Concerted QE – The Beginning of HYPERINFLATION
by Egon von Greyerz
We are living in unprecedented times. The perceived prosperity that the world has enjoyed in the last 100 years and in particular the last 40 years is coming to an end. The debt based wealth that has been created is now at great risk of imploding both for nations and for individuals. Never before in history have most major nations been on the brink of bankruptcy. In addition, the world financial system is bankrupt and only still standing due to false valuations of banks’ toxic assets. The risk of sovereign or bank failures is major. It is therefore critical for investors to eliminate counterparty risk. Throughout history gold is the only currency that has survived and maintained its purchasing power. All other currencies have been printed to oblivion. Gold represents the best insurance against a fragile world financial system. But due to the fragility of the banks and the massive counterparty risk, investors must hold physical gold and store it securely outside the banking system. The mess in the world both politically, economically and financially is deteriorating at a rapid pace.
Can it get worse? Of course it can. We have only seen the beginning of the collapse of the credit enhanced bubble economy. Every single country in the world is having problems. In addition to the European and US economies, the economies of India, China, Japan, Korea to mention just a few are all turning down fast.
In addition the problems in the MENA countries (Middle East, North Africa) are getting a lot more severe. I have said in the last few years that the situation in this area is likely to deteriorate dramatically with riots, social unrest, civil war as well as interference by other nations. And it will spread further than the current areas of unrest in Libya, Egypt, Iran, Sudan, Lebanon, Yemen, Morocco, and Tunisia etc. The mixture of famine, poverty, political unrest and oil is very dangerous and will sadly lead to continued conflict. Removing leaders or dictators is not a solution and is more likely to lead to anarchy.