THE CYCLE OF EVIL 

By Egon von Greyerz

Founder and Chairman

October 30, 2023

We are on the inevitable road to perdition for the world economy & financial system, ending in a potential global conflict of uncontrollable proportions. 

Evil begets evil as The Cycle of Evil hits countries at the end of an uncontrollable debt expansion.

The pattern throughout history has always been the same – countries and empires, without fail, become victims of their own success -failure, whether it was the Mongols, Ottomans or the British.

As real growth ceases, a country starts to finance expansion with debt until it cannot even afford the interest on the debt, never mind the capital which it has no intention to repay.

At some point, the people, fearing a war or terrorist attack will approve of the leader’s fear mongering by supporting unlimited debt issuance. This is now happening in the US with regard to Ukraine and Israel.

Neither the US nor Europe is taking a single step to remedy the situation. Both are now in the Cycle of Evil of more deficits, more debt, higher interest costs, leading to more deficits, more debt higher interest costs, leading to ……………..

The Cycle of Evil is also accompanied by decadence and moral decline where leaders invent problems that are not real such as climate change, ESG (environmental, social and governance), forced vaccines and incarcerations, 25 new genders and other woke issues etc. 

Few Americans understand that the next stage of the Cycle of Evil is about to hit them. 

And even fewer Europeans have a clue that they will be dragged down into the same debt collapse quagmire.

The next stage will involve many banks failing, more than the FDIC or government can afford to save without destroying both the Currency and the Bond Market, 

A collapsing currency and sovereign debt paper that no investor wants to touch with a bargepole is hardly the right climate for massive debt issuance. 

Most sovereign investors have already realised that they don’t want US debt at any interest rate. 

So that means even higher interest rates, more debt issuance as the Cycle of Evil eventually turns to a “Final Collapse” as von Mises described: 

THE CYCLE OF EVIL CONTAINS MORE CATACLYSMIC COMPONENTS THAN ANY SIMILAR CYCLE IN HISTORY.

Let us summarise where the world is:

GLOBAL CONFLICT

We have two wars both capable of leading to a major global conflict plus high risk of terrorism and jihads in the West. Just as with most global/world wars, there is no attempt at finding peace solutions. 

To make things worse, there is not a single Statesman in the West capable of taking a lead in solving the conflicts. 

DEBT COLLAPSE 

We have a global debt burden of $330 trillion plus derivatives totalling $1.5-3 quadrillion with debt growing exponentially, especially in the US.  This will very soon develop into a debt crisis and collapse of a heavily leveraged Western world plus Japan and China and also emerging markets.

CIVIL UNREST and CIVIL WAR

The downturn and eventual collapse in the global economy will lead to poverty, famine and misery for a great number of people in the West and Emerging Markets. 

UKRAINE WAR – 

This war started as a local conflict but with a US backed putsch in 2014, throwing out the democratically elected Russian friendly leader, this was the beginning of a war between Russia and the US and not a local war. 

The Minsk agreement brokered by Germany and France was supposed to settle the matter but as Merkel recently admitted, the intent was never to create peace but to give enough time for Ukraine to arm with the help of the US. 

The US forced Europe to take sides, in spite of Europe’s (especially Germany’s) dependence on Russian energy.

We can blame Russia for invading or we can blame the US for provoking Russia. 

Rather than to go into all the arguments who is right and who is wrong, best to accept that we now have a global conflict stemming from the Ukraine situation. The US has a reluctant Europe on its side – a Europe which is militarily and economically weak. Russia has China, Iran, North Korea and a few others, most probably a militarily superior group. 

A bankrupt USA just sends more money and weapons but has zero intent to send peacekeepers. 

Thus there is no end in sight but the independent reporting tells us that Ukraine is unlikely to have a chance against the superior Russian war machine.

In the meantime an estimated 500,000 troops in total have died plus many more wounded and civilian casualties. 

And still no peace attempt.

If the warring country’s leaders led from the front, which has been common in history, they would probably be less inclined to sacrifice more lives including their own.

ISRAEL – PALESTINE WAR – 

This region has had ongoing conflicts throughout history.  It was insoluble before 1948 and has become even more complex since 1948 when Israel was created. 

Again, we have major powers involved with primarily the US and Europe supporting Israel and Iran, Turkey and major parts of the Arab-Muslim world supporting Palestine and also Russia. 

