Gold & Silver Smash & Fires Burning Everywhere In The World

Today Egon von Greyerz spoke with King World News about the gold and silver smash, and the disturbing reality of what is happening in various troubled countries around the world.  Investors have also seen some shocking moves in global markets recently and below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this powerful interview.

Greyerz:  “On a day like today investors have to put aside the short-term action in gold and silver and look at the fundamentals.  It’s hard to know where to start, Eric.  There are fires burning everywhere in the world, and these fires can’t be extinguished.

Therefore, all governments and central banks will do is put more fuel on the fires because they don’t have any other tools to rectify these massive problems that we have in the world….

“Any of these fires could be the catalyst for the next major crisis, and the next crisis in the world will be much more severe than in 2008.  I’ve previously stated that Japan is a basket case that can never be saved.  And of course Japan is the world’s 3rd biggest economy.

When you look at China, its financial system and economy is a bubble.  The bursting of this bubble will likely have a massive effect on the world economy and global trade.  Therefore, both Japan and China will continue to expand credit and print money.  That’s the only thing they can do to save their economies.  Of course the consequences will be inflationary, and most likely hyperinflationary.

If you look at Europe, we just had two central banks confirming that their economies are in real trouble.  The ECB just had a press conference where Draghi stated that rates will stay low for an extended period.  The ECB is under tremendous pressure.  It’s balance sheet is full of toxic debt from its member countries.

These debts are guaranteed by the member countries, and some also by member country banks, and these debts are held on the ECB balance sheet at par.  These assets are not worth par.  Some of it is worth less than 50% of par.  So you have a potential write off for the ECB of hundreds of billions of dollars, or maybe even one trillion dollars.  And even though the member countries and some banks are guaranteeing the money, they don’t have the money to pay the ECB.  So the ECB will be forced to print a lot more money.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/5_Gold_%26_Silver_Smash_%26_Fires_Burning_Everywhere_In_The_World.html

$300 Trillion In Derivatives Losses To Lead Gold’s Rebound

Today Egon von Greyerz warned King World News that the global derivatives market has already suffered a staggering $300 trillion of losses.  These massive derivatives losses, which are being hidden from the public, will help lead the rebound in gold as it begins the next leg of its bull market.  Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this powerful interview.

Greyerz:  “A few years ago when the problems in Greece started, it was found that the Goldman Sachs had helped them to hide the real truth of their economy by a major derivatives positions.

 

Now we’ve found out that Italy has done exactly the same thing.  They took out derivatives in order to meet euro criteria back in the late 1990s.  They had a total of $31 billion of derivatives and now they are finding that at least $8 billion of that is worthless.  That’s about 30% of the entire position….

 

“This just illustrates what I’ve been saying time and time again, that a major part of the over one quadrillion dollars of derivatives currently held in the financial world is worthless.  Here you have a typical position that a government is taking, $31 billion of derivatives, and 30% is worthless.

 

If you then overlay that loss into the total amount of global derivatives, the loss would be a staggering $300 trillion.  It would not surprise me if $300 trillion is in fact very close to the total losses on global derivatives.  If that is the case it means that no counterparty can cover those type of losses, so in reality the entire financial system is bankrupt.

 

This is why the world will witness money printing on an unprecedented scale going forward, despite misinformation and propaganda about “tapering of QE.”  So central planners are just hiding the truth and lying to the public.

 

If we continue to look at Italy, 160 corporations are in “special crisis administration.”  That’s 160 major companies in Italy alone are in serious financial trouble.  But Italy has a stunning debt to GDP ratio of 238%.  In reality it’s probably a lot higher than 238% because of the derivatives losses which have been used to conceal the truth about what is really taking place.

 

But what this means is we can’t trust any government figures.  This is why Draghi recently said, “There is still downside risk.”  Of course there is downside risk, and that risk is massive.  If we look at the European banking system, it’s terminal.  People can never repay their debts to those banks, and of course the banks have continued to borrow money from the ECB since 2008.  Of all of the bad debts these banks have, remember that nothing has been written off or even written down so far.

 

And of course the central banks have bought worthless debts directly from the banks in Europe.  The ECB over the last 11 years has grown its balance sheet over 200%.  The Fed’s balance sheet has grown 400%.  The Chinese central bank has grown its balance sheet 660%, and the Bank of England 800%.  England’s balance sheet has gone from $2 trillion to $9 trillion, and of course that debt can never be repaid.

 

Not only are the central banks highly leveraged, but so are the commercial banks.  France is also in a mess.  French bank Credit Agricole has a remarkable 46 times leverage!  So if there is 2% bad debt, the capital of that bank is wiped out.  Another French bank is using 40 times leverage.  Credit Suisse, if you use Basel III rules, also has 40 times leverage.  Deutsche Bank has 30 times leverage.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/28_$300_Trillion_In_Derivatives_Losses_To_Lead_Golds_Rebound.html

Swiss Refiner Delays Hit 5 Weeks On Massive Gold Demand

Today Egon von Greyerz told King World News that delays from Swiss gold refiners have expanded to a stunning 5 weeks.  KWN readers need to remember that the Swiss refiners refine over 75% of the world’s gold supply.  Greyerz also discussed what is happening with gold demand in other key markets.  Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this remarkable interview.  

Today Egon von Greyerz told King World News that delays from Swiss gold refiners have expanded to a stunning 5 weeks.  KWN readers need to remember that the Swiss refiners refine over 75% of the world’s gold supply.  Greyerz also discussed what is happening with gold demand in other key markets.  Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this remarkable interview.

“Paper money hides the truth, and the truth is that most of the increase we have seen in paper wealth is illusory both for individuals and for the world.  But it suits the governments to fool their people.  This gives them the best chance of being reelected and they also engage in theft through inflation.

So as we have discussed many times, Eric, not only have investors’ assets gone down by 60% to 80% in real terms over the last 13 years, but they are likely to decline another 90% in the next few years vs gold.  The Dow for example, which now has a 10/1 ratio vs gold, is likely to go down to a 1/1 ratio or even below.

Will the level be $10,000 for gold or $100,000 or $100,000,000?  Well, that depends on how much money will be printed and what the level of hyperinflation will be.  But regardless, all assets that have been fueled by the credit bubble will decline in real terms.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/6_Swiss_Refiner_Delays_Hit_5_Weeks_On_Massive_Gold_Demand.html