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ALERT: Legend Warns This Will Be The Worst Crisis The World Has Ever Experienced
ALERT: Legend Warns This Will Be The Worst Crisis The World Has Ever Experienced
On the heels of more carnage in global markets to start the new year, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned this will be the worst crisis the world has ever experienced.
By Egon von Greyerz, Founder of Matterhorn Asset Management
Very few problems start in the centre. Instead trouble normally starts in the periphery. When an empire falls, it is normally the furthest away provinces where trouble starts. It seems insignificant at the time and therefore is ignored by the rulers. Eventually the problem reaches the centre but then it is too late to do anything about it…
Egon von Greyerz continues: And this is exactly what we will see in the gold market. Gold is currently strengthening against most currencies, commodities and other asset classes. Probably starting in 2016, gold will also rise against the US dollar. More accurately all currencies will compete in the race to the bottom. The real value of gold virtually never moves. It has maintained its purchasing power for 1000s of years.
What moves is the value of fiat or paper money. Governments are by their very nature irresponsible and incompetent. They can only hold on to power for a very limited time applying sound monetary and fiscal principles. Soon they must resort to excessive borrowings and money printing in order to buy votes. Voltaire said it already in 1729:
KWN Greyerz VIII 1:17:2016
Gold reveals economic mismanagement
Since a strong gold price is a reflection of economic mismanagement, governments will use all means to suppress the price. This is what we have seen blatant examples of since 2011. Demand for physical gold, especially from China and India is stronger than ever. Also, production is stagnant and cost of production has risen significantly in this century.
The gold inventory of bullion banks has gone down by 2/3rd since 2011 and there are 300 paper claims for every one ounce of physical gold in the futures market. The physical market is under real pressure and at some point very soon, when holders of paper gold ask for delivery, there will be no physical gold available and the price will rise vertically.
US economic fundamentals weak
The gold price is normally measured in US dollars but that is of course a fallacy. Only 300 million people have the dollar as their currency out of 7 billion. Gold should always be measured in the currency of the investor and not in US dollars. The dollar is currently temporarily strong in its long term downtrend against many currencies. It makes no sense whatsoever that the dollar is rising with the very poor underlying fundamentals of the US economy…..More Here
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