Thursday, November 19, 2009

Martin Armstrong – A Forecast for Real Estate…

This is a very interesting paper as well. Here Martin shows the following model for real estate, a peak in 2007, a bounce in 2012 to a secondary lower peak in 2015 and then it continues on down into the year 2033. That just would not be pretty for mid-life or older adults today, but I am certainly not one to dispel that notion.

I am going to be a little critical of Martin here in other areas. First of all, he’s flat out arrogant at times, this is one of those times. Truthfully, I am cautious when I hear people who think they are the brightest ones on the planet. No doubt he is bright, but to think you’re the brightest usually means that you are missing something vitally important. While I don’t claim to be the brightest, what I have begun to figure out is that our debt crisis is one of the structure of our currency. Reading Armstrong I get the sense, most of the time, that he does not understand that fully. What he does understand strongly is the value of the rule of law, he understands capital flows, and he understands cycles and the lack of science and understanding in economics in general.

But when you really investigate the MATH of debt and follow how it comes about, the glaring flaw is right there. Debt backed money. Alexander Hamilton was no hero for our country, he and his central bank idea began the concept of debt enslavement in America. Armstrong speaks of thinking outside the box, but I have yet to hear him stumble upon the answer... YET, he serendipitously does so when he closes this paper with the following:
“Without a slow burn and a monetization of the whole national debt and a truly restructuring of government, we will most like(ly) implode and then hopefully we will be able to create a novus ordo seclorum minus the whole Marx stuff.”

And on that point he is exactly correct. Let's think outside the gold standard and debt backed fractional reserve BOX. Bill Still’s line “It’s not WHAT backs our money, but WHO controls the QUANTITY” is exactly correct. But how can that be done? Politicians can’t be trusted to control themselves for sure, on that I definitely agree. I also agree that WHEN the debt is monetized that there must be a restructuring of government.

The two, monetary reform and political reform, MUST happen together in order to create a sustainable and prosperous future.

If you want Martin’s forecast for real estate, here it is. If you still own a bunch of real estate, you aren’t going to like it - 26 years of contraction.