Today a 42-year market veteran spoke with King World News regarding the shocking truth about what is really happening around the world. Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview.
Greyerz: “Eric, I’m looking at the latest round of rigging of markets by banks around the world. This has now led to fines of over $4 billion for rigging the Forex markets. You have banks like Citi and JP Morgan paying $1 billion each. UBS is paying $800 million and HSBC a bit less….
Continue reading the Egon von Greyerz interview below…
“But that’s just the latest Forex rigging and it’s probably only scratching the surface. We have also seen another $6 billion of fines for LIBOR rigging. So far in 2014 we have seen $56 billion of fines by U.S. regulators against the banks. It seems incredible that these enormous sums can be paid by the banks without the banks going under.
It’s clear that rigging these markets must be very profitable because otherwise the banks wouldn’t be able to pay those incredibly large fines. The Forex market trades over $5 trillion a day. So clearly it’s been very fruitful for the banks to be very active in manipulating currencies.
When you compare the $4.3 billion fines to the $5 trillion of daily trading, it’s nothing. But how has the banking industry gotten so large? I remember in 1995 when Barings Bank went under because the bank lost over $1 billion on Japanese Index futures. That put the UK financial system under tremendous pressure. That $1 billion almost collapsed the system. But today we already have $56 billion in fines just for 2014, and no one blinks an eye.
How can this happen? It’s simple: There has been a staggering amount of credit creation and money printing over the last 20 years. In 1995 total credit worldwide was around $30 trillion. Today it’s around $260 trillion. So that’s a roughly 9-times increase in the amount of debt outstanding. And since 2005, just 9 years ago, credit has more than doubled from about $125 trillion to $260 trillion today.
So the banks now have hundreds of trillions of dollars of money to play with. And if they leverage that up to 30-times, which we know the banks do for their trading, we’re talking about quadrillions of dollars. This is why $56 billion in fines means nothing — it’s pocket money for them.
This is why we already see hyperinflation in the banking industry. This is also the first sign of the world starting the hyperinflationary stage — because of all that money creation. All of this money has gone into the banking system and we are clearly seeing hyperinflation there.
We also talked about hyperinflation in Japan last week, and today the yen is at nearly 116 vs the dollar. The next stage is probably a quick run up to the 150 level. This will lead to all other Asian countries devaluing their currencies by printing money because they can’t afford to have a strong currency against the yen. This would make them totally uncompetitive.
So there will be a lot more money printing and currency devaluations all over Asia. That will lead to the West being under pressure because the West will then have deflation exported from Asia, and the West cannot survive with more deflationary pressures from Asia. As you know, the West would totally collapse under its massive debt load with deflation. So the West will not accept this.
The West will print as much money as necessary in order to debase their currencies, and this will also lead to hyperinflation. Western central bankers won’t like losing out in the currency race to the bottom, so they will print more than ever and that will be the start of the final leg of the total destruction of the currency system.
Turning to the gold market, we have the upcoming vote on the Swiss Gold Initiative, and the president of the Swiss National Bank is getting more and more desperate. He is now giving interviews every day talking about the dangers of the Swiss Gold Initiative, and how bad it would be for the Swiss economy. But of course it’s not the Swiss Gold Initiative which is dangerous, it’s the policies of the central banks — including the Swiss National Bank — that are dangerous.
The Swiss National Bank has already printed 400 billion Swiss francs in the last couple of years. This has been done in order to buy risky assets and to keep the Swiss franc weak. It is a disastrous policy to align the Swiss franc to a weak euro and a failed economic experiment like the EU.
The SNB president is also saying that speculators in gold as well as gold traders will benefit from this initiative. People buy gold for wealth preservation, not speculation. And anyone speculating on this would only have a 50/50 chance, so I don’t expect much in the way of speculation. But the ones who would benefit from this initiative are the supporters of true money as well as the Swiss people.
The question is: Will gold go up if there is a victory for the Yes campaign? It could be that a Yes vote would be a catalyst for gold to rise, but in any case I think gold has turned and we’ve already seen the corrective bottom. So gold is going to go up anyway.
But what is happening is the Euro/Swiss franc rate is now under pressure and it is at the lowest level since the SNB actually pegged the franc to the euro. It’s now creeping down to the 1.20 peg. To me that is a clear indication that the market sees a win for the Yes vote.” Since PayPal without warning blocked donations to the Swiss Gold Initiative, an alternative method of payment has been set up. The PayPal donations that were blocked have been refunded. Donors can now pay by bank transfer to a Swiss Post Finance account. Alternatively, Bitcoin donations are also accepted. Please click on the link below for details.”
IMPORTANT – KWN has many more interviews being released today.
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The audio interviews with William Kaye, Dr. Paul Craig Roberts, Andrew Maguire, Eric Sprott, Bill Fleckenstein, Rick Santelli, Rick Rule, Andrew Huszar, John Mauldin, Egon von Greyerz, Michael Belkin, and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.