Newsletters and Market Commentary

INFLATION DEFLATION AND GOLD

August 3rd, 2009 by Egon von Greyerz

The current debt and asset deflation will not lead to a Japanese 1990′s  style deflationary period. It is more likely to lead to hyperinflation in the US, the UK and many other countries.

Hyperinflation
Most people find it very hard to fathom that the current asset deflation is a necessary precursor to hyperinflation. The consequences of the credit and housing bubbles of the last few years have been a financial system which is leveraged to the hilt and with a foundation of quicksand. In order to prop up a sinking financial system just the US government has printed or committed to over $13 trillion and other governments have committed equally substantial amounts.
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THE DARK YEARS ARE HERE

July 14th, 2009 by Egon von Greyerz

The Dark Years are here
by Egon von Greyerz – Matterhorn Asset Management

In this newsletter we will outline what is likely to be the devastating effect of the credit bubbles, government money printing and of the disastrous actions that governments are taking. Starting in the next 6 months and culminating in 2011-12 the world will experience a series of tumultuous events which will be life changing for most people in the world. But 2011-12 will not be the beginning of an upturn in the world economy but instead the start of a long period of economic, political and social upheaval that could last for a couple of decades.
We will discuss
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WHERE IS THE GOOD NEWS?

June 26th, 2009 by Egon von Greyerz

The only reason why there has been an air of optimism in the world economy in the last couple of months is that the bearers of these false rumours of recovery all have a vested interest. They are either government officials who consistently mislead the people, bankers who are the principal beneficiaries of the dollar trillions printed  or they are investors in the stockmarket who hope to recover their losses.

Anyone who speaks to the man in the street will get a totally different message. Speak to the hundreds of thousands who are losing their jobs every week in the world, speak to the taxi driver, speak to the man with
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GOLDEN SHOOTS

June 19th, 2009 by Egon von Greyerz

No green shoots
There are no green shoots. Every single piece of economic and market news we observe confirms our view that the current optimism in the world economy is purely based on sentiment and not on facts.

The current corrective rallies in world stockmarkets were forecast by us in our January Newsletter. Corrective rallies create false optimism and hope. This is what we are seeing currently.

So, what indicators are telling us that things are going to get a lot worse:

Unemployment is increasing rapidly in all countries
Government deficits are rising at an accelerating pace
Many local governments, counties and cities are virtually bankrupt
Household finances are worsening rapidly
Bank balance sheets are as leveraged and
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A RECIPE FOR DISASTER

June 12th, 2009 by Egon von Greyerz

Take the following ingredients:

A banking system which is on the verge of collapse
Add a few $ trillion of government liquidity and guarantees
Inject $ 100′s of billions in loans and capital
Keep all the bank management that have caused the crisis
Pay them astronomical bonuses because otherwise they might be snapped up by a bankrupt competitor
Change the method for valuing the banks toxic and worthless assets so that they can publish hocus pocus  increases in profits
Construct a stress test that all banks can pass, some with minor capital injection

Let some of the banks repay the government money to make the markets believe that the banking system has been saved and is sound

And what
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NO COUNTRY HAS EVER ABOLISHED POVERTY BY PRINTING PAPER

June 4th, 2009 by Egon von Greyerz

No country has ever abolished poverty by printing paper
by Egon von Greyerz

We have consistently warned investors that the USA and many other countries including the UK will have a hyperinflationary depression in coming years. In this Newsletter we discuss why hyperinflation will happen. We also look at why government debt will grow exponentially in the next few years and discuss who is going to repay the additional $30-50 trillion that the world is likely to print since this crisis started?
Hyperinflationary Scenario Confirmed
We are primarily discussing the USA in this Newsletter, but most of the discussion also applies to the UK and many more countries.
Our three most important indicators
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LAST CHANCE TO BUY GOLD UNDER $ 1,000

May 28th, 2009 by Egon von Greyerz

“Don’t tell me what to buy, but tell me when to buy”!
Back in 2002 we told investors to buy physical gold for up to 50% of their liquid assets. Since then gold is up between 220% and 280% depending on base currency.
Thus it was very clear to us back then what the effect of the disastrous mismanagement of the world economy would be. But it is even clearer what will happen next. We are now going into the phase of recognition. This is the phase when the world at large is slowly waking up to the fact that printing unlimited amounts of money will make many currencies – and in
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UK JOINS THE PIGS – GOLD IS YOUR ONLY PROTECTION

May 21st, 2009 by Egon von Greyerz

We have told investors that the rating of US and UK sovereign debt is a farce and that they both will be downgraded.

Today the UK is on its way to joining the PIGS countries as Standard and Poor’s lower the UK’s AAA outlook from “stable to negative”. The PIGS countries are the hopelessly weak European countries (Portugal, Ireland, Greece and Spain) which have all been downgraded this year. The UK government deficit is estimated to reach £175 billion in 2009 (it will probably be a lot higher). This represents 12.4% of GDP.  Total UK government debt is forecast to reach £800 billion or 57% of GDP.

In our February Newsletter, “The
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GOODBYE DOLLAR – HELLO GOLD

May 13th, 2009 by Egon von Greyerz

Or, we could say  “Goodbye Paper Money  – Hello Real Money”.

We have for some time warned investors that the era of the dollar as a reserve currency is coming to an end soon and that the strongest and safest currency is gold. All currencies are hopelessly declining in value against gold and this trend will accelerate in the next few months and  years, starting now.

Voltaire’s statement from 1729 that “All paper money eventually returns to its intrinsic value – ZERO” is now ringing as true as ever. We show in the graph below the decline of major currencies against gold since 1900. The US dollar,  Euro (DM),  Pound and Yen
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IT AINT OVER ‘TIL THE FAT LADY SINGS

May 1st, 2009 by Egon von Greyerz

IT AINT OVER ‘TIL THE FAT LADY SINGS
by Egon von Greyerz

Spring is here and optimism is creeping back into the world economy. In this newsletter we will discuss why there will be a long time before the fat lady will sing (for explanation see Wikipedia). In our view we are still in the first act of three in a drama, the outcome of which will dwarf the most tragic of Wagner’s operas.
In our January 2009 Newsletter we forecast that there would be a correction up in the US stockmarket similar to 1930 when the market went up 50% from the low and then declined by a total
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