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Feb. 12, 2025 - Health Ranger - Mike Adams
59:22
Martin Armstrong talks with Mike Adams about why the central banks are in trouble...
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Welcome, everyone, to today's interview on Brighteon.com.
I'm Mike Adams, the founder of Brighteon, the free speech video network.
And as you know, we are really incredibly thrilled about some of the things that are happening right now in terms of accountability.
And I think Elon is saying that Ron Paul should audit the Fed.
I don't know.
It sounds great, but what will actually happen, I'm not sure.
We're very concerned about finances and honest money and all the money printing and the debt, all that.
And we couldn't have a better expert than we have on today.
Martin Armstrong from armstrongeconomics.com joins us to talk about what's happening with gold, with USAID, with the Fed, and much more.
Welcome, Martin Armstrong.
You're a legend.
I mean, I honor you so much and your work, and thank you for being with us today.
Well, thank you for inviting me.
We certainly do live in interesting times.
Isn't that the truth?
And let's actually start out with gold, if you don't mind, because, of course, it crossed $2,900 an ounce, and it appears that the central bank in London is unable to deliver on a timely manner, and people are starting to panic, and everybody wants their physical gold all of a sudden.
Can you tell us what's going on in your view?
Mainly, well, the Bank of England had sold off gold before to raise money.
But a lot of the gold has been shipped from London to New York in anticipation of tariffs.
So that's part of the shortage of gold that's developing there, particularly in London.
But also what they have to understand here is that gold doesn't really go up with inflation.
I mean, it went down for 19 years from 1980, you know.
Well, national debt went up, inflation went up, etc.
Gold really rises for geopolitical questions.
When you really lose the confidence in government and there's war, things of this nature.
For example, gold had fallen to $100 in 1976. It finally went up to about $400 by December 1979, but it went from $400 to $875 in the last six weeks.
Why?
That's when Russia invaded Afghanistan.
So when you look back, that's what gold really does.
It's neutral.
It doesn't depend upon any particular government winning.
And the unique thing about gold compared to oil, for example, you have Texas crude and you have Brent crude.
They're different.
Whereas gold is the same thing globally.
So an ounce of gold is the same thing in London as it is in New York or Tokyo.
So that makes it a bit different, even in a stock, for example.
Gold historically has been more of the hedge against government, but not inflation.
It's really more of the question of the survivability of a government or its credibility.
We're hearing whispers of the possibility of the dollar maybe being tied back to gold, partially backed by gold, or some new project that Trump might be thinking about.
Digital or non-digital that might be partially backed by gold.
Are those just wild rumors?
What do you think of that stuff?
Pretty much.
The main reason you cannot have a gold standard is because in order to do that, we also have to change the entire political system.
You can't have this Nonsense.
Vote for me and I'll steal it from this guy and give it to you.
You have to balance budgets, things of this nature.
And I think really ever since the Great Depression, we've ended up where I think politicians have lost their way.
They don't understand how to run without promising you something they don't have.
True.
That's the real problem with trying to have a fixed exchange rate system.
I mean, that's why the gold standard collapsed.
You know, you fixed gold at $35 an ounce, but you didn't limit the amount of dollars you were printing.
Right, right.
But eventually, though, I mean, who wants to buy U.S. Treasury debt if there's no fiscal responsibility, no limits?
And if other countries now have new options, you know, like perhaps BRICS or just trading with their own currencies like China and Russia are doing, you know, isn't there a point where the dollar debt demand is just untenable?
Well, yes.
I mean, people maybe are looking at the central banks, the Federal Reserve, etc.
But the real creator of money is really the debt.
Mainly because, look, the theory that we had that it was less inflationary to borrow than to print was because back in the 60s, if you had an e-bond and you went to the bank, $100 e-bond, would you lend me $50 on it?
The answer was no, it was illegal.
All right, so that was why the theory was it was less inflationary to borrow than to print.
But then when Brenton Woods collapsed, if you want to trade gold futures, you can post T-bills.
So the debt has just simply become money that pays interest.
That's it.
There's no distinction anymore.
So this is, you know, everything that we grew up with basically has changed.
But the economic theories haven't changed.
We don't, you know.
They still like to blame the central bank for inflation when really the bulk of it is created with the debt.
And we're not unique.
All countries have been doing this.
Martin, it seems to me, though, that there is more behind this almost gold panic than just tariffs.
Because, I mean, Trump has put tariffs on steel and aluminum for all imports from all countries, obviously.
