Via Egon von Greyerz

A Lehman squared second is drawing near with Swiss banks and UK pension budget below critical drive.

However let’s first have a look at any other circus –

The worldwide travelling circus is now achieving ever extra countries simply as anticipated. That is proper on cue on the finish of probably the most odd monetary bubble technology in historical past.

It’s clearly debt advent, cash printing and the ensuing foreign money debasement which creates the inevitable fall of but any other financial machine. This has been the norm all over historical past so the extra it adjustments, the extra it remains the similar”.

It began this time with the remaining of the gold window in August 1971.  That was once the start of a monetary and political circus which ceaselessly added extra possibility and extra deadly acts to stay the circus going.

An financial upheaval all the time reasons political chaos with a revolving door of leaders and political events going and coming. Bear in mind, a central authority isn’t voted in however invariably voted out.

What was once all the time transparent to a couple of folks was once that the circus would finish with the entire acts crashing nearly concurrently.

And that is what’s beginning to occur now.

We’ve got simply noticed a political farce in the United Kingdom. Even probably the most proficient playwright may no longer have created the sort of superb merry-go-round of characters who now we have noticed coming out and in of Downing Boulevard.

Simply have a look at the United Kingdom High Ministers. First there was once David Cameron who needed to surrender in 2016 because of mishandling Brexit. Then the following PM Theresa Might needed to pass in 2019 since she couldn’t get the rest finished, together with Brexit. Then Boris Johnson received the largest Conservative majority ever however was once compelled out in 2022 because of Partygate all over Covid.

In got here Liz Truss as PM in September this yr however she simplest lasted 44 days because of her and her Chancellor’s (Finance Minister) mishandling of the mini price range. They controlled to crash the pound and UK gilts (bonds) at the global markets resulting in the Financial institution of England having to step in. Each gilts, derivatives and UK pension budget had been on the level of implosion.

And now the carousel has long gone complete circle with Rishi Sunak the ex-Chancellor taking the helm as Boris bailed out. Boris obviously made up our minds that speeches and different personal engagements could be extra fruitful than being a part of the circus. However he’s going to maximum indubitably try to come again.

What a circus!

It simply displays that on the finish of an financial technology, we get the worst leaders who all the time promise however by no means ship.

In a bankrupt world machine, you achieve some degree when the price of published cash dies and no matter a pace-setter guarantees can not be purchased with pretend cash which is able to all the time have ZERO intrinsic price.

No person will have to imagine that that is simplest going down in the United Kingdom. America has a pace-setter who unfortunately is simply too previous and no longer in command. He has a deputy who isn’t revered through someone. So if Biden, as many imagine, doesn’t make it to the tip of his duration, the USA is prone to have an actual management circus. Additionally, the USA economic system is chronically in poor health having run deficits for 90 years. What assists in keeping the USA alive quickly is the buck which is robust as a result of it’s the least unpleasant horse within the foreign money strong.

Scholz in Germany was once given an excessively dangerous hand through Merkel however has under no circumstances progressed it since he took price and Germany is at the breaking point.

Maximum international locations are the similar. Macron doesn’t have a majority in France and moves are paralysing his nation every day. And his new Italian counterpart, PM Georgina Meloni indubitably doesn’t shred her phrases. Simply watch her having an excessively competitive pass at Macron (deficient video high quality).

However for other folks (like myself) who’ve issue accepting the present wave of Wokeism on the planet, Meloni’s assault in this fad and her robust defence of circle of relatives values is a “will have to watch” (video hyperlink). So there’s nonetheless hope when leaders dare to precise perspectives that almost all media together with social media censor nowadays.


Historical past has handled punishment of non fee of debt in a lot of techniques.

Within the early Roman Republic round 2,500 years in the past, there was once a debt bondage known as Nexum. In easy phrases, a borrower pledged his particular person as collateral. If he didn’t pay his debt he was once enslaved steadily for an undetermined duration.

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Leaping briefly to trendy instances, it could imply that almost all of other folks, particularly within the West would all be debt slaves nowadays. The massive distinction nowadays is that the general public are debt slaves however they have got bodily freedom. Since nearly no person, folks, corporations or sovereign states, neither has the goal nor the power to pay off debt, the arena now has a protracted debt slavery.

