BANKGUTHABEN SIND VERGÄNGLICH – HEUTE DA, MORGEN WEG

Gepostet am 20. Juli 2017 (Originalfassung auf Englisch)

von Egon von Greyerz

Nicht nur Papiergold ist Fake. Nur wenige Investoren wissen, dass die meisten ihrer Investments “fake” sind.

Fake News und Fake Vermögen gibt es überall. Zuallererst einmal in den über die meisten Teile der Welt verbreiteten Social Media: Facebook zum Beispiel hat 2 Milliarden aktive Nutzer, WhatsApp 1.2 Milliarden und Instagram 700 Millionen. Natürlich gibt es ziemlich viel Überlappung bei den verschiedenen sozialen Medien, aber sicher ist, dass diese drei Apps Milliarden Menschen erreichen und die Macht viel grösser ist, als die von allen anderen Medien. Soziale Medien haben mehr Einfluss als Zeitungen oder Fernsehen und sind die einzigen Medien, die von 2-3 Milliarden Menschen regelmässig konsumiert werden. Die meisten Menschen und besonders die Jüngeren schauen kein Fernsehen und lesen keine Zeitung. Sie bekommen alle ihre “Nachrichten” über soziale Medien.

Soziale Medien als Quelle für Fake News

Soziale Medien bedeuten sofortige Belohnung. Man schaltet etwas auf (einen “Post”) oder man sendet eine Nachricht und die Nachricht die zurückkommt oder die Anzahl der Reaktionen (“Gefällt mir”/“Like”) erzeugen Dopamin, das einen kurzzeitig glücklich macht. Aber wie ich an unseren vielen Enkelkindern sehe, sind soziale Medien auch eine perfekte Quelle für Fake News. Viele jungen Menschen, die soziale Medien nutzen werden so Empfänger von Fake News oder von Schickane. Soziale Medien eignen sich hervorragend für das Verbreiten von falschen Gerüchten die man nicht mehr so leicht wiederlegen kann. Trump’s Twitter-Konto ist noch so ein Beispiel für vermeintliche Fake News. Trump beschuldigt die Zeitungen und Fernsehstationen der Fake News und sie beschuldigen ihn desselben.

So ist die Welt, in der wir heute leben – eine Welt mit falschen Märkten, falschen Vermögen, falschen Werten, falschem Geld, falschen Menschen und falschen Nachrichten – Fake News.

Falsche Identität

Vor kurzem gab es einen interessanten Fall mit einer falschen Identität in Schweden. Dem Geschäftsführer der grössten Security-Firma in Schweden, Securitas, wurde im März die Identität gestohlen. Der Identitäts-Dieb nahm einen Kredit in unbekannter Höhe auf. Dieser Kredit wurde nicht zurückbezahlt und der “Fake-Geschäftsführer” von Securitas wurde am 10. Juli für zahlungsunfähig erklärt. Der echte Geschäftsführer der Firma war sich dessen gar nicht bewusst und er kämpft seither für die Wiederherstellung seines Rufs und um seine Position.

Wir leben heute in einer Welt in der alles elektronisch wird. Echte Menschen sind nicht mehr wichtig. Wir sind lediglich digitale Einträge in einer Datenbank.

Geld ist Fake

Das gleiche gilt für Geld. Heutiges Geld ist völlig Fake. Früher waren Silber oder Gold Zahlungsmittel. Um Handel zu vereinfachen wurde es mit Papier ersetzt auf einer eins zu eins Basis. Papiergeld repräsentierte einen echten Wert an Gütern und Dienstleistungen. Aber Banker und Regierungen merkten bald, dass sie sich mit Hilfe einer Reduktion des Edelmetall-Anteils in Münzen bereichern konnten. Sie scherten sich natürlich nicht darum, dass es sich um Betrug handelte und dass es den Wert des “echten” Geldes entwertete. Später wurde das gleiche mit Papiergeld gemacht. Als Papiergeld zum ersten mal eingeführt wurde, stand es für die Menge an Silber oder Gold, das von der Bank gehalten wurde. Schnell kamen die Regierungen und Banker darauf, dass sie durch das Hebeln des Silbers und des Goldes viel mehr Geld auf Kosten der Sparer und Kontoinhaber verdienen konnten. Und so begann das Schneeballsystem mit Fake Money und falschen Vermögen.

ETFs bestehen aus fingierten Vermögen

Heutzutage sind praktisch alle Vermögen und Verpflichtungen lediglich elektronische Einträge ,die die “echten” Werte um Faktor 10, 100 oder 1000 hochhebeln.

Geld ist um ein vielfaches gehebelt, Aktien sind ebenfalls gehebelt durch die Herausgabe von verschiedensten derivativen Instrumenten wie z.B. ETFs oder Futures, die angeblich das zugrundeliegende Instrument wiederspiegeln, im Endeffekt aber nichts anderes sind als ein elektronischer Eintrag mit nichts dahinter.

Da der weltweite Schulden-Stand mit allen ungedeckten Verbindlichkeiten und Derivaten über 2 Billiarden US Dollar beträgt, sollten ja auch die Vermögensgegenstände so viel wert sein. Aber weltweite Assets sind gerade einmal ein Bruchteil davon wert. Angeblich sind die weltweiten Assets 250 Billionen US Dollar wert, aber diese Blasen-Bewertungen werden implodieren sobal die Schulden und Verbindlichkeiten implodieren.

Bargeldloses Schweden

Da ich gerade einige Zeit in Schweden verbringe, erlebe ich auch die sogenannte “cashless society” – die bargeldlose Gesellschaft. An vielen Orten wird Bargeld nicht angenommen. Jeder will eine Kreditkarte oder eine elektronische Zahlung. Banken verlangen hohe Gebühren für jede Bargeldeinzahlung.

Geld kann per Knopfdruck verschwinden

Niemand merkt, dass ihr Geld nur ein elektronischer Eintrag ist, der in sekundenschnelle vom Staat abgestellt werden kann. Dies bedeutet, dass ihr Geld völlig verschwunden ist und nie mehr zurückkommen wird.

Regierungen und Zentralbanken führen gerade so ein System in den meisten westlichen Ländern ein. Menschen glauben, dass ihr Geld in der Bank sicher ist und merken nicht, dass elektronisches Geld nicht um der Bequemlichkeit willen eingeführt wird, sondern um Menschen davon abzubringen, Geld abzuheben, sobald stark hochgehebelte und zahlungsunfähige Banken kein Bargeld mehr haben. Jeder mit einem Bankkonto muss sich bewusst sein, dass eines Tages wenig oder kein Geld mehr in der Bank übrigsein wird. Die Geldautomaten/ATMs werden geschlossen sein und es wird kein Geld verfügbar sein. Dies ist eine elegante Lösung für die Insolvenz des Finanzsystems. Weder Papiergeld noch elektronisches Geld wird mehr da sein. Also gibt’s auch kein Geld zu besitzen.

Ab diesem Zeitpunkt werden Regierungen kein Geld mehr für Privatpersonen drucken, da es nicht mehr benutzt werden kann. Stattdessen werden sie Gutscheine für die Nutzung in Geschäften oder für andere Ausgaben drucken. Schon heute passiert dies in Ländern wie Zimbabwe.

Alternativ bekommen die Menschen die Erlaubnis, eine sehr begrenzte Menge ihres Guthabens jeden Monat auszugeben, so wie wir es z.B. in Argentinien gesehen haben.

Gleichzeitig wird natürlich ein gigantisches Gelddruckprogram aufgelegt werden, um das Finanzsystem zu retten, da alle Vermögenswerte implodieren. Nur sehr wenig von diesem Geld wird normale Menschen erreichen.

Die meisten Menschen sehen so ein Szenario als völlig unrealistisch und schlimmer als das jüngste Gericht an. Hoffen wir, es wird nie passieren. Aber was ich damit sagen will ist, dass die meisten Menschen, sobald sie Vermögen an Banken übergeben und damit ultimativ an den Staat, der die Banken kontrolliert, die Kontrolle über ihre Vermögensgegenstände völlig aufgegeben haben.

Es ist natürlich nicht nur Bargeld, das von so einem Schicksal heimgesucht werden wird sondern auch alle anderen Assets, die im Finanzsystem gehalten werden. Ob es nun Aktien, Anleihen oder sonst irgendwelche Wertpapiere in elektronischer Form sind.