I don't recall him saying there's going to be a specific tariff on gold from all countries, although he may target specific countries.
But even if that were so, how could that explain...
What I'm saying is, Martin, that it seems like there's something beyond just the tariff concern that even institutions in the United States want physical delivery now.
Like, people don't trust...
Maybe the rehypothecation that's happening in London or something, like the gold's not there, is the thinking.
Well, no, it's not that he would put a tariff on gold specifically.
What there is concern about is that he's going to put a tariff on Europe.
And in doing so, they don't distinguish between things.
Unfortunately, The way the trade numbers are actually calculated, there's nobody there at the dock counting the number of BMWs or Toyotas coming off the ship.
We just look at the cash flows.
I've dealt with this for decades and argued with governments over it.
They just look at the amount of dollars coming in and out.
That's it.
That's what the Fed will report, you know, current account, you know, deficits, etc.
But, I mean, gold has risen not because of that.
That's only just a recent shift that's causing a, I would say, you know, a shortage in Europe.
But it's also added because...
Of the Europeans who just keep beating the war drums to go against Russia.
True.
That's your main reason gold has risen sharply.
And you go into war, I mean, look, I've spoken to three European governments, and I went over there last year, and I was really shocked, but they...
You know, you're like, well, Russia's going to have to accept our terms, whatever.
I said, what are you going to do, invade?
You know, what are you going to do?
It's just, I don't know if they're just beating their chest out of stupidity or what.
Yeah, I mean, that's Starmer right there, beating his chest out of stupidity and Scholz and Macron and others.
But I recall that gold crossed $2,050.
In February, when Russia first attacked Ukraine with a special military operation, that was the first time gold hit, I believe, 2050. Now, it's almost 50% higher than that.
But what justifies that much concern in the minds of people when Trump is saying, no, we need to resolve this war right now.
We need to resolve it.
There was a big...
Clash going on.
The neocons that were so against Trump here, they shifted to Europe.
And so, look, I've seen the internal memos from like NATO, for example.
They were concerned about all the money going to climate change and they were like legitimately saying, how do we remain relevant?
And they can only remain relevant by Constantly preaching, oh, if Ukraine falls, Putin's going to take all of Europe, so you better send us money.
That's basically it, all right?
And all you've seen, I mean, look, it's the confidence in government that's collapsing.
Take a look at France.
Corporate rates went below that of government.
All right, you have Macron saying, oh, he'll send in troops to Ukraine, whatever.
Yeah, go ahead.
You know, French interest rates on government debt went above that of Greece.
And Greece was supposed to be the basket case.
Wow.
All right, this is the second largest economy in Germany.
I mean, in Europe.
Then you have Germany.
Which is, you know, you've got Schultz hopped on a plane to Ukraine.
Oh, we're going to be your strongest supporter.
They keep this up because domestically their economies are collapsing.
Between climate change and then the sanctions on Russia, the German economy, which has been the cornerstone of the EU, has actually shrunk by 3%.
So you put a lot of small businesses out of, you know, And bankruptcy.
They're gone.
All right.
So the economy is shrinking.
We're not just talking about a recession.
We're talking about the number of institutions are declining.
And all right, fine.
We blew up Nord Stream 1. Nord Stream 2 is there.
The Germans have voluntarily cut it off.
Voluntarily.
You know, and without energy.
They're no longer the manufacturing centerpiece of Europe.
So our computer is showing we're looking at a strong probability of Europe going into a depression going into 2028. So your model, Socrates, you study, I mean, you're known for being the expert on studying flows, capital flows, right?
Yeah.
One of the main drivers of your models analysis, correct?
Yes.
Over the years, from two aspects, one being one of the first international hedge fund managers.
You have to look at, you know, globally, every country, where you're going, whatever.
But also back in the 80s, I can tell you what was...
We were going to open an office in Geneva in 1985. And one of our clients was one of the top three Swiss banks.
And I went to lunch with him and I knew there was anti-Americanism there.
So I had a list of European, like European advisors, a few names we made up.
And I was asking him, which one do you think we should use?
And he kind of laughed and looked at me and he said, name one European analyst.
And I was embarrassed because at the time I really couldn't.
And he said, there are none.
He says, you don't realize why everybody uses you.
I said, no.
And he says, you don't care if the dollar goes up or down.
I said, it's just a trade.
And in Europe, he then explained to me, and still this way, Europe has had canceled culture since the 80s in the financial industry.
