Egon von Greyerz:
"We are facing colossal problems
in the world today.
The U.S. is bankrupt, with debts having
increased each year since the early 1960s. And in this
century debts have gone up exponentially….
"The U.S. has also had a trade deficit every year since the
1970s. So this is a country that's been living above its
means for half a century.
-
And what is the U.S.
government doing about the fact that they are
essentially bankrupt?
-
Are they cutting
expenditures?
-
Are they reducing the
size of the government?
Of course not. Spending is going
up continuously, especially on Social Security, Medicare and
defense.
When an economy is weak it is
always good to please the people and increase benefits in
order to buy votes.
Will a Desperate U.S. Start World War III?
The other tactic that all
governments have used throughout history when under economic
pressure is to start wars.
Wars are always a perfect excuse
for the people to take on even more debt. But the world will
eventually reject the U.S. dollar as the reserve currency
and this will put an end to this madness."
Eric King:
"Egon, your thoughts on what has
transpired in Greece. I think the outcome has shocked the
world."
Europe in a Catch-22
Greyerz:
"Eric, it has shocked the world
and nobody seems to know what to do in the aftermath.
Until now, no one has ever
before called the bluff of the elites. Europe is in real
trouble here. If debt is not forgiven now, Greece will not
survive. That is a fact. The IMF wants to forgive debt but
Germany is not prepared to forgive debt.
And if they forgive debt, that
means that Spain, Italy, Spain, Portugal, etc, will have to
write-off large loans to Greece and they can't afford to do
that.
Regardless, Greece needs debt forgiveness, otherwise they
can't survive. And if there is debt forgiveness, then you
have a massive problem in the European banking system
because European banks won't survive.
Also, the European countries
that have lent to Greece may not survive. Plus, they will
want the same forgiveness for themselves.
Just Like Greece, the ECB is
Bankrupt
The European banks and the ECB
have major outstanding lines out to Greece.
On top of that, the FED also has
swap lines to the ECB. The ECB is now bankrupt,
just as Greece is bankrupt. Greek debt is worth zero and the
same is true for Italy, Spain and Portugal.
And if you look at Germany, throughout history (in the last
100 years) Germany has never repaid its debt.
So no countries are repaying debt.
Therefore, Eric, we have a
massive problem in the $100 trillion worldwide bond market.
There is no liquidity in this
market and this is where we will soon see a problem. We will
see the bond market totally seizing up in the next few
months.
Eric, people simply don't
understand that this is a much bigger problem than Greece.
Expect Massive Contagion that will
Lead to a Worldwide Financial Catastrophe
So we are talking about a
worldwide problem, not just a Greek problem.
The majority of the $100
trillion bond market is worthless, and of course a
ticking time-bomb of over $1 quadrillion worth of
derivatives is linked to that.
This means that, sadly, we are
heading into a major contagion that will lead to financial
catastrophe for the world. This will also lead to an
implosion of all bubble assets across the globe.
So to own physical gold and
silver are absolutely essential to ensure against the coming
wealth destruction."
