Friday, November 23, 2018
By Paul Martin

by Egon von Greyerz
November 23, 2018

The risk of holding cash or gold in a bank is increasing continuously. Later on I discuss the difficulties bank clients encounter in taking money or gold out of their bank.

The word risk can be traced back to Greek via Latin to root or cliff. These were the the dangers that Odysseus encountered when he sailed between Scylla and Charybdis (a rock and a hard place). So root and cliff were the “risks” that sailors encountered in the sea. A more modern interpretation of risk is “Identification and evaluation of dangers that could prevent us from reaching our objectives”.

Very few have the ability to identify the enormous risks that we are all facing, on a global scale. And for the very few who can identify the risks, not many have the ability to evaluate them or to take protective measures.


Maximum risk requires maximum protection. But if most people don’t even see the risks, it follows that very few take any protection. Thus the world is totally unprepared for the coming calamities in the world. Even at the highest level, governments focus on the usual political problems rather than the most urgent issue of the world economy. Relative to a potential collapse of the financial system and the world economy, the domestic problems in for example the US, UK, France and Germany are insignificant but these internal problems clearly occupy the leaders minds totally, probably because they have no understanding of the massive dark cloud that is hanging over the world economy.


In the UK there is Brexit, which Theresa May has made a total mess of. The British people voted to leave the EU but all Mrs May has achieved after two years is an agreement which leaves the UK with almost all of EU’s obligations and laws but without any say or influence. On top of that the UK is paying Brussels £39 billion for the pleasure. Will May survive, will Brexit not happen? Nobody knows at this stage. But what we do know is that Brussels as well as France and Germany are desperate to hold this artificial edifice together. With problems all around and opposition growing within the EU, it will only be a matter of time before the EU breaks up. The coming economic downturn will see to that.


Both Merkel and Macron are now very unpopular in the polls and they are most likely spent forces. Only 17% of Germans are satisfied with Merkel whilst Macron has a 29% approval by the French.

In the US, Trump’s popularity rating is around 40%. But he is now a lame President and will not get any major decisions through both chambers. When the economy and the stock market turns down, within the next two years, Trumps ratings will decline rapidly as they do for all presidents in a declining economy and stock market.


Thus the picture is similar in all major Western nations. The popularity of the leaders is waning but this is just the beginning. As stock markets and the economy turn down, there will be political trouble in most countries with frequent elections, no-confidence votes or impeachment attempts. This will all be part of the massive political and economic turmoil which the world will experience in the next few years.

So is there still a solution? In my view no. With $250 trillion debt and another $2 quadrillion derivatives and unfunded liabilities, the world cannot print itself out of trouble. You cannot solve a problem by the same means that created it in the first place. But since central bankers have no other weapons in their armoury, they will still print unlimited amounts of money. It will probably be new electronic or crypto money in order to diffuse the situation. I would not be surprised to see the dollar turned into a cryptocurrency in order to fool people into believing that this has now solved all the debt problems since the current US debt will be settled in a new crypto dollar.

The Rest…HERE

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