'There's potential for a British Pound collapse in 2016' - Martin Armstrong


Current Job: Economist at Armstrong Economics
Career: Developer of the Economic Confidence Model based on business cycles and pi. Former chariman of Princeton Economics International Ltd.

Armstrong Economics View profile at FXStreet

Martin Armstrong is an economist and financial strategist known for his economic predictions based on the Economic Confidence Model, which he developed. 

Once a financial strategist and advisor to over one trillion dollars of asset, Armstrong developed a computer model based on the number Pi and other cyclical theories to predict economic turning points with eerie accuracy. He is the person behind the “Princeton Economics International” think tank. He is known to have predicted the crash of 1987 to the very day.

1. What will 2015 be remembered for? 

I believe 2015 will be remember for the crash in the Euro which broke the Swiss peg and has placed at risk the political landscape of Europe as a whole.
2. Which were your most important achievements this year?
Getting our Socrates system actually started. This will really open a lot of people’s eyes with respect to the fact that the world is truly interconnected.
3. What emerging issues or trends should traders prepare for in 2016?
The final decline in commodities and wild ride in the currency markets that will swing in both directions as we approach 2017 which will be political chaos globally from election in USA, France, Germany, to the EU vote of exiting the Euro and a likely uprising in Greece.
4. Which will be the best and worst performing currencies in 2016 and why?
We are likely to see the dollar still strengthen and the shocker could be the collapse of the British pound to eventually retest the par level of 1985.
5. Which under-the-radar currency pair do you expect to make a big move in 2016?
The potential for the biggest move will be the British pound if it closes below the 14050 level at the close of 2015. However, a closing even below 14615 will be a warning that there may be a serious crack on the horizon.
6. Which macroeconomic events will have the biggest impact on the FX markets in 2016?
That still appears to be a combination of sovereign debt and taxes. While government are trying to “stimulate” they are also becoming aggressive in hunting for taxes. Starting in 2017, G20 national will be reporting on all movement of money. As government continue to borrow, they are raising taxes and become confused why the economy continues to implode. It was the free movement of money post-WWII which rebuilt the world economy. Now they are doing the exact opposite because they are desperate for money.
7. Which asset class will cause the next financial crisis?
That appears to be the debt markets. Capital will begin to shift from public to private as they see the risk is with governments poorly managed and no hope of correcting the problem. We are likely to see the US share market rise sharply only everyone starts to realize government are fiscally in serious trouble.
8. What will you be focused on next year?
Debt, shares, currency, and commodities in that order. Currency will be the key to global capital flows.
9. Who are the people to watch in 2016 in terms of impact on the industry?
The politicians in Brussels and the antics of the ECB. Neither will admit a mistake so they will only press current policies even harder.
10. What are your New Year's resolutions?
Look for a reasonable place to live that is perhaps not in the direct path of the political chaos and economic insanity that lies ahead and seems to burst in the air starting in 2017.

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