I am astonished to see how much money the central banks are printing and how their balance sheets are expanding. We have the absolute perfect recipe for hyperinflation and thus a massive increase in the price of gold and silver.
So said Egon von Greyerz (www.goldswitzerland.com) in edited excerpts from an interview* with King World News.
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von Greyerz went on to say, in part:
It’s not just the ECB balance sheet that’s gone up in the last six months or even the last three months by hundreds of billions of dollars. It’s the same with the Fed, Bank of Japan, The Bank of England and the Swiss National Bank. They are all exploding. This can lead to only one thing – an explosion higher in gold and silver prices and the beginning of the massive inflation, which will lead to hyperinflation. Unfortunately, the market seems to be totally ignorant of this.
Regarding the Fed
The recent Fed action is totally consistent with what we’ve said for some time. The Fed knows they have to continue to print money and they will print unlimited amounts of money. On top of this, the U.S. is not taking any measures whatsoever to cut down on spending.
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Every year the Fed is printing between $1.5 trillion and $2 trillion. As you know, just during President Obama’s term the debt in the U.S. has gone up by about $4.5 trillion. This is about 30% of total borrowing in the U.S. It’s just incredible and it’s accelerating – but they are not the only central bank doing this. The ECB is in the same mess…
The move in gold, so far, looks extremely good. I’m always pleased that we don’t have a straight move up, although I do think we will have faster moves higher in the not too distant future. This is strong action with small corrections.
I think that within the next couple of months we will certainly be touching $1,900 and continuing higher from there. I don’t think $1,900 will be a stopping point for very long.
I really like the action of silver. Silver still hasn’t broken out like gold has, but I can see $37 being taken out within the next 30 days and then we will just start flying from there. It won’t take long to get up to $50 again.”…
Regarding Mining Shares
Regarding mining shares, I like them here. We’ve started buying them. We prefer physical bullion, but we’ve now started buying mining shares because they are massively undervalued and they will move a lot faster than the metals…
[As I said at the top of the article the actions of the central banks around the world] can lead to only one thing – an explosion higher in gold and silver prices and the beginning of the massive inflation, which will lead to hyperinflation.
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The Fed is completely convinced that without an inexorably rising rate of inflation there won’t be enough money made available to finance our rapidly increasing national debt. [As such, they have just] disclosed that they now have an inflation goal of at least two percent . As a result, we are stuck with a perpetually decreasing standard of living, a middle class that is on the endangered species list and provided the holders of U.S. dollars a target rate for its destruction…[Indeed,] Bernanke’s actions are so destructive to savers that I’m sure if he were a broker, he would be telling his clients to buy more gold.
The U.S. economic and systemic-solvency crises of the last five years continue to deteriorate yet they remain just the precursors to the coming Great Collapse: a hyperinflationary great depression. The unfolding circumstance will encompass a complete loss in the purchasing power of the U.S. dollar; a collapse in the normal stream of U.S. commercial and economic activity; a collapse in the U.S. financial system, as we know it; and a likely realignment of the U.S. political environment.
Most traders and some economists believe the Fed will step in with another round of Quantitative Easing (QE3) in the first half of 2012. This will pump up the stock market, particularly bank stocks, giving the impression that the US economy can’t be that bad, after all, [but in the process] debase the dollar and reduce purchasing power. [This, in turn, will result in higher]…inflation causing prudent investors to buy more gold. [Let me explain further what I see transpiring this quarter and why.] Words: 718
Evidence shows that the U.S. money supply trend is in the early stages of hyperbolic growth coupled with a similar move in the price of gold. All sign point to a further escalation of money-printing in 2012…followed by unexpected and accelerating price inflation, followed by a rise in nominal interest rates that will bring a sovereign debt crisis for the U. S. dollar with it as the cost of borrowing for the government escalates…[Let me show you the evidence.] Words: 660
In response to the financial crisis of 2008, the Fed injected unprecedented levels of liquidity into the banking system. While inflation has been modest to date, an analysis of similar periods in history shows that it typically takes more than two years for the impact on consumer prices to be seen. Consequently, we are now at a pivotal point in the current cycle as Fed stimulus began more than two years ago. [Let me explain further.] Words: 2755
The economic condition of the country continues to decline toward its rendezvous with an, as yet, unknowable catastrophe. Here is… a look (not a prediction) at a series of not improbable events that could develop [and which] would change our economic world overnight. Words: 1550
The Federal Reserve is now trying to figure out ways to boost inflation expectations… so that Americans are encouraged to spend more before their money is worth less. Unfortunately, not only will their money soon be worth less, it will literally become worthless! Words: 904
In… September’s Federal Open Market Committee minutes, the Fed officially announced that … “Unless … underlying inflation moved back toward a level consistent with the Committee’s mandate, they would consider it appropriate to take action soon” and take “… possible steps to affect inflation expectations.” That’s Fed-speak for a MANDATE TO CREATE INFLATION! Words: 694
If our assessment is correct, over the coming years, stocks, precious metals, commodities and real-estate will appreciate in value versus paper currencies. Furthermore, on a relative basis, we expect precious metals and commodities to outperform all other asset-classes. Conversely, we anticipate that cash and fixed income instruments will probably turn out to be the worst assets to own over the next decade. Words: 869
The economy is now so manipulated by politicians, big bankers, and special-interest groups that making sense of the markets has become an almost impossible feat. Which is to say, it must push even harder on the levers of its printing presses, further setting the stage for the massive period of inflation we continue to see as inevitable… and for a stunning rise in interest rates. Words: 968
Will our National Debt be trillions higher than today in a few years? If you think the answer is yes, than buying physical gold today is a good idea. It’s that simple. Just look at the chart. Words: 140
Check out this chart (via Ed Yardeni) that shows the price of gold relative to U.S. Treasury and U.S. agency securities held by the Federal Reserve and other central banks – a VERY interesting correlation to say the least. Words: 260