Egon von Greyerz continues:

“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....

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“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 are 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 shortages.  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.”

© 2013 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 interviews with Gerald Celente, James Turk, Bill Fleckenstein, John Hathaway, Egon von Greyerz, Ben Davies, Kevin Bambrough and Nigel Farage are available now.  Also, be sure to listen to the other recent KWN interviews which include Eric Sprott, Art Cashin, John Mauldin, John Embry and Andrew Maguire by CLICKING HERE.

Eric King

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