Egon von Greyerz, market analyst and founder of Matterhorn Asset Management, is predicting that the central banking system is on a trajectory towards collapse due to ever-increasing amounts of currency and debt. Von Greyerz states that in the face of a market without buyers, the only hedge will be tangible assets, such as gold and silver.
The Imminent Collapse of the Financial System
Egon von Greyerz, the founder of Matterhorn Asset Management, recently wrote an article titled “The Everything Collapse,” in which he explains the potential for the economy to crumble in the coming years and the necessity for people to hedge their assets in gold and silver.
Von Greyerz points out that the current macroeconomic problems are a result of the out of control issuance of fiat money and debt, which is manipulated by central banks.
He argues that the 2008 market collapse, the subprime mortgage crisis, the wild swings in the rates of treasuries, and the inflation boom are all direct products of the current central banking system. Von Greyerz states:
The debt which has built up has now reached levels that means the financial system is no longer sustainable.
Von Greyerz explains that central banks are doing their best to prevent bank collapses, as evidenced by what has already happened with Silicon Valley Bank and Credit Suisse. He believes, however, that the safety measures put in place, such as the Federal Deposit Insurance Corporation (FDIC), which insures only 0.7% of the $18 trillion in deposits, will ultimately fail.
In this event, governments will be forced to start printing money in order to save the system.
Gold and Silver: The Ultimate Hedge
In his article, Von Greyerz explains that all assets are priced at the margin, and while investors are withdrawing from the stock market and other markets, like the real estate market, it is possible for assets to plummet by 70% or more. He states:
If there is one seller and no buyer in the housing market, the price of all houses will go to zero. The same is true for the stock market. But as investors run for the exit, most will not get through since there will at some point be no buyers at any price.
In this dire situation, Von Greyers recommends paying off debts to avoid the risk of bank repossessions, and investing in tangible assets. He also suggests that in the long run, a flight to safety is the best option, by investing in precious metals such as gold and silver, before the shortage of supply leaves investors without any options. He concluded:
Currently, all production is absorbed. Any increase in demand cannot be met by increased supply, but only by much higher prices. We could reach a situation where there is no silver or gold available at any price.
What do you think about the potential collapse of the financial system discussed by Von Greyerz and the value of gold and silver as protection for investors? Tell us in the comments section below.
