Egon von Greyerz continues:  

“The 2008 correction lasted about the same amount of time, seven or eight months, but that correction was 30%.  Stepping back and looking at this minor correction, in this massive uptrend, where gold has risen twelve consecutive years, this reaction barely registers on the longer-term chart.

It was very clear fifteen years ago that the credit bubbles and the derivative bubbles were going to create a situation with either a hyperinflationary depression or a deflationary implosion and collapse.  That was so clear and predictable.

Things sometimes take a bit longer than you expect.  You know we moved heavily into gold in 2002 and instructed our investors to do likewise at $300.  The timetable of destruction was difficult to predict, but the dominos have been falling and will continue to do so in a nightmarish manner....

Continue reading the Egon von Greyerz interview below...


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“So, there is no reason for investors to be concerned or nervous.  If you look at a monthly chart of gold, starting in 1999, the correction in gold can hardly be seen.  This is just a normal correction, in a political and economic situation where dominos are falling because of the bubbles created by central banks.

People have to remember these are massive historic events we are witnessing.  We all expect things to happen very quickly, but things take longer than we anticipate.  Take the gold stocks as an example.  The gold stocks are now at the same level they were back in 2006, when gold was around $700. 

These mining shares are so cheap, Eric.  I’m a great believer in holding physical precious metals, and mining shares are not the same in terms of wealth preservation.  Nevertheless, the opportunity is so great that investors should position part of their assets into gold stocks because the quality shares will go up many multiples from where they they are currently trading. 

For what it’s worth, this correction may not quite be finished yet.  It could last another couple of weeks or so, perhaps longer, but it’s totally irrelevant if it does.  It just appears, for now, that there is a little bit of technical pressure which may continue for a while.”

Von Greyerz also added: “The focus will eventually shift to the United States.  We know the US bonds will never, ever be repaid with today’s money.  So what we have seen in the bond market has not been a flight to safety at all because the bonds can’t be repaid.  And as the focus shifts to the US, that bond market will be tested.

In Europe, we have seen suffering, but we haven’t had true austerity yet.  True austerity would mean they take away social benefits, they cut pensions dramatically, and that’s not happening anywhere.  People have been unhappy with the reductions so far, but that’s nothing compared to the cuts they are yet to experience.

If we have a hot summer in Europe, I could see rioting starting very quickly and spreading from country to country.  It is worrisome, but sadly, that’s where we are and it’s going to get worse.  Quite frankly, investors need to be positioned for more chaos in the future. 

If investors have cash, they should buy physical gold and silver as well as the mining stocks because they will be a lot higher in the next few years.”

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Eric King

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