Because after World War II, the politicians used the currency to validate that they did a good job.
Vote for me, the Deutsche Mark's up 10% against the dollar.
That shows I'm doing a good job.
So, consequently, no analyst at any of the major institutions, banks, or whatever, could possibly say the Deutsche Mark would go down if it was a political statement.
An example of that, after the 2007 high, one economist in Estonia came out and said, we're going into a crash.
They put him in jail for six months.
Wow.
If a major bank analyst comes out and says the euro is going to crash, the ECB will be on the phone and say, fire that guy.
Well, and the UK has become so authoritarian about speech at this point, and so has Germany.
But it's the path that they're on.
I have to characterize it as a suicide cult.
That's the leadership of Western Europe.
Your comments.
Well, what I'm saying is that this began in the financial industry.
Wow.
That's how we became global.
And I didn't understand it initially.
But we were getting called into, you know, all sorts of things, different governments around the world, because we were the only ones really doing honest, you know, foreign exchange forecasting.
I got to know Maggie Thatcher that way.
The capital flows, I began to see, we had a client in...
Excuse me.
In Lebanon.
Let me just shut that thing off.
Are you getting emergency alerts coming in or what's going on?
Yeah, I don't know.
I get a lot of emails and stuff.
The dollar's crashing!
It's like you have the dollar alert radio.
One of the major banks in Lebanon had found a book in the basement and somebody had written down the Lebanese pound back deep.
Mid-1800s.
And they asked if we could build a model on it.
And I said, sure, okay, fine.
They sent it over.
We put it in.
I didn't really know anything about the fundamentals that were going on.
And I said, look, there's got to be something wrong with this data.
The computer says your country's going to fall apart in eight days.
And he very calmly said to me, he says, well, what currency would you recommend?
I said, excuse me?
I said, well, it says the Swiss franc.
Eight days later, the Civil War began.
So obviously they saw it themselves and they came to me for the timing.
Then I had a client in Saudi Arabia.
He was one of the biggest shippers in the Gulf.
And he calls and he says, what do you think gold's going to do tomorrow?
Iraq's going to start attacking shipping in the Gulf tomorrow.
I said, you tell me a war's going to start?
Yeah, yeah, yeah.
What do you think gold's going to do?
Over time I began to realize So I became very famous with the Russian one.
You know, I stood up and we saw $100 billion going into Russia, but $150 billion coming out.
And I stood up in our conference in London in June of 1998. I said, look, Russia's going to collapse.
I give it maybe about six weeks.
And lo and behold, I didn't realize it, but the London Financial Times, it snuck in the back.
And next thing I know, on the front page, Armstrong says Russia's going to collapse.
And it did.
That was the long-term capital management crisis, etc.
Oh, wow.
So it's always capital flows that we've been monitoring.
And it's very...
When you're an international hedge fund manager, you see it.
Not domestic, but you see it internationally.
Like Tokyo, 1989. Everybody was there.
Every fund that I know, every manager was there.
Same thing on Russia.
Why did it collapse?
Because they're all in the same trade.
They try to get out.
They can't because they are the market.
There's no bid.
Then they start selling other assets everywhere else to raise money to cover their losses in Russia.
That's why it all collapsed.
Just like the Nikkei in 89, as you mentioned.
Yeah, these guys all get on the same trade, and that's the problem.
Right.
Soros was on with the pound, but he was not the only one.
They were all in the same trade.
Well, there's an argument for avoiding counterparty risk right there, but let's pivot a little bit.
it's kind of related, but USAID, you know, talk about outflows, even though it was about, I think, $50 billion a year, which is small compared to the total federal budget.
It was still significant as a giant slush fund of corruption and fraud and pushing, you know, LGBT themes and propaganda and who knows what else all over the place, funneling money back into the pockets of really bad people in the U.S. and all over the world.
Now, what do you make of the fact that that's been shut down and that the so-called Doge team has got basically crammed?
crawlers and AI agents working through the Treasury data, and apparently they're going to audit the Pentagon and maybe the Fed.
I mean, what do you make of all this and where is it going?
Well, I mean, you can go back to the day before 9-11.
You had Rumsfeld, and I think the tape is on YouTube.
There was $2.3 trillion missing just in that annual budget of the Pentagon.
And he promised an audit.
Of course, the plane hit in the Pentagon.
Hatcher so happened to hit the very room where all the records were.
Yeah, what a coincidence, yeah.
Yeah, quite a coincidence.
