By Egon von Greyerz

The world is immediately confronted with two nuclear threats of a proportion by no means beforehand seen in historical past. These threats are going through us at a time when the world economic system is about to show and decline precipitously not only for years however in all probability a long time.

The plain nuclear menace is the warfare between the US and Russia which presently is taking part in out in Ukraine.

The opposite nuclear menace is the monetary weapons of mass destruction within the type of debt and derivatives amounting to in all probability US$ 2.5 quadrillion.

If we’re fortunate, the geopolitical occasion will be averted however I doubt that the explosion/implosion of the Western monetary timebomb will be stopped.

Extra about these dangers later within the article.

There may be additionally a abstract of my market views for 2023 and onwards on the finish of the article.


With a enterprise lifetime of over 52 years in banking, commerce and investments, I’m lucky to nonetheless be taught each day and studying is actually the enjoyment of life. However the extra you be taught, the extra you realise how little you actually know.

Being a continuing and curious learner implies that life is rarely boring.

As Einstein stated:

The necessary factor is to not cease questioning.

Curiosity has its personal cause for current.”

There was one other necessary fidelity in my life which is knowing and defending RISK.

I learnt early on in my industrial life that it’s crucial to determine danger and endeavour to guard the draw back. For those who can obtain that, the upside usually takes care of itself.

Generally the danger is so clear that you simply wish to stand on the barricades and shout. However sadly most buyers are pushed by greed and rarely see when markets turn into excessive danger.

The tip of the Nineteen Eighties was such an apparent interval, particularly within the property market. Shares crashed in 1987 however in case you are not leveraged, inventory crashes usually don’t wipe you out. However in industrial property the leverage can kill a variety of buyers and sadly did within the early Nineteen Nineties.

The tip of the Nineteen Nineties was one other interval of very excessive danger within the tech sector. I used to be concerned with a tech enterprise within the UK and advised the founder in late 1999 that we should promote the enterprise for money. This was the time when tech companies have been valued at 10x gross sales. Just about none of them made a revenue. So we managed to promote the enterprise in 2000. We really bought shares as fee however have been allowed to promote them instantly which we did. Thereafter the Nasdaq crashed by 80% and plenty of companies went bankrupt.

At these explicit moments of maximum overvaluation, you do not need to be intelligent as a way to get out and take revenue. Tremendous earnings ought to all the time be realised when the valuation of companies doesn’t make sense and the prospects don’t look good.


So let’s get again to the large dangers which can be hanging over the world presently.

In my estimation this isn’t a warfare between Russia and Ukraine however between the US and Russia. Russia discovered it unacceptable that the Minsk settlement of 2014 was not saved to. As an alternative, the bombing of the Donbas space continued, allegedly inspired by the US. As Ukraine intensified the bombing, Russia invaded in Feb 2022.

I received’t go into the small print right here of who’s at fault and many others. However what is obvious is that the US Neocons have a serious curiosity for this warfare to escalate. For them Ukraine is only a pawn and the true enemy is Russia.  Why would the US in any other case lead the initiative to sanction Russia and ship weapons and cash to Ukraine however ship no peace keepers to Russia?

Allow us to simply remind ourselves that atypical folks by no means need warfare. The American folks doesn’t need warfare, nor do the Russians or Ukrainians. It’s with out fail all the time the leaders who need warfare. And in most international locations, even within the so referred to as democratic USA, the leaders have complete energy relating to beginning a warfare.

Most of Europe is closely depending on Russian oil and fuel. Nonetheless Europe is taking pictures itself within the foot by agreeing to the sanctions initiated by the US. The implications are disastrous for Europe and particularly Germany which was the financial engine of Europe.  Germany is now completed as an financial energy. Time will show this.

The worldwide financial downturn began earlier than the Ukrainian warfare butthe state of affairs has now severely deteriorated with the European economic system weakening quickly. Nonetheless, Europe is digging its personal grave by sending extra weapons and more cash to Ukraine a lot of which being reported to finish up within the fallacious arms.