It’s even worse than that. The taking part in box is completely skewed in favour of the banks, giant industry and the rich. The extra money you’ll play with, the extra money you’ll make possibility unfastened.


No banker, no corporate control or industry proprietor ever has to take the loss individually if he makes a mistake. Losses are socialised and earnings are capitalised. Heads I win, Tails I don’t lose!

However there are honourable exceptions. A smaller collection of Swiss banks nonetheless paintings with the main of limitless private legal responsibility for the companions/homeowners. If the worldwide monetary machine and governments carried out that concept, consider how other the arena would glance no longer simply financially but in addition ethically.

With the sort of machine, we wouldn’t simply adore the golden calf however put human values first. And every time we assessment an funding proposal or granting anyone a mortgage, we wouldn’t simply have a look at how a lot shall we acquire individually but when the transaction was once sound each economically and ethically and if the danger of loss was once minimum.

However I will be able to listen many of us protesting and arguing that the arena may by no means have grown as speedy with out this huge quantity of debt. This is in fact right kind within the quick time period. However relatively than speedy enlargement after which a complete implosion of belongings and debt, we might then have a a lot more strong machine.


Simply have a look at the closing 50 years since 1971. Globally governments and central banks have contributed to the advent of just about  $300 trillion of recent cash plus quasi cash within the type of unfunded liabilities and derivatives of $2.2 quadrillion making £2.5 trillion in overall.

As debt explodes, the arena may simply face a debt burden of $3 quadrillion through 2025-2030 because the derivatives and unfunded liabilities turn out to be debt.

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Derivatives isn’t a brand new device. For instance all over the Tulipomania bubble in Holland within the 17th century, it was once imaginable to industry choices on tulip bulbs.

As of late the monetary machine has evolved derivatives to turn out to be the sort of subtle device that almost no monetary transaction can happen with out involving some type of derivatives.

However the greatest drawback with derivatives is that the quants that create them don’t perceive the effects in their movements. And senior control, together with forums of administrators, haven’t were given a clue of the large possibility derivatives constitute.

The cave in in 1998 of LTCM (Lengthy Time period Capital Control), arrange through Nobel Prize winners and the 2007-9 Sub-High disaster is a transparent evidence of the lack of understanding of the danger of derivatives.

As an apart, it kind of feels that anybody can obtain a Nobel Prize nowadays. Simply take Bernanke, he has been awarded the Nobel Prize in economics. Needless to say Bernanke, when he was once Head of the Fed, published extra money than someone in historical past!

What we need to perceive is that the committee which chooses the winner of the Nobel  economic system prize is the Swedish Riksbank (central financial institution), stuffed with Keynesian cash printers!

Want I say extra?

Derivatives were an enormous benefit earner for all banks concerned. They had been to start with created as defensive hedge tools however nowadays they’re probably the most bad and competitive monetary device of destruction.

Simply over 10 years in the past, world derivatives had been $1.2 quadrillion. Then the Financial institution of Global Settlements (BIS) in Basel made up our minds to halve the values  to $600 trillion in a single day through converting the root of calculation. However the $1.2Q possibility was once nonetheless remained on the time.

Since then Over The Counter (OTC) derivatives have noticed an explosive enlargement identical to all monetary belongings. The wonderful thing about OTC derivatives, from the issuers perspective, is they don’t wish to be declared like derivatives traded on exchanges.

And nowadays there aren’t simply rate of interest and foreign exchange derivatives. No, those tools are all in favour of nearly each and every unmarried monetary transaction. Each and every inventory and bond fund comes to derivatives. And nowadays these kinds of budget encompass simplest artificial tools and include not one of the digital shares or bonds they constitute.


Simply a few weeks in the past, the United Kingdom and thus the worldwide monetary machine was once below critical drive because of pension budget’ pastime derivatives collapsing in price after the United Kingdom Finances. Pension budget are globally at the breaking point because of emerging rates of interest and insolvency possibility. With the intention to create money float, the pension budget have obtained rate of interest swaps. However as bond charges surged those swaps collapsed in price, requiring both liquidation or margin injection.

And thus the Financial institution of England needed to enhance the United Kingdom pension budget and monetary machine to the level of £65 billion to keep away from default.

