“Massive Storms” in Silver Market Before American Election, Silver $150

By Dominique de Kevelioc de Bailleul

Speculation of a post-presidential-election-central-bank-coordinated money bomb of fresh new cash from the Fed, the ECB and other central banks, appear to be just that: speculation.  That, according to a regular guest of Eric King’s King World News (KWN), Swiss money manager Egon von Greyerz.

The global central bank bailout and “the coordinated money printing I have been talking about for a long time is going to happen this autumn,” says von Greyerz.  “I can see an autumn with massive storms, Eric.”

Not only has the precious metals market sniffed out an imminent and overt global QE3 plan, the western bank cartel is presumably buying the Spanish 10-year bond ahead of the announcement, taking rates sharply down within a two-week period to 6.02 percent, from a 7.62 percent print of Jul. 24.  Buyers of the Italian 10-year nearly achieve the same performance during the same time period.

Those moves serve as a telltale sign that a money bomb will come before Novemebr.

“They [ECB and IMF] must do everything they can to eliminate counterparty risk because the counterparty risk in the system is massive,” adds Greyerz, which may include strong-arm tactics, according to Mail on Sunday American columnist Mary Ellen Synon.

She surmises that the ECB’s planned policy action of “outright market transactions”, as ECB President Mario Draghi called the debt monetizing scheme in an ECB press release this week, will contain provisions that include the classic IMF ‘carrot-and-stick’ approach to getting things done.

Synon suggestes that, instead of one of the PIIGS getting a bailout—first—before demonstrating agreed-to ‘austerity’ measures have produced results for an additional tranche, the ECB plans to wave money at the people of the country in question and wait for its political leadership to succumb to the pressure to allow the IMF to takeover the nation’s fiscal matters, just as all small Central American nations have had to endure when working with the IMF.

“Start with Spain.  Imagine Prime Minister Rajoy is finally forced to go for an official bail-out,” Synon states in her article, titled Draghi’s new plan to save the euro: ‘Goooood morning, Vietnam!’.

“He has been resisting it, apparently because bail-outs are for little people like the Portuguese and the Greeks, not for important Spain,” she adds.  “But Rajoy gets strong-armed. The EU-ECB-IMF troika designs a plan (which may or may not include IMF money). He has to sign.”

von Greyerz agrees, but falls short of speculating how the behind-the-scene politics will play out for a country like Spain to agree to unpopular cost-cutting measures at the nation-state level.

“There will be pressure from one country to the next,” von Greyerz continues, “and the ECB, European governments, the IMF, and the Fed, they will all be fighting to keep the system together and that will mean printing more money.”

Further speculation from other analysts is: if no signature to an IMF ‘package’, Rojoy must somehow resign to make room for another Goldman Sachs syndicate operator to take control of the country and sign—a la Greece.

All of that drama in Europe will take place before Nov. 6., according von Greyerz, who relays his recent observations of frantic activity in the paper gold market taking place behind the scenes.

Someone doesn’t believe any plan put forward by the ECB to stabilize the PIIGS will work, with a history of two previous plans by the troika having already failed.  This time, the big players are going for the physical gold, and its rumored that those creating a stir in the physical market come from the East.

“I need to add that we are now seeing a lot of fund managers and investors moving out of gold ETFs, and taking delivery of physical gold and holding it outside of the banking system,” he said.

“The reason for this is investors and asset managers are becoming deeply troubled at the thought of a systemic collapse, and the gold being encumbered inside the banking system in that circumstance.”

von Greyerz, KWN’s most bullish contributing analyst, believes the coming weeks will start the next leg higher in the gold price, with the bulls taking gold to bizarrely high levels as the result of the panic deliveries of physical gold and silver bullion (an observation also made coincidentally by one of Hat Trick Letter publisher Jim Willie’s sources).

“This move in gold and silver has barely started,” von Greyerz concludes.  “We will eventually see $100 up-days in gold, and silver will move several dollars in a single trading day.  So we will see an acceleration this autumn.

“We will reach these short-term targets of $50 in silver, and roughly $2,000 in gold.  But I would add that I expect gold to reach $4,000 to $5,000, and silver $150, without any major correction.”  The time frame for such a massive move, he has said in previous interviews with KWN, is 12 to 18 months.

Spot on! “Mayans Forecast 2012” as “End of Era”, Says Prominent Swiss Money Manager

By Dominique de Kevelioc de Bailleul

It’s all too clear to long-time gold and silver investors, the finally days have come for a collapse of the global financial system.  No doubt about it, this time.  Gold and silver will take its rightful place as money whether the global monetary magicians like it, or not.