Wir sind nun an einem Punkt angelangt, an dem die Welt nicht mehr an einer Kreuzung ist, sondern am Ende der Sackgasse. Aber keine Sackgasse aus der wir umkehren und zurückgehen könnten. Es ist eine Sackgasse, die als einzigen Ausweg den Sprung über die Klippe hat. Und es ist gut möglich, dass dies der Welt nun als nächstes blüht.

Der Weg dorthin liest sich wie der sichere Weg in die Katastrophe:

  1. Man nehme 18 Billionen US Dollar an Schulden von insolventen Zentralbanken auf, plus 300% seit 2006.
  2. Man füge sonstige Staatsschulden und Privatschulden hinzu um auf 230 Billionen US Dollar zu kommen, 60% mehr als 2006.
  3. Dazu fügt man die weltweiten ungedeckten Verbindlichkeiten und anderen Versprechen in Höhe von 270 Billionen hinzu um auf einen Gesamtbetrag von mindestens 500 Billionen USD zu kommen.
  4. Jetzt noch die Kleinigkeit von 1.5 Billiarden hinzugeben, was uns auf 2 Billiarden USD (oder mehr) bringt.
  5. Dann über 50 Jahren lang Budgetdefizite, wie die USA
  6. Weiter ist sicherzustellen, dass man immer mehr kauft als man verkaufen kann, um mehr als 40 Jahre lang Handelsdefizite auszuweisen, wie die USA und das Vereinigte Königreich.
  7. Dann drucke man Geld um für alle Staatsausgaben zu zahlen, so wie es Japan macht.
  8. Man kauft seine eigenen Schulden zurück, so wie es Japan, die USA, die EU und UK machen.
  9. Man wirtschafte sein Land und seine Währung herunter, bis die Währung den intrinsischen Wert von Null erreicht. Seit 1913 haben alle Währungen zwischen 97-99% an Wert verloren. Es fehlen nur noch 1-3% um Null zu erreichen.
  10. Man erlaube dem Finanzsystem unlimitierte Hebelung, damit eine verschwindend kleine Minderheit profitieren kann und brumme der Mehrheit die Schulden auf.
  11. Man manipuliere alle Märkte, um die Preisfindung völlig zu verunmöglichen.
  12. Man setze den Zinssatz auf Null oder Negativ, damit sich Staaten ohne Limite verschulden können.
  13. Man drücke den Preis von Gold herunter um das Missmanagement des Geldes und der Wirtschaft zu verschleiern.
  14. Man baue ein System von Desinformation und Fake News auf, um die Menschen in die falsche Richtung zu lenken.
  15. Sobald 1 bis 14 durchgeführt wurden, starte man wieder bei 1 und produziere mehr von demselben.

Und was ist der beste Weg sich vor dem grössten Risiko in der Geschichte der Weltwirtschaft zu schützen?

Physische Wertgegenstände, im direkten Besitz eines Investors reduzieren das Risiko. Hierzu zählen Liegenschaften, Ackerland, Wald, oder z.B. Industriemetalle. Für die meisten Menschen ist es unpraktisch, im Besitz solcher Wertgegenstände zu sein. Dafür ist der perfekte Vermögensgegenstand als Versicherung gegen die Risiken im Finanzsystem natürlich Gold oder Silber – ausserhalb des Systems gelagert, vorzugsweise ausserhalb des Landes, in dem man wohnt.

Jetzt ist der Moment, Fake News und gefälschten Vermögen zu misstrauen. Nur echte Vermögensgegenstände geben Schutz.

DER GOLDPREIS IST FAKE NEWS

Gepostet am 13. Juli 2017 (Originalfassung auf Englisch)

von Egon von Greyerz

Träge Finanzmärkte im Sommer geben uns oft ein falsches Sicherheitsgefühl. Aktien und Immobilienbewertungen sind nahe an ihren Allzeithochs, Zinsen sind auf dem tiefsten Stand seit 72 Jahren und die meisten Investoren fühlen sich reicher denn je. Zentralbanken verweisen auf die starke Wirtschaft und deuten höhere Zinsen und die Reduktion ihrer Bilanzsummen an.

Zentralbankchef enthauptet

Wie ich letzte Woche in meinem Artikel über die Federal Reserve (Artikel auf Englisch)  geschrieben habe, sollten wir niemals den Zentralbanken über den Weg trauen, denn sie liegen jedes Mal hoffnungslos falsch. Schweden gibt uns auch so ein Beispiel für eine Zentralbank, die eine schreckliche Leistungsbilanz in der Vorhersage der Wirtschaftsentwicklung hat. Und es ist nicht irgendeine Bank, wir sprechen hier über die älteste Zentralbank der Welt – Schwedens Riksbank wurde 1668 gegründet. Alter hat aber natürlich nichts damit zu tun, wie gut man die Märkte und das Wirtschaftsgeschehen versteht. Die untenstehende Grafik zeigt die Bilanz der Riksbank bei der Vorhersage der Schwedischen Repo Rate. Es ist einfach erbärmlich, wie hoffnungslos falsch sie über die letzten 7 Jahre lagen. Seit 2011 haben sie mehrmals pro Jahr Zinserhöhungen von 1-2% vorhergesagt und jedes Jahr gab es tiefere Zinsen. Insgesamt haben sie seit 2011 25 falsche Vorhersagen produziert. Hoffentlich lagen sie seit 1668 auch einmal richtiger?

Nicht nur, dass sie höhere Zinsen vorhergesehen haben, sie haben gleichzeitig seit 2011 die Zinsen konsequent gesenkt und liegen nun seit 2015 im negativen Bereich. Es ist ziemlich erstaunlich, dass eine Zentralbank 25 Vorhersagen von steigenden Zinsen macht, aber stattdessen 10 Mal den Repo-Satz senkt. Die Zinsen wurden tiefermanipuliert um die Schwedische Währung abzuschwächen und um Exporte zu stimulieren. Die niedrigen Zinsen haben in Schweden eine riesige Immobilienblase aufgeblasen. Die Verschuldung der Schweden (inklusive Hypotheken) gehört zu den höchsten in Europa und eine spürbare Erhöhung der Zinsen wird zu massiven Problemen in der schwedischen Wirtschaft und im schwedischen Finanzsystem führen, viel schlimmer als in den frühen 90er-Jahren. Wie bereits zu einem früheren Zeitpunkt besprochen, dreht sich der 35 Jahre alte Zinszyklus nach oben und ob es nun die Zentralbanken wollen oder nicht, werden die Zinsen in den nächsten Jahren deutlich höher sein. Der Verkauf von langlaufenden Anleihen durch nervöse Anleger wird die Zinsen hochtreiben. Dies wird auch die kurzfristigen Zinsen mit nach oben ziehen.

Die entsetzlich falschen Vorhersagen der Schwedischen Riksbank

Die entsetzlich falschen Vorhersagen der Schwedischen Riksbank

Im 17. und 18. Jahrhundert ging der Riksbank aufgrund sehr hoher Kriegsschulden das Silber aus. Die Bank griff auf Papiergeld zurück, was sehr schnell scheiterte. Dann münzten sie wieder Kupfergeld, dem von den Schweden aber nicht getraut wurde. Als Konsequenz wurde der Vorsitzende der Riksbank 1719 enthauptet. Über die letzten 104 Jahre seit der Gründung der Fed haben die meisten Vorsitzenden massiv versagt. Bis jetzt gab es noch keine Enthauptung eines Zentralbankchefs in unserer Zeit, aber wenn das Finanzsystem in den nächsten paar Jahren zusammenbricht, werden sich viele Banker sehr verwundbar fühlen.

Eine neue Subprime-Krise droht

Ob eine Zentralbank die älteste der Welt ist oder nur 100 Jahre alt, wie die Fed, das Problem bleibt gleich: Alle Zentralbanken machen haarsträubend falsche Vorhersagen. Basierend darauf greifen sie in den Wirtschaftszyklus ein, der normalerweise relativ kleine Ausschläge nach oben und unten hätte. Dieser natürliche Zyklus wurde von den Zentralbankmanipulationen völlig zerstört. Das totale Unverständnis der Gesetze von Angebot und Nachfrage führt dazu, dass die Zentralbanker denken, sie besässen göttliche Kräfte. Sie glauben, dass niedrige Zinsen und Geld drucken Wohlstand erzeugen, während das Gegenteil der Fall ist. Das einzige, das mit dieser Art von Manipulation erreicht wird, sind brutale Aufschwünge und Crashs, die die Substanz der Wirtschaft zerstören.

