Dec 7, 2009

Egon von Greyerz: "Gold is not going up - Paper money is going down"

Chances are you may be thinking gold is just another bursting bubble... Well, then Matterhorn Asset Management's Egon von Greyerz monthly newsletter has news for you. It's titled "Gold is not going up. Paper money is going down" and I've included a juicy snippet as "hor's d'oeuvre"....

"We have in the last few years made clear to our investors and readers that there will be very serious consequences arising from the actions of the government:
  • Government deficit will surge. The current borrowings of $12 trillion are likely to increase to over $30 trillion as we have discussed in previous reports. Interest rates could then be 20% or more and the US government would have absolutely no possibility to finance the interest on this debt.
  • The dollar will collapse. It is only due to the fact the dollar is the reserve currency of the world that the US has been able to dupe the rest of the world into accepting its worthless currency and financing its enormous debts. But this will not last much longer.
  • There will be hyperinflation. A deflationary implosion of credit and assets financed by a credit bubble is the necessary precondition to hyperinflation. In order to counteract these deflationary factors, the government will be printing unlimited amounts of money. It is the fall of the currency that causes hyperinflation and the US will be no exception. The fall of the dollar will lead to a hyperinflationary depression in the US.
  • There will be major social and political consequences. The economic devastation caused by the mismanagement of the economy will not only create poverty and famine but also social unrest. There will be major changes in the political system and leadership..."
Please click HERE for full article.

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