The Ukrainian chief Zelensky is skilfully inciting the West to escalate the warfare as a way to obtain complete NATO involvement.

The chance of a serious escalation of the warfare is appreciable. Russia’s principal intention is for the Minsk settlement to be honoured while the US Neocons wish to weaken Russia in a direct battle. Main wars are sometimes triggered by a minor occasion or a false flag.

The Neocons know {that a} defeat for the US on this battle could be the tip of the US greenback, hegemony and economic system. On the identical time, Russia is decided to not lose the warfare, no matter it takes. That is the sort of background that has a excessive danger of ending badly.


Since there’s not a single Statesman within the West, darkish forces behind the scenes are pulling the strings. This makes the state of affairs notably harmful.

The chance of a nuclear warfare in such a state of affairs is incalculable however nonetheless very actual.

There are 13,000 nuclear warheads on the planet and fewer than a handful of those would wipe out many of the West and a dozen, a serious a part of the world.

Let’s hope that the West involves its senses. If not, the implications are unthinkable.


The opposite nuclear cloud which is monetary will fortuitously not finish the world if it detonates however inflict a serious world setback that would final a few years, possibly a long time.

I’ve in numerable articles (hyperlink) and interviews (hyperlink) outlined that the worldwide debt growth will finish badly.

This may be illustrated in plenty of footage so allow us to take a look at two self explanatory graphs.

The primary one exhibits how world debt has grown 75X from $4 trillion to $300T since Nixon closed the gold window in 1971.

The graph additionally exhibits that the world may attain debt ranges of possibly $3 quadrillion by 2030. That feels like a sensational determine however the rationalization is easy. Derivatives have been round $1.4 quadrillion over 10 years in the past as reported by the Financial institution of Worldwide Settlement (BIS) in Basel. However with some hocus-pocus they decreased the determine to $600 trillion to make it look higher cosmetically. The BIS determined simply to take only one aspect of a contract because the excellent danger. However everyone knows, it’s the gross danger that counts. When a counterparty fails, gross danger stays gross. So so far as I’m involved, the outdated base determine was nonetheless $1.4Q.

Since then derivatives have grown exponentially. Main quantities of debt are actually created within the derivatives market moderately then within the money market. Additionally, the shadow banking system  of hedge funds, insurance coverage corporations and different monetary enterprise are additionally main issuers of  derivatives. Many of those transactions should not within the BIS figures. Thus I consider it’s practical to imagine that the derivatives market has grown not less than consistent with debt however in all probability rather a lot quicker within the final 10+ years.  So the gross determine is well in extra of $2 quadrillion immediately.

When the debt disaster begins in earnest which might be immediately or within the subsequent 2-3 years, main defaults in derivatives will turn into debt as central banks print cash on an unprecedented scale in a futile try to avoid wasting the monetary system. That is how debt can develop to $3Q by 2030 because the graph illustrates.


The second graph exhibits that the US, the world’s largest economic system, resides on each borrowed money and time.

In 1970 complete US debt was 1.5X GDP. At present is is 3.6X. Which means as a way to obtain a nominal progress in GDP, debt needed to develop 2.5X as quick as GDP.

The conclusion is easy. With out credit score and printed cash there could be no actual GDP progress. So the expansion of the US economic system is an phantasm manufactured by bankers and led by the non-public Federal Reserve Financial institution. Because the graph above exhibits, GDP can solely develop if debt grows at an exponential charge.

The hole between debt and GDP progress is clearly unsustainable. Nonetheless with hysterical cash printing within the subsequent few years, in an try to avoid wasting the US monetary system, the hole is more likely to widen even additional earlier than it’s eroded.

There is just one method for the hole to slender which is an implosion of the debt by default, each sovereign and personal. Such an implosion may even result in all property inflated by the debt – together with bonds, shares and property – additionally imploding.

Quickly the US has achieved this illusory wealth however sadly the time is now coming when the Piper have to be paid.


