Follow Swiss Pension Fund—Buy Gold… “Don’t Worry Be Happy”

The comments below are an edited and abridged synopsis of an article by Egon von Greyerz

Global debt is out of control, and stocks are only rising due to money printing. The worst crash in history is coming, says Von Greyerz.

As fear takes hold of markets and the global financial system, the flight to safety will start. There will be few safe assets. Stocks and bonds will crash, and so will property, as interest rates surge and lenders tighten. And paper money will decline rapidly in value as central banks print unlimited amounts.

The only money that has survived in history—gold—will reflect the fear in markets and be in great demand; other precious metals, too. Not only will individuals acquire gold (and silver), but so will institutions and pension funds in order to inflation-hedge their portfolios. The major Swiss state pension fund has, for example, decided to increase gold holdings from 1% to 2% and to hold it in physical. This is a significant move, and likely the beginning of a trend. In the next few years, all pension funds will need to buy gold to inflation-hedge their portfolios.

There is still time to buy gold and silver before the price explodes. The coming demand, combined with the failure of the paper gold market, cannot be met by more supply since we have already seen peak gold production. The only way to satisfy a higher demand is through a much higher price. A pension fund that intends to spend $100 million on gold would get around 2.5 tonnes today. As gold supply dries up and the price surges, the fund will still spend $100 million, but it will buy much less as gold climbs to $13,000 an ounce.

Now is the time to preserve wealth against a rotten financial system by buying the best insurance possible in the form of physical gold and silver.