Today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events warned King World News that Greece is the model for a catastrophe that is about to engulf the entire world. He also discussed the $113 trillion problem.
Egon von Greyerz: “Eric, Greece is a country that is an example of not just the problems in the EU and the eurozone but also the problems in the world. Since 2006 Greek debt is up by 50 percent to 320 billion euros. During the same time, Greek GDP has fallen by over 20 percent….
Continue reading the Egon von Greyerz interview below…
“Greece should never have joined the EU and certainly not the eurozone with the euro as their currency. Historically, culturally, economically, Greece does not belong in the same group as say Germany.
The result of this unhappy union has created a financial wreck that’s been kept from sinking by the troika, which is the IMF, the EU and the ECB. The troika has mistakenly done all they can to keep Greece afloat. But it makes no sense whatsoever to prop up a bankrupt nation with more debt when they can’t repay any of it at any time.
Greece does not have and will not have enough money to pay the interest, much less the principal. But the troika is desperate to give Greece more money, even if they are only posturing temporarily. And the troika knows that they have no intention of helping Greece or the Greek people. Any money given to Greece will go mainly to the banks that financed Greece in the first place.
The $113 Trillion Problem
And herein lies the problem, not just for Greece but for most of the world. The powers that be have overseen a staggering $113 trillion increase in total debt worldwide. The global debt load has increased dramatically from $87 trillion to $200 trillion just since the year 2000. This means that global debt has more than doubled in 15 years.
Greece Is The Model For A Catastrophe That Is About To Engulf The World
So it’s not just Greece that is required to continually increase its debt in order to remain afloat. Most countries, particularly in the West, have the same problem. Greece is just a model of the catastrophe that is about to engulf the world. But central banks, governments and Nobel Prize winners refuse to recognize the problem. They know that if they allow Greece to fail today, it will be Spain and Italy next, and then Portugal, France and eventually the entire financial system.
What we have to remember, Eric, is that a Greek default would not just lead to 320 billion euros disappearing from the system because the lending banks and institutions are all levered up to 50-times that amount. But even if we only take a figure of 20-times leverage, it would mean that over 6 trillion euros would disappear out of the system.
But the carnage wouldn’t stop there. A lot of the world’s $1.25 quadrillion of derivatives would be directly affected by a Greek default. This would have a dramatic impact on interest rates, credit risks and volatility in the system. We would see disastrous losses in the global derivatives market.
There Is No Way The System Can Be Saved
Whether the unraveling of the world’s financial system starts now or in the autumn, there is no way the system can be saved. Governments are not going to create $200 trillion out of thin air, plus potentially more than one quadrillion dollars for the derivatives.
When the Great Financial Crisis started in 2006, U.S. interest rates were 5 percent. Today they are at zero. So there is nothing to be gained from lowering rates. The only tool left will be more money printing from the IMF and the major central banks. This will lead to a hyperinflationary period before a deflationary implosion of the financial system. And any attempted reset would just be a disaster because of the enormous amount of worldwide debt.
Most stock markets are oblivious to these economic realities, and instead are only reacting to money printing. Take Japan for example. The Nikkei is up 2.5 times since November 2011. This is with real cash earnings being negative since 2012 and while the Japanese economy is slowly sinking into the Pacific.
In the meantime, the king of wealth preservation, which is gold, is simply biding its time. But gold will reign in splendor as many bubble assets decline to their intrinsic value, which will be between 75 – 100 percent below current levels.” ***The remarkable audio interview with Michael Pento has now been released, where he discusses the coming carnage in global markets, what investors can do to protect themselves, and what to expect from gold and silver, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN has also now released one of the most important and powerful interviews that Dr. Paul Craig Roberts has ever given. Dr. Roberts discusses why the Greek tragedy is one of the most important and pivotal crises that the world has ever faced, as well as the desperate moves being made by Western central banks in global markets ahead of the resolution of this crisis, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Paul Craig Roberts Warns That The Greek Government May Be Assassinated In This Crisis If The Pivot East To Stop World War III CLICK HERE.
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The audio interviews with Rick Rule, Nomi Prins, Gerald Celente, Bill Fleckenstein, Stephen Leeb, Andrew Maguire, Michael Pento, Dr. Paul Craig Roberts, Eric Sprott, Robert Arnott, David Stockman, Chris Powell, John Mauldin, Egon von Greyerz, Dr. Philippa Malmgren, Marc Faber, Felix Zulauf, John Embry and Rick Santelli are available now and you can listen to them by CLICKING HERE.