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.

Jim Rogers: I’m telling you, the economy is going to be bad next year

By Dominique de Kevelioc de Bailleul

Commodities investor extraordinaire Jim Rogers of Rogers Holdings strongly suggests battening down the hatches, because the global economy is headed for the rocks, taking stocks with it.  To protect wealth from a deepening of the mostly Western side of the global depression, the 69-year-old Rogers is long oil, gold and other tangibles to front-run the predictable response by central banks of further money printing.  He is short equities.

“If stocks collapsed around the world I would have to buy a lot more stocks,” he told CNBC, Wednesday.  “I would buy stocks again, but I don’t see that happening. I’m telling you, the economy is going to be bad next year. Why buy stocks in the face of something like that?”

Rogers’ gloomy assessment of the future reconciles with the data out of Europe, the U.S. and China—which, taken together, these economies represent approximately 60 percent of global GDP.

In Europe, the sovereign debt crisis accelerates, from relatively paltry numbers needed for a Greece bailout, to gargantuan bailout packages recently proposed for Spain—amounts so large that the ECB emergency bailout fund will be wiped out completely in a matter of weeks.  Then again, there is Greece; it teeters on leaving the eurozone all together, according to EU member of parliament Nigel Farage.

“There’s an impending looming disaster . . . . 100 billion (euro) is put up for the Spanish banking system, and twenty percent of that money has to come from Italy,” said Farage on the floor of EU parliament this week.  “Under the deal, the Italians have to lend to the Spanish banks at three percent.  But to get that money, they have to borrow on the market at seven percent.  It’s genius, isn’t it?

“Any banking analyst will tell you that 100 billion (euro”) doesn’t solve the problem,” Farage added.  “It would be more like 400 billion (euro).  The real elephant in the room is, once Greece leaves, the ECB, the European Central Bank, is bust. . . It has 444 billion euros worth of exposure to the bailed out countries.”  The Euro Titanic has now hit the iceberg, and sadly there simply is not enough lifeboats.”

Jim Rogers agrees.

“What they’re [European Parliament] doing is they’re making this situation worse,” he said in Wednesday’s CNBC interview.  “What I see happening is more and more bailouts . . . the debt is up to the ceiling. The recession is going to be worse. This is not going to be fun.”

Rogers has said in an earlier interview with NewsMax that he knows the economic statistics coming out of Washington are jury-rigged in an effort to bolster the dollar in the wake of the euro woes, and also suggested that after the U.S. elections in November, the EU sovereign debt collapse will move to the U.S.—and that’s the time when the global panic may begin in earnest.

“ . . . this year is going to look good and feel good, because Mr. Obama is going to give out a lot of good information,” Rogers said in a NewsMax interview of nearly two weeks ago (BE article).  “It may be manipulated information, but he’s going to put out a lot of good information.  He’s going to spend a lot of money; he’s going to print a lot of money to get us through the election . . . So if you are not worried about 2013, please — get worried.”

And the signs of a U.S. economic collapse to pair up with Europe’s breakup riddle throughout the monthly data, according to Charles Biderman, CEO of TrimTabs.  Biderman reported as early as March that he saw massive discrepancies in the job data released by the U.S. Department of Labor for the months of January and February, alone.  As the Labor Department reported approximately 350,000 jobs added, Biderman calculated approximately 3 million loss for the two combined months.

Biderman, too, believes the day of reckoning is coming for stocks.

“How can stock markets be this high if the real economy is barely growing?” Biderman stated in his latest video, posted on zerohedge.com.

After the election, the truth cannot be withheld from the casual observers of the markets regarding the phantom statistics not jibing with reality.  It’s then, Rogers believes, the global sell off in stocks will catch up with investors who are long the U.S. recovery story.  In fact, Rogers is so convinced of the bubble in stocks popping in the coming months that he’s short equities.

“I’m not advocating because I’m short, but I’m short because I think there are going to be more problems in the world economy in the next year or two,” he said on Wednesday.  “That’s how you protect yourself in times like this.”