In an August 22, 2015 interview, Egon von Greyerz, founder and Managing Partner of Matterhorn Asset Management AG and GoldSwitzerland predicted “the most incredible bull market” in precious metals in the coming months.
With stock markets around the world apparently collapsing and the gold market rallying, von Greyerz said, “The perfect storm has now started. . .and this storm will turn into a hurricane probably in the next two months.”
Greyerz expects to see all stock markets down at least 25% to 30% and “probably a lot more.” He predicts that gold will reach $2,000 and silver $50 in 60 to 90 days as the hundred-year cycle of credit explosion “implodes.” He believes that the dramatic increase in the price of gold will “just be the reflection of paper currencies returning to their intrinsic value of zero.” He foresees massive demand for physical gold as the only safe method to protect wealth.
As asset markets tumble, investors will flock to gold, but there is, Greyerz said, “very little physical gold available.” China will buy about 2,000 tons this year and India 1,000 tons this year, even while annual mine production is only about 2,500 tons. Furthermore, bullion banks hold extremely low stocks of gold, which is, Greyerz said, “Why they’ve tried all the tricks in the book to suppress the price of gold in the paper market….This suppression has now come to an end.” He predicts “the most massive panic buying to cover shorts.”
Greyerz sees a global crisis with stock markets and currencies collapsing around the world, especially the overvalued dollar. Every single emerging market currency is under pressure. The Russian ruble is down more than 30% since May, and the list of troubled currencies is growing longer by the day. However, Greyerz said, “Any investor who owns gold is totally protected.” In Australia, for example, gold is down only 12% from its 2011 peak while the Dow Jones was down 530 points today. Some $2.5 trillion in value was wiped off the books in the past few days.
Even after six and a half years of zero interest rates, Greyerz said, “The real economy is not growing.” Only homeowners, banks and investors have benefited from the zero interest rate policies of central banks; “common people just have more debt.”
China’s poor manufacturing numbers yesterday were just one more catalyst causing stocks to fall in what Greyerz sees as a “great financial catastrophe.” Worse, European leaders do not understand that their EU experiment has “failed….Europe is crashing around them.”
In the US, Greyerz said, “The Fed just confirmed that the economic data does not allow them to raise rates….We will see a panicked reaction this autumn with massive money printing . . . joined by every central bank in the world.” The renewed printing of money will help stocks in the short term. “For the very few who hold gold and silver, and precious metal mining stocks,” Greyerz said, “they will now see rises in these markets.” For precious metals he predicts “The most incredible bull market,” even as there is a major decline in the bubble markets: stock, bonds, and housing. He sees investing now in physical gold and silver as “a lifetime opportunity to not only make money, but to preserve your capital.” If investors remain in the bubble markets of real estate, stocks and bonds, they “will likely lose most of their assets in the coming years.”
