Historical Market Falls, Collapsing Currencies and Soft Statesmen vs. Rising Hard Assets

By Egon von Greyerz

Founder and Chairman

September 12, 2022

In this brief (20-minute) interview with Wall Street Silver, Matterhorn Asset Management founder, Egon von Greyerz, discusses US and global markets, precious metal pricing and the inevitable rise in hard assets as global economies and currencies soften in a backdrop of rising rate insanity and increasing risk.

Egon opens with a discussion regarding imminent risks facing equity markets into the autumn resulting from misguided (rising) interest rate policies pursued by a Fed which, as always, is far behind the curve of economic realities. Bond markets offer no alternative safe-havens or yields in a backdrop of negative real returns and inevitable defaults across the entire spectrum of credit products.

Looking at the UK, which is facing double-digit inflation and a pending recession, the “solution” appears to be additional subsidies which can only be monetized by even further currency debasement as Europe marches into a self-made energy crisis on the heels of blindly following US sanctions in the East. The hard but now unavoidable reality is that every crisis facing the West is inevitably resolved with money created out of thin air rather than GDP. Today’s financial leadership is not much superior to a room of monkeys, and the death of currencies is no longer theoretical but playing out in real-time.

Meanwhile, voices of common sense and discord within the EU, including from the Italian government, are asking if these sanctions are worth the energy crisis (and hence debt crisis) looming over Europe. How long can the European “Union” remain a union when faced with such insurmountable challenges? Where are the intelligent Western statesmen today? The sad answer, is nowhere, as Russia (with $75T in energy reserves) and China move forward as the West falls backwards.

Turning to gold, Egon addresses the obvious question of gold’s massive and current under-valuation. The simple reality is that gold will rise because everything else is imploding. Despite natural frustrations with current pricing, Egon remains non-pulsed by short-term gold valuations given its longer-term role as currency insurance in a fiat-money world without stable purchasing power. Today, preparation is far more important than market/price timing, as the markets are already running out of time.