But they have failed, what is it, their fifth audit already?
Look, if you were running a small business, the IRS came in and you said, hey, where's that $100,000?
Oh, gee, I don't know.
I think they are going to come to handcuffs.
You know, that's not an excuse.
Yet, this is what is going on in government.
I mean, it's outrageous, but nobody's ever held accountable.
I mean, I can tell you, in my case, I was actually asked to put in $10 billion into Hermitage Capital, and this was the whole Russia...
Collapse and long-term capital management.
It was a regime change attempt.
All right?
And look, you can look at New York Magazine, the money plane.
All right?
They did a big article.
I saw skids, $100 bills, you know, in the basement of Republic National Bank being shipped off to Russia.
All right?
To fund all this regime change nonsense.
And, I mean, I sold them.
And so, I mean, they were trying to, basically, what they did, they got Yeltsin to move $7 billion from the IMF. And a wire went to Geneva.
And as soon as the wire went through Bank of New York to Geneva, the Republic National Bank ran to the feds and say, oh, they just did a $7 billion money laundering.
Now the feds run into it, okay?
And everybody gets upset, whatever, and they're threatening Yeltsin, all right?
This is basically he was going to run for election in 2000, and they're threatening him to step down and hand it to Boris Barostovsky, all right, who I, you know, he even called me when I refused to put in the money.
And he was going to be their shill.
They were going to take over Russia.
The bankers in New York were going to get all the gold, the diamonds, the oil, the platinum from Russia.
It was all going to go through the New York trading desk.
And so it was a regime change attempt.
And I said, look, I'm sorry.
sorry, I'm not getting involved in this shit.
And so the feds run into, into bank in New York.
I got the transcripts.
The two brokers that were involved, when the feds finally realized it was Yeltsin, they plead guilty and said, well, it also included a ransom to a Russian businessman.
And the judge goes, oh, okay, fine, thank you.
You don't even ask the name?
Who could possibly have that kind of money to pay for a ransom?
And then gives them six months house arrest.
Wow.
No prison time.
This is why Hillary started the Russiagate.
They were involved in this.
And she assumed in 2016, Putin basically is retaliating against her for what they did in 2000. Right.
Because they were trying to get Yeltsin to hand it to their guy.
Yeltsin at the same time...
The communists had filed a motion for impeachment on this corruption.
And so that's how Putin comes to power.
All right, Yeltsin turned to Putin.
That's why he was so popular, because one, he wasn't an oligarch, and two, he wasn't a communist.
That's why the people cheered him.
Martin, this is truly fascinating.
And let me bring in the new Secretary of State, Marco Rubio, here, because obviously he's very different from Antony Blinken.
And Victoria Nuland, you know, please leave forever from all anything related to government.
But Marco Rubio says, or Secretary Rubio says that the U.S. can't, I'm paraphrasing, but he says the U.S. can't dominate the world anymore.
It's going to be a multipolar world.
And it's actually not natural for a single dominant power like post-World War II to control the world.
Marco Rubio is saying.
That there's going to be China, there's going to be Russia, there's going to be the United States.
And all these efforts to destroy Russia over the last few years under the Biden regime and under Victoria Nuland and Blinken and so on have absolutely failed, if not completely backfired.
So what does this mean, this massive pivot from the State Department?
I mean, I've had contact with Rubio.
I hope he sticks to what he said.
I really do.
The neocons, I know, I've been to dinner with them, alright?
I know Bill Kristol, his father is the one who started the whole neocon movement.
And he's a massive recipient of USAID money?
Yes, exactly.
By the way, yes.
To go against Trump, basically.
Right.
And, I mean, I had arguments with Bill back in the 90s.
And he said, if we remove Saddam Hussein, Assad out of Syria, and Gaddafi, we would bring peace to the Middle East.
I said, you're out of your mind.
Don't you understand?
The Middle East is tribal.
Everybody in Syria does not consider themselves to be Syrian.
They're tribal.
Shunni, Shia, Kurd, they see that first.
It's very tribal.
Understand the Middle East.
There was a big Arabian war.
The Saudi tribe won, so that's why we call it Saudi Arabia.
The Hadramites, which were basically lost, they got Jordan.
Jordan was supposed to be the place for the Palestinians.
Look at the king of Jordan.
What did he do?
He married a Palestinian to try and merge the two tribes.
That didn't work.
Look, this is the Middle East.
If you don't understand that, forget it.
You have no business even talking about it.
