Egon von Greyerz, the managing director of Matterhorn Asset Management in Zurich, gave some dire economic and social predictions in a recent interview with Eric King. von Greyerz is known for his accurate predictions about Quantitative Easing, historic moves in currencies and that the Swiss National Bank would incur heavy losses.
That’s why whenever Mr. von Greyerz talks, we believe you should listen.
Here’s the report from King World News:
“Money printing and debt is just the most beautiful scheme invented by governments to make ends meet and give the people whatever they want. In this perfect system, it makes not the slightest difference if the budget doesn’t balance. Conventional methods of increasing taxes or reducing government expenses is old hat and totally unnecessary. With modern methods, such trivial problems are solved by the printing press…
“More social security, more guns or major infrastructure projects; whatever is required there is money printing. Because printing presses have no limit. And with computers, a few zeros can easily be added.
“… there will be debts of a magnitude that computers are unlikely to cope with. Before the world can get on a sound footing again, all this debt must disappear. There is clearly no chance of ever paying it off. And there is no possibility for the world to grow again as long as this debt is overhanging the world economy. Therefore, the only solution is an implosion of the debt.
“But when this happens, all assets financed by this debt will also implode in value. This will create a global super depression that will be devastating for every individual on earth. It will also involve a major reduction in world population due to poverty, famine, lack of medicine and hospital care, disease, social unrest and wars.
“… in coming years, there will be times when the financial system will not function and when paper money will be worthless. The demand for physical gold and silver will then increase exponentially. At that time, no one will accept paper gold or silver.
“My longstanding target of $10,000 [per ounce] gold is in today’s money. Taking into account credit creation, money printing and inflation in the last 26 years, this is a very realistic target that could well be exceeded. Silver on the same basis could reach $500-1,000. But remember that these targets don’t take the coming hyperinflation into account. With that we need to add quite a few zeros to the gold and silver price.
“The wonderful thing is that investors can still today take advantage of the current low prices to buy physical gold and silver based on the paper prices for the metals. But remember, this situation is unlikely to last for much longer.”
Mr. von Greyerz’ dire predictions should give you more reasons why at least a portion of your wealth should be in physical gold and silver. As the French philosopher Volatire said, “Paper money always returns to is intrinsic value.” Which is zero.
Tangible assets like silver or gold will never drop to zero, or face a loss of confidence like Enron, Global Crossing and MCI Worldcom’s stock did. The two-letter question I’ll leave you with today is: Got gold?
When do you think Egan von Greyerz’ financial and social predictions will start to come true… and how many years will it take for this hyperinflationary cycle to play out?
Give us your take in the comments section below.