Intervention, manipulation and suppression
We have gold intervention, manipulation and suppression by governments, banks and hedge funds. We have a paper market in gold which is around 100 bigger than the physical market, facilitating this market intervention. Governments dislike gold since it reveals their deceitful actions in destroying the value of paper money by printing unlimited amounts of it. The media don’t understand gold. Financial TV ridicules gold and even the most respected newspapers, like the FT, don’t appreciate that gold is money.
And even with the major investment demand that we have seen in the last few years, only 1% of world financial assets are in gold.
So why is gold likely to erupt in the next few weeks? After a strong move into late August 2011 we have had a correction/consolidation for almost 11 months. Debts are increasing at an exponential rate and there is no attempt by government to stop the spending of money the country doesn’t have. Total debts and exposure in the US is approaching $500 trillion. This includes unfunded liabilities and derivatives.
Bonanza
A concerted (ECB, FED, IMF etc) money printing bonanza is likely to start in 2012. This will lead to all currencies collapsing in real terms. Collapsing currencies will lead to a hyperinflationary depression.
Distrust in governments
Gold will also appreciate because there is a total distrust in governments’ ability to govern. The more governments fail, the more they will want to control the system and the citizens and the more regulation they introduce. There is also distrust in the financial system.
Consequences
The financial system is rotten in its core and bankrupt governments have no chance of saving it.
Unemployment is already 25% in many countries (USA 23%) with youth unemployment in many areas at 50%. This will get a lot worse. But this time around there will be no government handouts. The social security system will collapse under its own weight and so will the pension system. Most pension plans worldwide are non-existent, unfunded or massively underfunded. Very few people will be able to rely on a pension and whatever is paid out will be worthless due to hyperinflation. The social and human effects of this will be horrendous and very long lasting.
Gold
...remember that gold must be held in physical form and stored outside the banking system.
The next move could be explosive and take gold to $3,500 to $5,000 in the next 12-18 months. My long term target, set several years ago, that gold is likely to exceed $10,000 could be reached within the next 3-4 years.
............. By Egon von Greyerz
So why is gold likely to erupt in the next few weeks? After a strong move into late August 2011 we have had a correction/consolidation for almost 11 months. Debts are increasing at an exponential rate and there is no attempt by government to stop the spending of money the country doesn’t have. Total debts and exposure in the US is approaching $500 trillion. This includes unfunded liabilities and derivatives.
Bonanza
A concerted (ECB, FED, IMF etc) money printing bonanza is likely to start in 2012. This will lead to all currencies collapsing in real terms. Collapsing currencies will lead to a hyperinflationary depression.
Distrust in governments
Gold will also appreciate because there is a total distrust in governments’ ability to govern. The more governments fail, the more they will want to control the system and the citizens and the more regulation they introduce. There is also distrust in the financial system.
Consequences
The financial system is rotten in its core and bankrupt governments have no chance of saving it.
Unemployment is already 25% in many countries (USA 23%) with youth unemployment in many areas at 50%. This will get a lot worse. But this time around there will be no government handouts. The social security system will collapse under its own weight and so will the pension system. Most pension plans worldwide are non-existent, unfunded or massively underfunded. Very few people will be able to rely on a pension and whatever is paid out will be worthless due to hyperinflation. The social and human effects of this will be horrendous and very long lasting.
Gold
...remember that gold must be held in physical form and stored outside the banking system.
The next move could be explosive and take gold to $3,500 to $5,000 in the next 12-18 months. My long term target, set several years ago, that gold is likely to exceed $10,000 could be reached within the next 3-4 years.
............. By Egon von Greyerz
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