It's not the same as nationalism and things.
These borders, we drew.
All right?
I mean, breaking up the Ottoman Empire after World War I, we're the one that created these countries and stuck in dictatorships because it required a dictatorship because all the tribes were fighting.
Just look at Tony Blair's apology.
It's on YouTube.
He says, we thought we were freeing the people from Saddam Hussein and we subjected them to sectarian violence.
Just because he at least kept the tribes in check.
But without somebody doing that, they all want to kill each other.
And look at Qaddafi in Libya.
I mean, the post-Qaddafi Libya has been a disaster.
Oh, yeah.
I mean, look, this is because we created the borders.
All right.
Look, I know RFK. We even had a discussion.
Asked me, you know, how would you solve Ukraine?
To me, the solution is very simple.
We had it with the, you know, men's agreement.
Just look at, you know, Yugoslavia when it broke up.
And I had been called in by the Yugoslav government.
I met with them.
And they were like...
Oh, you know what they did to us?
They killed over 600 of us and threw us in a common grave.
And I was kind of shocked.
I mean, I thought I missed something on the news.
I said, oh my God, really?
I said, when did this happen?
Oh, about 700 years ago.
Oh, that one.
Okay.
I mean, that's what I mean.
These resentments go back, I mean, centuries.
The Greeks don't like the Turks.
All right?
This has been going on since the time of Alexander the Great.
Yeah, right.
I mean, we're not talking about new conflicts here.
These things have been going on for a long time.
Okay, I want to...
Iran, Shunasuni, and Shiite, these are religious things that, for example, that's like the Protestants versus the Catholics in England.
True.
True.
I mean, to this day, you still have...
You know, in London, they'll still call a Catholic a pape.
I mean, that was, you know, 1600s.
These things live on for a very long time.
Okay, I want to remind our viewers of your website.
It's armstrongeconomics.com.
And I think not only do you have the post here, but don't you also have a newsletter there, Martin?
You want to tell us about it?
Well, there are some things.
We have a private blog, which for political reasons, I... You know, we necessarily don't want it.
It's not searchable by Google.
Okay, got it.
We try to at least keep it off the mainstream and just for clients.
You know, it's...
Look, I... They don't really bother us because...
And I was kind of surprised, but, you know, one friend in Washington, I didn't realize, he says, you're not...
He says, you're not blocked anywhere in the world.
He says, you're the only one.
And I thought about it.
I said, yeah, actually, you're right.
We actually have offices in China.
I've been on Russian TV. They know it's the computer.
And that it's not biased.
It's not going to say on page three, by the way, overthrow your government or anything.
It just is what it is.
And it's been...
It's phenomenal in its forecasting, mainly because, I mean, like Nigel Farage came to our conference in Rome in 2019, and he says, look, he says, not only are they the alternative to Davos, he called us, he says, they're the only ones that said I would win.
Every newspaper said that Brexit was going to lose.
And also, your model said that Trump was going to win this recent election as well.
But it said that they were going to win on a landslide.
It looks at it from the numbers perspective.
Right.
It's not calling up a bunch of people, oh gee, who would you vote for?
That depends, honestly.
I mean, if you just did a poll and you called on any people in Washington, D.C., you'd be lucky if Trump would have got 5%, right?
Right.
So, I mean, those things can be skewed one way or another.
So, most of the, everybody wants to see what the computer's got to say because it's not doing that way and there's no human.
Interaction or interference in it.
So we just say, look, this is what it is.
All right, Martin, I really want to pivot.
I want to ask you about China and AI and tech and your thoughts.
Let me just set it up, okay, because I just want to remind our audience that China released the DeepSeek reasoning model.
I've done demonstrations of that model.
I run it on my desktop.
It's really astonishing.
The U.S. tech sector lost, I don't know, a trillion dollars in valuation the next day.
NVIDIA and so on, which I think was an overreaction.
I think NVIDIA's got a super strong future.
My company alone will probably spend half a million dollars on NVIDIA just this year, just saying, because we're building AI engines and using AI everywhere.
Martin, we are using AI in our logistics supply chain.
We are applying a whole new AI system for our own logistics, because to not do so is to become obsolete.
But China is really giving the U.S. a run for its money.
China has put out open-source decentralized models for free while the U.S. is focused on Trump funneling a bunch of money into a company called OpenAI, which is not open.
It should be called ClosedAI that Elon Musk is trying to buy because they don't release their models to the public, or at least not until recently.
