Greyerz – We Are Now Seeing Massive Shortages Of Silver
Today Egon von Greyerz told King World News he is now seeing massive shortages of silver. Greyerz went on to warn about a frightening series of global storms which are set to collide, which will create an enormous hurricane in 2013. He also spoke about gold and included a tremendous chart that all KWN readers will want to see.
Here is what Greyerz, who is founder of Matterhorn Asset Management in Switzerland, had this to say in this remarkable, exclusive interview: “Eric, I see storm clouds gathering everywhere. We have currency storms, economic, political, and geopolitical storms. But short-term we may see some optimism in the economy as global stock markets make their final top.”
“But that top in global stock markets is the final top before a major long-term collapse. Thereafter, I see these storm clouds developing into serious problems for the world. Every country is running a deficit and they all keep borrowing and printing incredible amounts of money.
Central bank balance sheets have exploded to extraordinarily dangerous levels in recent years….
“Governments continue to apply the only solution they know which is to print money in order to prevent their economies from completely collapsing. But money printing will not save any of these desperate countries.
I’ve included a chart for this interview(below), and this shows the growth in GDP over five years, compared to the balance sheet of the major central banks. As you can see there is virtually zero growth in GDP, but there is massive growth in the balance sheets of these central banks.
That growth in central bank balance sheets is of course money printing. So this graph clearly shows that all of this unbridled money printing has had no effect whatsoever. It will not have any effect in the future either, in terms of helping GDP. More and more money will continue to be printed and borrowed, but the economies of the developed will continue to be in shambles going forward.
I mentioned the political storm. Politicians around the world can’t seem to agree on virtually anything except money printing. US and European politicians are simply worried about the pressures in their own countries. The next countries to have problems in Europe will be France, and that will be followed by the UK and other European nations.
When it comes to geopolitical storms, we have seen problems in the Middle-East and North African countries. These conflicts are becoming more and more escalated. This could become extremely serious for the entire world. So we are now reaching a point in 2013, Eric, where all of these storms will be colliding and coming together to form a hurricane. The combination of these factors will be very detrimental for the world economy.
We are also seeing an increase in global hunger, as well as dwindling food supplies. It’s not only in the developing world that people are starving. In the United States now, 46 million people can’t get sufficient food. That’s a staggering 30% increase from 2011 to 2012. The same thing is happening in southern Europe. Also, in the UK, many families can no longer afford the food for their children. This is just the beginning, Eric. We have a major social disaster in the making here.”
Greyerz had this to say regarding gold: “These storm factors I’ve described will lead to the precious metals exploding over the next couple of years. The falling currencies, the deficits, the political and geopolitical problems will all fuel gold’s rise.
Up to this point the paper market has managed to hold the gold price down, but that time is now ending. The fundamental and technical picture is now in a perfect position for gold to surge. The real gold market is the physical gold market, and this is the only market that will count in the long-run. Not only will countries want to have possession of their physical gold, but investors will as well. Germany is just one example of this.
If you look at Switzerland, where about 70% of the world’s gold is refined, we are seeing incredibly strong demand. The refiners are seeing it, the Swiss banks are seeing it, and we are seeing it from our customers also. We are seeing major investors now buying physical gold, and in increasing amounts. We are also seeing gold moving out of the banking system and into companies like ours that vault gold outside of the banking system.
Interestingly, we have just seen a break-in in a German bank. The burglars dug a 45-meter long tunnel and emptied all of the safe deposit boxes. Of course the contents of these boxes is not insured, and banks take no responsibility for the contents in private boxes. This is yet another example of why gold must be stored outside of the banking system in safe vaults, and of course it must be insured.
The point I’m making, Eric, is we are seeing major increases in demand from people either buying or transferring gold to us. And this is happening before any major increase in the price of gold. Investors are sensing the dangers here and they are concerned. I expect to see a massive rush into gold as the price begins rising.”
Greyerz also warned of severe shortages in silver: “We are now seeing major shortages of silver. It’s much, much harder to get hold of silver than it is to get gold. As soon as people get silver inventory to sell, it’s gone straightaway.
