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 warned King World News that people must prepare now for the elites’ nightmare endgame.
One Of The Least Desired Asset Classes On The Planet
May 12 (King World News) – Egon von Greyerz: More than 99.5% of world financial assets are invested in other things besides gold. That makes gold one of the least desired asset classes on the planet. Most professional as well as private investors would never consider gold as part of their portfolio. So if 99.5% of assets are not in gold, how can a small clique of gold owners holding less than 0.5% of world financial assets be right? They clearly look like a small minority of obstinate goldbugs and contrarians who are living in the past. Or do these people see something that the majority of investors don’t?..
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Yes, gold has always been money but it is different today. Gold doesn’t work as money. There is not enough of it and it is very impractical to hold and even worse to pay with. You can’t, in a convenient way, transfer it without going through the financial system. Clearly fiat money, with electronic transfers or crypto money, must be the way forward. And the great advantage with such money is that you can create unlimited amounts of it with just a touch of a button. Who needs gold in this new modern world?
The world always thinks that it is different this time. The Keynesian crowd with their cheerleader Krugman and the MMT (Modern Monetary Theory) followers are totally convinced that unlimited money printing and deficit spending is the only way forward. And since this has worked for the US for the last 60 years, it must clearly work forever. So why can’t the US continue to run chronic budget deficits, just as it has since 1960?
The Rise Of Socialism
As the US economy collapses in the early 2020s, socialists will present the perfect candidate for the 2024 US election. As hard times hit the US, this candidate will promise the earth by having a solution for everyone, especially the poor. It will be unlimited social security, free medicare, guaranteed pensions, housing benefits, and any other freebees that will win votes. The rich will naturally be hit very hard with punitive taxes which will please the masses.
This socialist candidate will be just right at a time when the US elects its first socialist president and the perfect antidote to Trump. In his second term, if he is reelected, the aging Trump will be blamed for all the problems that have emerged by that point such as economic misery, poverty, hunger, and a breakdown of government services including social services. This will lead to social unrest and crime which will all be blamed on Trump. And being the opposite to Trump in everything they will totally convince the Americans that they have the answer to all the problems.
Like all socialists, they don’t understand that socialism works until you run out of other people’s money. When they take over the US debt could be around $40 trillion, if it follows the historical pattern of doubling every 8 years. But that won’t worry them. They will spend tens of trillions of dollars or more on nationalizing a number of companies that are going under. They will also dramatically increase the spending on social security, medicare and pensions.
When the socialist candidate takes power they will already have a fellow socialist as well as a Marxist as UK leader. The latest point for the next UK election will be June 2022. With the mess that Mrs May has caused the Conservative party, it is not impossible that Corbyn, the Labour leader, will become British Prime Minister before 2022. If the socialist leader will be bad for the US, Corbyn will be even worse for the UK. He will socialize many major utilities such as the railways, water and electricity. He will subsidize or nationalize all failing industries that employ a high number of workers. And obviously he will increase taxes dramatically for the wealthy and for big corporations.
When Corbyn became Labour leader in 2015, I was convinced that he would be the next Prime Minister. Not because of his qualities but due to the coming collapse of the UK and world economy. The mood in the world in the early 2020s will lead to socialists taking over in most countries. When people are desperate, they will see the socialist/communist promises as the only solution to their miseries. At that point, the media, which will be almost exclusively socialist, will support the socialist cause and the propaganda machine will hail socialism as the solution to the world economy’s woes.
Keynesian and MMT theories of deficit spending, combined with direct government ownership, will be hailed as the solution to the US and UK economic problems and also for the rest of the world’s. Thus, deficits and debt will go up exponentially. No one will listen to the argument that it was debt that caused the problem in the first place, even though it will be impossible to solve a debt problem with more debt. Nor will people learn from history that socialism or communism has never worked in any country over time.
The Golden Antidote
The consequences will be obvious. Rapidly rising deficits and debts will lead to increased global currency debasement. Obviously, all currencies can’t fall against each other at the same time but they will all fall against real money, which is gold and also against silver. Currency debasement will lead to high inflation which will be rapidly followed by hyperinflation.
At that point, central banks will not be able to hold interest rates down. Most forecasters today are predicting that rates will be held low for many years. I disagree with that. The coming insolvency of governments and businesses, combined with money printing, will lead to a collapse of bond markets and a surge in interest rates. Central banks will lose their manipulative powers due to the sheer weight of debt, most of it bad debt. US rates at that point will be at least 10% but most likely 20% or more. Imagine US debt of $40 trillion in 2025 at say a 15% interest rate. That would be a $6 trillion interest bill, which means that 100% of tax revenue would be used to pay interest. But with the economy under severe pressure, total tax revenue at that point will be down dramatically. So more money printing will be required, leading to higher deficits and higher debts with higher interest rates and more defaults.
You Must Prepare Now For The Elites Nightmare Endgame
At that point, even the proponents of MMT or socialism will realize that you cannot create wealth by printing money. That will then lead to the final stage of this cycle which will be a deflationary implosion of debts and assets and a depression. There is no other possible outcome of the mess the world is in today. That is absolutely guaranteed. What we don’t know is when it will happen and how long it will all take. Events of this magnitude often take longer than you expect. Those of us who saw the problems of 2007-9 coming would not have thought that the temporary rescue at that time would have lasted 10 years.
So rather than trying to time the coming secular economic downturn, it is more important to plan how to protect yourself. How do I protect my wealth? Gold and silver will be the only money to survive, just as they have for 5,000 years. Do I have enough and is it stored in a safe place and jurisdiction? Where I live will I be safe from crime, social unrest or war? What are the alternatives? Will I have enough food and other necessities like medicines?
What is guaranteed is that future taxes for the wealthy will be punitive when the socialists take over. In the UK, many wealthy people are moving their money out of the country and also moving themselves. There is also a risk that the UK and other countries will copy the US system of worldwide taxation of all citizens regardless of where they live. The first step to protect against this would be a second passport followed by renouncing the US, UK or other citizenship.
The above list is far from exhaustive. Also, these decisions are both drastic and personal. Therefore, everyone will decide based on their specific circumstances. Many wouldn’t want to leave the country where they were born or their family and friends. With the world going through the most dramatic changes in the next 5-10 years, life will be very different and very difficult for most of us. But remember Rudyard Kipling’s words in his wonderful poem “IF”:
“If you can meet with triumph and disaster
And treat those two imposters just the same”
Finally, heed these ancient words of wisdom which are so appropriate when a dire set of circumstances unfold:
“This Too Shall Pass”
For those who would like to read more of Egon von Greyerz’s fantastic articles CLICK HERE.
***KWN has now released the powerful audio interview with legend Pierre Lassonde and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Also just released: Top Analyst Just Predicted A 7% Plunge In The US Dollar That Will Ignite The Gold Market CLICK HERE TO READ.
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