As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies told King World News that another Swiss bank can’t find their client’s gold.
Another Swiss Bank Can’t Find Client’s Gold
June 30 (King World News) – Egon von Greyerz: “Don’t let your bank hold your gold. They might not find it. A gold investor told us recently that his Swiss bank had moved the client’s gold from the the bank’s safe to a private vault in the name of the bank, in Zurich. The client was aware of this move. But then the problems started…
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The Gold Was Not To Be Found Anywhere
The gold was allocated and the client had the bar numbers. The client wanted to store the gold through our company and instructed the bank accordingly. But the gold wasn’t there any more. The gold was supposed to be segregated but the bank had stored it in the collective vault. And the client’s allocated, numbered bars were not to be found anywhere.
Presumably, the bank will accept liability and buy new bars for the client. But again this proves that it is not safe to keep your gold in a bank. We have regularly experienced similar problems with many different Swiss Banks, big or small.
In normal times when there is still physical gold available, the bank will clearly rectify the problem. But when there is a shortage of gold and the bank comes under pressure, they could easily “borrow” client gold. If at that point there is no gold available, the bank could have a liability that it wouldn’t be able to meet, especially if the gold price rises fast.
Do Not Store Gold In A Bank Vault Or Safety Deposit Box
So again I warn gold investors not to hold physical gold in a bank vault or in a bank safe deposit box. When the next financial crisis starts, you will not get your gold back from the bank’s vault and you will not get access to your safe deposit box. The bank will obviously tell you that the gold in the box is yours, but I wouldn’t trust them. Also, the bank doors could be closed for a very long time. So even if you did eventually got access, it might take years. Much better to store gold privately in secure vaults which you have physical access to at any time.
Total global government bond market is around $50 trillion. Out of that total, $13 trillion carries negative interest. To me it is totally incomprehensible that anyone can lend bankrupt governments money. First, since most currencies have lost 97-99% of their value in real terms after the Fed was created in 1913, you are guaranteed to get back less real money than you invested if you hold a sovereign bond for more than a few months. Second, no government will be in a position to pay back their debt in coming years. And soon they will reach a point when they can’t even pay the interest.
Who Buys This Stuff?
Then how can investors lend governments $13 trillion of money and pay for the privilege of the state holding your money. That is totally absurd. You give money to an insolvent country and you must pay them for that great honor. Take little Portugal as an example. They have a massive debt to GDP of 125% and they also have negative yields from 2-5 years. What would you do? Would you lend money to a country that will never repay it and also pay them for the pleasure or buy gold? I certainly wouldn’t.
Gold is the only money that has survived for 5,000 years and also the only money that has maintained its purchasing power. It is also no one else’s liability and totally unencumbered. In addition, it is totally liquid and can be used for barter. I doubt that anyone would accept a Portuguese bond as payment in 2025 when it will be totally worthless. But I am completely convinced that everybody will accept a gold coin or gold bar.
Using Gold To Buy A Condo In Vietnam
Many people in the Far East prefer to hold gold or foreign currency to cash. The Bangkok Post reported recently about using gold for house purchases in Vietnam. A shopkeeper in Hanoi bought a new $138,000 condo with half gold, half cash. He said:
“We did it because we and the the seller didn’t want to do a bank transfer. We are so used to buying things with gold and cash.”
Cue The Anti-Gold, Pro-Cashless Society Propaganda
The newspaper stated that Vietnam is one of the world’s fastest growing economies, yet “it is still in the dark ages when it comes to joining the global trend toward cashless transactions.”
Hmmm! It seems that the shopkeeper understands a lot more than the journalist. The shopkeeper understood and trusted the timeless value of gold rather than paper money that is likely to become worthless in the next few years. Seems like the journalist will be more likely to go back to the Dark Ages when paper money dies in the next few years.
The shopkeeper confirms the wisdom of the East that we often talk about. The people in India, China, Vietnam, Thailand and many more Eastern countries all put a major part of their savings in gold since they know that this is by far the best way to preserve wealth. Had the people in Zimbabwe, Argentina or Venezuela done this, it would have saved them from poverty and misery.
As asset prices collapse and gold appreciates, you will be able to buy a house for a fraction of the cost today, especially if you have your savings in gold, just like like the Vietnamese shopkeeper.
Let us look at the coming collapse of the price of a new house in the USA. Today the median price for a new house is $335,000. In 1963 it was $17,000 – a 20x increase.
As asset bubbles implode together with debt, a return to at least the 1985 level seems likely. That would mean a 75% fall in house prices. As credit dries up and interest rates surge, I would expect that this will be the minimum fall.
The Road To $10,000+ Gold
At the same time, let’s assume a very likely increase in the gold price to $5,000 in today’s money. In my view this is the very minimum and $10,000 or much higher is more likely.
235 Ounces Of Gold To Buy New Home Today But Only 17 Ounces Later
As the table above shows, a new home today costs $335,000 or 235oz of gold. In 2025, with the average price of houses down 75% to $84,000, and gold up 254% to $5,000, a house would cost only 17oz of gold. That is a 93% fall in gold terms. Sounds unrealistic today but it is very likely.
As the next global financial crisis unravels in the coming few years, we will see massive money printing, total debasement of most currencies and hyperinflation. The only way to protect yourself from the total destruction of paper assets is to hold physical gold and some silver.
There are three kinds of money, Worthless, Soon Worthless, and Eternal. Since all fiat money has always gone to ZERO throughout history, the same will be the case for the dollar and all other currencies in coming years.
In 1971, you could buy 100 grams of gold (just over 3 oz) for the $100 bill in the picture above. Today the $100 gram bar costs $4,400 and for $100 you would only get a small corner of the gold bar. This is how central banks destroy the value of money with most people being totally unaware since they don’t understand that gold is constant purchasing power and eternal money.
The Gold Maginot Line Broken Decisively
Gold has moved $130 in a short time, decisively breaking the 6 year Maginot Line at $1,350. The current pause in the up-move can last around 2-10 days but thereafter gold will rise quickly to around $1,650.
Crisis Will Return With A Vengeance
Very important changes will soon take place in markets with the 2007-9 crisis returning with a vengeance. The final phase up in US stocks could last a few weeks but most likely not more than 2 months. Thereafter a secular bear market will start that will be devastating for the world economy, the financial system and paper money. Wealth preservation today is more important than anytime in history...For those who would like to read more of Egon von Greyerz’s fantastic articles CLICK HERE.
$2.2 Billion In Losses For Gold Shorts
READ THIS NEXT! Central Banks See Massive $2.2 Billion In Losses On Gold Shorts, But Here Is Why It May Get Much Worse CLICK HERE TO READ
***KWN has now released an extremely important audio interview with Dr. Stephen Leeb discussing why he believes that the price of gold will soar above $10,000 and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
More articles to follow…
In the meantime, other important releases…
This Is Remarkable, Plus 3 Absolutely Shocking Charts CLICK HERE TO READ
Stephen Leeb – There Is An 80-90% Chance Of This Happening In The Gold Market CLICK HERE TO READ
Bullion Banks And Commercials Ramp Up Short Positions In Gold & Silver CLICK HERE TO READ
BULLISH GOLD CATALYST: Albert Edwards – Beware A US Dollar Slump CLICK HERE TO READ
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