Derzeit sind wir in einem der längsten künstlichen Aufschwünge der Geschichte. Als nächstes kommt ein Crash, der unsere Welt für eine sehr lange Zeit völlig verändern wird. Diesmal wird die finanzielle Repression, die vorübergehend das unvermeidbare Desaster von 2006-2009 verhindern könnte, nicht funktionieren. Geld drucken wird Hyperinflation erzeugen und alle Versuche, die bereits niedrigen Zinsen weiter zu senken, werden scheitern. Die Zentralbanken werden der grössten Finanzkrise in der Geschichte vollkommen machtlos gegenüberstehen.

Schon oft diskutierten wir den weltweiten Schuldenberg, der exponentiell für viele Jahre auf nun $2.5 Billiarden angewachsen ist (= 2.5 Milliarden Millionen; enthalten darin sind Derivate und ungedeckte Verbindlichkeiten).

Amerikanische Hypotekarschulden und Subprime Schulden waren der Haupttreiber während der letzten Krise. Die Fed und die amerikanische Regierung haben nichts gelernt. Die Subprime-Krise hätte um Haaresbreite einen globalen Finanzkollaps ausgelöst. Und nun übersteigen die amerikanischen Haushaltsschulden mit 12.7 Billionen US Dollar erstmals den Peak von 2008. (Anmerkung des Übersetzers: Die deutsche Übersetzung des englischen Worts “Trillion” ist “Billionen”, eine Zahl mit 12 Nullen, eine Million Millionen, 1’000’000’000’000. Die deutsche Übersetzung des englischen Worts “Billion” ist “Milliarden”, eine Zahl mit 9 Nullen, eintausend Millionen, 1’000’000’000)

Die Schulden amerikanischer Haushalte auf rekordhohen 12.73 Billionen US Dollar

Die Schulden amerikanischer Haushalte auf rekordhohen 12.73 Billionen US Dollar

So wie die Zinsen hochgehen und die Häuserpreise sinken, wird die nächste Kreditkrise noch viel grösser sein, als diejenige von 2006-9. Effektive Häuserpreise könnten um 75-90% sinken. Und die kommende Krise wird auch zwei neue Subprime-Krisen beinhalten: Die Studenten-Kredit-Krise und die Auto-Kredit-Krise. Studenten ohne Jobs werden kaum ihre Schulden zurückbezahlen und viele Autokäufer ohne Job werden einfach aufhöhren, ihre Auto-Kredite zu bedienen. Kollabierende Preise auf dem Gebrauchtwagenmarkt werden das ihre tun, um das Problem weiter zu verschärfen. Jetzt ist ein hervorragender Zeitpunkt kein Haus oder Auto zu kaufen. In den kommenden Jahren wird es nämlich echte Schnäppchen geben.

Solange, wie noch Euphorie in den Märkten herrscht, haben Investoren kaum Angst und auch wenig Verständnis dafür, dass die über die letzten Jahrzehnte entstandenen Blasen wenig mit echtem Wohlstand zu tun haben, sondern einzig auf Schulden, gedrucktem Geld und künstlich tiefen Zinsen beruhen.

Das tödlichste aller Schulden-Gemische

Unglaublicherweise sehen die meisten Investoren keine Gefahr darin, dass Aktien, Anleihen, Immobilien und Schulden gleichzeitig auf historischen Höchstständen sind. Dies ist die tödlichste Kombination von Blasen, die jemals in unserer Geschichte existiert hat. Natürlich können Blasen weiter wachsen bevor sie implodieren. Aber wer möchte in einer platzenden Blase sein, die zu Netto-Verlusten von 75% bis 100% führt? Denn das ist es, was mit Aktien, Anleihen und Immobilien in den meisten Ländern passieren wird. Mir ist völlig bewusst, dass 99.99% aller Investoren diese Art von Vorhersagen als angstmacherischen “doom & gloom”-Unsinn abtun. Aber auch wenn sich die Geschichte nicht wiederholt, sie reimt sich und wir wissen nur zu gut, dass Optimismus seinen Höhepunkt immer kurz vor der Umkehr des Zyklus erreicht.

Da die westlichen Investoren sehr wenig Angst haben, kaufen auch nur wenige die günstigste und beste Art von Versicherung, die derzeit zur Verfügung steht. Noch wichtiger vielleicht: Die meisten wissen garnicht, dass dieses Investment in diesem Jahrhundert besser performt hat als praktisch alle andern Assets. Natürlich spreche ich über Gold. Seit 1999 hat der Dow Jones Industrial Average Index in Gold gemessen 60% an Wert verloren. Gold hatte einen riesigen Aufschwung von 250 US-Dollar im Jahr 1999 bis hin zu 1’920 US Dollar. Seither sammelt Gold Kräfte für den nächsten Aufschwung. In den Jahren von 2013 bis 2017 wurde Gold in einem Band von 290 USD gehandelt, was im Vergleich zu dem 1’670 USD starken Anstieg von 250 USD auf 1’920 USD zwischen 1999 und 2011 sehr schmal ist.

Seit 2013 wurde Gold in einem Band von 290 US Dollar gehandelt

Gold 1999-2017

 

Der Goldpreis ist “Fake News”

Ein Blick auf die obige Grafik zeigt, dass anscheinend sehr wenig interesse besteht, Gold zu kaufen und zu halten. Gold sieht sehr lustlos aus und hat eine Tendenz, möglicherweise leicht nach unten zu driften.

Was die meisten Investoren aber nicht verstehen ist, dass der Goldpreis, der man in der obigen Grafik sieht, nichts mit dem echten Preis von Gold zu tun hat. Wie auch die meisten Finanzmärkte heutzutage, ist die obige Grafik “fake news”. Die Grafik zeigt die Auswirkungen von verdeckter Finanzmanipulation auf der allerhöchsten Regierungs- und Zentralbanken-Ebene. Diese Manipulation findet in den Gold-Papiermärkten statt, die viele hundert mal grösser sind als der physische Markt. Die wirklichen Akteure hinter diesem dunklen und heimlichen Papiermarkt kommen niemals zum Vorschein. Alle Untersuchungen werden direkt an der Quelle gestoppt. Bestenfalls wird ein unbedeutender Junior Bank-Trader mit einer Ordnungsbusse belegt. Praktisch jeder Trade, mit dem der Goldpreis gedrückt werden soll, wird immer dann ausgeführt, wenn die Goldmärkte geschlossen sind und es keine Käufer mehr gibt. Die Beträge an gehandeltem Papiergold sind riesig. Kein Händler mit Geschäftsinteressen würde jemals in einer so idiotischen Manier traden. Wer würde je auf die Idee kommen, grosse Mengen an Gold verkaufen zu wollen, wenn es keine Käufer und keinen Markt gibt?

Wenn es einen echten Markt gäbe, der mit physischem Gold hinterlegt wäre, könnte so eine Art von Handel unmöglich vonstatten gehen. Wenn ein Verkäufer mehrere Monate Goldproduktion in wenigen Sekunden auf den Markt schmeisst, ist natürlich keine einzige Unze physisches Edelmetall im Spiel. Falls der Käufer physische Auslieferung beantragen würde, müsste der Verkäufer Konkurs anmelden, oder hunderte bis hin zu tausenden US Dollar über dem Marktpreis bezahlen um die physischen Mengen zu erwerben. In Wahrheit aber existiert das physische Gold gar nicht, um diesen Handel zu vollziehen.

Es gibt nur einen echten Goldmarkt

Der echte Goldmarkt ist der physische und in diesem Markt ist das gesamte produzierte Gold bereits im voraus ausverkauft. Im echten Goldmarkt wird das gesamte geförderte und veredelte Gold von Langfristvertägen übernommen. Aber der Westen versteht diesen Markt nicht, da der Westen in falschen Märkten handelt, der auf falschen Werten beruht. Der Grossteil des Handels in den weltweiten Finanzmärkten findet in Form von Derivaten statt, ohne dass die zugrundeliegenden Werte je ausgeliefert werden.