The times of the greenback as reserve forex are counted. A forex that has misplaced 98% within the final 50 years hardly deserves the standing of a reserve forex. A mix of navy may, petrodollar funds and historical past has saved the greenback far too sturdy for a lot too lengthy. Since there isn’t a fast various, it’s attainable that the greenback quickly will stay sturdy for some time because the Ukrainian battle continues. The economies of different currencies (Euro, Pound, Yen) are clearly too weak presently to be practical reserve forex contenders.

The times of the Petrodollar are additionally counted.

Main strikes are actually happening between the world’s largest vitality producers (excluding the US) which can regularly finish the Petrodollar system.


However firstly let’s perceive that despite the local weather zealots, there will probably be no critical various to fossil fuels for a lot of a long time. Fossil fuels account for 83% of world vitality.

International progress can solely be achieved with vitality. Since renewables immediately solely account for six% and are rising very slowly, there will probably be no critical various to fossil fuels for a lot of a long time.

Despite that, Western governments in Europe and the US haven’t solely stopped investing in fossil fuels, but additionally closed down pipe strains, coal mines and nuclear energy crops. That is after all sheer political and financial lunacy and a really fast methodology to realize a collapse of the world economic system. Add to that the Russian sanctions and we now have a world recipe for catastrophe.

With out fossil fuels, the world economic system will collapse. Despite that, political stress has slowed down fossil gasoline manufacturing considerably. Because the graph exhibits, fossil gasoline manufacturing is more likely to decline by 26% by 2048. Will increase in nuclear and, hydro and renewables won’t compensate for that fall. The impact will probably be a fall in world GDP and commerce. However extra concerning the vitality aspect in one other article.

Nuclear energy

Few folks perceive the significance of world commerce. Rome conquered many international locations from Europe to Asia and Africa. However in the course of the Roman Empire, the assorted economies prospered on account of free commerce. The Romans have been clearly superior thinkers in comparison with present Western leaders.


The GCC international locations (Gulf Company Council) encompass Saudi Arabia, UAE plus plenty of Gulf international locations have 40% of the oil reserves on the planet.

One other 40% of oil reserves belong to Russia, Iran and Venezuela all promoting oil to China at a reduction presently.

As well as there are the BRICS international locations (Brazil, Russia, India, China and South Africa. Saudi Arabia additionally wish to be part of the BRICS which represents 41% of the worldwide inhabitants and 26% of world GDP.

Lastly there’s the SCO, the Shanghai Cooperation Organisation. This can be a Eurasian political, financial and safety organisation headquartered in China. It covers 60% of the realm of Eurasia and over 30% of world GDP.

All of those organisations and international locations (BRICS, GCC, SCO) are regularly going to realize world significance because the US, and Europe decline. They may cooperate each politically, commercially and financially. As vitality and oil is a standard denominator for these international locations, they are going to most certainly function with the Petroyuan as their frequent forex for buying and selling.

With such a robust constellation, minor hobbyist teams like Schwab’s WEF will dwarf in significance and eventually disappear because the WEF members together with the political leaders lose their energy and the billionaires their wealth.


This text is already very lengthy however I’ll nonetheless cowl what I see in markets in 2023 and coming years. I’ve lined this in lots of articles so I will probably be transient.

Shares have simply had a serious down yr globally. That is the mere starting of the implosion of the acute overvaluation based mostly on printed cash. I’d be stunned if shares on common decline by lower than 90% in actual phrases. The measure for actual phrases is after all gold.

It won’t be a straight line fall and plenty of buyers will purchase the dips till they’ve exhausted most of their wealth.

Bonds will in all probability carry out even worse than shares. Many debtors, each sovereign and industrial, will default.

The 40 yr decline in rates of interest has completed. Central banks will lose management of the curiosity markets as buyers panic out of bonds.

The mix of excessive inflation, collapsing currencies and defaults on an enormous scale will flip the bond market right into a historic horror story.

The bond equation is easy:

Hyperinflation + Currencies going to Zero + Defaults = BOND VALUES ZERO

Good luck to bond holders. They may want it.

