The thing I like about Martin is his dispassionate analysis of economic events possibly learned through experience documented in the movie, “The Forecaster”. Although he provides a political backdrop in identifying the climate inherent to his analysis of international capital flows, he does so with an emotional indifference even tinged with sarcasm suggesting a deeper sense of abomination for the mismanagement of global monetary policy.
In contrast to other contemporaries of Austrian economic theory, Armstrong does not foresee an imminent collapse in the equity markets, nor a short term devaluation of the U.S. dollar. Armstrong sees the rising interest rate environment and cracks in the European bond markets as potential sources of support for the U.S. dollar over the short term given that big money will have few places other than U.S. equities to turn.
Armstrong also differs from his peers in referencing a direct correlation between rising rates and rising equities in the current environment. He cites problems with European bond yields as reason to flee for quality in U.S. equities.
Over the long term however, Armstrong sees the monetary system start to unravel come 2021 once emerging markets come to the realization that debt repayment in lofty valued U.S. dollars will become untenable. Alas, Armstrong falls in line with others espousing ultimate trouble for markets of all sorts other that real estate, precious metals and other tangible assets.
On the contrary, P.H.D. of statistics Jim Willie, suggests that contagion associated with European banking default could become the prime driver of economic chaos. My sense is that Willie’s time frame is shorter than that of Armstrong’s. Both gentlemen see problems such as hyper inflation, unemployment, and corruption in under developed nations masked from media view as seeds adjunct for the culmination an economic reset.