Dies ist der Grund, warum die meisten Menschen im Westen, die mit Gold handeln, sich keine Sorgen machen, je ihre Ware nicht geliefert zu bekommen. Sie finden physisches Gold zu unpraktisch und zu teuer zum Traden. Warum sollte man physisches Edelmetall besitzen, wenn man auch eine elektronische Bestätigung haben kann, die einem anzeigt, dass man x Unzen Gold hält? Praktisch niemand realisiert, dass diese elektronischen Einträge eines Tages nicht einmal den Strom wert sein werden, der gebraucht wurde, um sie zu erstellen.
Während sehr wenige Leute im Westen den Wert von echtem Geld und Versicherung in der der Form von Gold verstehen, haben die Leute im Osten die genau gegenteilige Einstellung. Sowohl Privatpersonen als auch Regierungen im Osten häufen mit immer höherer Geschwindigkeit mehr und mehr Gold an.

Man muss sich nur die neuesten Nachfragedaten der sogenannten “Seidenstrassen-Länder” in der untenstehenden Grafik ansehen. Seit 1995 haben Indien, China, Russland und die Turkei 34’000 Tonnen an Gold gekauft. Der Zukauf hat sich seit der Finanzkrise im Jahr 2007 beschleunigt.

Von 2007 bis Mai 2017 haben diese Länder 26’000 Tonnen physisches Gold gekauft. Dies bedeutet, dass sie mehr absorbiert haben, als in Minen über die letzten 10 Jahre produziert wurde. Und es ist noch sehr wahrscheinlich, dass diese Zahlen den Zukauf durch sowohl China als auch Indien stark unterschätzen. In den Zahlen für Indien ist der Goldschmuggel nicht enthalten, bei dem es sich zeitweise um sehr grosse Mengen handeln kann. Und auch die Chinesischen Behörden möchten lieber nicht offenlegen, wie viel Gold China wirklich gekauft hat. Nur im Mai haben diese Länder 400 Tonnen an Gold gekauft. Auf das Jahr hochgerechnet entspricht dies einer Zukaufsrate von 4’800 Tonnen. 60% mehr als die in allen weltweiten Minen produzierte Jahresmenge.

Absolute Goldnachfrage von Indien, Türkei, Russland und China

Absolute Goldnachfrage von Indien, Türkei, Russland und China

Die kumulierte Nachfrage der “Seidenstrasse” von 1’552 Tonnen in den ersten 5 Monaten des Jahres 2017 ist die zweithöchste der letzten 10 Jahre nach 2013.

Goldnachfrage von der Seidenstrasse nach 2013 die zweithöchste in den letzten 10 Jahren

Goldnachfrage von der Seidenstrasse nach 2013 die zweithöchste in den letzten 10 Jahren

 

Diese Grafiken und Zahlen aus dem Osten zeigen klar, dass der physische Goldmarkt extrem robust ist mit einer Nachfrage auf Rekordlevel. Der niedrige Goldpreis ist eine Illusion, die auf einem falschen und manipulierten Papier-Gold-Markt beruht. So wie bei allen falschen Märkten ist es nur eine Frage der Zeit, bis die Wahrheit ans Licht kommt. Und die Wahrheit wird für diejenigen, die Papiergold oder sonstirgendwelche Papier-Werte halten, sehr schmerzvoll sein.

Der Preis von Gold wird schneller nach oben ausbrechen als der von Kryptowährungen

Gold für 1’220 US Dollar ist ein ein falscher Preise in einem falschen Markt, der von Papier-Gold-Manipulanten bestimmt wird. Es wird aber nicht mehr zu lange dauern, dann wird der Goldpreis im physischen Markt bestimmt, da keiner mehr dem Papiermarkt trauen wird. Die Verfügbarkeit von physischem Gold ist bei den derzeitigen Preisen extrem limitiert. Die Deckung von Leerverkäufen und die gleichzeitige Zunahme der Nachfrage aufgrund höherer Preise wird zu einem mustergültigen Gold-Zyklus führen. Im Ergebnis wird der Goldpreis hunderte von US Dollar oder sogar tausende von USD in einem sehr kurzen Zeitraum nach oben springen.

Sobald diese Aufwärtsbewegung begonnen hat, werden wir wohl prozentual noch viel grössere Preissteigerungen sehen als wir zuletzt bei Kryptowährungen gesehen haben. Für alle, die noch nicht genügend Versicherung in Form von Gold halten, ist das derzeitige Preislevel ein echtes Geschenk. Und diejenigen, die bereits phyisches Gold besitzen, können gut schlafen – im Wissen, dass sie das ultimative Werterhaltungssasset halten, das in den kommenden wenigen Jahren Höhen erreichen wird, die sich heute nur schwer vorstellen lassen.

 

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management AG
GoldSwitzerland.com
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CHRONIC CRISES NEXT FOR YELLEN AND THE FED

by Egon von Greyerz

“The report of my death has been grossly exaggerated” are words that Janet Yellen is likely to utter within the next few years. It was of course Mark Twain who said it over 100 years ago, before the Fed even existed. Yellen has recently stated that there won’t be another financial crisis in her lifetimeand she will most likely have to eat those words in coming years. We know that the Fed’s record of economic forecasting has been abysmal. They have never forecast or anticipated a single economic downturn. Here is what Greenspan said in 2010: “We didn’t forecast better because we can’t”.

Well there we have it from the master himself of both Fedspeak and gobbledygook. For over a century the Fed has not anticipated any of the major economic or financial events that have plagued the world. Instead of predicting these events, the Fed has actually caused most of the economic downturns or financial crashes.

A TOTAL FAILURE BY THE FED TO FULFIL ITS MANDATE

The Fed has a Dual Mandate of Price Stability and Maximum Sustainable Employment. Since the US government uses a yardstick with infinite flexibility, they should be able to produce whatever figures the they need to meet their targets.

If we take the official US consumer price inflation, it has fluctuated from 25% to -15% in the 1920s and between 12.5% in 1980 to -0.3% in 2009.


This can hardly be called price stability and shows that at no point has the Fed achieved their goal.The fact that official inflation is now just under 2% is just sheer fluke and has nothing to do with Fed policy. Inflation levels in most industrialised countries are currently between 0 and 2%. Real inflation is substantially higher as anyone buying food, insurance, paying for education etc knows.

As regards the Fed goal of Sustainable Employment, they have found a very elegant way of solving this. By eliminating everyone who hasn’t found a job after six months, the unemployment rate miraculously declines from 23% to 4%. The fact that 95 million Americans capable of work can’t find a job is not taken into consideration. There are many ways to skin a cat and the Fed has used every method possible to achieve their goal. No one should be fooled because all is certainly not well in the kingdom of America (Hamlet paraphrased).

The Fed’s stated Dual Mandate does not seem to be the real policy they are pursuing. Instead their actual policy is to create cheap money by setting interest rates at zero and to print massive amounts of money. This benefits their banker masters and shareholders by having access to free financing which can be leveraged 10-50 times thus generating super-profits. The Fed policy also creates massive gains for the banks and the wealthy in stocks, bonds and property. These bubbles are now so big that the Fed doesn’t dare to pop them. But regardless of Fed policy, the sheer size of the bubbles will lead to their implosion in the next few years.

GLOBAL DEBT UP 2.5X IN 15 YEARS

Central banks worldwide have gradually stepped up their attempts to create a demand induced inflation for the last two and a half decades. It started with Japan in the 1990s with the rest of the world following in the 2000s. Since 2003, the major central banks have printed $12.5 trillion and still not manged to boost inflation figures. But this is just a small part of total credit creation since global debt has increased by $130 trillion in the last 14 years to $217 trillion.


This means that since 2002 we have seen a credit explosion which is equivalent to 2 years’ global GDP. It is a frightening thought that for 2 out of the last 14 years there would have been ZERO GDP without a credit expansion of $130 trillion. And even with this credit growth, world GDP has grown on average by less than 2% (excluding China). Debt to GDP has grown from 160% in 1979 to 375% today in the US and from 320% to 580% for Japan. Most countries have seen similar increases to levels which are totally unsustainable and thus confirm that this will not end well.


The effect of the credit growth is not shown in official inflation figures as all that printed money has instead created high inflation or hyperinflation in asset values. The values of stocks, bonds and property have all exploded. Just look at Japan. Since 2009, the BoJ has printed Yen 370 trillion ($3T) which has pushed the Nikkei index up 2.5x. The ECB and FED printing have achieved similar results. Credit expansion has created massive wealth for a miniscule elite and massive debts, both private and public, for normal people.

