Is a 90% Fall in Stocks Ahead?

January 8, 2016

We ended 2015 as yet another year when most investors felt safe with their stocks, bonds, property and other investments. But sentiment can change very quickly and since the year end the Chinese market is down 14%, the S&P down 6% and most global markets down 6-10%.

Most investors had been hoping that the investment Shangri-La would continue for another year? Little do they realise that current values in no way reflects real values or risk. As we know, markets can remain irrational for a very long time. The risks that one day will bring the world economy down have been with us for quite a few years. In 2007-9 world financial markets were on the verge of collapse but a Central Bank programme of money printing and guarantees amounting to $25 trillion kicked the can down the road yet another time. It is too early to tell if the very strong falls in world stock markets so far in 2016 are the beginning of the biggest bear market since 1929. But is is not unlikely that this is the start of a bear market which will see falls of up to 90% just like the Dow in 1929-32. Fundamentals today are considerably worse than at the beginning of the Great Depression.

The world has seen an acceleration in credit creation since the Fed was founded in 1913 but the real acceleration started on 15 August 1971 when Nixon abandoned the gold backing of the dollar. The 1987 stock market crash and the property bubble in many Western countries in the early 1990s started the final phase of easy money, led by Alan Greenspan’s irresponsible monetary manipulations. But he was of course loved by politicians and investors since he created another investment bubble leading to the 2000 crash. With more easy money the world reached the next bubble and crisis in 2007-9. With the help of Bernanke who was the most productive person ever in American history we have now reached the super bubble era. Remember that Bernanke during his 8 years doubled US debt from $8 trillion to over $17 trillion. It took the US government over 100 years to go from zero to $6 trillion, a feat that Bernanke managed in a fraction (3/100th ) of the time.

To be fair, it is not just US debt which has ballooned. Global debt in the mid-1990s was around $20 trillion and today it is $225 trillion. This is an incredible 10 times increase in world debt in 20 years. And just since 2008, global debt has increased by 50%. It should be clear to most observers that this exponential growth in credit will not have a good ending.

Read the Whole Article

Check Amazon for Pricing.

SentrySafe H2300CG Wat... Check Amazon for Pricing.

Helix Deluxe Hardback ... Check Amazon for Pricing.

Large The New English ... Buy New $12.99 (as of 01:25 UTC - Details)

The Best of Egon von Greyerz

Tags:

$post_author: WP_User Object
(
    [data] => stdClass Object
        (
            [ID] => 914
            [user_login] => egon-von-greyerz
            [user_pass] => 32c9251fff9638420c3b5093c4f56704
            [user_nicename] => egon-von-greyerz
            [user_email] => [email protected]
            [user_url] => 
            [user_registered] => 2012-11-02 07:11:19
            [user_activation_key] => 
            [user_status] => 0
            [display_name] => Egon von Greyerz
            [type] => wpuser
        )

    [ID] => 914
    [caps] => Array
        (
            [contributor] => 1
        )

    [cap_key] => wp_capabilities
    [roles] => Array
        (
            [0] => contributor
        )

    [allcaps] => Array
        (
            [edit_posts] => 1
            [read] => 1
            [level_1] => 1
            [level_0] => 1
            [delete_posts] => 1
            [email_single_user] => 1
            [contributor] => 1
        )

    [filter] => 
    [site_id:WP_User:private] => 1
)

get_the_author_meta:

$bio: Egon von Greyerz – Founder and Managing Partner of Matterhorn Asset Management (MAM) and GoldSwitzerland based in Zurich. Egon forecasted the present problems in the world economy already in 2002 when he recommended to investors to allocate 50% of assets into physical gold (at $300) stored outside the banking system. Egon began as a banker in Geneva and was thereafter Finance Director and Vice-Chairman of a FTSE 100 company in the UK.  He makes regular media appearances  on CNBC, BBC and King World News and speaks at investment conferences around the world. MAM (founded in 1999), specialises in wealth preservation. GoldSwitzerland buys, sells, transfers and stores physical precious metals for private investors and institutions outside the banking system. His website is www.goldswitzerland.com.

$bios: Array
(
    [0] => Egon von Greyerz – Founder and Managing Partner of Matterhorn Asset Management (MAM) and GoldSwitzerland based in Zurich. Egon forecasted the present problems in the world economy already in 2002 when he recommended to investors to allocate 50% of assets into physical gold (at $300) stored outside the banking system. Egon began as a banker in Geneva and was thereafter Finance Director and Vice-Chairman of a FTSE 100 company in the UK.  He makes regular media appearances  on CNBC, BBC and King World News and speaks at investment conferences around the world. MAM (founded in 1999), specialises in wealth preservation. GoldSwitzerland buys, sells, transfers and stores physical precious metals for private investors and institutions outside the banking system. His website is www.goldswitzerland.com.
)

Egon von Greyerz – Founder and Managing Partner of Matterhorn Asset Management (MAM) and GoldSwitzerland based in Zurich. Egon forecasted the present problems in the world economy already in 2002 when he recommended to investors to allocate 50% of assets into physical gold (at $300) stored outside the banking system. Egon began as a banker in Geneva and was thereafter Finance Director and Vice-Chairman of a FTSE 100 company in the UK. He makes regular media appearances on CNBC, BBC and King World News and speaks at investment conferences around the world. MAM (founded in 1999), specialises in wealth preservation. GoldSwitzerland buys, sells, transfers and stores physical precious metals for private investors and institutions outside the banking system. His website is www.goldswitzerland.com.

Previous article by Egon von Greyerz: Avoid Wealth Destruction

Markets can Remain Irrational For a Very Long Time

Political Theatre

LRC Blog

LRC Podcasts