Man Who Predicted The Global Collapse Now Warns What Is In Front Of Us Is Truly Frightening

Today the man who predicted the global collapse just warned King World News that what is in front of us is truly frightening.

The Frightening End Of The Biggest Financial Bubble In History
April 5 (King World News) – Egon von Greyerz:  A Hyperinflationary Depression has always been the inevitable end to the biggest financial bubble in history. And this time it will be global. Hyperinflation will spread from country to country like Coronavirus. It could start anywhere but the most likely first countries are the US and the EU or ED (European Disunion) They will quickly be followed by many more like Japan and most developing countries. Like Coronavirus it will quickly jump from country to country with very few being spared. 

CURRENT INTEREST RATES ARE A FALSE INDICATOR
Ever since the last interest cycle peaked in 1981, there has been a 39 year downtrend in US and global rates from almost 20% to 0%. Since in a free market interest rates are a function of the demand for credit, this long downtrend points to a severe recession in the US and the rest of the world. The simple rules of supply and demand tell us that when the price of money is zero, nobody wants it. But instead debt has grown exponentially without putting any upside pressure on rates. The reason is simple, central and commercial banks have created limitless amounts of credit out of thin air. In a fractional banking system banks can lend the same money 10 to 50 times. And central banks can just print infinite amounts. 

Global debt in 1981 was $14 trillion. One would have assumed that with interest rates crashing there would not have been a major demand for debt. High demand would have led to high interest rates. But if we look at global debt in 2020, it is a staggering $265 trillion. So debt has gone up 19X in the last 39 years and cost of debt has gone from 20% to 0% – Hmmm!

CORONAVIRUS IS THE CATALYST BUT NOT THE CAUSE
The crisis that the world is now encountering has not been caused by the Coronavirus. As I have stressed in many articles recently, Coronavirus is just the catalyst, albeit the most vicious one which could have hit the world. The real cause of the Greatest Financial Crisis in history is the Central Banks. They have been pouring fuel on the fire for 50 years by continuously reducing the cost of money until it became free in 2008 when rates were reduced to ZERO. Since then we have also seen negative rates around the world. 

Negative rates are not just a total paradox but also absolute lunacy. Bankrupt sovereign nations around the world have been issuing debt at no cost or have even been paid for it. The whole purpose of interest is to be paid for the risk of lending money. As governments around the world have issued virtually unlimited debt which will never be repaid, the risk  of lending to them has increased exponentially. But instead of much higher rates to reflect severely elevated risk plus massive increase in debt, central banks have gotten away with defying the laws of nature.

FALSE MARKETS WITH NO REAL PRICES
Money is a commodity and the price should be a direct function of risk plus supply and demand. But since we currently have a false financial system with fake money and false markets, there are no real prices. So through constant manipulation and intervention  central banks together with a few accomplices can totally rig most markets and prices…

---

Listen to the greatest Egon von Greyerz audio interview ever
by CLICKING HERE OR ON THE IMAGE BELOW.

---

Therefore, the cost of money today neither reflects the risk nor the demand. All it represents is malicious manipulation to serve governments and their masters the central bankers. But like all fake markets, also this one will end, not just badly but catastrophically.

THE SITUATION IS DESPERATE FOR BUSINESSES AND INDIVIDUALS
As I discussed in last week’s KWN article, we now have the perfect storm. Virtually every government in the world is now committing billions and even trillions of dollars, euros, etc, in fruitless attempts to save a collapsing world economy. In many countries, 50% or more of industry is shut. Most service industries are in a total lockdown and so is aviation, transport, and most small businesses. Unemployment is approaching rates not seen since the 1930s depression. All businesses need assistance, from major corporations to small firms. The majority of individuals haven’t got savings for more than a couple of weeks living, and for the ones who are now becoming unemployed, the situation is desperate.

Many major US corporations need assistance from the government. Very few of these have put aside profits to reserves for a rainy day. Instead management has been too generously rewarded as well as the shareholders. Since 2009, S&P 500 companies have spent $5.4 trillion in share buybacks. Instead of asking government for assistance, management should pay back their bonuses and shareholders who have received major payouts should recapitalise the companies. But this will obviously not happen. Just like in 2006-9, profits are privatised and losses are socialised.……more here

Click here for reuse options!
Copyright 2020 Hiram's 1555 Blog