Egon von Greyerz, founder
of Goldswitzerland.com (Matterhorn Asset Management AG) and member
of the board of directors of Goldbroker.com published an article
headlined "Two Important Charts For Gold & Silver Investors" :
No, nothing new. More QE and
gold goes down. In addition, another downpour of economic news that confirms
the total inability of central banks and governments to provide any credible
solution to what is a guaranteed road to perdition.
Investors worldwide are
continuing to buy debt that yields nothing or virtually nothing from bankrupt
issuers. The only thing that is guaranteed is that the bond market, which is
the most over overvalued market in the world, will default. This is
particularly the case with the government bond market where government
deficits are increasing so fast that the only buyer remaining will be the
issuer of the bonds...
On the other side of the pond,
the Fed did what was expected and announced an annual asset purchase program
of over $1 trillion. With this money the Fed will buy worthless bonds that
will make their balance sheet worth less than zero. Most central banks are
doing the same. It is just that the US figures are so much bigger.
The US now has a National Debt
of $16.4 trillion and over $225 trillion of Federal entitlement liabilities.
With 125 million people on benefits and 22% unemployed the situation is more
than serious – it is desperate.
In the last 100 years since
the creation of the Fed in 1913, the dollar and most other currencies have
fallen 97-99%. So we only have a 1-3% fall left to reach a total collapse of
the current monetary system. That is likely to happen in the next few years.
With this desperate economic
situation, most people expected a different reaction to the Fed’s money
printing announcement on 12.12.12. But we should have learnt by now that
markets always do what they should do but not when we expect them to. Gold
and silver went up on the Fed announcement but sold off afterwards and
continued to be under pressure. Let us just remember that all we are
seeing are little wiggles in a major secular bull market in the metals.
Although gold (and silver)
didn’t go up in the last couple of days, it is absolutely guaranteed that the
continued destruction of paper money will lead to substantially higher prices
in the precious metals. But remember you have to hold physical metals and
store them outside the banking system.
>> For the complete
commentary, please visit King
World News
