Gordon T Long, Co-Founder of FRA interviewed Egon von Greyerz in Zurick.
Egon Von Greherz is the founder of Matterhorn Asset Management who has worked
as a financial director for over 17 years in Geneva, and has been advocating
for wealth preservation through Gold for over 13 years. MAM now has plans in
over 40 countries for investors to place their savings into physical Gold
storage for preservation in the world's largest Gold vault in Switzerland.
Wealth Preservation
Egon says that approximately less than half a percent of assets are
invested in Gold today by the people and that most of them do not own any
Gold whatsoever. Even with the risky stock market in recent months we have
not seen a significant increase in the purchase of Gold as an investment
itself. However the increase in Gold purchases is linked more closely to the
retail market for public use. Von Greyerz expects the market stocks to drop
further down below their current value and is viewing the current spike in
stocks as a mere bear trap, insisting that following this we may see a rise
in purchases for gold.
"Less than half a percent of world financial assets are of gold
today and that's absolutely nothing!"
It is necessary to understand that gold is not to be viewed as an
investment but for insurance purposes against all the property investments
and bonds that you may have currently. For over 5000 years the price of gold
has only gone up and the value of money has been decreasing ever since. With
the expectation of the stock market dropping by at least 50% in its current
state, having even 10% of your assets in gold will ensure the safety of your
portfolio. The reason being that with the drop in stocks the price of gold
compared to the dollar could be at a 1:1 ratio like the 1980's meaning Gold
will outperform all the other assets.
With only a .5% of current assets invested in Gold there is no current
risk of a shortage of physical Gold. However, in the near future with the
price of Gold expected to rise rapidly there is a certainly a risk of there
being a shortage. If institutions, governments and pension funds begin to
hedge their assets in gold there will never be enough Gold to satisfy their
needs. Alongside rapid printing of money there will be no way to control the
rapid increase other than to increase the price of gold itself to purchase
smaller amounts of physical gold but for much larger prices to ensure that
there is no shortage of real Gold.
"In the next few years it will be hard to get a hold of gold, as
there will be a time when there will be no price offered in the market for gold
due to its shortage"
Thoughts on NIRP and the cashless society
There are no positive consequences for this situation, Japan had other
options but chose this disease which again will make no difference to either
economy in the world. The negative interest rate will however stop
withdrawals and place cash limits in Europe since people would rather take
the money out and hold on to it rather than pay interest on it. But we should
still expect more countries to go into negative interest rates even though it
is hard to imagine this central bank policy to solve our economic problems.
Unfortunately there are not many other options for investors at the moment
to encourage them to place their money elsewhere outside of the collapsing
banking system. To avoid possible 'bailins' people can invest in property,
fine art, and precious metals but not much else to be safe from this risk.
Gold on the other hand has not seen a significant price increase and shows
just how powerful it can be in the future. It is like holding real money it
has the equivalent purchasing power to any currency in its history for the
past 5000 years and does not devalue over time.
Even in the event that a bank does not have money to exchange for your
gold you may still use it as barter, it has had this function throughout its
history and will remain this way. It is an excellent opportunity for insuring
your wealth and having liquidity at the same time. This is away from the
banking regime and does not need to be declared to the IRS either for further
taxation.
Furthermore, there is no safe spot currently to store your wealth other
than a select few countries with good law and politics to ensure you get to
keep what you've earned. Switzerland currently holds 70% of all the gold bars
in the world and is by far the most secure location for storing wealth in
long term.
Egon does not think that the current primary elections going on in the
United States will have any effect on the current economic situation of the
world. Referring to the fact that there is simply too much debt at this point
and no difference will come from the selection of a new president. He
suggests that there needs to be a complete systemic overhaul of the way the
economic system works.
Egon von Greherz publishes several articles weekly and you can find his
research and upcoming investment opportunities online at www.matterhorn.gold or at www.goldswitzerland.com
Abstract by: Saad Gohir sgohir@ryerson.ca
Video editing by: Min Jung Kim minjung.kim@ryerson.ca