Armstrong penned what I think is a really fascinating piece today on how Trump is the counter-trend move for the US on its way to the End of Empire and the decline and fall of Western society in general.
He doesn’t mention this, but Rome too had its emperors who tried to reform things during the decline. They succeeded for a time, but could not change the trend.
From a purely technical perspective VOID of political affiliation, emotion or hatred, Trump is what we classify as a FALSE MOVE. He is the calm before the storm. He has tried to reverse the course of the nation lowering taxes and trying hard negotiations on trade to restore the manufacturing jobs to Americans. What I mean by saying he is the CALM BEFORE the storm will invoke hate mail from those you hate him. But look at this chart. The market will ALWAYS make a correction in the opposite direction of the major trend. Trump in this context is a correction within the decline and fall of Western society, but he will not reverse the trend.
Armstrong further states that when confidence in US sovereign debt fails, big money will flee US treasury debt in order to hide in equities, and that will cause the vertical move that he has talked about forever.
Note: US treasury debt is NOT any sort of senior debt that provides the creditor a claim on the assets of the underlying entity, unlike corporate debt where the creditor gets the assets of the company on failure.
Instead, when a sovereign defaults, creditors (typically) get a bunch of nothing.
The US defaulted on its debt in 1971, when Nixon closed the gold window, and also once before, when Roosevelt devalued the buck by 60%. Bang – you just got 60% less gold for that sovereign bond.
Did our creditors get anything? They did not.