Egon von Greyerz, market analyst and founder of Matterhorn Asset Management, predicts that the central banking system will collapse in the next few years because of increased currency and debt issuance. The increase in currency and debt issuance will cause the central banking system to collapse in the next few years. Von Greyerz says that in the face of a buyerless economy, the only hedge will be tangible assets, including gold and silver.
Collapse of “everything”
Egon von Greyers, founder of Matterhorn Asset Management, recently expressed concern about the state of the central banking system in aarticle titled “The Everything Collapse”, detailing the possibility of an economic collapse in the next few years. He details the possibility of an economic collapse in the coming years and urges people to hedge their savings with gold and silver.
Von Graers states that the current macroeconomic problems stem from the unlimited issuance of fiat money and debt, which is manipulated by central bank moves.
He believes that the 2008 market collapse, the subprime mortgage crisis, the wild swings in government bond rates, and the inflationary boom were all created by the current central banking system. Von Graers states:
The accumulated debt has reached a level where the financial system is too big to survive.
Von Graeers explains that central banks are vigilant to prevent a banking collapse, as we have already seen happen at Silicon Valley Bank and Credit Suisse. But he believes that issued controls, such as the insurance set up by the Federal Deposit Insurance Corporation (FDIC), which guarantees only 0.7% of $18 trillion in deposits, could fail.
This means that the government must start printing more money to save the system.
Gold and silver: the ultimate hedge
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Von Graeers points out in his article that all assets are priced on the margin, and while investors exit other markets like the stock market and real estate market, assets can go to 70% or even zero. He states:
If there is one seller and no buyer in the housing market, the price of all homes will be zero. The same is true of the stock market. However, most investors will not be able to reach an exit because at some point there will be no buyers at any price, even if they run for the exits.
In this hypothetical situation, von Graeers recommends paying off all debt and jumping into tangible assets to avoid bank foreclosures. In the long run, however, he recommends a flight to safety by investing in precious metals such as gold and silver before demand reduces the current supply to zero. He concludes:
All production is now being absorbed, and increased demand cannot be met by increased supply, only at much higher levels.
