Saturday , 22 October 2016

Biggest Speculative Bubble Ever Will Begin To Implode This Autumn. Got Gold?

This coming autumn we are likely to experience the beginning of the end to the biggest speculative bubble in world history. All bubble assets will implode and the financial system will come under massive pressure:

  • stock markets will decline by 90% or more,
  • bond markets will totally collapse,
  • world trade will more than halve,
  • the dollar will fall and so will many other currencies,
  • money printing will follow, fueling the currency collapse and hyperinflation and, as a consequence,
  • gold and silver prices will surge.
The above comments, and those below, have been edited by (Your Key to Making Money!) for the sake of clarity [] and brevity (…) to provide a fast and easy read and have been excerpted from an article* by Egon von Greyerz ( originally entitled  Gold – One World Two Markets ‏ and which can be read in its unabridged format HERE.

All of this seems unimaginable today but if someone had said in 1932 when the Dow was 40 (it is not a misprint) that it would reach 18,000  83 years later, no one would have believed that either…

Wealth Protection

Gold has now corrected for four years from the $ 1,900 peak in 2011. On most criteria gold is now oversold and undervalued. On a real inflation adjusted basis gold is now as cheap as it was in 2002 when it was $300. Speculators currently have an all time high short position in the futures market – and that doesn’t include the interbank market where the short positions are most likely a lot bigger.

The gold price bears no relationship to the real price of gold nor to the major and continuous very high demand for physical gold.

  • The gold price is set in the paper market by the speculators and manipulators. The buyers of physical gold are very fortunate to be able to buy real gold today for prices which have nothing to do with the real value of gold. India and China, especially, understand this.
  • Mine production of gold is around 2,500 tons annually. Only China buys 2,000 tons and India 1,000.
  • In the last few years the demand for physical gold has substantially exceeded production.
  • The sellers have been central banks which clearly only have a fraction of their stated figures. When China reveals their real holdings and allows an open audit, no one will believe that the  USA has anywhere near 8,000 tons without an independent audit.
  • What we also must remember is that the world has printed and borrowed another $60 trillion since 2008. This massive credit expansion is not reflected in the gold price.   If there was no paper market in gold, the price today would probably be $ 8,000 since this is the correct price adjusted for real inflation.

…What we have seen in the last 100 years is totally unprecedented in world history. It has only been [made] possible by central banks creating a money bubble that has expanded far more than anyone would have thought was possible.

In my view this bubble cannot expand any further so like all bubbles it will either gradually implode or suddenly explode burst. Hopefully for the world, there will be an implosion so at least we will have a bit of time to adjust.


Related Articles from the munKNEE Vault:

1. Curtains To Come Down 70% On Greatest Bull Market & Bubble In History By 2017

Where does the Dow go from here? Maybe up a little higher but, more likely, it’s all downhill from here though perhaps that statement is misleading. More like, down a cliff.

2. Major Market Gurus See Devastating Collapse of Global Bond Bubble Soon

There is literally nowhere for the bond market to go except down and, when this bull market turns into a bear, it will create chaos and financial devastation all over the planet.

3. The So-called Credit “Bubble” Will NOT End Soon! Here’s Why

The latest rage is writers saying that the current economic cycle is aging and we had better watch out as the ‘bubble’ will burst soon. NONSENSE. Here’s why.

4. Bursting of Bond Bubble Will Make 2008 Stock Market Crisis Look Like A Picnic!

Many investors think that we could never have a crash like the melt-down in 2008 but they are wrong. The 2008 Crisis was a stock and investment bank crisis – but it was not THE Crisis. That will happen when the biggest bubble in financial history – the epic Bond bubble – bursts. Let me explain.

5. Bonds Getting Slaughtered, Interest Rates to Rise Dramatically, Economic Bubbles to Implode

What does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven’t done in 50 years? If your answer to those questions involves the word “slaughter”, you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. So why should the average American care about this?

6. When the Bubble Bursts It Will Cause Deflation & Drive Widespread Social Unrest – Here’s Why

Should we be concerned when tepid economic growth and low inflation are accompanied by increasing public and private debt? Are we borrowing just to stay alive? [As I see it,] national governments will increase national debt loads in order to stay in power until one or more of them default. Then their will be financial panic which will most certainly be deflationary. Here’s why.

7. What’s An Investor To Do Given the Current Bubble Environment? Here’s What!

These days anything with a sustained gain is called a bubble that’s just about to burst so what’s an investor to do?

8. Bursting of S&P 500 Bubble Fast Approaching! Here’s Proof

Huge growth patterns in markets — more commonly known as “bubbles” — have a remarkable timing signature common to every single one of them – they all have lasted 64 or 65 months from initial growth to blow-off top.

9. Borrowing Binge & Asset Bubble to Continue Until…Until

History strongly suggests that, rather than a return to a nice, placid world of “normal” interest rates, we are likely to see a continuation of the borrowing binge/asset bubble until real rates spike as a result of either soaring nominal rates soar or plummeting inflation. Here’s why that is the case.

10. How Much Time Before “The 7 Bubbles of America” Start to Burst?

History has shown us that all financial bubbles eventually burst. It is not a question of “if” they will burst. It is only a question of “when” and when the 7 current financial bubbles in America burst, the pain is going to be absolutely enormous. That being said, how much time do you believe that we have before these bubbles start to burst?