Tuesday, April 19, 2016

GoldSwitzerland's Egon von Greyerz:
All Hell Is About To Break Loose
In The Global Economy & Financial Markets
"What else did central planners expect? To print money that has no value or to lend money that doesn’t exist can never create wealth or save anybody. The downturn will soon start to accelerate and eventually lead to a total failure of the financial system and sovereign defaults. But no one should believe that there will be a sudden implosion or a 'reset' that solves or changes everything. Instead, what we will experience is a process with things deteriorating at a fast pace but without one single event that changes everything overnight. It is actually happening all around us right now. Let’s just look at some examples of the stresses within the system. The ECB is facing bank failures in almost every member country. An Austrian bank just had to be bailed-in and the whole Italian banking system is on the verge of collapse. The Greek banks are already bankrupt, although no one dares to declare it officially. The ECB knows that they only have one tool left to temporarily postpone a breakdown of the European banking system and that is to further increase its money printing program .. Most central banks and sovereign governments are virtually bankrupt but so are commercial banks. Their share prices are definitively telling us that. Most major banks’ shares are down between 75% and 90% since 2007. Deutsche is down 87% and Citi 92% whilst Credit Suisse and Barclays are 'only' down 78%! The massive falls in all major banks’ share prices are clearly telling us that these banks are unlikely to survive. If we look at global company profits, they are down 20% in mature markets and 25% in emerging markets since 2014. And so far we have seen global corporate defaults of $50 billion in 2016, which is the biggest since the financial crisis. It is all happening in front of our eyes right now. No one should wait for a major event because it will be a series of events as I have described and it has already started. It is time to take protective measures right now."
- Egon von Greyerz
link here to the article

1 comment:

Anonymous said...

This is trite. Incidentally printed money does have value. People accept it for goods and services. That is how it gets its value. Human habit is not something that can easily be changed.

Try getting along without it !