As global stock markets are seemingly slipping back into crash mode, imprisoned global forecaster Martin Armstrong suggests that not everything is as clear cut as we may think.

Most of our readers understand that the economy is in shambles, and consequently, stock markets shouldn’t be at the high levels which they recently achieved. The US government is printing trillions of dollars, but the dollar is still holding its own, especially now that crisis contagion is spreading throughout Europe. The only asset that seems to be doing what it’s “supposed” to do is gold, which happened to reach an all-time high on June 8 in terms of nominal dollar value.

For those who believe the economy will continue to deteriorate, and the Federal Reserve will continue to debase the dollar, the outcome is, arguably, pretty clear: Stock markets will crash, the dollar will crash, gold will rise, and economic and financial panic will ensue in short order.

What if, however, we were misinterpreting the signals – or at least some of them?

Martin Armstrong has some different ideas on what may play out:

When a major pattern such as a critical one as this WATERFALL EVENT is concerned, it begins to show up in short term levels of activity before the big one happens. The pattern of May 6th is the same pattern as the decline and fall of Rome. This is showing we are acting in the same manner and just as people panic intraday, this is how they will eventually act on the monthly level that is on the horizon.

Capital is confused because of all the bullshit spun by the various news services. They try to relieve everyone by claiming somebody had entered trillions instead of millions. But these type of explanations are designed to eliminate the truth. What is taking place is that capital is moving faster and faster in this global economy. VELOCITY is increasing and eliminating that ability of nations to even control their money supply. International capital can effect the money supply by at least 25% and when leveraged on a fast-track, who knows the real effect. The driving force behind this is CONFIDENCE and that is the key to everything. It is the key that will wipe-out the plans of all Western governments and is going to force a complete restructuring worldwide. There is NO intention of paying off any debt by any nation. It’s just one big joke.

…

WE WILL SEE NEW HIGHS AND NO DEPRESSION!

…

This is a DEBT CRISIS and you better start understanding what the hell that truly means. Capital is confused. The market made its crash because at first blush capital in domestic hands listens to the nonsense spun by the shill for the government. This is an INTERNATIONAL DEBT CRISIS and that means we are facing a crisis in international capital that will fly instantly to quality. That is why the dollar and gold will rise, and why YES, the stocks will rise as well!

…

The doomsday boys who only see the Dow falling to 1400 – 2000 are lost in crevices of their own mind. This is an international conflict. This is not domestic. The talking heads will confuse more people than anyone and what they speak is the same old bullshit over and over again.

The fact that we have seen a WATERFALL EVENT intraday, warns that this pattern is going to manifest itself in higher levels of economic activity. Capital will at first rush into America for it can absorb it. This will swing the treasury bears who see only domestic inflation into losing positions. As they are forced into becoming bullish, then the capital flows will reverse once more and then we will see an outflow.

The stock markets are supposed to go down, but let’s remember what happened at around the time of the March 2009 stock market lows: stimulus. As Dr. Marc Faber has suggested, the government will do whatever it takes in an attempt to keep the economy from falling apart – and the current Keynesian policy of printing as much money as possible and infusing it into the system seems to be the trend going forward. Thus, as stock markets collapse, we can expect more of the same on this front.

In addition, there are millions of panicky Europeans worried about debt problems and Asians on the brink of a bubble-popping. Recent Treasury bond prices suggest that the safe haven assets of choice for the entire world is the US Dollar and will remain so until something happens to cause a loss of confidence in the United States’ public sector (i.e. government).

We’ve suggested before that the US dollar may continue to rise or remain strong until such time as the rest of the world realizes that our currency really is worthless. It doesn’t seem like they have yet come to this realization. After states across the Union start facing the serious prospect of debt default, and the US government has to print trillions upon trillions just to keep the public sector afloat, money will continue to flee for safety in the US.

But make no mistake, at some point in the not-so-distant future, confidence in the US government will be lost as well, and we will have a debt crisis of unprecedented proportions, at which point we will likely see a flight of capital out of US dollars and likely to the last remaining safe haven asset – gold.

The main takeaway: Expect the Unexpected.