destroy price discovery, you’ve kind of messed with the markets. So talking about the $13 trillion of negative yielding bonds, but more specifically, let’s make this – that’s a big number – nobody understands $13 trillion, right.

In Europe, we have the stunning fact that there are now, at last count, fourteen junk rated companies whose bonds are trading with a negative yield. And there’s only one interpretation for that, right? If you hold that to maturity, guaranteed loss. If the company goes belly up, guaranteed loss. The only way you can come out ahead on that is to sell it to somebody else at an even more negative yield in the future.

So it seems to me that when you talk about the expectations and the confidence, the fact that there are junk rated companies in Europe with a negative yield tells me that there are people out there with a lot of confidence that the Central Bank of Europe is going to be able to continue to do what’s it’s been doing, which is to continue to drive yields more deeply negative. Is that a fair interpretation, and what happens next?

Martin Armstrong:    No. There’s another twist to this. And the thing is that virtually every government has defaulted and their debt is worthless. And that goes back to Babylonian days. So the problem is that a government defaults, you get nothing. Absolutely zero. You can’t go running down the national gallery and start lifting out Picasso’s or something like that. That’s it.

Private debt, however, is substantially different. And if you bought General Motors and their profits are absolutely negative, et cetera, if they go bust it goes into bankruptcy, you get some of your money back. You’re buying tangible assets. This is what the takeover boom was in the ’80s. It was another thing they were blaming me for, but effectively, we had charts – you can find them on our website – we showed that the book value of the Dow bottomed in 1977. And if you could buy a company, sell its assets and double your money or more, how could the market possibly be overvalued?

And that’s what the 1980s was all about. People were suddenly realizing, wait a minute, the book value of these companies is more than what it’s actually trading at. So you had the Dow go from 1,000 to 6,000 within a matter of a few years. We’re back at that point in time where the private assets, even if the company is negative, et cetera, not doing so well, what’s its book value?

If you actually look – you can go to our site as well – we’ve published the PE ratio, the S&P back to inception. Where is the high? The high’s actually at the bottom of the market in 2009. Why? Because at that point in time, people don’t trust the banks, the don’t necessarily trust the government. I’ll buy equities. I’m not expecting to make five percent on my equities; I just want my money back.

So, you get at those points in time, and this is what’s happening now with the equity side. It’s not necessarily economic growth or what they expect in profits, et cetera. It’s where can I put my money that I think I’m at least going to get the majority of it back?

Europe is in serious, serious trouble. Italy is kind of like moving toward creating a two-tier monetary system. This is what happens historically. Great Depression, there were over 200 cities in the US that issued their own currency. They did the same thing called notgeld in Germany during the hyperinflation period. Companies were issuing their own currency. They always go for premium versus the government.

And if you look at what survived the hyperinflation of Germany, it was real estate and corporate assets. When they came out with the new currency in 1925, it was backed by real estate. So you reach these points where it’s tangible assets versus anything on the public side. And I strongly advise everybody, do not own any municipal bonds, state bonds. The Fed US treasuries are probably good still for another two to three years. After that, forget it.

Because what will happen is that you start getting a couple municipal defaults and then it spreads like a contagion. They start looking around and say, “Oh, gee, who’s next?“ This is what happened with Greece. And soon as Greece got in trouble back in 2010, the markets made a lot of money. Traders, okay, fine. Then they looked around and said, “Hm, that’s interesting. Who’s next on the list? Oh, Portugal, yeah. Then Spain and Italy.” Then they even went after France. That’s how capital moves. It’s a contagion.

And you’re going to read 1931 chapter, Hubert Hover Memoirs. He explain the same exact thing. He says, “Capital acted like a loose cannon on the deck of a ship in the middle of a hurricane.“ He said, “Shooting off in every which direction so fast they couldn’t even form a committee to figure out what was going on.“ Once Austria defaulted, that’s it. Germany was next. Everybody ends up defaulting. Even Britain went into a moratorium. So, it’s a contagion.

So once you get that first crack, that’s it. The only thing that’s going to up are private assets.

Chris Martenson:    And let’s explore that a little bit. So obviously, we had a long up-cycle here and I’m wondering – first question is where are we in that cycle in terms of your Economic Confidence Model? And second, when it does finally turn the corner, something you said earlier – let me see if can phrase it correctly. The central banks might be able to wiggle things around at the margin but they can’t change the trend. So when this trend changes, you’re saying here that private assets are going to be a better place to be than public assets, not state, not muni, things like that. Maybe treasuries but maybe not Euro area sovereign debt, things like that, if I’ve captured all that right.

So when this turns, what do you think this looks like?

Martin Armstrong:    It looks like we’re heading – that the next business cycle on the Economic Confidence Model bottoms in January. So the next wave is basically in a six year wave. So this one has been deflationary, which is why the quantitative easing has failed, et cetera. The next one will be inflationary.

