Greyerz—Warning: We Are Now Headed for A Catastrophic Global Crack-Up Boom
The comments below are an edited and abridged synopsis of an article by King World News
Egon von Greyerz, who has become legendary for his predictions on QE and historic moves in currencies and metals, says that we are headed for a catastrophic global crack-up boom.
Economic history tells us that we need to focus on inflation and currency to understand where the economy is going. These two areas are indicating that the world is in for a major shock. Few investors expect inflation to become a real problem, but instead believe interest rates will be subdued. And no one expects the US dollar to collapse.
But in the last two years, money supply growth has been exponential with, for example, M1 in the US growing at an annual rate of 126%.
Von Mises defined inflation as an increase in money supply. The world has seen explosive growth in credit and money supply since 1971, and now we are seeing hyperinflationary increases.
Hyperinflation is a currency event. Since 2000, most currencies have lost 80-85% of their value. And since 1971 they have all lost 96-99%. The race to the bottom and to hyperinflation is now on.
History tells us that the explosion of credit and money supply will lead to rapid increases in inflation and interest rates and an even faster fall of the US dollar.
When it comes to monetary events, inflation and the currency are totally interdependent. Normally an economy is sound when the currency is sound and vice versa. So why has no currency ever survived in history? And why has every economy collapsed when the currency has collapsed?
Up for discussion: Economic and monetary chaos as the rule rather than the exception; fifty years since the latest monetary chaos started; the petrodollar has delayed the dollar’s total collapse; US money supply is growing exponentially; asset inflation will turn to consumer price inflation; gold’s rise has started; crack-up boom; and gold, silver and wealth preservation.