I agree with John Embry who talked about silver going up hundreds of dollars. Silver will absolutely explode in price. Silver does have a much greater potential than gold, there’s no question about that. As an investment silver will be spectacular.
But the bottom line is we are having real problems getting silver because of these massive shortage. We are now seeing very lengthy delays in getting physical silver. You can still find gold, but silver is simply not around, and we expect the situation to get much worse. We are now to the point where we are going to begin to see a massive breakout in the price of silver.”
Statistics: Posted by DIGGER DAN — Sat Jan 19, 2013 12:41 am
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Greyerz – One Of The Most Important Charts Ever
Today Egon von Greyerz sent King World News one of the most important charts you will ever see. Greyerz, who is founder and managing partner at Matterhorn Asset Management, demonstrated, in this one chart, the incredible danger facing the global financial system and why gold will explode higher in price.
This is the first of two interviews KWN will be releasing with Greyerz today. Here is what Greyerz had this to say in Part I, along with his chart: “If I look around the world, the problems continue. China has yet another round of QE totaling $60 billion. China is under real pressure. And if you look at ArcelorMittal, which is the biggest steel producer in the world, and for them China is a massive market, they had a 20% decline in sales in Q3.”
“That’s a massive plunge in sales, and a major part of that is due to China. Steel production is a very good indication of what’s happening in the world, and a 20% fall is massive. But, importantly, that is a sign of a worldwide fall in demand for raw materials, especially in China.
Looking at Japan, one company after another is having problems. The electronic company Sharp is fighting for survival. Panasonic has massive losses, and even Sony is suffering. Japan is in trouble and their debt-to-GDP is a staggering 200%….
“So the reality is Japan will need to continue to print money. Argentina is another country which will default very soon. It’s an absolute mess in Argentina, but that is not unusual because they have one default after another.
Moving to Europe, eight months ago Greece had a financing package, agreed to by the EU, of 175 billion euros. Of course now we are being told that will not be enough. They expected the debt to peak at 167% of GDP in 2014. Now Greek debt will be 200% of GDP, and I doubt that will be enough.
The target for the Greeks was to get down to 120% by 2020, but there is no chance whatsoever of accomplishing that. So the question is, who is going to finance even more debt for Greece? Well, obviously the ECB will have to print more money.
Spain is also suffering. Retail sales last month had the biggest plunge in history. We also see Europe’s unemployment is at a record high of 11.6%. So everywhere we turn the problems continue. In spite of that, the European Union is now having budget discussions for financing Brussels activities and the EU.
Well, of course the unaccountable bureaucrats want an increase in the EU budget. Virtually every country is hemorrhaging in the EU, but the well-paid bureaucrats are asking for more money. The UK Prime Minister Cameron is trying to fight against that, but he is unsuccessful.
Over in the US, hurricane Sandy is going to negatively impact the already struggling US economy. The negative effect may be relatively small, but it will still be damaging. With 50 million people on food stamps and unemployment at levels which can only be compared to the Great Depression, the US can ill afford additional unforeseen problems such as hurricane hitting the east coast.”
Greyerz also warned about insolvency: “I’ve spoken in the past about bankrupt governments, and the bankrupt banking system. If you value debt in the banking system at market value, then no major bank would be standing today. But in addition to that, if you then look at the derivative positions of the banks, this is a disaster waiting to happen (see chart).
The real over-the-counter derivatives outstanding, worldwide, is at least $1.1 quadrillion, and a major part of that is worthless. People have no idea what kind of turmoil and destruction this can cause to the global financial system. KWN readers need to understand that as the global economy edges closer and closer to collapse, the earthquakes in the financial system will become so enormous that it will eventually overwhelm politicians and central planners.
This is why it is so important that investors protect themselves by holding physical gold and silver outside of the banking system because the coming derivatives disaster will create an explosion in the price of gold. And when the chaos is finally over and a new financial system emerges, gold and silver will be one of the few assets left standing.”
