Martin Armstrong, former Chairman of Pricenton Economics, discusses The Sum of All Fears: A Great Depression. Armstrong provides historical data, charts and a forward looking forecast.
“Those who always talk doom & gloom know not of what they are saying. Even Mr. Ben Bernanke’s claim that the bailout of the investment banks (speculators) like Goldman and AIG, were somehow necessary to prevent a Great Depression, was just bullshit. If he really believed that, then he should resign for he doesn’t know half of what he claims about the Great Depression. It was not bailing out the speculators that would have prevented the Great Depression. It was a debt default by Europe and South America that wiped out whatever the stock market failed to get. Stocks can crash, but it is debt that creates depression when it defaults.”
“The stock market will NOT be a leading indicator that the worst is over. For you are about to experience the second phase shift that often appears in a Private Wave. This will be the shift from immovable investment to the movable that has taken place even back in the Roman times during the 3rd century.
If we approach this idea of what constitutes a Depression by simply the one-dimensional view that the stock market is everything, you will end up in a gutter drinking rain water. This is just not how things work. People look at the stock market because it is tangible and easily quoted. Real Estate, for example, is not anything like stocks. One building or home is not the identical value of another. Where it is located is just as important as the structure itself.
Even the figures we are looking at reported around the world that 25% of homes are worth less than the mortgage, this is only a very superficial market-to-the-market. It does not reflect homes with paid down mortgages or those whose mortgages may have but a decade left and the decline in value is perceived savings.
The crash is far from over and we should expect this number to rise to about 72%. This will still exclude non-mortgaged properties. This will lead to serious bank problems that all the bailout money went to the speculators like Goldman Sachs. What is coming behind this, is the dwarfing of the S&L Crisis that was just a dress rehearsal for today.”
As has been mentioned in previous articles, posts and commentary, we are experiencing one of the largest (if not the largest) credit/debt collapses in history. Once nations start defaulting on their loans it will be very apparent, very quickly, that this is no ordinary recession. We may very well be one of those nations.