In a striking interview on King World News, Egon von Greyerz of Switzerland-based Matterhorn Asset Management told Eric King the financial world is in collapse—right now—in 2012—just in time to vindicate the Mayan prophecy buffs who have been repeatedly ridiculed as ‘unsteady’ throughout the year of financial turmoil.

With Cyprus, Greece, Spain and Italy (now Slovenia) collapsing at once, “it’s incredible that the Mayans forecast 2012 would be the end of a major era,” said von Greyerz.  “It looks, today, like we are standing on the eve of massive changes in the world that will have consequences for a long, long time to come.”

Time is on the side of every gold and silver stacker.  The trend is up, and any steep drop in the paper price (albeit from a JP Morgan takedown or industrial buyers slacking of purchases from bad economic news) has triggered the Pavlovian response from accumulators of physical to ‘back up the truck’ and drain inventory from the Comex.  That knee-jerk reaction, buying on paper market dips as well as buying truck loads on crashes is a relatively new phenomenon in the precious metals markets.

That patience and forthrightness throughout the 11-year precious metals bull market may be well rewarded soon, according to von Greyerz.

FOCUSING UPON THE PHYSCIAL SILVER MARKET AND GLOBAL QE PACKAGE

Not only are fiscal budget deficits and sovereign debt levels unsustainable, so is the rate of physical silver leaving inventories.  To put the silver market into a proper prospective, especially to newcomers, here’s a recap of Eric Sprott’s interview with FinancialSense Newshour of October 19, 2011.  It’s worth repeating a spot-on interview with a dealer who has his ear to the ground on a daily basis.

It’s all about the physical market.

“There’s a paper market; there’s a physical market.  The physical market is what I analyze more than anything else.  And all I see is buyers.”

The markets recognize gold as a reserve currency, and silver cannot be far behind.

Sprott: “One of things I believe, sort of, on a longer-term prospective, is that, the markets have made gold the reserve currency . . . it’s gone up hundreds of percent against every currency in the world, so it is the world’s reserve currency as far as the markets go.  And, as an offset to that, gold is not going to be a reserve currency without silver playing a hand, here.”

Historically, silver trades at an ‘equilibrium’ price of 1/15th the cost of gold.  Today, gold trades at more than 50 times the price of silver’s price.

Sprott: “Give it three to five years, we’re going to get back to ratios which are way more appropriate to the underlying fundamentals of gold and silver.”

The global banking crisis will drain cash from the monetary system into gold and silver.

Sprott: “If you think it’s bad for banks, today, wait until you deal with a couple of years of negative GDP growth and what happens to the value of those [tier-3] paper assets that they own, because it will get worse.  One thing I’ve always imagined . . . the ultimate destiny for gold and silver is that, people will prefer to own those investments rather than have their money in the bank.”

See BER article regarding future GDP, Jim Rogers’ Most Dire Warning, Please Get Worried

Conventional commentary on the state of the banking system is completely wrong.  Ignore it.

Sprott: “Three months ago (July 2011), when they did the European stress test, Dexia bank was considered to be the most well-capitalized bank.  And three months later, they were . . . I don’t the word, broke, or taken over by respective governments.”

Fund managers haven’t discovered the silver market yet.

“You go to some of the biggest names that even own gold and you ask them: Have you looked at silver?  They haven’t even looked at it.  So, I think we’re in the early days to people moving into silver, both in the sense of owning physical silver and of course in the sense of owning silver stocks. . .”

Fast forward back to von Greyerz’s latest KWN interview. Everything Sprott spoke of in the October 2011 interview may be coming to a head right now, according to von Greyerz.

“What we know is that the euro will collapse, and it doesn’t matter whether it collapses by being printed into oblivion or because many countries desert it such as Greece, Spain etc.,” von Greyerz said.  “We also know that other major currencies will collapse.  The consequences of these (eventual) collapses will be horrible because we will have a hyper-inflationary depression.

“Gold is on the verge of a major breakout here.  I agree with James Turk that this summer we could see a major move starting.  I could see a 12 month rise of major magnitude.  Gold will reflect the destruction of the world economy.”

And silver’s ratio should shrink dramatically during a summer rally, giving investors of the white metal more bang for the buck against gold on the way up during a catchup feeding frenzy from fund managers and retail public caught off guard.  Maybe the Mayans were right after all.