25885 Views September 20, 2015 GOLD, KWN, KWN II King World News
Today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events warned King World News that the next 2-3 months will shock the world as a “super-bubble” begins to bring down the U.S. and the rest of the globe.
September 21 – (King World News) – Egon von Greyerz: “Eric, Thursday we had another one of these ridiculous moments when the whole world was focusing on what the Fed would do. Nobody seems to understand that the Fed hasn’t got a clue what to do about the desperate situation they face…
Continue reading the Egon von Greyerz interview below…
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“Whatever the Fed does will make absolutely no difference to a bankrupt United States and a bankrupt financial system.
The U.S. should not have been running budget deficits for over 50 years. The U.S. also has debt of over $18 trillion and the Fed’s balance sheet is over $4.5 trillion. A proper interest policy would have stopped all of these excesses.
A Super-Bubble That Will Bring Down The U.S. And The Entire World
But the Fed has been totally irresponsible. Instead of halting bubbles in their infancy, the Fed is guilty of creating a super-bubble that will not only bring down the U.S. economy, but also the rest of the world. Eric, the Fed is bankrupt, the U.S. government is bankrupt, and sadly, the whole financial system is now in a desperate situation as the central planners try to keep it afloat.
Central banks around the world are now panicking because they know that deflation will mean a guaranteed implosion of the financial system. Virtually every central banker is now considering more QE and negative interest rates in a desperate attempt to avoid deflation. So we are not far from seeing additional QE from the ECB and Japan. We will also see major new QE packages from the Fed, Bank of China, the Bank of England, and many other central banks as well as the IMF.
This massive injection of additional QE will then accelerate the fall of most currencies to zero. And when the $1.5 quadrillion derivative bubble starts to implode, the currency creation will reach proportions never seen before in history. But any sensible person will know that printing money will just add to the already massive debt bubble. This will just exacerbate the problem.
Eric, I have said many times that the autumn of 2015 was likely to be the resumption of the decline of the world economy and the financial system that began in 2008. The Fed decision, although not really important in itself, was the first catalyst. We are now likely to have a stream of bad news and negative surprises in the next few months. This could mean anything from bank failures to defaults as well as political and geopolitical problems.
Poverty and migration will lead to more social unrest and the likelihood of wars is increasing dramatically. At some point sovereign defaults will also start. Initially it will be smaller countries like Greece, but eventually major economies like Japan and the U.S. will follow. It will of course be disguised as a moratorium or a restructuring, but soon the world will realize what it really is.
The Next 2-3 Months Will Shock The World
Coming back to markets, the next 2-3 months will shock the world. We will see major falls in global stock markets. Later on the biggest bubble of all, the bond market, will crash, leading to more problems in the system. And so the vicious downward spiral will continue for a long time. In between long periods of despair there will of course be hope and optimism, but sadly this will be short-lived.
Gold and silver will be the major beneficiaries of these problems. As fear sets in and asset markets fall, many investors will look for refuge in precious metals. The dilemma is that there is very little available physical gold left in the West as Western central banks have already sold or leased their gold.
Meanwhile, the wise nations in the East, such as China and India, have taken advantage of this and bought massive quantities of physical gold at highly-discounted prices. This situation will not last for much longer because there will be major shortages in the physical market.
Just look at the Comex as an example. The open interest in the Comex gold contract is 41 million ounces. That equates to almost 1,300 tonnes or $50 billion. But the Comex registered stocks of physical gold are only a mere $185 million. Thus there are 250 times more paper gold positions on the Comex vs. the available physical inventory.
Massive Shortage Of Physical Gold
So, Eric, there is a physical shortage of almost $50 billion, which equates to seven months of annual worldwide gold production. On top of that, bullion banks have issued major amounts of paper gold with no physical gold backing at all. So it’s totally clear that at any time we could have a massive short squeeze in the gold market. This also applies to the silver market as well.
The time when investors can buy gold at $1,100 will soon be gone forever. And nobody will buy paper gold, realizing that only physical gold stored outside the banking system is real wealth preservation.”