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 stunning global demand has now created major gold shortages in the financial system.
Egon von Greyerz: “Eric, what’s happening in the gold and silver markets is totally unreal. The discrepancy between physical demand and paper gold manipulation is continuing to grow to ridiculous levels…
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Egon von Greyerz continues: “There is now a massive divergence between physical gold demand and paper gold supply. The relentless selling of paper gold will soon come to an end as the paper shorts run for cover.
Stunning Global Demand For Gold Overwhelms Swiss Refiners
The demand in the physical gold market is currently very strong. In the U.S., for example, there is a demand for gold eagles not seen since the 2008 – 2009 crisis. U.S. demand is up 200 percent year-over-year, and the World Gold Council just announced that global coin demand is the highest it has been in five years.
The Swiss refiners, which produce 60 – 70 percent of the gold in the world, now have production delays for bigger orders. We know that China, India and a few other countries together buy more than the total annual gold production every year.
We must not forget that when Germany, in 2013, asked for the return of 674 tonnes of their gold primarily from the Federal Reserve and some from France, they only received 5 tonnes. They were then told that they could get the rest back by 2020. They then announced that they actually received around 150 tonnes back in 2014.
But Germany has since stopped repatriating their gold, with Merkel declaring that Germany is happy holding its gold in the United States. We also know that no Western central bank dares to have an official audit, including leasing and paper transactions. It is just unbelievable that the U.S. gold hasn’t been audited since Eisenhower’s days in the 1950s.
Massive Gold Shortages And Western Central Bank Games
It’s totally clear to me that a major part of central bank gold has been leased or sold and is now probably in China and India. The combination of strong physical demand, with a smoke and mirrors game played by the Western central banks, is a very clear indication that the manipulation of the gold price in the paper market is a desperate attempt by Western central banks and bullion banks to conceal the fact that there are major shortages of physical gold in the financial system.
So, Eric, that is the physical position in the gold market, but what is also critical to the gold price is of course the world economic situation. Debt is growing exponentially everywhere and so are deficits. Japan, for example, is printing 15 percent of GDP annually. That is a staggering figure, Eric.
Japan’s government debt/GDP will reach 250 percent in 2017. That is the biggest Debt/GDP of any major nation. Their demographic situation guarantees that there will never be enough working population to repay that debt.
And in China, where debt has grown 15-fold in this century, their bad debt situation is deteriorating rapidly. Fiscal spending is also up 35 percent year-over-year. China soon needs to start additional QE. And in Europe, ECB head Mario Draghi has again indicated that if necessary he will use all instruments available when the ECB increases its money printing. It is clear to me, Eric, that the ECB will in fact do this.
The Greek financial system is still bankrupt and none of the other problems in the Mediterranean EU countries have been resolved. A government takeover by the Communist and Socialist Parties in Portugal now seems a certainty. That does not bode well for Portuguese debt.
And in the United States the real figures are just getting worse. We know that the real unemployment figures bear no resemblance to the ones announced. The only job gains last month were low paying jobs for people over the age of 55. Major retailers in the U.S. are suffering and retail sales are now as bad as in 2008.
Credit risk in the U.S. is surging. In the energy sector, for example, four companies are now on the brink of going bankrupt. If the oil price stays at these levels, that will just be the beginning of insolvencies in the energy sector. And it also seems that inflation is non-existent. The PPI (Producer Price Index) just dropped the most on record.
Get Ready For Additional Worldwide QE
Eric, with what is really happening in the U.S. economy, I still don’t see a rate increase in December. Instead, I see additional worldwide QE in a futile attempt to save the financial system. Gold and silver prices could always be manipulated a bit lower, but physical gold and silver at these levels are an absolute bargain.” ***KWN has now released the powerful audio interview with Nomi Prins, the keynote speaker who recently addressed the Fed, IMF and World Bank, where she discusses the coming financial destruction that is in front of us, what is going to put an end to the manipulation of the gold and silver markets, what investors can do to protect themselves and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Radical Policies Are About To Be Implemented As Chaos Erupts Across The Globe CLICK HERE.
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