CONCENTRATION OF WEALTH WILL LEAD TO SOCIAL DISORDER

The Wealth Pyramid shows how 0.7% of the world population control 45% of global wealth and 8% own 85% of wealth. These are the privileged few. Most people in the world either have negative or no savings. And these are the people who will suffer when governments default, which is extremely likely in coming years. This unequal wealth distribution will eventually lead to social disorder and serious civil unrest.

A NATION CAN DEFAULT IN MANY WAYS

Defaults can occur in many ways. It can involve just not paying back debt or not paying the interest. Or it can be debasing the currency until it is totally worthless. Default will also entail not paying entitlements such as pensions or social security or not providing free or subsidised medical care. It is virtually guaranteed that with the current state of the world economy, many or most of these default events will happen within 5 to 10 years maximum but probably sooner. That is the only way the world can solve a $2.5 quadrillion debt and liability problem (including unfunded liabilities and derivatives). But sadly that will involve a very different world for an extended period.

CENTRAL BANKS’ SUCCESS IN DESTROYING PAPER MONEY

A manipulated economy can never be in equilibrium. The Fed’s and the government’s artificial meddling of economic cycles will always result in massive overshoots, thus creating gigantic booms and busts. Very few people realise what is actually happening to the value of money. Since true inflation statistics are never produced, nobody realises how everything becomes more expensive. Let’s take a couple of examples: A loaf of bread in 1971 was 25 cents and is now $2.00. One pound of hamburger meat has gone from 62 cents $5.00 during the same period. What most people do notice is that the value of their house has gone up dramatically. An average American house in 1970 was $25,000 and today it is $290,000. These price increase are all due to the total mismanagement of the economy by the Fed and the government and has nothing to do increases in real value.

If we look at the purchasing power of the dollar since the Fed was founded in 1913, the dollar has lost 97% of its value.


There has been a lot of talk of the strong dollar in recent years. But a strong dollar is an illusion. It is true that the dollar has strengthened somewhat but just look at the long term trend against the Swiss Franc. When I started my working life in Switzerland in 1969, $1 bought Swiss Francs 4.30. Today $1 buys 0.96 Swiss cents. So in 48 years the dollar has lost 78% against the Swiss Franc. Looking at the chart, there has been a pause in the downtrend for the last 6 years. But it now looks like the dollar soon will resume its downtrend and go down by another 50% in the next few years to 0.50 Swiss cents. That major depreciation of the dollar doesn’t mean the Swiss Franc will be strong. All it means is that the dollar will be extremely weak.

RECORD US BUDGET DEFICITS FOR OVER HALF A CENTURY

The US Treasury’s Financial Report for 2016 shows a Budget cash deficit of $587 billion. On a proper accounting basis, the deficit is $1.047 trillion. So the 57 year trend of continuous US budget deficits is not going to be broken in the next few years. For anyone who believes there were surpluses in the Clinton years, I will just remind them that these were false and that the debt continued to go up in spite of the manufactured surpluses.

There is every reason to believe that the US deficit will double every 8 years just as it has since 1981. That would mean that the road to perdition will lead to a US debt of $40 trillion by 2025 with a static tax revenue which will never be sufficient to reduce or repay the debt.

ALL MAJOR CENTRAL BANKS WILL RAISE RATES AT THE WRONG TIME

European Central Bankers met at the ECB Economic Forum this week in Sintra, Portugal. They were all echoing the Fed and talking about higher rates. Central bankers are always far behind the curve and what they didn’t do several years ago to restrict the credit explosion, they are likely to do now. Of course, the a heavily indebted world will not cope with higher rates. But higher rates will happen across the world whether it is right or not. The 35-year interest cycle bottomed last year and now higher rates will be a major contributing factor to the coming fall of the world economy. Central banks will try to break the fall of bond markets (higher rates) but that will fail as bond investors panic to exit the biggest credit bubble in history. Central banks will also panic as higher rates will create private and public debt defaults. The only tool that they have left is money printing and the world will see plenty of that in coming years. Will it be just in the trillions of dollars or will it reach quadrillions as derivatives fail due to higher rates? Time will tell.

As I discussed in a recent article, the pieces are now falling into place with the dollar and stocks falling and rates rising. So far gold is not reacting as price suppression in the paper market is still going on. But at some point in coming months, the gold manipulation will fail and at that point it will be virtually impossible to get hold of physical gold at anywhere near current prices. 2017 is likely to end very differently to how it started.

 

 

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management AG
GoldSwitzerland.com
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GRANT WILLIAMS JOINS MATTERHORN AS ADVISOR

A message from Egon von Greyerz:

I am extremely pleased to announce that Grant Williams has agreed to join Matterhorn as an Advisor.

Grant has spent 30 years in finance, holding senior positions with many leading financial institutions around the world. He is co-founder of RealVision TV, an online, on-demand financial channel showcasing the brightest minds in finance. He also publishes “Things That Make You Go Hmmm”, an extremely popular and widely-read publication.
Grant is very much in demand as a speaker at financial investment conferences around the world. He has a wonderful ability to mix finance, history and humour into greatly appreciated presentations.

I have known Grant for many years and find him to be one of the most brilliant and interesting thinkers in finance today, on top of being an extremely nice individual. Grant, like myself, is a freethinker who is not bound by conventional wisdom. We are both deeply concerned about the risks in the world today. We both believe in sound money and consider physical gold to be an extremely important wealth protection asset.

Our intention to work together is very much based on a meeting of minds at many levels, with a true desire to inform investors around the world of the perils that we are facing and to assist them in their wealth preservation plans.

 

Egon von Greyerz, Founder & Managing Partner

Egon von Greyerz & Grant Williams in the Swiss Alps

Egon von Greyerz & Grant Williams in the Swiss Alps

Grant Williams speaks to Egon von Greyerz on RealVision – Click to watch

 


About MATTERHORN ASSET MANAGEMENT – GoldSwitzerland
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HUBRIS KILLS WHILST GOLD PROTECTS

by Egon von Greyerz

Hubris is a deadly sin. It is an arrogance and conceit of the highest degree that eventually leads to failure. As we reach the final stages of the current economic cycle, hubris is prevalent everywhere. Central bankers and bankers believe that they can continue to create wealth by printing and borrowing money. Since it has worked so well for 100 years in this latest cycle, why can’t it continue?

THE LAWS OF NATURE CAN’T BE SET ASIDE

Throughout history, governments have attempted to set aside the natural laws of sound money by manipulating the financial system using criminal methods like counterfeiting and creating money out of thin air. With their hubris, they believe they can get away with their evil deeds. All they would need to do is to look at history. Long term, no one has ever got away with creating a system based on fake money, unlimited debt, zero or negative cost of money with the government and the bankers being the main beneficiaries. They will of course not succeed this time either but the power and massive wealth created by a small elite make the “Powers That Be” so corrupt and so arrogant that they can’t even see the consequences.

The politicians are suffering with the same hubristic disease. Just take the EU, a massive bureaucratic dinosaur in Brussels with unelected and unaccountable leaders. Juncker, the President of the European Commission personifies the hubris of his organisation. Their extremely arrogant treatment of the UK in connection with Brexit is just one example of their conceit.

The hubris we are seeing in many parts of the world is a typical sign of the end of an era. Another sign is the fear created by authorities which leads to draconian measures to control the people.

PROTECTION OF THE PEOPLE BY CONTROLLING THEM

In the US for example, a new Bill has been introduced in the Senate. The name says it all: “Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017”. The purpose of the law is to “Improve the prohibitions on money laundering and for other purposes”. Money laundering has an extremely wide definition and anyone who carries money over $10,000, cryptocurrency or a blank check, has a prepaid mobile can fall under this law. In summary, if the incumbent has not in advance filled in a form to declare these items, it allows the government to seize all his assets and put him in prison for 10 years. The bill also gives the right to surveillance and wiretapping.

If this law was used only to catch real criminals, it might be acceptable. But we know that when a body is given such extensive and ill-defined powers they will be widely abused. And this is how slowly but surely a police state is created. A lot of smaller measures that most people don’t pay any attention to until these draconian powers are unfairly applied to innocent people.

In Germany, similar measures are being discussed. The German Interior Minister is preparing a new law introducing surveillance of the people to combat terrorism. It gives the authorities the power to fingerprint and give access to mobile phones, social networking apps even down to 6 year olds. Germany is also considering installing software on mobiles so that the authorities can read messages before they are encrypted.

