Publications

The ECB is making a mockery of the world: it is shirking its responsibilities (printing money, zero interest rate), it is being lax with the banking system (insufficient capital), it refuses to recognize the damage it is causing (bubbles in equities, bonds and real estate), it refrains from lecturing governments with chronic deficits (France, Southern Europe), it is displaying objectives that are not within its direct competence (climate), and it is designating scapegoats in the event of a crash! Signs of loss of control and the beginning of panic.

In Part II of Egon von Greyerz’ two-part conversation with Cambridge House’s Jay Martin, Egon candidly digs deeper into the realism rather than sensationalism of the current macro headwinds and the inevitable implosion of the global financial/monetary system.

These interventions on the futures markets now only have very transitory effects, and at the same time, they are reinforcing the tensions on the physical side. Each enforced correction on the paper market prompts a veritable run on the physical metal. This holds true for the entire metals compartment (whether precious or otherwise), with all the metals finding themselves in backwardation with each new raid.

Serbia has increased its gold reserves to 37 tonnes and moved them to the treasury of the central bank from Switzerland's Bern, governor Jorgovanka Tabakovic said.

Obviously, (ex-post) real rates are very important to the gold price. In the 1970s gold skyrocketed when real rates for two times in a row hit -5%. Can it happen again if inflation proves not be transitory and real rates stay negative?

In Part I of this 2-Part discussion with Cambridge House CEO Jay Martin, Egon von Greyerz discusses MAM’s precious metal approach to preserving generational wealth in the backdrop of an increasingly “messy” global backdrop.

Over the next couple of years we are likely to see a stampede into gold by institutional investors which need to have some inflation protection in their portfolios. But even if they increased their assets in gold from 0.5% to 1.5%, there will not be enough gold in the world to satisfy the extra demand. This type of increase in gold demand can only be satisfied by much higher prices, creating a gold mania.

I recommend to increase the proportion of gold in your portfolios and buy some, if you didn’t already have any, but that you should also reduce the size of the stocks component, because the situation is getting bad. Why? First of all, because inflation is accelerating in the United States, something that is never good news for the stock markets around the world.

The Fed, for its part, is continuing to print money at the same crazy pace as before. The central bank promised to reduce its asset purchases, but by refusing to hike its rates and continuing to grow its balance sheet, it is exacerbating the rise in prices even more. There is ever more money in circulation, chasing fewer and fewer tangible assets available. How do you expect the inflation to dissipate, in those circumstances?

Gold rallied thanks to the changed narrative on inflation, and Biden’s infrastructure plan can only add to the inflationary pressure. Huge price moves ahead?

The mass distribution is planning a price increase in food, reports Le Figaro. Michel-Edouard Leclerc, president of the hypermarket group of the same name, expects "a hell of a price increase this month". This should not come as a surprise. This was foreseen by one of the few economic theories that works: the Cantillon effect.

The consumer prices index (CPI) published in the United States is a shock for the last of the faithful believers still clinging to the myth of ‘transitory’ inflation. Prices of gold and silver are breaking out. Over the long term, we note that this Gold/Copper pairing is a fairly reliable indicator as to the steering effects of the Fed’s monetary policies, since its first interventions in 2008.

Is inflation transitory? How does inflation expectation affect gold price? When will gold break out from its cup and handle price target? Gold experts Egon von Greyerz and Matthew Piepenburg share their level-headed forecast in this video.

With the sheer quantity of cash accumulated in bank accounts in Western countries, the disruption to supply chains and the melting of the stocks in the futures markets (the last ‘tools’ that are putting the brakes on the rise in precious metals), the virus of physical gold and silver will likely spread from China to the Western countries...as and when the economic difficulties catch up with us.

The Fed’s favourite inflation indicator, the PCE Deflator is at a 30 year high. Since the Treasury or the Fed are never correct in any prediction, how can they now believe with inflation tuning to the highest in 30 years, that this is transitory. Well at least the Fed is consistent in their inaccurate forecasts.