Egon von Greyerz, founder
of Goldswitzerland.com (Matterhorn Asset Management) and member
of the board of directors of Goldbroker.com published an article
headlined "Printing
Money – Price of Gold – Preservation of Wealth" :
1. Worldwide money printing
continues unabated
2. Just In 10 years $120
trillion have been printed making global debt $200 trillion
3. World GDP has gone
from $32 trillion to $70 trillion 2001-2011
4. Thus $120 trillion
debt is required to produce a $38 trillion annual increase in GDP
5. The marginal return on
printed money is negative in real terms
6. Thus the world is
living on an illusion of paper that people believe is money
7. This illusionary paper
wealth will implode in the next few years
8. The initial trigger
will be the collapse of the world’s reserve currency – the US dollar
9. The dollar is backed
by $120 trillion of US government debt and probably NO gold
10. All currencies will
continue their race to the bottom and lose 100% in real terms against gold
11. This will create a
worldwide hyperinflationary depression
12. All assets financed
by the credit bubble will go down in real terms
13. This includes stocks,
bonds, property and paper money of course
14. The financial system
is unlikely to survive in its present form
15. The banking system
including derivatives has total liabilities of around $1.2 quadrillion
16. With world GDP of $70
trillion, the world is too small to save a financial system which is 17x
greater
17. This is why there will
be unlimited money printing and hyperinflation
18. The only asset that
will maintain its purchasing power is gold Click here for chart
19. Gold has been money
for 5,000 years and will continue to be the only currency with integrity
20. Western countries’
23,000 tons of gold is probably gone. See recent article by Eric Sprott.
21. The consequence is
that most of the gold in the banking system is likely to be encumbered
22. This means that
Central Banks one day will claim it back against worthless paper gold IOUs
23. Thus gold and all other
assets within the banking system involve an unacceptable counterparty risk
24. Gold should be held
in physical form and stored outside the banking system