WHEN HOPE D--S, GOLD RISES
Egon von Greyerz
@GoldSwitzerland
The world is now witnessing the end of a currency and financial system which the Chinese already forecast in 1971 after Nixon closed the gold window.
There are no good scenarios left for a country, currency and sovereign bond which has replaced productivity, balanced budgets, trade surpluses and national income with historically unprecedented debt, twin deficits and a central bank which has become the un-natural and de-facto (yet busted) portfolio manager over our shattered economy and totally centralized markets.
When the gold window was closed in 1971 I was working in a Swiss bank in Geneva. At the time, one dollar cost Swiss Franc 4.30. Today, 52 years later, one dollar costs Swiss Franc 0.88! There is no prize for coming first to the bottom. The dollar is down almost 99% in real terms since 1971. So it has a bit over 1% to fall to reach ZERO. To debate if a currency, which has fallen 98.2% in the last 52 years, is going to strengthen or weaken in the next year or two is really missing the point. Every single currency has without fail gone to ZERO. And this is where the dollar and its lackeys are heading.
Swiss Debt to GDP is around 40%. This was the level of US debt back in 1971 before the gold window was closed.
When it comes to grieving over the slow demise of the American economy, sovereign IOU/USD and the absolute failure of our “re-e------n-only-focused” policy makers, these stages of grief are easy to see yet easier to ignore. The political system is clearly a farce. You have to lie to be elected and you have to lie to stay in power. That is what the gullible voters expect. The sad result is that they will always be cheated.
The Federal Reserve now has $1.3 trillion in unrealized losses on its balance sheet.
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