So it's a quagmire, but China is competitive, if not dominating in this space right now.
So give us your take, Martin.
Look, I mean, I think the DeepSeek and OpenAI, they're language-based models.
All right?
So the computer can learn a lot and develop quite good.
I mean, there are certain things it's not going to be able to do.
All right?
But, look, AI, I mean, My computer, Socrates, I mean, it's the longest-running AI system in the world, really, and with a 40-year track record.
But it was designed differently.
This was designed for my understanding international capital flows.
So it will pick up things.
I did a...
Actually, before I think it was MSNBC, it was FNN Financial News Network that they bought.
And I was on there one night with Walter Bressert.
And this was the beginning of the 80s.
And the computer came out and it actually impressed me.
The British pound was at 240. And I said, look, it's saying the British pound is going to fall to par.
And I gave it about five years.
And he was shocked.
And he turned to Walt and he said, what do you think of that forecast?
And Walt said, I wouldn't bet against his computer.
And indeed, the pound fell to 103 by 1985. So the analysis side that you're describing, that you really pioneered on the financial side of this, and...
I think that today's AI models are able to do a lot of middle-manager type of tasks within a company.
For example, in our company, we're in the food business and we get documents from suppliers about their compliance with FDA or USDA organic and whatever.
So instead of paying a human being to sit there and go through the documents, we're just going to have an AI agent go through and read it and find out what's missing and send the email to the...
Like, you're missing this and this and this, and it's just done.
You know what I mean?
I don't need a human to do that, but the humans I have, I'm not firing them.
They're thrilled.
Like, they're thrilled about this because they're going to be able to get more done in less time and do higher-level tasks.
And my question to you, sir, is about what does that mean in our economy, in our society, when people have tools that can automate the tedious tasks?
And let them do more important decision-making that AI can't really do that well.
Look, I can tell you our own company.
Why do we, besides the foreign exchange, why do we become the largest institutional advisor?
Because our reports used to go out on Telex.
Wow.
Okay.
Those are the days.
Yes, it was $75 to receive one Telex in the Middle East.
No.
On one market, okay?
Oh my.
We had clients, this is why we started opening offices around the world, because they were paying $200,000 to $300,000 a year in communication costs.
Unreal.
Back then, all right?
So, I can say that from then we went, you know, you went from Telex, I can see in our own company.
Back then, we had staff around the world that would collect the data in each of these countries and input them into our computer.
Today, the computer just basically pulls it down from the exchanges around the world.
We've eliminated that.
It's all instantaneous.
The computer basically writes Over a thousand reports every night.
There aren't that many analysts in the world to do this.
Right.
So AI, I think that it can expand something dramatically.
It allows us to do things that we would never have been able to service the retail market before.
You just couldn't do it.
I mean, today, anybody can go online and pull down our reports and whatever.
It's much more open today than it was 30 or 40 years ago.
So I think AI has the ability to really expand the economy, all right?
My father was a lawyer, wanted to push me into law.
I started studying law.
I just didn't want to go into it.
I just felt it was, you know, not for me.
And so he pushed me into computers.
And so I went into engineering school.
And back then, you had to do the programming and the design.
So we had to do hardware and software in a course to get out.
That was it.
So people don't realize, I mean, back then, RCA was the biggest in computers.
It had all the government contracts coming out of World War II. And then I was on the design team.
They asked me if I would do the presentation to the board because Integrated circuits had just come out.
And I said, why me?
I was a young kid.
And they felt that they were brilliant guys, but they couldn't sell a life preserver on the sinking Titanic.
And so they stuck me in front of it, and I was kind of nervous, and I got them to understand, look, we could shrink this computer the size of a room down to a desktop.
It's the late 60s.
They asked me a question I could not answer.
They said, what's somebody going to do with it?
And I didn't have the experience to know.
I mean, this is before Lotus, Microsoft, all this.
Right.
Now I know the answer.
Just build it and somebody will come out and figure out how to use it.
Well, I mean, you're talking about an era where, yeah, IBM was the big gorilla in the room of mainframes, right?
And they would fill rooms.
Yeah, this is what people don't realize is that RCA, because they had, you know, the radio was such a big thing coming out of the Great Depression.
It used to be a standing unit and everybody would sit around it and listen to FDR, etc.
When they decided, IBM was just a typewriter company.
RCA, because I couldn't answer that question.
The board decided to sell the computer division.
Oh, you're kidding me.
I was there for it.