Within the closing couple of weeks now we have noticed a gloomy state of affairs in Switzerland. Swiss banks, throughout the Swiss Nationwide Financial institution (SNB) have won $11 billion ongoing enhance thru foreign money swaps (a type of buck loans) from the Fed.

No main points were printed of the Swiss state of affairs apart from that 17 banks are concerned. It may be global banks. However maximum indubitably the in poor health Credit score Suisse is concerned. Credit score Suisse simply introduced a 4 billion Swiss francs loss.

What is obvious is that those UK and Swiss eventualities are simply the end of the iceberg.

The arena is now at the verge of any other Lehman second which might erupt at any time.


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Those derivatives which a few of us now estimate to be over $2 quadrillion (no longer $600b reported through BIS) are what’s going to carry the monetary machine down.

Each and every spinoff comprises an pastime component. And the development of all derivatives didn’t foresee the main and speedy upward thrust in rates of interest that the arena has noticed. Bear in mind Powell and Lagarde calling inflation transitory only a yr in the past!


This text is indirectly about gold. No, it’s concerning the disastrous penalties of governments’ deceitful mismanagement of the economic system and of your cash. However in response to historical past, gold has been the most productive coverage or insurance coverage in opposition to such mismanagement.

Why do 99.5 % of all traders in monetary belongings keep away from the funding this is ceaselessly subsidized and supported through each and every govt and each and every central financial institution globally.

Traders personal $600 trillion in shares, bonds and belongings that have all loved a 50 yr (40 years for bonds) explosion in price.

However why do they simply grasp $2.3 trillion of an asset that with out fail and for five,000 years has all the time preferred and not long gone to 0 and even long gone down considerably over the years?

It’s the most simple asset to know and respect. It appears just right, even glossy and also you don’t have to know the generation at the back of it nor the steadiness sheet.

All you want to know is that each day and yearly your govt does no matter it might probably to extend the price of this asset.

So this asset that simplest will get 0.5% of global monetary investments and is ceaselessly supported through governments thru their consistent advent of cash is clearly gold.

What only a few traders know, in part as a result of governments are suppressing it, is that gold is the one cash that has survived all over historical past. Each and every different foreign money has with out fail long gone to ZERO and turn out to be extinct. 

With this best 100% file for gold, it indubitably is unexpected that almost no person owns it!

Traders don’t perceive gold or its relevance. There are lots of causes for this.

Governments hate gold despite the truth that all their movements make gold respect significantly over the years.

They’re in fact utterly acutely aware of the truth that their utterly inept control of the economic system and of the financial machine, destroys the price of fiat cash.

That is why it’s of their pastime to hide their mismanagement of the economic system through suppressing the price of gold within the paper marketplace.

However traders lack of understanding of gold and reluctance to shop for it’s going to very quickly undergo a tectonic trade.


General gold ever produced on the planet is $10.5 trillion. Maximum of this gold is in jewelry. Central banks around the globe grasp $2 trillion. That incorporates $425 billion that US allegedly grasp. Many of us doubt this determine.

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So with over $2 quadrillion (2 and15 ZEROS) of debt and liabilities resting on a basis of $2 trillion of presidency owned gold that makes a gold protection of 0.1% or a leverage of 1000X!

In order that is obviously an inverse pyramid with an excessively vulnerable basis. A valid monetary machine wishes an excessively forged basis of actual cash. Quadrillions of debt and liabilities cannot live on resting in this feeble quantity of gold. If gold went up 100X to mention $160,000, the protection could be 10% which remains to be hardly ever appropriate.

So the $2 quadrillion monetary weapon of mass destruction is now on the best way to utterly spoil the machine. This can be a world area of playing cards that may cave in sooner or later within the no longer too far away long term.

Clearly Central Banks will first print limitless quantities of cash, purchasing as much as $2 quadrillion of remarkable derivatives, turning them to on steadiness sheet debt. This may increasingly create a vicious circle of extra debt, upper rates of interest and better inflation, with possible hyperinflation as debt markets default.   

No govt and no central financial institution can remedy the issue that they’ve created. Extra of the similar simply received’t paintings.

So those are the big dangers that the arena is now dealing with.

Clearly there is not any simple task in a lot of these forecasts. However what is bound is that possibility of this magnitude will have to be safe.

There’s no reason why to imagine that gold this time will play a unique function to what’s has finished all over historical past.



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