Many other countries are considering similar methods or are already applying them tacitly. The combination of increased immigration and terrorism will continue to lead to more surveillance measures around the world in all aspects of life. It is not just physical surveillance but bank records, fiscal control and the banning of cash transactions and cash. This trend is unlikely to stop until this cycle ends. We will need to see an end to the socialism and globalism which is creating the current unpleasant trends. We will also need to have an implosion of the debt and asset bubbles which are part of the current problems.

CRYPTOCURRENCIES IS NOT WEALTH PRESERVATION

But sadly, the final stages of the current cycle will involve severe hardship for most people in the world. There are of course ways for the people who have assets to alleviate the suffering. Cryptocurrencies seems to be the speculative craze that many use to avoid the system. The rise in many of these currencies has been spectacular and it could very well continue to a much bigger bubble. Personally, I have always stated the cryptocurrencies have nothing to do with wealth preservation. It is electronic money with no underlying asset. The more successful these currencies become, the more governments will control or regulate them. The new US Money Laundering Act which I have discussed above is one way for governments to make cryptos illegal. Another risk is that the production of cryptocurrencies can increase dramatically, just like with other fiat money. I also understand that liquidity is extremely thin when there is a bit of selling pressure. This is what eventually could make these currencies worthless just like the tulip bulbs in the 17th century. It will be impossible to get out at any price.

CENTRAL BANKS WILL FAIL TO RESCUE THE SYSTEM

It is interesting to observe how central banks always fail in their attempt to manage or rather manipulate the economic cycle. The financial system was bankrupt and almost went under in 2006-9. Since 2006 interest rates worldwide have come down to virtually zero or negative in most countries. At the same time, the major central banks have printed over $11 trillion since 2006.


The printing curve became steeper in 2009 and since 2016 global printing is accelerating further. At the same time, global debt has grown from $130 trillion in 2006 to around $250 trillion today. This massive stimulus which the world has received in the last 10 years should have had a major impact on global growth. But that is certainly not the case. Just take the US. US GDP 2007-16 has grown at an average of 1.3% per year. This is exactly the same rate of growth as during the US depression 1930-39. So neither global money printing nor US printing has made the US fare better in the last nine years than during the 1930s depression. This is a very clear sign that the US economy is running on empty. Pushing on a string has no effect. And why should it. If we all could just live on printed money, we could stop working and just print some more. For some incomprehensible reason, central bankers and governments don’t understand that they have come to a point when they can’t fool all of the people all of the time, including themselves. I suppose they consult Nobel prize winners like Krugman who doesn’t understand what sound money means either.

CENTRAL BANKS ARE ALWAYS BEHIND THE CURVE

Since central banks and especially the Fed are always reacting to events, they have for decades always been behind the curve. The best solution is to abolish central banking totally and let the cycle regulate itself. That would stop all the booms and the busts and just create natural cycles of a much smaller magnitude.

So the Fed increased rates now when the economy is turning down. Retail sales, a leading indicator, are very weak and tax revenues are not growing in line with expenditure. That is why real deficits in coming years will rise dramatically, just like they have every year since 1960. But even if the Fed is several years too late to raise rates, it looks now even with a weak economy that the interest rate trend is turning up.


Looking at the long term trend since 1915, it is clear that we are at a 72 year low and there is only one way to go which is up. Yes of course rates could stay in this region for yet a little while. If we look at shorter term charts, US 10-year rates seem to have bottomed in July 2016. So even if higher rates will be very serious for a weak and highly indebted economy, it is likely to happen. To me this looks like another confirmation of inflation going up, eventually leading to hyperinflation.

LET’S LOOK AT A COMPARISON WITH THE 1970S.

The Dow made a high in Jan 1973 and then declined by almost half into Dec 1974 which was the bottom. It continued to fluctuate under 1000 until 1982 when the current bull market started.

US rates rose from Jan 1973 to Dec 1974 as the Dow went down 46% and the economy was in a severe recession. As the table shows, Fed Funds increased by 44% between 1973-74. At the same time, inflation went up by 83% from 6% to 11%. In the UK, it was even worse with inflation going from 9% to 16% between 1973 and 1974.

Having experienced high inflation in the 1970s in the UK, I can sense that we are now likely to enter a similar period in many countries. With debt today substantially higher, the consequences will be exponentially greater. During most of the 1970s there was high inflation in many countries. The US average inflation rate 1974-81 was 8.1% with a peak of 14.5% in 1980. In the UK average inflation for the same 8 year period was 15.5% with a peak of 24.2% in 1975. Living in the UK at the time, my first mortgage was as high as 21% for quite some time. When interest rates return to these levels in coming years, no individual and no government will be able to pay the interest on their debt.

In 1971 the dollar was released from its gold backing and gold went from $35 in 1971 to $66 per ounce in Jan 1973. As interest rates and inflation rose, so did gold. It doubled between 1973 and 1974 and eventually reached $850 in January 1980.

So, what lessons can we learn from history?

As Mark Twain said:

“History doesn’t repeat itself but it often rhymes”.

Sadly, governments learn virtually nothing from the past. Everyone believes it is different today. Why otherwise would the world create $2.5 quadrillion in debts and liabilities that can never be repaid nor financed as interest rates rise. What we can observe from the table above is that inflation can rise very quickly from one year to the next. As inflation rises, so will interest rates. In the 1970s they doubled very quickly and stayed at high levels throughout the whole decade.

WATCH THESE SIGNS

In the next few years, we will experience the consequences of the failed experiment in creating wealth from printed money. The signals will be quite obvious like:

  • Rising inflation
  • Higher interest rates
  • Falling dollar

Interestingly, all those three factors are already happening, albeit at a slow pace currently. In the next year or so we will see much higher inflation and interest rates as well as a crashing dollar. This will be a vicious cycle that will feed on itself. Massive debts are not a friend of high interest rates. Higher rates will put enormous pressure on governments, consumers and corporates. We know that none of these groups can ever repay their debt but as rates go up, they will not even be able to finance the debt. Our friendly central bankers will stand by and print unlimited amounts of worthless fiat money. But this time it won’t work. The printed money will not save the system but only create inflation leading to hyperinflation and eventually a collapse of the financial system.

Just like in the 1970s, physical gold and some silver will protect investors from the ravages of inflation. At that time, gold went from $35 to a high of $850 or up 24x. A similar increase this time would take gold over $6,000. But history won’t repeat itself but it will rhyme very nicely. This means that gold will go up substantially more than 24x due to the massive amount of money that will be printed to cover $2.5 quadrillion of debts, derivatives and liabilities. It will be impossible to forecast the level but it could be the $150,000 or $2.6 million as I discussed in my article last week. Or it could even be 100 trillion as in the Weimar Republic.

PROTECT YOUR ASSETS FROM BIG BROTHER

The level becomes irrelevant. What is important is the protection that gold will give against the implosion of most asset values as well as currencies as well as assets lost in the failure of the financial system. This is why gold and silver must be kept safely and legally outside the banking system and outside your country of residency.

The draconian measures in the US and Germany that I discuss above are just the beginning. The Big Brother is Watching measures will become much worse. This is why it is important to store assets legally outside your country of residence. The time will soon come when it will neither be possible to take out currency or assets. It is less likely that assets already abroad will be required to be repatriated.

Gold at $1,255 is as low as the $300 early this century if adjusted for real inflation. The manipulation of gold has made it possible for many investors to buy gold at extremely favourable prices just as the Chinese and the Indians are doing continuously. But when the next upleg starts, there will be no physical gold available anywhere near current prices. Gold will go “NO OFFER” which means that sellers of gold are not offering it at any price. So for anyone who is not fully protected, now is the moment to acquire wealth protection insurance in the form of gold.

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management AG
GoldSwitzerland.com
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WILL GOLD REACH $2.6 MILLION OR JUST $150,000

by Egon von Greyerz

Last week, we were again reminded of the global instability and disequilibrium. In the UK, the conservative Prime Minister Theresa May decided 9 weeks ago to call an election. This was done due to the conservatives being 20 percentage points ahead of their Labour rivals in the opinion polls which would have led to a strong backing for the Brexit negotiations as well as another five years in power. But things went disastrously wrong. An extremely badly run campaign by Mrs May and an opportunistically clever campaign led by the Labour leader Corbyn have led to a hung parliament. Like all socialists, Corbyn promised the earth and no one cared about that this would bankrupt the country. The conservatives are now dependent on a small Northern Ireland party as well the Scottish conservatives. The effect of the election is total political chaos that will weaken a UK which is already in a mess with a high debts and untenable budget and trade deficits. But the EU bureaucrats led by Mr Junker are of course delighted. They know now that Mrs May who was for a hard Brexit will have to go at some point and the EU will have the upper hand to reach a soft Brexit or no Brexit at all.

