(0:00 - 0:39) In recent months, several European Union countries have dramatically increased military spending and have clearly signaled their intention to go to war with Russia. Peace talks between Ukraine and Russia have so far failed to produce results, and Vladimir Putin has openly stated that if Russia is attacked by NATO countries, Russia may respond with nukes. Meanwhile, China has been increasing their military spending in recent years and now has 17 naval shipyards compared to the U.S. five. (0:40 - 2:22) Is World War III brewing over the Ukraine conflict? And if so, why would the powers involved allow that to happen, especially knowing that it could devolve into a nuclear exchange? Many people think that economists only study the flow of money, but in actual fact their expertise goes well beyond that. Economists study societies, resources, politics, and trade largely in an effort to not only understand what is happening, but what is going to happen. One of the most successful in this area is Martin Armstrong, who founded Armstrong Economics decades ago created the economic confidence model, which has accurately predicted many crises over the years. Martin joins me today for part one of this two-part interview and explains what's really happening in Europe, Russia, and China, dispels the myths and misinformation being pushed by mainstream media, and in the process reveals the true motivations of these powers and those who lead them, all of which leads to one inescapable conclusion. War in Europe and Asia is coming, is in fact very likely inevitable, and that war will have consequences for those involved and for the entire world, including us here in Canada, that will last for decades. Martin, welcome to the show. (2:23 - 5:55) Well, thank you for inviting me. And I was very pleased that I ran into you at the Cornerstone Forum in Alberta this past weekend, was able to invite you, and you've very graciously given up an hour of your time, because there is, yes, so much happening in the world right now. And as an economist, you specialize in not only analyzing what's happening, but also predicting from that you created your model years ago, which has been extremely successful in predicting things that were going to happen. So while I want to get to your views on Canada a little later in the interview, where I'd like to start is with the situation really revolving around the Ukraine, which includes, of course, the European debt crisis, what Putin wants, what Zelensky wants, and you've analyzed all of this in depth. So if you would please give us your opinions on what's really happening there, what's driving it, and what is likely to happen. Well, the truth about it is that you really have a lot of propaganda. And actually, Churchill, I think he said, truth is so precious in time of war that it needs to be protected by a bodyguard of lies. And nothing really has changed, really. The truth is that they have used Ukraine as the vanguard. And this has always been, a group of neocons have always been against Russia. I mean, you even have Robert McNamara, who took us into Vietnam before he died. He wrote a book, and also you can see him on YouTube. He apologized and said that they took us into Vietnam because they thought Russia was involved. And he says, we were wrong. It was just a civil war. I mean, this has been going on. I think even Ron Paul said they've been waging these endless wars and haven't won a single one. And I know some of these people we call neocons. I knew Bill Kristol even spoke at one of our conferences back in the 90s. It's hard to fathom, but I think that some of these people, like John Bolton, I mean, he'd invade Canada to get to the Russians. I think they were psychologically damaged during the 50s or something, when we all had to hide underneath our desks. They think this is going to be the third time is the charm. Russia is actually the richest country in the world from a natural resource perspective. They have virtually everything, gold, diamonds, oil, timber. And NATO, I have the declassified documents from the Clinton administration. Russia was invited to join NATO. And Gorbachev was actually thinking about it. (5:56 - 6:22) And then they staged a coup against him. And that's when Yeltsin stood on the tank in Moscow. And told them not to shoot at their own people. And the coup failed because the army didn't do it. And NATO should have been shut down after that, really. It has no purpose. (6:23 - 6:44) I mean, I've seen the internal memos. They were afraid of all the money going to climate change. And they actually were saying, how do we remain relevant? And the only way they remain relevant, and people keep sending their money to them, is by saying Russia wants to invade Europe. (6:45 - 12:04) Now, that was plausible when they were communists. And it wasn't for economic reasons, because Europe has nothing. It doesn't have energy. You're