The Paper Gold Tail Wagging The Golden Dog
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
Investors may hope that the biggest financial experiment and debt bubble in history will last another 100 years. And they can pray that the currency system, which has lost 98% of its value in the last 50 years, will last another half century.
But that would be investing on a wing and a prayer with extremely poor odds of success.
Since neither the wing nor the prayer is likely to save investors from the greatest economic and financial collapse in global history, the need for protection or insurance is vital.
With virtually all asset markets—stocks, bonds and property—at all-time highs, investors are clearly judging the risk of failure to be nearer zero.
Von Greyerz judges the risk of a collapse of markets and the economy to be between 95% and 99%, so a risk range from 0% to 99% is quite a spread. An actuary would probably pitch it at 1% to 5% risk and sell catastrophe insurance on that basis.
Up for discussion: Financial discussion dirt cheap; or in other words, rubbish in, rubbish out; insurance that withstands the test of time; the paper gold tail wagging the golden dog; the fake paper gold market; is 50% of central bank physical gold lost forever; buying insurance must not be finessed; gold is much more than insurance; no fiat currency in history has survived—the dollar is next; next target for gold is $3,000; Greyerz is standing on a soap box.
