What’s Next For Gold As Governments Become More Desperate

kingworldnews.com

With gold and silver moving higher this week as stocks were trounced, today, Egon von Greyerz lets King World News readers know what to expect for the rest of this year as well as for 2013.  Here is what Greyerz had this to say:  “We are entering one of the most worrying times in history, maybe even for centuries or even for a millennia.  I think we are going to see a turn in the world economic situation that is going to be long and extremely difficult.”

Egon von Greyerz continues:  

“We will see an economic collapse.  The economic collapse will lead to more social unrest, and it will lead to wars.  It will also lead to unlimited money printing, bonds collapsing and interest rates soaring.  We will also see a stock market which will collapse in real terms (vs gold).

Investors also have to realize there will be exchange controls because with all of this taking place there will be an outflow of money, and the governments will stop that outflow at some point....

“Whether exchange controls come in 2013 or later is impossible to say, but it’s likely it will happen fairly soon.  If investors want to spread out their investments and assets they should move as soon as they can to get some funds out of their country.  There are many legal ways to accomplish this. 

But finally, we will have hyperinflation.  So 2013 will be the beginning of what is going to be a disaster for the world.  We also know that the unlimited money printing will have no effect.  It will be pushing on a string, but there will be more and more of it because of the increasing desperation of governments.

Problems are continuing in Europe.  Greece has no money left, and they have a 5 billion euro repayment they will not be able to pay.  There will probably some deferral because the bureaucrats are not going to let Greece leave the euro currency system.  Unemployment in Greece is now a shocking 58% for young people.  In Spain it’s 54%.  Overall the unemployment is getting near 30% both in Greece and in Spain.  It’s an absolute disaster. 

Worldwide we are seeing between 25% and 50% youth unemployment, and that is going to contribute to the world’s problems, as well as the social unrest we will see.  All of these young people are not just going to sit there and take it.  They are going to make trouble because these people are going to be hungry and they will need food. 

As we go through this period of chaos, the central banks of the world will continue to take on more of the worthless debt which is owned by the banks.  So their balance sheets will continue to explode with worthless pieces of paper that will never be repaid.  They will force them to print even more money.

One of the other problems in the world is Japan which is an absolute disaster.  Japan is now getting up to 1 quadrillion yen in debt.  Their debt has gone up from 300 trillion yen to 1 quadrillion in the last 15 years.  And Japan has zero percent interest rates.

If interest rates in Japan went up to 1% or 2%, they would have no money to pay the interest.  Imagine when they get hyperinflation.  So Japan is a disaster waiting to happen.”

Greyerz had this to say regarding gold:  “The Dow/Gold ratio reached almost to the low for the year now.  But that’s nothing because I am expecting the Dow to fall a further 90% against gold in the next few years.  The Dow should collapse vs gold next year as it will begin to reflect the underlying economy.

Gold will continue to strengthen because of what is happening in the economy and the risk in the system.  Gold will continue to express the money printing, and will start a major move to the upside.  I think gold will reach targets that are unthinkable to most people.

The reason for this is gold will be the only way to preserve your wealth and your purchasing power.  In my entire investment life I have never seen such an easy decision as the one to hold gold.  There are still less than 1% of the world’s assets in gold.

What is now unloved and misunderstood, will be a must own in the future.  Eventually everybody will know the gold price.  Right now, virtually nobody knows the price of gold.  So 2012 will be the end of an era, and 2013 will start a horrible period in history.

Investors need to organize their affairs.  If you have some savings, then buy gold and store it outside of the banking system.  There will be positive outcomes for gold and silver holders in what will otherwise be a very difficult time period.”

Obama Victory - Increased Gold And Silver Storage In Zurich And Asian Capitals

歐美走資, 實金實銀最安全儲存地方是 : 瑞士、香港和新加坡 !

goldsilver.com

NOVEMBER 08, 2012

Gold rose for a third day yesterday after confirmation that President Barack Obama won re- election, while stock markets fell sharply and treasuries headed for the biggest advance in 11 weeks.

Robust investment demand continues and may intensify after the election and exchange traded products backed by gold attracted $2.5 billion of inflows in October alone.

Total inflows in commodities ETPs were $3.1 billion last month, taking assets under management to $201.6 billion for Blackrock Inc alone according to Bloomberg.

Many analysts believe that President Obama’s re-election is the “best- case” scenario for precious metals due to implications for monetary and fiscal policy. Obama faces chronic high unemployment, weak economic growth and the upcoming fiscal cliff, not too mention very difficult geopolitical challenges in the form of Israel, Iran, Russia and China.

Today, The European Central Bank has its rate decision at 1245 GMT and they are expected to leave rates unchanged.

The Bank of England decided to leave its benchmark interest rate at a record low and pause its stimulus plan after the British economy emerged from a double-dip recession in the third quarter.

Investors are now again focussing on the US fiscal cliff which will enact $600 billion in tax hikes and severe budget cuts, if no action is taken by the US Congress, than the US will fall deeper into its recession.

Gold bullion is not only supported by the uncertainty of the “fiscal cliff” but the Eurozone debt crisis is set to deepen again.

There remains the real risk of an exit from the single currency by one or more members and of course the risk of a global recession and Depression which will be responded to by more loose monetary policies by various central governments.

More of the world's rich are moving their gold, silver and other valuables away from the economic turmoil in the West to the Asian capitals of Singapore and Hong Kong according to Reuters (see commentary).

This is prompting vaulting and storage specialists in the increasingly prosperous region to increase their capacity by creating extra vaulting space.

Depositories in Asia report that there are a lot of enquiries from European banks, not because the banks themselves necessarily want to move the assets to Asia, but because their clients are asking them to.

These clients include rich Asians who want their valuables closer to home as well as Westerners.

Singapore and Hong Kong are two of the favoured destinations. Both have seen a significant increase in gold importations in 2012.

With Chinese demand for gold and silver surging depositories are looking to cater to the huge growing swathe of wealthy Chinese and this is leading to increasing vaulting services being offered in Singapore, Hong Kong and now even Shanghai. 

China is on its way to overtake India as the world's biggest gold consumer this year, as India's gold demand has taken a blow on record rupee prices and higher import tax while Chinese consumers' appetite for gold remains resilient.

We have firsthand experience of this increasing preference for secure bullion storage  as we have seen an increased preference for storage in Zurich and Hong Kong. 

Zurich remains the preferred destination for most western investors and of investors internationally but we and other bullion providers are seeing some western clients opt for secure storage in Asia.

There is a definite sense amongst some of our American and European clients that storing gold in Zurich and Asia is safer than in London, New York, Delaware or elsewhere in U.S. and this trend is set to continue.

Throughout history capital has flowed to where it is most favourably treated and today there is a definite move to own capital and assets outside of massively indebted and near insolvent western democracies.

Obama’s second term is likely to see Ben Bernanke continue to devalue and debase the dollar which will lead to increased investment demand and store of wealth demand for gold and to investors seeking storage in Zurich, Singapore and Hong Kong.