We Are Moving Closer To Total Financial Collapse

Today Egon von Greyerz told King World News that the global financial system is much closer to the point of collapse.  Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland.  Von Greyerz also said, “world money supply is coming down at a very fast rate.”  Here is what Greyerz had to say about the unfolding crisis which is taking place around the world:  “We are very near a deflationary implosion if the money printing doesn’t come soon.  Spain said they could finance their own banks, and now they say they need 50 billion euros from the ECB.  50 billion euros is a drop in the ocean, Eric.  We’re probably talking about hundreds of billions or maybe one trillion euros they need.”

“Portugal has also said they need money from the ECB.  Portugal’s banking system is on the verge of collapsing.  The UK is also looking terrible.  GDP is negative.  All of the economic figures for the UK, including production, are collapsing. 

The UK already has the highest borrowing of any country in the world.  The UK’s total borrowing to GDP is roughly 900%....

“So the UK is not going to be far behind the rest of Europe.  There will soon be an attack on the UK financial markets because their economy is in real trouble.  Italy will also have a financing crisis very soon. 

Interestingly, the Swiss have been spending a fortune defending their currency.  In the last couple of weeks the Swiss have spent roughly $30 billion Swiss francs to buy euros and sell Swiss francs.  Switzerland will not be able to continue to do that.  At some point, this scheme will collapse.

Germany is also suffering.  All of their economic figures are down.  Over in the East, China is suffering.  In Beijing, they now have 50% vacant homes.  Prices of luxury goods are falling rapidly in China.  Prices for quality French wines have been cut in half as an example.  China is totally dependent on the rest of the world, and global GDP is coming down right now.

Moving to the US, there is real unemployment of about 23%, not the fake figures of 8% or 9% being tossed around in the mainstream media.  Deficits are increasing and economic figures are contracting.  There will soon be an attack on the dollar.  So the dominos are continuing to fall.

Coming to an even bigger problem, world money supply is coming down at a very fast rate.  This is a very serious situation.  This is happening in all countries, but money supply is falling more rapidly in China.

For many years I have expected that we will have a hyperinflationary depression.  This, to me, has always been a 90% probable outcome.  I would now say the odds of hyperinflation have declined to about 60%. 

The possibility that the world will experience a deflationary implosion has increased to 40%.  If this scenario plays out, it will mean the whole banking system will implode.  If central planners don’t come up with a massive money printing package very soon, in the trillions, the odds of this implosion increase with each week that passes.

This would be a terrible situation for the world because if the banking and financial system collapses, the whole world will collapse.  Governments know we are getting very close to this scenario. 

In spite of these headwinds, I still believe we will see hyperinflation.  The bottom line is the world is in imminent need of a massive money printing package.  If that doesn’t happen, we are going to see the deflationary implosion.”

Von Greyerz also added: “With all of this as the backdrop, we are continuing to see central banks buying gold.  We just saw the record imports of over 100 tons of gold into China in April.  Iran also picked up 25 tons of gold.  So physical buying continues to be robust.