So this is what the markets are starting to show you. Gold has kind of poked its head up, finally. But unlike the gold bugs, I mean, just listen to what they say, “Oh, everything’s going to crash and only gold’s going to up.” Sorry, the stock market has been making new highs with gold.

If you look historically, it’s the private versus the public. So gold will only move opposite of private assets when you’re on a gold standard. When you’re not on a gold standard, gold will move with the rest of the private assets, and both are moving up.

So the next wave, they’re showing you what’s coming. And then next wave is going to be an inflationary one, and that’s probably going to run off into a peak around 2024. But we have serious problems heading in here. I would say you have a major crisis coming on monetary side. We’ll probably see something similar to like an international meeting of Bretton Woods, et cetera, most likely by 2021 to 2022, not that you’re going back to gold standard or something.

But just that we are in a situation where the philosophy of currency is different between the United States and Europe. US always wants a cheaper dollar because they look at, okay, the dollars down, we can basically sell more goods. So the two times the dollar went up dramatically was during the Great Depression because everybody else was defaulting, and that’s where FDR ends up devaluing the dollar.

All right, when is the second time? 1985. And what did they do then? They created the G-5 at the Plaza Accord. They lowered the value of the dollar by 40 percent. US always wants a cheaper dollar. Europe always wants a stronger currency. It’s a philosophy that has emerged since World War II.

When we were going to first open our offices in Europe back in ’85, I went to lunch with a friend of mine who was head of one of the major Swiss banks. And I said, “Okay, fine. Here’s a bunch of names that we need to come up with Europe advisor or something like that,” because I assumed  there was still a lot of anti-Americanism in Europe. And he looked at me and he says, “Name one European analyst.” And I was very embarrassed because I couldn’t. I’m thinking, here I am an arrogant American or something. I said, “Look, I’m sure there is. I just know of anybody.” And he laughed and he says, “There are none.” And I said, “What? Why?” He says, “The reason everybody uses you is because you don’t care if the dollar goes up or down.” He says, “If he’s French it’s via la franc. If it’s British, it’s God Save the Queen.” And he was right.

Then I started paying attention that because all the currencies went to zero, the politicians in Europe said vote for me, the deutschmark is up two cents against the dollar. They used the currency as justification politically. Whereas, in the United States, nobody could run and say vote for me because the dollar is up against the Mexican peso. Everybody would go, “Yeah, what are you talking about?”

In Europe, it was always a political issue. And even in 2007 when the euros going to crash, et cetera, they put an economist in prison for a few months because he came out and said it was going to go down. The euro – you know, I get emails all the time from guys that work in the top banks in Europe and they all say the same thing, “God, I wish I could say what you say.” But they have to sign confidentiality agreements. They can’t come out and say, “You know, the euro’s really screwed. It’s going to go down really big.” The ECB would be on the phone to that bank and fire that guy.

So you never looked at any kind of real analysis out of any of the major institutions because they’re not allowed to.

Chris Martenson:    Well, now, Martin, when you said a major crisis, a monetary crisis maybe sometime 2021 – 2022, somewhere in there, what are you speaking of? Are you speaking of a collapse of the euro? Maybe the yen? What does that look like to you? What do you mean by that?

Martin Armstrong:    It’s mostly both. And the only time you get a major crisis, as a said, like 1934 or 1985, is the dollar going up. When the dollar is pushed up, and that’s when the US government is going to come in, “Look. We can’t take this. We have to manipulate the currency, got to do something.”

You got the similar situation problem with Hong Kong because they pegged it to the dollar. If the dollar goes up they get deflation contrary to everybody else in Asia. It’s a real issue. And they don’t understand what this is, and that’s the real problem.

The capital flows are moving into this country, and this is what Powell was talking about. The Fed is trapped between domestic policy objective versus international. The US, he should not be lowering interest rates. Economy is doing well. Stock markets up at highs. Why would you be lowering interest rates at this point in time? Makes no sense.

The only reason he’s saying this is because the rest of the world is imploding. And everybody else is out here screaming, “You got to lower interest rates. Your killing us.” That’s what’s going on. So it’s a major international crisis, and the dollar is going to be pushed up because the more these people refuse to reform, the capital just leaves.

And I go to Brussels, I meet with probably more governments than anybody in the world. And I just sit there sometimes in amazement. It’s like Europe wants to take the trading of the euro away from Britain. Oh, we can’t allow that to be…I said, “So, you’re going to take it away from New York, Chicago, Tokyo, Hong Kong and Shanghai?” And they look at me and they go, “Well, no, just Britain.”

What are you trying to do here? Are you trying to turn the euro into the new ruble or something that it’s constantly the same price and can’t trade agai