not talking about gold, timber. They have to get beef from other places because they don't have the land to grow cattle. That's why veal was popular in Europe. So that was the days of Khrushchev. We will bury you. It was more like an economic religion that communism is going to defeat capitalism. And Europe has nothing to warrant Russia to invade. All right. What are you going to get? Nothing but conflicts. And the French basically will say, we're going to pay our pensions now. But with the shoe in the other foot, that's different. You had Hitler tried to take it. Napoleon tried to take it because of its wealth. Most people don't realize, but and they probably should make a movie of it. But in 1917, Russia had the world's largest gold reserves. And whoever was in charge hid it. So the Bolsheviks didn't get it. And nobody's ever found it yet. And rumors were they buried it in a forest or they dropped it to the bottom of one of their deep lakes. But, you know, people have been searching for it like the Knights Templar quest, you know, and nobody's ever found it. Now, the criticism that Putin gets from inside Russia is that he should have went into Ukraine like we went into Iraq. Shock and awe would have been over in three or four weeks done. Instead, he didn't want to do that. He went in just to protect the Donbass, which are all Russians. Crimea, about 15 percent of the population are still Mongols from the invasion of 1240. And most people don't realize that Khrushchev grew up there. His successor, Brezhnev, was born in the Donbass. So right up to Kiev, in fact, Khrushchev was in charge of rebuilding it after World War II. I mean, this was all part of the Russian czar, the empire, long before USSR stuff. So you have this. I mean, Trump said peace is difficult because both sides hate each other. We had an employee in Kiev and one in Donetsk. They would never talk to each other. We had a conference in Greece. The one from Kiev refused to go fly back the quickest way, which was a stopover in Moscow. She went every which way. So I'm very familiar with that region. I've been there, spoken to them. If I can just jump in for a second, because there's something here that you've said that's really important, and I want to clarify this and make sure that I and the viewers are understanding. Because as you say, there's all this misinformation about what are the motivations for this. And Putin has been compared to Hitler, and he's going to go and try to take over all of Europe. But from what you've just told me, because I know some history myself, when Hitler took Austria and he started attacking Czechoslovakia, his excuse was that he was repatriating Germans in that area. Well, that was just an excuse to start a war. But what you're telling me is that Putin's the exact opposite. When he wants to take these regions in Ukraine, he really is repatriating Russians. And he's got no interest in going beyond that. That's all he wants. Okay, that's very important. And what's more important is that they demonize Putin so much that it's ridiculous. He is probably not just the smartest world leader over there, but also the most restrained. The criticism he gets is, you know, he should have done the shock and awe thing. And all these people say, oh, we'll remove Putin. If you remove Putin, we got a real problem. Because the neocons, they also have behind their scenes. And they hate the West just as much as ours hate the Russians, you know. Putin is in between. He was appointed by Yeltsin, because Yeltsin was being attacked by, you know, the bankers and the CIA with Bank of New York. (12:04 - 12:39) You know, they got him to take $7 billion from the IMF loans and wire it to Geneva, and then immediately started this investigation going after Bank of New York and all led the Yeltsin. So he was getting it from that side. And then the old hardliners who wanted to take it back to the USSR filed a motion for impeachment against them. So he was getting attacked from both sides. That's why he turned to Putin. Putin wasn't an oligarch, and he wasn't a communist. (12:40 - 13:00) So he was like middle of the ground. And he said his last words to Putin was protect Russia. And that's basically what he has done. All this nonsense, oh, he wants to take Europe. Look, he's been there for 25 years. I think he would have done something a lot sooner than this. (13:00 - 13:42) And he's always that poor. As you point out, extremely important to understand. Europe doesn't have anything that he wants. There would just be a burden on them. Why in the world would Russia want Europe? Yeah, if you look at history, Japan, why did it invade Manchuria? Because they had no resources. Manchuria had everything. Okay, they had the oil, etc. You know, and Japan was buying energy from the United States by ship. You know, so that's why they invaded China. So you have to have some sort of a incentive to do that throughout history.