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The severe problems that the world economy and
financial system have experienced in the last couple of years will seem like
a walk in the park compared to what will happen in the next couple of years.
For the investors who haven’t yet protected themselves, let us
tell you that you are very lucky. You are lucky that you have been given yet
one more chance to protect yourself. But let us be very clear, you have a
very short time to put your house in order. Because during the month of
November the events that we outlined in our Newsletter
“A Shocking Fall” are going to start to unfold.
Dollar
down and Gold up
Starting in
November, we are likely to see the dollar falling precipitously and stockmarkets turning down after this bear market
correction. We will see the bond market falling and especially long term
interest rates going up. And most importantly gold will start to move up very
strongly.
We have since
2002 advised our investors to protect themselves by buying physical gold and
store it outside the banking system. Gold has since gained
more than 250%. Also, in the last ten years the Dow Jones has moved
down 80% against gold. Most world stockmarkets have
had similar falls against gold. So in real terms the stockmarket
has been a very poor investment. We expect the Dow to fall another 90%
against gold in the next few years.
The
party is over
Earlier this year
we said that a 50% correction is totally normal in a bear market and that
would take the Dow to 10,300 which could happen by early November. Stockmarket investors have been given an incredible gift
in the last seven months but the party is now over. Most investors will not realise this until it is too late. They will hang on to
their shares for a long time yet and follow the market most of the way down.
In our view, the only stocks worth holding are precious metals stocks which
are grossly undervalued and will benefit from a very strong rise in gold.
The next few
years will be devastating for the world economy, for the financial system and
for private lives. We have outlined this scenario in our newsletters and
commentaries for a long time.
The majority of people are short sighted and believe the
economy has improved because governments have printed trillions of Dollars,
Pounds, Euros etc that they call money. But let us be very clear, you can’t abolish
poverty by printing paper and you can’t solve the world’s
enormous debt problem by exacerbating it. These debts will never be
repaid with normal money, not today and not tomorrow – NEVER!
Still time for
protection
In the next few
weeks until some time in November, investors can
still protect themselves by selling their stockmarket
investments and buying gold at reasonable prices. Gold at $1,050-60 will be
seen as the bargain of a lifetime in the next 12-24 months. But
remember that the main reason for buying gold is to protect yourself from the destruction of paper money and assets
that will take place in the next few years. Many countries, including the US
and the UK will have a hyperinflationary depression which will change the
face of the world as we know it today.
So physical gold
(and silver) stored outside the banking system is your best protection.
Matterhorn Asset Management has set up a separate
Gold Division called GoldSwitzerland
(www.goldswitzerland.com) in order for
investors to purchase physical gold at very competitive prices and store it
in their own name in Zurich, Switzerland outside the banking system and with
personal access to their own gold bars.
Egon von Greyerz
Mattherhorn Asset
Management AG
Also
by Egon von Greyerz
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