Without Gold, The Wealthy Will Be Wiped Out
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
The massive explosion of wealth in the world could be a sign of general prosperity, but that is not the truth. The printed money and credit expansion has only benefited a minority. The gap between the rich and the poor is getting ever wider, but it will soon shrink dramatically.
The UK’s Sunday Times just published its annual Rich List of the 1,000 wealthiest UK residents. There are 151 billionaires with a total wealth of £771 billion. When the list began in 1989, there were 9 billionaires. That year, £30 million was enough to be in the 200th richest list; in 2019, you would need £700 million. In 1989, £5 million was enough to be included in the list; today, you need £120 million. Over a 30-year period, the qualifying level to be in the top 1,000 went up 24 times from £5 million to £120 million.
No one realizes that in the next 5 to 10 years they will have lost, on average, 75-90% of their wealth in real terms. The world is about to experience the biggest wealth destruction in history, which will destroy the artificial paper wealth that central banks have created. This will happen worldwide.
Up for discussion: None of the wealthy owns gold; socialism in the West will lead to Venezuelan hyperinflation; gold reveals governments’ failure; coming QE will have no positive effect; will AI be the end of humanity; gold investors have had 7 lean years; investors should now be out of stocks; and gold and silver are starting a spectacular bull market.
Precious metals are finishing a correction to the downside. It could take a little longer and go down a little further. But more likely is that the metals have turned and we are starting the most spectacular bull market in gold and silver in history. The move will be fueled by worsening economic conditions, leading to massive money printing and currency debasement.
At some point, the paper market in gold and silver will fail, leading to a panic and shortages to the point of no physical gold or silver being available. Much better to buy when the metals correct rather than chasing them on the upside.