They sold it to IBM. And part of it was also sold to UNIVAC. Oh, wow.
And then they exited because they thought they were selling these mainframes back then.
They were going for like $7 million.
Right.
A lot of money.
And they would do less than what an Excel spreadsheet can do today.
Yeah.
But they were still worth it for accounting.
Large companies would put them in for accounting.
They were very impressive.
I can tell you, you see old James Bond movies, these things with lights flashing and everything.
We used to call them idiot lights.
The salesman would say, more idiot lights.
Because if it didn't look like it was doing something, the more idiot lights it had, the more money they could get.
Yeah, that's right.
But, I mean, that's how IBM started.
And actually, to tell you, RCA kept the servicing of all the government installations.
So, the married guys were getting offered London, Hawaii, Paris.
I was not married.
I was offered Thule, Greenland, Guam, or Vietnam.
I passed.
So to the Greenland back then, and that's why Trump wants it today, was where we had NORAD. And NORAD basically covers the top of the globe, because if Russia's going to send a missile, it's not going to come across the Atlantic.
It's going to come across the top of the globe.
That's right.
It's quicker to get here, all right?
Anything from the Atlantic is going to be from a sub.
So NORAD was up there to protect the United States.
And back then, planes were still props.
There were definitely jets around, but not many.
And I asked a guy that did two tours there.
Back then, you made $50,000 a year tax-free, and you had to stay there a year and a day.
And I asked him, I said, what did you do?
He said, nothing.
You had to be there in case something happened.
Wow.
Because if it went down, they couldn't get somebody in quick enough.
Right.
I said, boy, and he did two tours, came back, bought a house for cash, everything.
I said, I don't know if I can do that.
I said, what'd you do?
I said, I watched the same movie about 30 or 40 times.
I played darts and cards.
Unreal.
It didn't sound like something thrilled that I wanted to do in life, you know?
No, no, not at all.
But if you don't mind me pursuing this question a little bit more about AI, we now have reasoning models.
Beyond language models, so they do go through a thinking process, and open AI, Sam Altman just announced that by the end of this year, there would be super coding AI agents that can make almost all human coders obsolete, which means the human coders will be in charge of the project, but not writing code, but they'll still be the architects of it, right?
Like, what should the computer build for us?
What are we building, right?
But they're not writing code anymore.
I mean, isn't this reasoning model phenomenon going to be a game-changer for things like policy areas?
Well, yes.
I mean, look, I think you could replace judges with AI, actually.
That would be more fair.
I think so, too.
They would be more fair.
Even doctors, I mean, look, what we would call a look-up program.
You list every disease, what are the symptoms, you put it in, and the computer can very well look that up faster than any doctor and say, this is probably what you have.
Those things are certainly possible and not really a problem.
Where AI probably will not be able to do things is more or less, for example, in trading.
As a major fund manager, you have to know much more.
It's little nuances.
Like you're driving down the road and the guy just looks like he's...
He starts to move out but hesitates.
Or you know what he's going to do.
You have to know that in trading.
True.
And there's the human element behind all of it.
Yeah, it's like a poker game.
Is he bluffing or is he not bluffing?
Do you think he has it?
Those are human aspects of intuition that I'm not sure you really can code or a computer can pick up.
I agree with you.
I think that human element is elusive to AI systems.
But let me just share something with you that I use DeepSeq reasoning model as a test.
I just want to demonstrate this, describe this to you and get your reaction because this derived knowledge that was not in any resource.
I run a food lab and I asked it.
I said, what common solvents would be the best?
For extracting rosmarinic acid from rosemary herb.
Like, give me a recipe for the best solvents.
And it went through a thinking process, and it realized that rosmarinic acid is a phenolic compound, so it knew the polarity of that compound.
And then it went through its list of solvents and thought about things like water versus isopropyl alcohol versus other things.
things and and and it went through a process and it came up with a a recipe of the best solvent mixture for that molecule based on solubility and the polarity of the molecule and like that was not in any reference book anywhere it figured that out like that is something different than what we had seen over the last couple years yes but it's also coming from a knowledge base it is i mean like the molecular structure.
Exactly.
Right.
So you can...
Possibly create things of that nature, where it's going to go off and search things and come up with things that are...
Our computer has done countless times on war and politics and things of this nature because it's looking across the board.
I would say you can say one common Trend in politics is you take the economy down, and I don't care who's in, it always flips.
Right.
