Egon von Greyerz continues:  

“We also have to contend with governments which are attempting to coverup the truth.  Therefore, it’s hard for most people to see what the truth is, and for investors to fully understand that we have this impending economic and financial disaster.

The cause is very clear, but there are so many in the media who don’t understand what is happening.  So they are just spewing out propaganda which is coming across a teleprompter....

Continue reading the Egon von Greyerz interview below...


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“And, of course, the herd they are like lemmings, following the endless propaganda.  Sometimes it’s something Bernanke says, today it’s Draghi.  Draghi lowered European interest rates 1/4% today, to .75%.  He also lowered the deposit rate to zero. 

They are desperate and trying everything they can.  Of course it won’t stimulate the economy at all.  Zero interest rates aren’t going to make any difference to a bankrupt economy or to a bankrupt eurozone. 

The outcome is clear, we will have a hyperfinlationary depression, and everyday we see dominos falling to confirm that.  The Bank of England just came out with more QE of 50 billion pounds, which is nothing but they have to start somewhere.  Draghi said there won’t be more QE right now, but of course there will be.

Spanish interest rates are rising once again.  In France, Hollande is doing everything he can to destroy that economy.  The Germans will be left to pay for all of this or they must exit the euro system.  Germany would even have to suffer one trillion euros of financial burden if they leave the euro because of the position of their banks and government.  So this is not an easy decision for them.

Everyone in the world is in despair over what is happening in Europe, but let’s look at the US.  The US is a ticking time bomb of a much larger magnitude than Europe.  The US will continue to spend and run up the deficits.  The debt is up to almost $16 trillion, and I think in the next few years we are going to see the debt going up almost exponentially.

The US, like many parts of the world, has had a false prosperity built on debt.  The total debt including government, private, banking, etc., is at least $60 trillion.  When you add to that the unfunded liabilities, together they will be at least $70 trillion.  So now you are up to $130 trillion of debt and liabilities.

US derivatives, the official figures for the largest banks in the US, the total is roughly $250 trillion.  If the numbers were correctly reported, I believe the derivatives figure would be closer to $400 trillion. 

So when you add in derivatives, the US has over a staggering $500 trillion of risk.  You have to remember that’s at zero interest rates.  Just look at the  recent JP Morgan fiasco, the enormous risk that these derivatives represent.  So you are talking about $500 trillion against a GDP of around $15 trillion. 

The leverage and debt in the US system is absolutely massive.  The risk is enormous.  The US has just been fortunate to have the focus be on Europe for quite some time.  Soon the US will have the spotlight shined on it, and one day these derivatives will unravel. 

Today the dollar is stronger, but eventually the dollar will be under tremendous pressure.  Right now we are seeing gold slightly weaker in dollar terms, but gold is trading higher in virtually every other currency today.

I have consistently told people told people for over a decade to put up to 50% of their money into physical gold stored outside of the banking system.  I now believe investors should consider putting even more of their liquid assets into physical gold.  In my view this is the best way to protect against the risks the financial system faces today, and the chaos that is still in front of us.”

© 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.

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Eric King

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