THE GLOBALISTS AND DEUS EX MACHINA

So again, the globalists have sadly won, just like they did in the Netherlands and France recently. The unelected and unaccountable Brussels bureaucrats are absolutely elated. They can now continue to run Europe irresponsibly with open borders for anyone who wants to enter, with a currency which only benefits the Germans, and with a financial system which is rotten in its core and totally bankrupt. But it is not just the financial system which is bankrupt because so are most major EU nations from Greece, Italy, Spain, Portugal, France, UK etc. The illustration to my article “Deus ex Machina” written in December 2011 tells the story:

Events might have taken a bit longer to unravel but the trend is irreversible. Country after country will crash under the burden of debt and this is not just European countries but also China, Japan, Emerging Markets and the US of course.

WHO WILL BE GLOBAL LIABILITIES OF $2.5 QUADRILLION

We are now at a time in history when extraordinary events will be the norm. The world is currently as far from a harmonious equilibrium as it has ever been in history. The masses are ultimately responsible for $2.5 quadrillion of debts derivatives and unfunded liabilities. None of this will of course ever be repaid and that astronomical sum will grow exponentially as governments accelerate their money creation in their futile attempt to save the world. On the other side of the scale, is a very small elite, being a fraction of 1%, who owns most of the assets in the world. But they are of course not responsible for the debt which is being created so that the wealthy can continue to grow their capital at the cost of ordinary people who in real terms are worse off every year.

POLITICS HAS BECOME A FARCE, BETTER THAN TV SHOWS

But the disequilibrium in the world is not just financial, it is also moral, ethical and political. In the final stages of an era, all values disappear and the ugliest side of mankind appears. We see this currently all around us. US politics has become a total farce better than any television drama. It is hard to believe what is happening is actually real. The problem is that what we are seeing is a stark reality that has serious consequences for the US as well as for the rest of the world. It will not only lead to financial disaster but also serious political and geopolitical disasters. Only afterwards will the historians know if the cyclical peak in the world economy that we are experiencing now is just the end of a 100-year era from the creation of the Fed in 1913 or a 700 year period from the beginning of the Renaissance or from the Roman Empire 2000 years ago.

Whatever cycle we are in, it will lead to a very extended period of misery and economic hardship for the world. Since the $2.5 quadrillion liabilities can never be repaid or run down in an orderly fashion, we will in the next few years experience a debt implosion which will be totally devastating. Not only will debt implode but also all the assets that have been fuelled by the debt bubble. Hopefully it will not take 500 years like the Dark Ages after the fall of the Roman Empire. But the world is likely to see an extended decline that will affect all of us.

ALL THE GOLD IN THE WORLD CAN’T COVER US DEBT

It is primarily the disastrous US monetary policy since 1913 which has created the biggest debt mountain in history. It is not easy to illustrate what $2.5 quadrillion actually means but we can start with the US Federal debt of $20 trillion. The illustration shows the size of the US debt in $100 bills in relation to the statue of liberty. The statue is standing on a pedestal of gold worth $20 trillion. The cube has 30 meter sides and weighs 500,000 tonnes. There is only one problem – 500,000 tonnes of gold do not exist. All the gold ever produced in the world is estimated at 170,000 tonnes.

So if the US debt would be backed by gold, it would require 3x more gold than what has ever been produced. Remember that it was de Gaulle demanding payment in gold of the US debt to France that made Nixon close the gold window. If we then look at the total gold required to cover all global liabilities of $2.5 quadrillion, it would be 125x greater at $62 million tonnes. That is 365 times more gold than exists. If we were back to the gold standard rather than fiat money with zero intrinsic value, gold would need to be worth 365x $1,270 or $463,000. That price of gold is based on all the
gold in the world including jewellery but if we just take sovereign gold of officially 30,000 tonnes backing global liabilities, the gold price would need to be 5.7 times higher or $2.6 million.

You could of course argue that a 40% gold backing would be sufficient. Against that, central banks are unlikely to have anywhere near the official 30,000 tonnes in physical gold. All they have are IOUs from bullion banks which have leased the gold from central banks and sold it to China. Bearing that in mind the $2.6 million price is still valid even at a 40% gold backing of the debt and liabilities.

GOLD $150,000 OR $2.6 MILLION

I do realise that liabilities are not the same as debt and that global debt is ONLY $250 trillion. But I expect that in the next few years central banks will need to print at least a couple of quadrillion dollars to cover all outstanding liabilities and derivatives.

No, I am not dreaming. I am not expecting a gold price in today’s money of $2.6 million anytime soon. I am just proving that as the world went from real money to phoney money, the value of real money or gold does not in any way reflect the incessant creation of paper money. In the superb “In Gold we Trust” report, Ronni Stoeferle and Mark Valek show how a gold price between $50,000 and $150,000 can be justified.

Whatever the real, unmanipulated price of gold would be, it is likely to be multiples of the current price, whether that is $10,000, $150,000 or $2.6 million.

GOLD – INVESTMENT OF THE CENTURY

What few people realise is that gold has been the best investment in this century in all major economies. Gold in pounds for example is up 5.7X since 2000 whilst the FTSE 100 is only up 8%. This is an outstanding return and also the ultimate wealth preservation insurance. But it must obviously be physical gold, stored outside the banking system. We went seriously into gold in 2002 for our UK investors at £200 per ounce against the current £1,000. Since we were both concerned about the pound as well as the UK and global economy, we recommended up to 50% in gold at the time. But even at a much lower percentage, the investors have done remarkably well. The unique advantage UK investors have is that they can buy Sovereign gold coins which are exempt from capital gains tax.

There is clearly no science to determine what percentage of investment assets should be in gold. My recommendation is that investors should buy enough gold to fall back on if there are major problems in the financial system.

In my view 10% into gold is an absolute minimum but preferably it should be much more. Since our investors are strong believers in wealth preservation, the majority hold at least 25%.

For anyone who lives in a hyperinflationary economy like Venezuela or Argentina, gold is an absolute life saver and thus a necessity for the ones who have surplus funds. But you don’t need to be wealthy to own gold. For $40 anyone can buy a one gram gold bar per month for example. Over time that could become an important sum as gold rises and the crisis comes.

The coming six month period and especially the autumn, is likely contain a lot of shocks. The investment community is totally oblivious of the risks they are taking by having most of their money in assets that have reached stratospheric values whether it is the stock market at a 30 p/e or property prices at bubble values worldwide or bonds at zero percent. All these asset markets only have one way to go and that is massively down. Investors must not believe that they will be saved by central banks again. The world is past the point of being saved and must now suffer the consequences for the excesses of the last 100 years. If there was a Deus ex Machina, he needs to come down soon but sadly I don’t think that will happen.

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management AG
GoldSwitzerland.com
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CASSANDRA, CENTRAL BANKS AND GOLD

by Egon von Greyerz

The general public doesn’t like hearing what some of us who are Cassandras have to say. Because our message does not fit in with the choir of propaganda and lies. We are predicting a future for the world which is unpleasant for most people and therefore few believe our predictions. It is part of human nature to believe that the current state of affairs will go on forever. And that is the case whether times are good or bad. In bad times, everyone believes that it will never end. I remember vividly the 1970s in the UK when it felt like the severe recession was going to be permanent. It is the same now; conventional wisdom says that the economy will continue to grow at a steady pace and so will assets such as stocks and property. Very few realise that the growth we have seen in the last few decades is totally false and based on credit and printed money.

CASSANDRA’S ACCURATE PROPHECIES WERE RIDICULED

Cassandra was the daughter of the king of Troy in Greek mythology. The god Apollo gave Cassandra the power of prophecy but when she resisted his approaches, Apollo inflicted a curse that no one would ever believe her prophies although they were all accurate. And this is exactly what is happening to Cassandras or soothsayers today. Many of us are totally clear about the consequences of the total mismanagement of the economy during the last 100 years. Gradually the situation has deteriorated to a point when there is no solution. Instead, at some point in the next few years the debt and asset bubbles will implode with dire consequences for the global economy and for most people on the planet. But just like with Cassandra, nobody believes what we are saying when we are predicting the likely outcome of the most massive, government led, global Ponzi scheme in history.

