2013 would be a very difficult year

面對目前危機, 不要過度借貸和少持紙資產 !

kingworldnews.com

With continued volatility in global markets, today Egon von Greyerz spoke with King World News about the precarious state of the financial world and key markets, including gold and silver.  Here is what Greyerz had this to say:  “I was talking to you last week about how Japan was a disaster waiting to happen.  I was pleased to see John Embry agreeing with me on Japan because John is one of the wisest men I know.  So Japan is in a mess, but you don’t have to go far to look at another problem which is China.”

Egon von Greyerz continues:  

“China has been dealing with over-investment and easy credit for years, and it’s a bubble.  There is a bubble in the economy in China, there’s a credit bubble, there’s a property bubble.  China is the only economy in the world that is totally built on credit.

Most emerging economies are built on investment out of profit....

“This is not the case with China.  Therefore, they have a massive economy based on credit.  This makes China’s situation even more dangerous and more vulnerable.

If we look around the rest of the world, Europe is in recession.  We have already seen two negative quarters of growth in Europe.  Within that, Germany and France are still showing positive growth, but both Germany and France are declining now.

Then we have the problems all over Europe with the strikes and riots.  We are seeing strikes and riots in Spain, Italy, Portugal, Greece, France, and even Belgium.  This will just be the beginning.  Sadly, conditions will just continue to deteriorate.

Moving to the Middle-East, it’s a time bomb.  Israel is preparing to move troops into Gaza because rockets are being fired into Israel.  So the Middle-East is a powder keg waiting to explode, and we may be seeing the beginning of that explosion right now.  The hungry people, combined with the economic conditions, and the political conditions, will lead to many more revolts, smaller wars, and possibly bigger wars in the Middle-East.

Conditions are also deteriorating in the United States.  We just had the Philly Fed Index out today, which was -10.7 vs +5 last month.  We also just had another survey released which predicts general business conditions six months forward to be the worst since the collapse back in 2009.

Manufacturing is also predicted to be the worst since 2009.  That means factories are less likely to hire, and more likely to fire people over the next six months.  This will increase unemployment in the US going forward.  Initial Jobless Claims also spiked to 439,000 today in the US.  Retail sales are also falling. So the US is deteriorating like everybody else.

I stated last week that 2013 would be a very difficult year.  The statistics I am discussing with you today are just signals of things to come.  I think 2013 will be an annus horribilis, and people can expect to see major change.  I am not a pessimist by nature, but I am a realist, and right now investors need to be warned about what is coming. 

It is important to warn investors about the risks and to help protect against these risks.  The risks going forward are greater than ever.  Where we are at this moment reminds me very much of what Brutus said in Shakespeare’s Julius Caesar:

‘There is a tide in the affairs of men, which taken at the flood leads on to fortune; omitted,

all the voyage of their life is bound in shallows and in miseries.  On such a full sea we

are now afloat; and we must take the current when it serves, or lose our ventures.’

I think that’s where we are now.  Investors who make the right choice have a chance to protect themselves.  Investors who make the wrong choice, they stand to lose everything.”

Greyerz also added: “It’s very interesting that silver is holding up better than gold.  Normally, if there is a move down in the metals, silver plunges the most.  To me, silver holding up, and this is a sign that we are very near the end of this correction.”