Viscous Cycle Of Self Destruction, Gold Outperforming All Asset Classes – Silver Doctors

The present pretend financial system will collapse beneath its personal nugatory weight…

 by Egon von Greyerz of Gold Switzerland

“The primary panacea of a mismanaged nation is inflation of the foreign money; the second is warfare. Each convey a brief prosperity; each convey a permeant smash. However each are the refuge of political and financial opportunists.”

Ernest Hemingway

Because the West is standing on the sting of the precipice, there are solely unpalatable outcomes.

At greatest the world is dealing with a hyperinflationary melancholy later adopted by deflationary melancholy.

However sadly there’s at this time rather more at stake because the West is frenetically escalating the sound of warfare drums in opposition to Russia’s invasion in Ukraine.


As the worldwide economic system reaches the purpose of collapse, nations get the leaders they deserve. There may be at this time no chief or statesman within the West who can stand as much as Putin in an effort to negotiate peace. Biden sadly neither has the vigour, nor the flexibility to play any important position in fixing the battle. Additionally, he has the neocons pressurising him to assault and defeat Russia. And Biden’s rhetoric in opposition to Putin is actually not conducive to peace, with phrases like warfare prison and genocide. Biden mustn’t overlook that simply within the Vietnam warfare, the North Vietnamese and Viet Cong are estimated to have misplaced a million troopers and two million civilians. Unprovoked wars are in fact all the time mindless whoever begins them.

President Zelensky is doing all he can to contain the remainder of the world militarily by demanding extra money and extra weapons from the West, somewhat than placing his efforts into peace negotiations. Ukraine can in fact by no means win the warfare in opposition to Russia alone. And dragging within the US and NATO can solely result in a warfare of incalculable penalties and probably a WWIII which might be nuclear.

And within the West, not a single chief is making a severe peace try. From Biden to Johnson, Macron and Scholz, we solely hear discuss of extra weapons and extra money for Ukraine. That is terribly tragic and an indication of completely incompetent management within the West.

Trump had many weaknesses, however he wouldn’t have hesitated to provoke peace talks with Putin.


So the US and the West has no capability or want to attain peace. And Boris Johnson has welcomed the warfare as a diversion from his home “Partygate” political pressures and due to this fact has taken an aggressive place in opposition to Russia somewhat than discovering a peaceable answer.

Macron is an opportunist who stands with one foot in every camp by being chummy with Putin and on the identical time condemning him.

And Scholz, the German chancellor is in an inconceivable place attributable to Merkel’s poor administration of Germany’s vitality place. The three remaining German nuclear energy stations might be closed down and fossil fuels are politically unacceptable. Almost 60% of German gasoline imports come from Russia. German business wouldn’t survive with out Russian gasoline. So Scholz needs to have his cake and eat it, sanctioning Russia on the one hand and concurrently spending billions of Euros shopping for their vitality and different pure assets together with meals.

Fairly a precarious place for Germany to be completely dependent economically on its warfare enemy. On the identical time, that is good for the world as Germany has a vested curiosity to attain peace.

However we should do not forget that solely a minority of nations are backing the actions of the US and Europe.  Africa, South America, most of Asia are usually not taking sides and persevering with to commerce with Russia and these areas symbolize round 85% of world inhabitants.

So the overwhelming majority of the world has no want for warfare with Russia however their voice is seldom heard within the Western dominated media.

As Western leaders proceed their warfare mongering, we should remind ourselves of Winston Churchill’s phrases:

“By no means, by no means, by no means consider any warfare might be clean and simple, or that anybody who embarks on the unusual voyage can measure the tides and hurricanes he’ll encounter. The statesman who yields to warfare fever should realise that when the sign is given, he’s now not the grasp of coverage however the slave of unforeseeable and uncontrollable occasions.”

                                                                                 Winston Churchill

So Messrs Biden, Johnson, Scholz and Macron ought to take word that they may quickly, within the phrases of Churchill, be “the slaves of unforeseeable and uncontrollable occasions”.

Russia is clearly decided to take again what they think about traditionally belongs to them, which is the Donbas area within the east and southern Ukraine, together with Odessa, which supplies them full entry to the Black Sea.

Being completely surrounded by NATO nations, particularly if Finland and Sweden be a part of, is clearly one other “irritation” for Russia however since these nations have by no means been a part of the Russian empire, it has much less significance.


Politics and cash can’t be separated and the geopolitical scenario that has now arisen  will act as an ideal catalyst to the tip of the financial period for the reason that creation of the Fed in 1913.

However what we should bear in mind is that it’s primarily the Western managed financial system  (together with Japan) which can come to an finish.

America’s and the EU’s last determined try to avoid wasting their damaged system by sanctions on world commerce will ultimately fail because the Western economies steadily decay in an financial and social breakdown caused by a quagmire of foreign money collapse, deficits, money owed and historical past’s most epic of asset bubbles.

The Phoenix rising will clearly be the East, led by China with Russia as an vital companion. China is, inhabitants sensible, the largest nation on the planet and can quickly be the largest nation in GDP phrases. With complete US help within the type of know-how and expertise China has constructed up a strategic and superior manufacturing base with dominance in lots of sectors.

For instance, 18% of all US imports come from China together with 35% of all computer systems and electronics. Chinese language sellers symbolize 40% of all prime manufacturers on Amazon and 75% of all new sellers.

