This Autumn Will Be One Of Market Turmoil & Shock – Here’s Why

…I think this autumn will be the autumn of market turmoil and shock.

• Over extended stock markets seem ready for major falls.
• Same with the dollar, the world’s reserve currency, only backed by gigantic debts.
• Property markets worldwide will first freeze and then fall hard.
• Central banks will try to hold interest rates down but will eventually fail, leading to major falls in bond markets.  

It is very clear to me that the time for change is now very near…Those who are forewarned by articles such as this can take some preventive actions [or, at the very least, such]…knowledge…should ease the shock.

…I do realise that bearers of bad news are unpopular figures. If they are right, nobody will thank them and many people will blame them. If they are wrong they will be ridiculed but, as most readers know, I am not here to be a prophet of doom and gloom. No, my purpose is just to tell things as I see them and to warn people about the massive risks that the world is now facing. For the privileged few who have assets to protect or the ability to move to a safer place, now is the time to seriously consider this…

Nine steps to the abyss

The average person is totally ignorant of the insoluble risks facing the world currently, namely:

1. Record global debts of $225 trillion which can never be repaid and will bankrupt most nations in the next few years. This includes public as well as private debt.
2. Their money, whether it is dollars, euros yen or yuan will become worthless within 5 or maximum 10 years as governments finish off the 100 year debasement of all currencies which are already down 97-99% since the Fed was founded in 1913.
3. Most assets will decline by 75% to 99% in real terms. This includes the bubble markets financed by the credit boom and money printing such as stocks, bonds and property.
4. Central banks will become insolvent. Most central banks are today hedge funds with massive leverage. The assets they hold, government bonds, stocks and other bonds will all become worthless. The demise of these banks will be a blessing for the world since they are the primary cause of the coming financial collapse.
5. The banking system will fail and most assets held in a bank will disappear. This includes both money and securities.
6. As nations go bankrupt and money printing has no effect, the state will become totally ineffective. This means that there will be virtually no money left to maintain the socialist system that the world has experienced for almost a century. A system which in most Western countries absorbs and wastes more than 50% of what the country produces. As the very wise Margaret Thatcher said: “The problem with socialism is that you eventually run out of Other People’s Money.” (abbreviated OPM) and this is exactly what will happen next.
   • As the world runs out of OPM, there will be no money or taxes to fund social security, medical care, pensions, defence etc.
   • On the one hand, this will of course be devastating for most people who are totally dependent on the state and OPM.
   • On the other hand, government tax departments will be decimated or disappear, and all the unproductive bureaucrats and civil servants will also be gone. This will be a very good thing.
   • I do realise that the transition will be devastating for most people initially but hopefully the Phoenix that will come out of this will create a much stronger and sounder system based on personal initiative and self-reliance rather than destructive socialism.
7. The core of democracy and values are being totally torn down as a result of the socialist system.
   • The family is for many no longer the kernel of society. In the West, the divorce rate is 50% or above in most countries.
   • Many people are restless and less grounded. This is also linked to the earth’s magnetic field which is weakening significantly.
   • Religion as well as moral and ethical values are waning.
   • Heritage, history and culture is denied by the powers that be. Tearing down historical monuments is a sign of this. Everything must now be politically correct, and political correctness is determined by the minorities and not the majority.
8. There will be political upheaval in most countries in coming years. The party in power will be pushed out or lose the next election since they can’t fulfil their socialist promises. The opposition party will gain power since they will promise the earth. But they will soon run out of OPM and also fail.
9. We will see social unrest and also civil wars. People without money or jobs will revolt. There will be major clashes or civil wars between political phalanges.

…Physical precious metals will be major beneficiaries of the coming global crisis. Gold should go to $1,360-70 quite quickly on its way to new highs. Due to a temporarily strong dollar, gold in US dollars is 29% below the 2011 high (monthly close). In most other currencies gold is down a lot less. See gold in Canadian dollars below.

Silver, albeit very volatile, will rise faster than gold. For anyone considering buying physical gold or silver, there will soon be a time when there will be major shortages. There just won’t be sufficient production or stocks to cover the coming demand. Also, we recommend that gold and silver should be held outside the country of residence. There will soon be exchange controls in many countries including the USA. So the option to transfer assets or money out of your country might not exist for much longer.

The risk that we will have major market turmoil this autumn is big but remember that even if things take a bit longer to materialise, insurance must be acquired before the event.

The comments above are edited ([ ]) and abridged (…) excerpts from the original article by Egon von Greyerz

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