Physical Gold…The Only Pension Fund to Survive

The comments above & below is an edited and abridged synopsis of an article by Egon von Greyerz

Investors will likely lose a major part of their assets held in stocks, bonds and property over the next 5 to 7 years. It is also likely that they will lose most of their money held in banks, either by bank failure or currency debasement.

What is absolutely certain, however, is that investors who buy the new Austrian 100-year bond yielding 2.1% are going to lose all their money. Who actually buys these bonds? No individual investing their own money would ever buy a 100-year paper yielding 2% at a historical top of bond markets and bottom of rates.

The buyers are institutions that manage other people’s money. These will be the likes of pension fund managers who will be elated to achieve a 2% yield against negative short yields and not much above zero for anything else. These managers will hope to be long gone before anyone finds out the disastrous decision they have taken with pensioners’ money.

But the danger for them is that the bond will be worthless long before the 100 years are up. It could happen within 5 years.

Von Greyerz discusses the $400 trillion pension gap; global debt of $2.5 quadrillion; interest rates at 15% to 20%; the world’s biggest hedge fund (the Swiss National Bank); and gold reaching $5,800 to $8,500 based on previous bull markets.