Gold and Silver Update 09/30/11

Submitted by: Francis Soyer

King World News interviews economist Martin Armstrong. Martin Armstrong the inventor of historical economic modeling techniques is probably one of the most accurate long term market cycle economists on the planet. Armstrong in the below interview answers one of the more central questions of late as to which currency will fail first the Euro or the US dollar.This interview is relevant in terms of Gold and Silver in that as fiat money fails and implodes on itself the only real safe havens for preservation of wealth is Gold, Silver and to some extent hard commodities in general.

“This is what a lot of people didn’t understand.  That is why a lot of people (Congressmen) ended up coming to me because I understand these markets, how they were created, I was there when they were created.”

When asked which currency will collapse first, Armstrong responded, “Americans tend to focus really just on the United States.  The United States is, among the Western countries, it’s actually in the best shape.  Europe is going to largely collapse first.  What you have to understand with the dollar is that the dollar is the reserve currency.  What that means is that about 40% of the interest that we pay goes overseas.

All of the foreign central banks hold US government bonds, not actually physical dollars, but they actually hold bonds as a reserve. So the reserve currency is not something that is going to crack first.  You have to understand that because if the dollar were to be the first thing to collapse, the rest of the world has to go with it.

In Europe, to put it into an American context, imagine if every state had the right to print dollars, it would be total chaos.  That’s what Europe did (by allowing individual country bonds to be issued) and that’s why I warned them that they were going to collapse, but politicians just didn’t want to hear it ten years ago.  They were more interested in creating a euro than they were in creating a (long-term functional) system.

...This is also why the banking system over there is in trouble.  They (European leaders) are going to try to hang on as long as they can.”


Original Article Here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/30_KWN_Special_-_Martin_Armstrong__Who_Will_Collapse_First.html