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Egon von Greyerz continues:
“The prosperity that we’ve had since the early 1900s, to a great extent is governed by massive money printing. Let’s just take GDP for example. In the first 50 years of the 1900s, for every dollar of debt about five dollars of GDP was generated. So five times the amount of debt created was generated in GDP in the US.
Over the last eleven years, for every dollar of debt creation only six cents of GDP has been generated. That’s six cents compared to five dollars. That is just incredible....
Continue reading the Egon von Greyerz interview below...
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“What is happening is the law of diminishing returns has firmly taken over with regards to money printing. But it’s not just diminishing returns, it’s collapsing returns. We have to print trillions and trillions, not just in the US but worldwide, in order to receive a nominal increase in real GDP.
If you look at the debt that has been created worldwide, in just the last ten years, it’s gone up from $80 trillion to $200 trillion. So we have seen an increase of $120 trillion or 140% over the last ten years. You can imagine the effects this will have on the world.
First of all, we know the debt levels are too high today and gold is starting to reflect that. But because less than 1% of world financial assets are in gold, we have yet to really see the gold market react to all of this massive money printing. Once the gold market starts reacting to all of this, that’s when gold is going to go exponential.
It doesn’t matter whether investors are buying gold at $1,600 or $1,800, it’s irrelevant in the long-run. What’s important is they are invested in physical gold in order to preserve their wealth.
I believe that QE will and must start very soon. This will either happen in April or the gold market will anticipate its start at that time. The Treasury bond market, which is going down fast, is already smelling inflation and QE. So I believe we are nearing the time period where gold will have an explosive move to the upside.”
When asked about silver specifically, von Greyerz stated, “Silver will break out somewhere between $34 and $35. Once that happens silver should move higher in very rapid fashion. Central planners may have delayed the move in gold and silver through intervention, but in the end this delay will look like a blip on a chart. I think, post-intervention, we are building up for quite a big move in both metals.”
© 2012 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.
Eric King
Greyerz - Gold Will React to the $120 Trillion of Additional Debt
Today Egon von Greyerz told King World News that global debt has increased 140% in the last ten years. Von Greyerz also said even though the massive creation of debt has yielded virtually no GDP growth, the gold market will soon react to the money printing binge. Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland. Here is what von Greyerz had to say: “We are all focused on the short-term and that’s natural, but let’s step back and look at the longer-term picture because that is really what is important for us today and for the next few years. The bigger picture is so important because very few people understand that the last 100 years are exceptional in history.”
© 2012 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.
March 16, 2012