Like, you know, Hoover was just elected in the beginning of 29. I mean, the guy didn't cause the Great Depression, but hey, he's there, he gets blamed.
That's it.
And pretty much that's what you see in politics on a global scale.
It doesn't matter what culture you're looking at.
Or anything else.
Human nature will respond the same way to his very similar set of facts.
Wow.
Right.
Okay.
So, Martin, we're almost out of time.
I want to give your website again.
Martin, I'm sorry, armstrongeconomics.com is where people can find you.
And I want to ask you, too, do you also, I mean, you still do consulting for, it could be institutions or governments or nations or high-level parties, right?
Oh, yeah.
Look, we get called in mainly because, you know, it's the experience.
I understand.
I mean, I've dealt with probably just about every central bank and called into every financial crisis, you name it.
I mean, even the Asian currency crisis in 97. It's called in by the Bank of China.
I mean, so more or less, they come to us because they know, one, we're global, but two, that we have a track record that can be verified.
Yes.
And that's everything.
If you came up with some model and say, look, this is the greatest thing since sliced bread, trust me, they can't touch it.
Mainly because if they lost money, then they're going to say, and you gave this thing a shot?
There goes your career.
So as long as everybody's in the same boat, they're fine.
But I've had to deal with central banks, and I can tell you right now, the real problem with central banks and even Trying to send in anybody to audit the Fed.
What they don't get is that when Keynes came up with Keynesian economics in the 1930s, and I just recently read this to a congressman.
I said, wake up, will you please?
In the 1930s, we had a balanced budget.
So Keynes made sense.
If we raise interest rates or lower interest rates, they were affecting us.
Today, the government is the biggest borrower in the room.
So what's happened, Powell raised rates to try and fight inflation.
It creates more.
Why?
Because all of a sudden the interest expenditures of the United States go up.
Right.
All right.
So the Fed, all central banks, they have been basically neutered.
They've lost any ability to actually control the economy.
But now they can't publicly say that because everything depends upon confidence.
Yes, there you go.
I can tell you, why did the 87 crash happen?
Because in 1985, they stood up with the Plaza Accord and said, oh, we want to see the dollar down by 40%.
Very nice.
Then the dollar kept falling.
Then there was the Louvre Accord in early 1987. They all got together, became a G7 then.
And they said, all right, fine.
The dollar went down enough.
What happened?
The dollar made new lows.
And everybody went, oh, shit.
The central banks can't stop it.
Right.
And that caused your crash.
Black Monday.
Once the confidence is gone.
Everything is on the table.
I can tell you the Brady Commission started going after fund managers, asking them why did they sell.
The answer was overwhelming.
They called the floor.
Why is it dialed down a thousand points?
I don't know.
There was no information.
The Fed didn't raise interest rates, no economic number, nothing.
So what do you do as a fund manager?
You sell because you don't know if it's going to go down another 20% tomorrow.
It's prudent.
I didn't want to go into the 87 crash.
They started lobbying my friends.
The theory was computer trading caused it.
And actually, Jack Schwager called me and said, Marty, if you don't go in, they're going to come take a lot of computers.
He says, all right, all right, all right.
So I went in and, you know, basically what they said, well, we're going to find the guy that shorted this market and forced it down.
And I said, do you realize that every investigation since 1907 began with those same words and nobody's ever been found?
I said, don't you understand what makes a market move?
When everybody's long, it's like that Russian thing we just talked about.
And something happens, and they try to sell.
There's no bid.
That's when it goes down a thousand points.
Well, I think that's a little foreshadow of some interesting things to come.
Martin, we're out of time.
I apologize.
But this has been a fascinating discussion.
And I want to thank you for taking the time to join me today.
It's been a pleasure.
Thank you for inviting me.
We have to get people to understand what the real problems are here.
And once you understand that, then the future you begin to see is a little bit different than maybe what you anticipated.
Yeah, there you go.
Exactly right.
Well, thank you, Martin.
Again, it's been an honor.
Thank you for all that you do.
Thank you for joining us today.
And to our viewers, the website again is armstrongeconomics.com.
Be sure to visit there and read Martin's numerous articles, and he does a lot of interviews as well.
And again, thank you, Martin, for your time today.
It's always a pleasure to speak with you, and I hope 2025 goes well for all of us, but wow, it's going to be a rocky ride.
So thank all of you for watching today here.
I'm Mike Adams of brighteon.com, and feel free to share this and repost this interview on other platforms and channels as well.
Take care, everybody, and God bless America.
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