Today a 42-year market veteran warned King World News that we are going to witness a horrifying and destructive future for the entire world. Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this powerful interview.
Greyerz: “Eric, we have a world where the wealth of the 85 richest people is the same as the 3.5 billion poorest. 1.5 billion people must live on $1.25 a day. So the gap between the rich and the poor is at unacceptable levels. Also, the world’s population has exploded in the last 100 years, almost 5-times, from 1.5 billion people to 7 billion people....
“In the coming economic
downturn, which is an economic certainty, we will not only see many of
the poor with empty stomachs, but also revolting because of the severe
inequalities, with severe social unrest following.
What is
happening in Ferguson in the United States will be commonplace around
the world, and probably a lot worse. Throughout history the world
population has always been controlled by war, plague, or famine.
Currently all three of these risk factors are in place. The risk of a
major war is the greatest since any time after World War II. Both
Ukraine and the Middle East could easily develop into a major war on a
global level.
Of
course virtually nobody believes this, but nobody believed that World
War I or World War II would start either. And the second risk factor is
a plague. It’s happening already. Ebola is still relatively small,
but the fact that it seems to have become an airborne disease makes the
risk extremely serious.
And
with an impending economic downturn, famine is virtually guaranteed for a
world that has grown too fast and can only survive on credit and
printed money. So the exponential rise in world population is unlikely
to continue. Instead, we could see a reduction in the next few decades
of one, two, or three billion people. It’s hard to believe today, but
nobody would have believed 100 years ago that the world population would
explode by 5.5 billion.
If my
forecast becomes reality our children and grandchildren will live in a
very different world. But as you know, Eric, we don’t just live in an
overpopulated world, but also in an over-borrowed world. Worldwide
borrowings have exploded in the last 6 years. In 2008, at the height of
the crisis, world debt was $190 trillion. Today world debt is an
estimated $260 trillion. That is a staggering $70 trillion increase.
But in
spite of that credit explosion, and in spite of zero interest rates, the
real economic situation is not improved. In fact, the situation has
deteriorated. Yes the wealthy are wealthier and the bubble in stocks
and real estate has grown, but for ordinary people things are getting
worse. Wages in many countries, including the U.S., are declining, and
so is real GDP.
Debt
has also exploded in the U.S. since 2008. Federal debt is up from $10
trillion to almost $18 trillion. The Fed’s balance sheet has increased
over $3 trillion due to money printing, and business debt has gone up by
$2 trillion. So all these areas have seen an increase since 2008 -
2014 of $13 trillion. And that doesn’t include student loans, car
loans, etc..
So both
in the U.S. and worldwide an astounding amount of debt has been
created. This has not improved the world economy one bit. Also, this
debt can never be repaid. Keith Barron touched on the massive problems
in Europe in his KWN interview yesterday. Yes, Spain, Italy, and
Portugal are all disaster areas. And these countries will not make it
through this crisis. On top of this, the European banking system is
under tremendous pressure and fighting for survival. A major ECB QE
package is imminent, and that will be followed by a Fed QE package, but
the U.S. will call it something different.
So how
do investors navigate through these very difficult conditions? Physical
gold outside the banking system is a must. Having assets outside your
country of residence is important. A weak dollar and exchange controls
are imminent, so taking these measures to protect oneself is absolutely
critical.
With
regards to geopolitical and social risks, we can only hope and pray that
they won’t be too serious for the world, since for most people it will
be impossible to protect themselves. As to the short term picture in
gold, it looks constructive. In spite of regular interventions, gold is
holding above $1,300 and looks poised for the next leg higher. We are
now getting to the 3 year anniversary of the $1,900 high in gold, and
during the coming autumn we are likely to see gold moving towards that
level. The geopolitical and world economic situation will most
certainly see to that.”
沒有留言:
張貼留言