Today one of the greats in the business warned King World News that 2015 will be a year of catastrophic bank collapses, QE on a grand scale, and skyrocketing gold. He also said that the big money is now dumping their stocks ahead of the coming madness.
Greyerz: “Eric, we live in a crazy world and it will only get worse. Sadly, events in France remind us of that. There will not only be political unrest but also great social unrest due to people getting poorer and more dissatisfied with governments not being able to provide for all their needs.
Also, look at the tremendous volatility. In the first few days of January the Dow went down 800 points but in the past few days it is up 600 points….
Continue reading the Egon von Greyerz interview below…
“This has nothing to do with rational investing. Instead it’s a sign of a major trend change that is about to occur.
To me it is very clear that there are now more risks than ever in paper markets and in the world economy. And, Eric, the big money is now dumping their holdings in equities, just like they did at the end of the Nasdaq bubble in 1999 and 2000.
Bankrupt United States
Then we have the strange situation of a strong U.S. dollar. This surge in the dollar is taking place even though the United States is a bankrupt nation whose debt can never be repaid. This shows you how distorted markets have become. When the next leg down in the dollar begins it will be massive.
Right now everyone is bullish on bonds because of the deflationary situation that is engulfing most of the world. It’s possible rates may still go lower but the massive bond collapse could start at any time. The trigger could be events in Greece or emerging market defaults. Nobody believes this scenario, but a few months ago nobody believed the price of oil could fall below $50 either. So investors must focus on risk because the upside in bonds is very, very small, and yet the risk of defaults causing a negative chain reaction in bonds is great.
Catastrophic Bank Collapses And Bail-Ins
Of course there will also be bank collapses and bail-ins. There will also be pension fund collapses, and money market collapses. Right now we are seeing half a trillion dollars that went into financing the shale oil expansion which is in trouble, plus many times amount that in derivatives. And the one quadrillion dollars of derivatives will be the biggest debacle of all. Many of your interviewees, including Dr. Philippa Malmgren, have talked about the coming derivative disaster and I totally agree with them that it will be catastrophic.
QE On A Grand Scale
The risk also includes sovereign defaults. The emerging markets are under tremendous pressure now because of the stronger dollar and falling commodity prices. So what are the world governments going to do about this situation? Well, they don’t have any solutions. They are merely exacerbating the problems with QE. I’m absolutely convinced that massive amounts of additional QE will come and it will come on a grand scale.
Yesterday Charlie Evans of the Fed said the drop in long rates has been extraordinary. He also said that raising rates at the wrong time would be catastrophic for the market. Of course the Fed won’t raise rates. Instead they will be looking to do additional QE.
So it doesn’t matter if an event triggers the disaster today or in a year’s time. The risks are unprecedented and gold will rise like a Phoenix out of the mess that the world is currently experiencing. Gold has risen 80 percent in ruble terms in just the past year. That will happen in all currencies in coming years. Gold has now broken out in virtually all currencies and that's quite significant. The dollar has simply been moving higher recently, so this has masked the underlying strength in gold.
Gold To Soar
But investors must also remember that there isn’t much gold in the West — not in bullion banks or in central banks. So at some point when the market discovers this, gold will move by hundreds of dollars in a period of just a few days, and that will trigger panic and delivery failures.”
© 2015 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
The audio interviews with Gerald Celente, Lord Christopher Monckton, Michael Pento, Bill Fleckenstein, David Stockman, Dr. Philippa Malmgren, Egon von Greyerz, Dr. Paul Craig Roberts, Stephen Leeb, Andrew Maguire, John Embry, Rick Rule, Rick Santelli, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.