The Big Short And The Bigger Long

For at least 35 years, the monetary system has been telling us that the current era is coming to an end. 

That means a debt collapse, a currency collapse and a collapse of most bubble assets like stocks and property. THUS THE BIG SHORT!

As I am writing this on Easter Monday, the Dow is down 1,100 points (2.9%) and the Nasdaq is down 3.3%. 

Anyone who buys the dips will be slaughtered. As I have said for a very long time, before this is over, stocks will be down 90-99% in real terms, which is gold. 

More importantly, this total collapse has very little to do with TRUMP. More later. 

And don’t for a moment believe that gold is overvalued. As many have used conventional technical tools to predict a gold correction, I have been saying for a long time that gold is in an acceleration phase and will reach multiples of the current price. (Yes, of course, there will be corrections on the way up, but most probably not yet.) THUS THE BIG LONG! 

END OF A MONETARY ERA

The end of a monetary era is always the same, with bubble assets going up in smoke. 

The majority of investors haven’t got a clue what is happening. They are hanging on to their stocks, hoping that Trump will save them by firing Powell and telling the next Chairman of the Fed to lower interest rates. 

But the time of manipulating rates is over. The market will now determine rates, which it should always do. And with uncontrollable debt escalation in the US and many other countries, the cost of debt can only go one way – UP! 

Remember, there is only one buyer of US debt, which is the Fed. But the Fed can only buy debt if the US government issues more debt.  

And therein lies the crux. More debt must be created in a futile attempt to save the ever-growing and out-of-control finances of the US. 

This is without doubt the biggest Ponzi scheme in history. Madoff would certainly have enjoyed it. 

And still, it would have been so easy, as all of this has been totally predictable.

To paraphrase Churchill, the more you study history, the more self-evident the future becomes. 

Still no government, no central banker, no journalist and virtually no market student spends any time on learning from the past. 

Why, why, why, you ask yourself. Well, it is clearly sheer arrogance in believing that we know better today and that we have better tools. And of course, “The times are different today”. Hmmm!

But they are not and have never been. 

Every monetary system has collapsed in history, and every currency has gone to ZERO, without fail. 

As I witnessed Greenspan’s expansionary policy after the property market collapse in the 1990s and how debt and derivatives quickly continued to grow, I was certain that we were seeing the end of a major monetary system. 

I had, since the late 1980s, been convinced that gold was the best insurance against yet another coming failure of the monetary system.

As major central banks like the UK and Switzerland were selling their gold in the mid to late 1990s, it was clear that we were near the bottom. So we waited until the 1999 gold bottom at $250 and confirmation of the gold price recovery in the early 2000s before buying physical gold. 

HISTORY OF VON GREYERZ

I founded Matterhorn Asset Management (brand name GoldSwitzerland) in 2000.

We changed the name to VON GREYERZ in January 2024 to indicate our long-term commitment to a generational family business built on wealth preservation principles.   

Finally, in early 2002, we decided to commit the major part of our liquid assets, and that of the investors we advised, to physical gold, stored outside the banking system. So we then bought important amounts of gold at $300 per ounce. 

We haven’t looked back since. Although we never intended to open up the business for outside clients, demand from close contacts led to our business expanding. 

Today, we are a global business with clients in 90 countries, and vaults in Singapore and Zurich with a $/CHF 400,000 starting level and also the biggest and safest private vault in the world in the Swiss Alps, starting at $/CHF 5 million.

BACK TO TRUMP – the culprit

But everything is, of course, Trump’s fault!  

All the misery hitting the world now is due to Trump’s capricious actions.

Here are just a few examples of how TRUMP is now wrecking not just the US but the whole world economy, according to the general public as well as the media and politicians in most countries:

Stocks crashing, bonds crashing, rates up, dollar crashing, trade wars with massive daily tit for tat yo-yo swinging tariffs between 10% and 145%, much higher Inflation, collapse of global trade etc, etc.

Yes, all of the above is happening and much more and it is all Trump’s fault.

But is it really?  No, Trump is not the culprit.

Instead, Trump happens to be the catalyst. 

Leaders are instruments of their time, and they appear at the time in the cycle to carry out what was going to happen anyway. 

Just like Thatcher and Reagan were the right leaders to lead the upturn in the early 1980s, Trump is perfect for creating the havoc and chaos that comes with the end of a major monetary era.  

What is happening in the US and global economy today, and the total collapse which is about to happen, is not “Trump’s fault”.

He just happened to be the right person to execute the inevitable downfall of a major monetary era. 

But even if it is not his fault, history will unfairly blame him as the villain who brought the world economy down, and thus see him as probably the worst president in history.  

So not the best of timing for Mr Trump. 

GOLD IS NATURE’S MONEY

Gold is the only money that has survived in history because it is the only money which is made by nature. 

Gold has history on its side – 5,000 years, as the only surviving currency, is enough proof.  Let’s see where Bitcoin is in 5,000 years…

Investors have nowhere to run.  

Government bonds were seen as good as gold. That’s why they were called Gilts in the UK. 

But today, they are not worth the piece of paper they are written on these days. 

Governments won’t even be able to pay the interest on them. And the capital is already lost. 

And the currency these bonds are issued in is also on its way to ZERO. 

It is incomprehensible and irresponsible to hold government bonds today!

Investors are guaranteed to lose 100%.

And stocks are likely to lose at least 90% in real terms, gold. The same with property, private equity and all other leveraged assets. 

GOLD IS THE ULTIMATE WEALTH PRESERVATION ASSET

That is one of the reasons gold is going up.  There is nowhere else to turn to for anyone looking for wealth preservation. 

But gold can, of course, not absorb all the capital which is looking for safety. 

The coming gold demand can only be satisfied at much, much higher gold prices. 

Gold is now also a Tier 1 asset. This means that physical gold is, according to the Bank for International Settlements rules, as safe as cash and government bonds. 

This is, of course, laughable. As I just explained, cash and government bonds will be worthless. Thus, it is an insult to gold to put it in the same category as cash and bonds. 

As we enter the biggest global wealth destruction in history, we will simultaneously witness a long-term revaluation of gold. Gold is the only monetary asset which has survived in history and will, in the coming years, be the only asset which will preserve investors’ wealth.

Thus, it is important to understand that this is not just another gold rally. Instead, gold will resume the role that it has historically had, as nature’s money and the only REAL MONEY that has ever existed. 

The current rerating of gold to what it was always meant to be is both historical and fundamental. Gold will be permanently re-rated and revalued, both as a transactional asset and as a wealth preservation asset that every investor must hold. 

But gold won’t be just 0.5% of global financial assets as it is today. More likely gold will be 10% or more. 

I have been standing on a soapbox for over 25 years, warning about the risks to the financial system and the critical importance of gold for wealth preservation purposes. 

Few have listened. But now, as gold has gone up 11- 12x depending on the currency it is measured in, everyone is talking about gold. 

There will be gold sellers popping up everywhere, and many without the integrity that investors must demand. 

• Only deal with companies that have the highest reputation and have been reputably involved with gold for at least 15-20 years. The long-term superior reputation of the owners and management is critical. 
• Hold gold in the safest jurisdictions, such as Switzerland and Singapore. 
• Don’t hold your gold in the US, which is more likely to take irrational actions. 
• Don’t hold your gold in banks.
• Also, only hold physical gold, which you can access directly in the vault. 

Many will wonder about silver. Yes, silver is likely to go up faster than gold. But it is much more volatile and thus riskier. We recommend 25% silver maximum and 75% gold. 

And remember that times are likely to become very difficult. Help your family and friends to whatever extent you can. 

Courtesy of VonGreyerz.gold

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