The US and the remainder of the world criticise Germany for being depending on Russian vitality, however the US folly of shifting a lot of its manufacturing to China actually qualifies for joint first prize in industrial and strategic idiocy.

Since gold is the final word cash and the one cash that has survived in historical past, it can have a vital position in coming years as the fiat foreign money system collapses.


Empires usually endure a drawn-out and painful dying. The autumn of the US and the West has actually been lengthy, beginning over half a century in the past. However the pretend prosperity has benefitted a small elite and lumbered the plenty with colossal money owed.

In 1971, US debt was $1.7 trillion and 50 years later it’s $90 trillion, a mere 53x enhance. 

Because the finale of the debt and foreign money collapse approaches, the desperation rises exponentially. Consequently, rising quantities of cash have to be created and wars initiated to justify the debt explosion, all in a vicious cycle of self-destruction.  

For over half a century, the US has destroyed its foreign money and initiated unprovoked army actions in quite a few nations – nearly all of them unsuccessful.

Sure, the US has actually skilled a brief false prosperity. However that would solely be achieved with deficits, debt and printing pretend cash.

The large price of the failed Vietnam warfare led to Nixon closing the gold window in 1971.

As Nixon stated on the time, “the energy of the foreign money is predicated on the energy of the economic system”! 

Hmmm, half a century later that foreign money has misplaced 98% in actual phrases (GOLD) and the Federal Debt has grown 75 fold from $400 billion to $30 trillion. It took 22 years , from 1971 to 1993 for the debt to develop by $15 trillion. Simply within the final 2 years the debt is up by the identical quantity of $15 trillion.

It’s superb, as Hemingway stated,  how shortly “political and financial opportunists” can destroy each the economic system and the foreign money.

So there now we have it. The US greenback is a completely failed foreign money reflecting the bankrupt state of the US economic system. As I’ve identified quite a few instances, the US has elevated the federal debt yearly since 1930, except for 4 single years.

As most currencies have been linked to the greenback since WWII, both by means of Bretton Woods or by means of the petrodollar, they’ve all been dragged down into the swamp with the greenback.

Having began my working life a few years earlier than the ominous date of 15 August 1971 (closing of the gold window) I’ve had the most effective seat to watch the collapse of a foreign money system and the unhappy however inevitable incidence of warfare.

Intellectually it’s a fascinating expertise to observe incompetent and determined leaders who’ve completely didn’t handle each their economic system and foreign money.

However even with out a world warfare, the results of the collapse of the West can have devastating results on humanity for a really very long time.


Because the 1999 low of $250, gold is up 8X in greenback phrases. However extra importantly, the Dow Jones has misplaced 60% in opposition to gold throughout the identical interval (dividends are excluded).

On this century, gold has been among the finest performing asset lessons and nonetheless no person owns it with lower than 0.5% of economic belongings being invested in gold. Since January 2000 gold is up 7X.

It’s fascinating that regardless of this stellar efficiency, gold has been completely ignored by the funding world.

However that’s all about to vary.

The present pretend financial system primarily based on $300 trillion of world debt, plus nugatory paper belongings within the type of derivatives to the extent of round $2 quadrillion, will over coming years collapse beneath its personal nugatory weight.

Future observers and historians will write many books on a system of smoke and mirrors with pretend cash, pretend paper and grossly overvalued belongings, all creating probably the most colossal asset bubble in historical past.

Clearly China and Russia would be the kernel of the longer term world economic system with the mixture of the globally dominant manufacturing base of China and the world’s biggest pure useful resource reserves of Russia amounting to an enormous $75 trillion.

China and Russia are additionally the world’s largest producers of gold and possibly have gold reserves far in extra of their reported figures which may quantity to nicely in extra of 20,000 tonnes. Alternatively, a significant a part of the reported US gold reserves of 8,000 tonnes has in all probability been offered or leased in opposition to nugatory paper gold claims.

So it’s apparent that over coming years because the Western greenback primarily based foreign money system collapses, it is going to be changed by commodity backed currencies with the Yuan and the Ruble as two vital pillars, each backed by gold.

Anybody who hasn’t purchased bodily gold but, which is 99.5% of buyers, can nonetheless purchase it extremely cheaply however not for very lengthy.


Since we concentrate on wealth preservation and specifically bodily valuable metals, we’re neither involved with paper belongings nor with brief time period strikes. However since 99% of economic investments are in paper belongings with a brief horizon, these buyers ought to actually be involved with defending their pretend paper wealth.

As I’ve tweeted just lately, shares are about to begin a devastating fall and are usually not the best place to be. However sadly most buyers will consider in yet one more miracle with the Fed and different central banks saving them.

These buyers might be very sorry as the largest wealth switch in historical past is now beginning.

Gold will quickly resume its robust uptrend and might be extraordinarily vital as wealth preservation insurance coverage to guard in opposition to the approaching financial and geopolitical storms.

The consequence of the inventory market crashing and gold surging could be seen within the Dow/Gold ratio beneath.

In 1980 this ratio was 1 to 1 at Dow 850 and Gold $850. This ratio is more likely to, at a minimal, attain the pattern line on the chart which is 0.5.

Because of this the Dow (and different inventory markets) will fall a minimum of 75% in opposition to gold from present ranges.

What that includes in worth we will solely speculate about. It might be Dow 10,000 and Gold $20,000. Or it might be Dow 5,000 and Gold $10,000.  In my opinion, the ratio might be loads decrease than 0.5.


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