Funding properties may even fare badly. Low rates of interest and limitless credit score have created a bubble of historic proportions.

In lots of international locations it has been attainable to borrow as much as 15 yr cash at 1% or much less. Anybody who didn’t benefit from free cash will remorse it badly. The chance reward calculation was apparent. At 1%, charges may solely go to zero which is a 1% fall. However, charges may go to twenty%+ like they did within the Nineteen Seventies.

Falls of 75-90% in actual phrases will probably be commonplace within the property market.

When you’ve got no mortgage or a low one at a set charge, don’t fear. However simply take a look at it as an abode and never an funding.

Lastly and most significantly let’s take a look at GOLD.

We invested closely into gold in early 2002 at $300 for ourselves and the buyers we suggested. This was based mostly on our danger evaluation of the monetary system and a gold value which had declined for over 20 years. We have been sure that gold was undervalued on the time and in addition that it was the last word wealth preservation funding.

Since that point we and our shoppers haven’t ever anxious in the future about our gold holdings.  As a matter of reality, gold immediately in relation to cash provide is cheaper than in 2002 and due to this fact represents very good worth.

2023 would be the begin of one other gold period. The circumstances are good for this.

Again in mid September I tweeted that gold was bottoming when the worth was $1665 and that we’d see $2,000 not less than in 2022. Properly as I usually say, forecasting is a mug’s recreation and we’re “solely” at $1,875 immediately. See graph under which was Tweeted in Sep 21.

Contemplating the 2 nuclear dangers mentioned above, the gold value turns into irrelevant. Bodily gold is the last word wealth preservation funding. The worth needs to be measured in ounces or kilos and never in ephemeral currencies.

Gold is more likely to attain ranges that nobody can think about immediately. However to forecast a value in paper cash serves no function with out defining the buying energy of the fiat cash at some future level.

Gold is the steel of kings and needs to be the first wealth preservation holding. Silver has an enormous potential however is way more risky and far bulkier.

This can be very necessary how gold is saved. The principal a part of your gold holding needs to be exterior your nation of residency. It is best to be capable to flee to your gold.

Don’t retailer gold at house. With crime charges surging globally and more likely to go up a lot additional, this can be very unwise to retailer gold at house. Add to that doubtless social unrest in most international locations, no matter valuables you retailer at house are in danger nonetheless effectively hidden you assume they’re.

There isn’t any good nation to retailer gold immediately. The world has turn into a typically unsafe place. Our firm has carried out a serious evaluation of the very best international locations to retailer gold globally. This will probably be revealed at some future level.

Switzerland continues to be considered one of our favourites. The mix of the political system, historical past and 70% of gold bars being refined in Switzerland plus most non-public gold being saved right here, makes it an apparent alternative.

Our firm additionally has a serious benefit in having the ability to provide the one non-public vault which is nuclear bomb proof and might function absolutely below any such circumstances. We additionally provide full information backup even in opposition to EMP dangers (Electro Magnetic Pulse). I’m not conscious of anybody in our business that provides this safety. The placement of this vault is confidential. Here’s a transient video which exhibits the distinctiveness of the vault:

To summarise, the dangers immediately are higher than anytime in historical past. A full nuclear warfare between the US, Russia and China is the tip of mankind and nobody can defend in opposition to this type of occasion.

However there are extra restricted conditions, whether or not nuclear or with standard weapons which necessitate the very best safety attainable of your wealth preservation asset.

Let’s hope {that a} main nuclear warfare won’t happen. In any case, there’s little or no we will do about it.

The monetary nuclear danger could be very actual and in addition very more likely to be triggered for my part. Anybody who can has a accountability to organise safety in opposition to this danger as mentioned on this article.

Lastly keep in mind that in intervals of disaster household and mates is your most necessary safety. Serving to others will probably be important in a coming disaster.

Leave a Comment

Copyright © 2024. All Rights Reserved. Finapress | Flytonic Theme by Flytonic.