I would just add to what Greyerz has said here that when you look at the ‘cubes’ within the cubes, which represent gold and alleged gold holdings, the smaller of the two cubes shows gold held by the central banks totals $1.6 trillion. Greyerz, like Turk, believes the central banks do not physically possess all of the gold they claim to have.
This could mean that the central bank gold cube may in fact only be half the size of the one Greyerz shows in his chart. If that is true, then the case for an eventual explosion in gold is that much more compelling.
Greyerz – Gold & The Incredible Financial Destruction We Face
Earlier today King World News published the extraordinary chart sent exclusively to KWN by Egon von Greyerz. In part II of his interview, Greyerz, who is founder and managing partner at Matterhorn Asset Management, discusses the incredible chart, and gives readers a shocking price for gold which is based on that ‘cubed’ chart.
Here is what Greyerz had this to say in Part II, along with his comments about the fascinating chart: “I discussed the real over-the-counter derivatives earlier, which stand at $1.1 quadrillion, and this is worldwide. Every time there is a problem in a bank it seems to be derivatives related, such as what happened with JP Morgan which recently lost $5.6 billion, and UBS which lost $2.3 billion.”
“They have young people, many times in their 20s, coming in and having derivatives positions of tens of billions or even one hundred+ billion dollars, and these young people have no idea what they are doing. The individual from UBS, who is now defending himself, said, ‘I just came in to run these positions. I had no idea about this market.’ He is only 27 years old.
So you have inexperienced people taking massive risks, and running positions which amount to an unthinkable total of $1.1 quadrillion….
“Every time we look at these positions closely and value them, which is when there is a problem, the banks realize the positions are not worth anywhere close to what they believed they were. The real, underlying problem is that even management at the banks don’t understand these derivatives. They don’t know how to value them, so they have no understanding of the true value of the positions.
Many times they are virtually impossible to understand, therefore the traders can value them at whatever they want. Of course they are unregulated and they are not traded on any exchange, and most all of this is held off-balance-sheet. Meaning they are not included on the banks balance sheet.
What the banks do is net down the positions to a very small total because they assume that counterparties will pay. Well, we know when something happens in the banking world, take Lehman as an example, and we will have many more Lehmans in the future, the counterparty doesn’t pay or isn’t able to pay.
What that means is the gross remains the gross, and again, we have an outstanding exposure, worldwide, of an unfathomable $1.1 quadrillion. You also have to realize that there are virtually no reserves against these enormous positions.
This is why investors that hold major assets in banks are taking risks they shouldn’t take. The reality is the banking system is incredibly fragile because of the ongoing risk of the derivatives bubble blowing up at some point. I would add that the risk of this happening is very high in my view.
This is the reason, as I’ve said, that investors have to hold assets outside of the banking system. Let’s take a look once again at the cube chart, just to look at the proportion of outstanding derivatives to gold:
You have $1.1 quadrillion of derivatives, and all of the gold ever produced, which is in one corner of the chart, is $9 trillion. If you take the gold said to be held by central banks, which assumes the central banks physically possess the 30,000 tons and I don’t believe they have anywhere near that, but hypothetically speaking, if they did, it is only $1.6 trillion worth of gold.
You can see in the above chart that the central bank gold only fits into a tiny corner of the cube. So what I am saying with this chart is if there is a derivatives blow up, you can only imagine the amount of money that would need to be printed. And, again, I think there is a very high probability of a derivatives blow up taking place.
If you then related the enormous derivative position to the percentage of gold allegedly held by central banks, if gold were to reflect that, you are not talking about gold at $10,000 or $20,000, you are talking about gold well above $100,000 an ounce. This is what investors must focus on in terms of the bigger picture for gold.”
Statistics: Posted by DIGGER DAN — Fri Nov 02, 2012 12:53 am
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KING WORLD NEWS INTERVIEW WITH EGON VON GREYERZ
Statistics: Posted by DIGGER DAN — Mon Sep 03, 2012 9:59 am
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KING WORLD NEWS INTERVIEWQ WITH EGON VON GREYERZ
Statistics: Posted by DIGGER DAN — Sun Jul 15, 2012 5:13 pm
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