Everything Is on Fire
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
A global fire is coming, and it could be cataclysmic.
It has started already. Stock markets, property markets, bond and debt markets are on fire. The problem is that fires are initially explosive but always end up implosive.
Right now we are in the explosive phase, with markets going parabolically exponential, or exponentially parabolic!
We are at the end of a secular bull market in the world economy. Never before has there been an explosive fire of this magnitude, fueled by uber-profligate money printing and credit expansion by central and commercial banks.
Inflation is running wild, and not just in stocks. Property markets are exploding all over the world. Second-hand leisure boats are in such demand that they cost virtually the same as a new boat. And if you want a new boat, there is none available until 2022.
Yes, everything is on fire and people are desperate to spend, spend, spend after a year of lockdowns and restrictions.
Up for discussion: An economic bubble of air; the ultimate of all Ponzi schemes; the US is bankrupt; the world needs a big fire; gold, silver and wealth preservation; and the Dow to fall 97% against gold.
“Gold and silver have not at all reflected the massive creation of money in the last 50 years. That catchup phase is likely to start very soon based on both fundamentals and technicals. The upside potential for gold and silver is multiples of the current prices… Hyperinflation could take the metals to unfathomable heights.”
Holding physical gold, as opposed to Bitcoin, should not be seen as a speculative investment but rather as the best protection against the coming destruction of paper assets and the imminent disorder in the financial system.