Don’t get me wrong, we were not knowingly given prophetic powers by Apollo or any other god. But a few of us are absolutely convinced that you cannot build prosperity on a lie, on printed money or by breaking laws of nature that have stood the test of time. We now live in a world where lies have become the truth.

As George Orwell said:

“The very concept of objective truth is fading out of the world. Lies will pass into history.”

 

FROM PONZI TO SHANGRI-LA

In order to run a successful Ponzi scheme, participants must be made to believe that they are all winners. Human beings’ inherent greed prevents them from seeing that a Ponzi scheme eventually runs out of money since it will require a few billion creatures from another planet for everyone to get their pay-out. In a modern economy, unlimited amounts of money can of course be printed or created electronically. And this governments will do in a final and desperate attempt to save the world. But just like with a Ponzi scheme, all this manufactured money will have zero value. Otherwise, why don’t we just print unlimited amounts of money and stop working and stop all production. This would be the perfect Shangri-La world with nobody working and everyone living in total affluence. But sadly, it is not that easy.

Governments’ money forging scheme which has lasted a century is now coming to an end. The value of all major currencies in the world has declined 97-99% in the last 100 years. In the next few years we will see money printing of a scale that make all these currencies worthless by declining the final 1-3%. Though, what we must remember is that this final move involves a 100% decline in value from today.

Because even if Orwell is correct that lies are the new truth today, fortunately the truth will always win over time.

As Winston Churchill said:

“The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is.”

FED, ECB AND BOJ HAVE PRINTED $10 TRILLION SINCE 2006

Since 2006, global debt has grown exponentially and is now around $250 trillion. This is all driven by the main central banks in their attempt to prevent the financial system from collapsing. The three major central banks’ balance sheets have all expanded rapidly during the same period. They have all taken turns in the race to become the most profligate money printer. For a few years the Fed was in the lead but since 2015, the BoJ and ECB have caught up quickly. All three have now printed around $4.5 trillion each, having grown from below $1 trillion at the beginning of this century. The seesawing is likely to continue and sometime during the next 12-18 months, the Fed will start accelerating the US money printing again by adding many trillion dollars or even tens of trillions to their balance sheet.

Central Banks create false prosperity

Central Banks create false prosperity

 By manipulating markets and creating infinite liquidity, central banks are not just temporarily putting off the demise of the financial system. They are also creating a false prosperity by fuelling global stock market rises to new highs. No one should be under the illusion that all is well on Stock Street and that the new highs we are seeing in many markets around the world is based on real growth. This rise is primarily liquidity driven, leading to over valuations and p/e ratios not seen since the 2000 stock market bubble.

The graph below shows the perfect correlation between money printing and stocks. In March 2009, the combined balance sheet of the Fed, BoJ and ECB was $5.8 trillion whilst the S&P index was at 700. Since then, the three central banks’ balance sheets are up 2.3 times to $13.6 trillion and the S&P is up 3.5 times to 2,400. So this is where the world is today. For stock prices to grow, money must be printed, for GDP to grow by one dollar, credit must be expanded by several dollars. At the same time, billions of paper gold must be created and sold to keep the gold price down. Because a high and true price of gold would be a sign of economic mismanagement and must therefore be prevented at any cost. Thus, we are really living a lie. Cassandra would have seen this and warned the world but no one would have listened. And for the Cassandras of today it is the same. Very few want to hear what we have to say and most people think we are mad, just like Cassandra.

HOUSEHOLD, AUTO AND STUDENT LOANS – THE NEXT DISASTER

Until the truth is revealed, debt will continue to expand but not only the Fed’s balance sheet. US National debt is $ 20 trillion and will at least double in the next 8 years like it has every 8 years since 1980. In addition, more and more US sectors are joining the $1 trillion debt club. Currently it has the following members; Unsecured households, Auto loans and Student debts. Outstanding debt for each one of these categories exceeds $1 trillion and growing. But not only are the debts growing but so are bad debts. Eventually most of these debts will become bad debts with no chance of ever being repaid. Also, US corporate debt is growing and is up $8 trillion since 2010.

But it is not only US debt growing as we are seeing the same trends in Europe, Asia, Canada, Australia and Emerging Markets. What the world is now experiencing is the last hurrah of a global debt bonanza.

In addition to debt, pensions or the lack of them will be a massive problem for world population. Aging populations in many countries like Japan, China and Europe will lead to human misery. In the US 10,000 people reach 65 every day! Very few of these will have enough pension savings to live on for the rest of their lives especially when the recession/depression hits.

Short term, US unemployment is pointing to a less buoyant economy than the Fed had planned for. The latest unemployment figures are making another two rate hikes in 2017 very unlikely. The real figures are of course a lot worse than the published ones since the Bureau of Labor Statistics invents a few hundred thousand jobs every month.

GOLD STRENGTH AND DOLLAR WEAKNESS

As I discussed in my article  two weeks ago “Gold’s days of glory beginning as Dollars are ending”, the dollar turned down in December and is now starting a major long-term fall against most currencies. But it won’t be in a straight line since the currency race to the bottom will see much seesaw action.

More importantly, the weaker dollar is a signal that gold is now resuming the long-term bull market. The next pause could be $1,360. We might not see gold going through that level until the autumn, but once it does the rise will be very rapid.

From a wealth preservation point of view, there are two major factors to consider:

  1. Global is risk has never been higher in history. And this pertains to economic, financial, geopolitical and cyber risks. Investors must not believe the lies and propaganda they are being fed. All is certainly not well in the state of the world. No, everything is very, very rotten! (to paraphrase Shakespeare’s Hamlet).
  2. Physical gold offers the best wealth protection and insurance against the rotten state of the world. Like all insurance policies, gold must be owned and safely stored before the catastrophe happens. At $1,280 per ounce, it is the cheapest insurance premium that anyone will ever pay against the risk of the total destruction of assets and currencies.

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management AG
GoldSwitzerland.com
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Audio Interview with Egon von Greyerz on King World News: What Is Happening In The Physical Gold Market Is Remarkable

Egon von Greyerz:

“We speak to the Swiss gold refiners all the time and I visit them regularly. I was there very recently and they are seeing constant flows of gold to primarily China, and also to India. …..

Every single ounce of gold of the 3,000 tonnes mined in the world each year is sold. The gold doesn’t need to be marketed, it’s been pre-sold, all of it.”

Click here to listen to the latest Audio Interview on King World News with Egon von Greyerz

 

 

 

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GOLD’S DAYS OF GLORY BEGINNING AS DOLLAR’S ARE ENDING

by Egon von Greyerz

Since the 2011 tops, precious metals investors have had their patience severely tested. Six years later, silver is down 66% from the $50 peak and gold 35% off the $1,920 peak. We mustn’t forget off course that these metals started this century at $280 and $5 respectively. But that is no consolation for the investors who got in near the highs. The best time to buy an asset is when it is unloved and undervalued like gold and silver were in the early 2000s. What few investors realise is that the current levels of gold and silver, when real inflation is taken into account, are very similar to where the metals were in 2000-2. Thus gold at $1,265 and silver at $17 is an absolute bargain and unlikely to remain at these levels for long.

Why are asset markets booming and gold static?

As the precious metals have corrected for six years, many markets have boomed. Money printing and credit creation can do wonders to asset markets. Since 2009, stocks in the US for example have trebled and many other asset classes such as property have appreciated substantially. Global debt since 2006 is up by 75% or $100 trillion and short term and long term rates in the Western world re down from 5-6% to anywhere from negative to around 2%. This has fuelled stocks and property but so far had limited effect on gold and silver.

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GOLD SHORTS – ALWAYS NAKED LIKE THE EMPEROR

by Egon von Greyerz

The most expensive investment anyone can buy today is paper gold. For $1,260, an investor will get a piece of paper saying he owns 1 ounce of gold. But he is unlikely to ever see that gold. Firstly, most investors who buy paper gold have no understanding of the real reason for holding gold and will therefore never contemplate taking delivery. And even if he did understand the importance of holding real gold, he is quite happy to hold the surrogate alternative which is paper rather than physical. This is of course what the issuer of the paper gold wants. He knows that paper gold buyers have no intention of taking delivery. This is perfect for the seller because he has no intention of making delivery either. And this is how paper markets function. Weiterlesen..