The US is sending two aircraft carriers to the Mediterranean to assist Israel. But as a military expert pointed out, these are in modern warfare just two floating bathtubs which can be taken out easily by two missiles from for example Iran.  

In this conflict there are also many casualties on both sides plus a massive number of Palestinians being homeless with little food or even medical help. 

What makes this conflict even more serious is the major support in the West for the plight of the Palestinians. Massive protests in many countries can easily escalate to serious clashes or even civil war. 

In addition, we can be certain that the massive migration from Muslim countries to the West will also contain many militant cells which could easily create havoc in the US and in many European countries.

Both Europe and the US basically has an open border policy for any migrant who wants to enter. But neither continent has the ability to properly take care of the migrants. This will risk both continents to be destabilised with both migrants and the native population not accepting the other side.

CHINA – TAIWAN

It is unlikely that China will abandon its claim that Taiwan rightfully belongs to them. 

The US is already busy with two wars, assisting with an array of military equipment plus $100s of billions of financial aid. A third conflict with major US military involvement would be extremely unwelcome to the US government. 

But that is exactly the right time to strike from China’s point of view. 

China knows of course that seizing Taiwan, is likely to involve major US sanctions leading to reduced or no US imports from China leading to a major fall or collapse of global trade. It is doubtful that Europe or the rest of the world would comply with these sanctions.

It would also lead to freezing of China’s assets in the US of $1.7 trillion, including treasuries of $850 billion offset by US direct investments in China.

But if China seizes Taiwan, they would control 60% of the world’s semiconductor production and more importantly 90% of advanced semiconductors. This would be a very serious blow to US strategic industries including military equipment.

THE CYCLE OF EVIL HOLDS ALL COMPONENTS TO CREATE HELL ON EARTH 

It is intellectually fascinating but humanly depressing to watch how all the pieces fall into place for a global conflict of a magnitude greater than WW1 or WW2.

It is frightening to see how one component after the next falls into place in the Cycle of Evil.

Nobody realised that the shooting of the Archduke of Austria-Hungary Franz Ferdinand in 1914 would be the catalyst for WW1. 

Nor did anyone understand that Germany’s invasion of Sudetenland in Czechoslovakia  in 1938-9 and of Poland on September 1, 1939 would lead to WW2.

The two major conflicts in Ukraine and Israel-Palestine today with Taiwan looming combined with no attempt of peacemaking plus a likely collapse of the global financial system and world economy is more than enough to create devastation for the world for the next decade or more. 

Let us sincerely hope that all these events in the Cycle of Evil will not develop into global havoc.But even if that were to be avoided,  it is absolutely certain that global risk today is higher than at any time since the 1930s. 

WEALTH PRESERVATION 

Most of us have little influence over the geopolitical or global economic situation.

Nor do most people have the flexibility to move to a lower risk area in regards to a conventional or nuclear war. 

But anyone who has savings however small or big can at least protect some of their liquid assets. 

As we have pointed out in many articles, physical gold and some silver is the only money which has survived and maintained its purchasing power for thousands of years. 

Thus gold and silver are the perfect insurance and wealth preservation asset to protect against the coming problems. 

It is critical to hold gold and silver outside a fractured financial system in the safest jurisdictions preferably outside your country of residence. It is important to be able to flee to your wealth preservation asset if there are problems in your own country. 

It must also be kept in the safest vaults with direct personal access. Nuclear bomb proof vaults are an additional important protection but hard to find. We offer this in Switzerland for bigger investors. 

As I have stressed in recent articles,  WILL THIS FALL BE THE FALL OF FALLS, gold just fulfilled the technical projection of a small dip and is now on its way to much, much higher levels.

With Central Banks likely to switch their reserve assets from US dollars to gold, we will see a major revaluation of gold to probably multiples of the current price. See my important article: A DISORDERLY RESET WITH GOLD REVALUED BY MULTIPLES

HUMAN SUFFERING – HELP FAMILY AND FRIENDS

Sadly the coming conflict will lead to major human suffering both economically and humanly.

So helping family and friends is very important. 

Also, remember that some of the best things in life are virtually free. In addition to family and friends, life offers so many wonderful things like nature, music, books, sports etc.