Egon von Greyerz: "A Hyperinflationary Deluge Is Imminent", And Why, Therefore, Bernanke's Motto Is "Après Nous Le Déluge"

Tyler Durden's picture

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Sudden Debt's picture

it's not just on, it's almost over.

once the rates go into double digits, all the private reserves of the citizens will be gone.

Like most have already seen : only about 1% has protection of their wealth in gold or silver. Give it another year and no normal person will be able to buy it anymore.

 

DoChenRollingBearing's picture

Sudden, that is a great remark about no normal people will be able to buy gold in a year or so.

The percentage that I have seen the most is that 3% own physical (non-jewelry) precious metals.  1% seems too low, as I do know at least three people who own gold & silver...

Am I correct that it is similar there in Europe (1% - 3% own PMs)?  I had read that Germans have been on a buying blitz lately.

tmosley's picture

Which is closer to the truth:  you know 100 people, or you know 300 people?

1% is just about spot on from my observations.  I have known exactly one person who owned silver before I spoke to them about it.  I have convinced perhaps a dozen people by now to buy silver, even if in only tiny amounts.

Imminent Crucible's picture

It's Monday morning in Asia, and silver is already over $36.

I think von Greyerz is right; prices are already running away.  I wonder how Blythe Masters is feeling right now.

Heehee.

Popo's picture

The bond market apparently disagrees that there is hyperinflation.  

You can look at whatever market metric you like.  But one metric is the largest capital market on Earth, and the other is a small, highly-manipulated, relatively illiquid market.

I know I'll get junked for this comment.  But really -- I'd like to hear some logical rebuttal to the fact that the bond market is not behaving like there is any sort of imminent hyperinflation.

Inflation, yes.  Absolutely. Crippling inflation is without question in our future.  But hyperinflation?  Imminent?   I see no evidence of that in bond rates.

Responses?  Analysis?

 

 

akak's picture

When the Fed essentially now IS the bond market, what other signal than "all is well" do you really expect it to relay?

The "bond vigilantes" were all sent to the gas chamber by Herr Obergruppenfuhrer Bernanke long ago.

velobabe's picture

funny story, T, my girlfriend Liza Leggette who dated Iggy Pop, told me her Dad only did

G O L D , in 1981. i remembered it quite well. i have been thinking about gold for almost 30 years now. so i believe, i was aware of one being able to invest in gold. all kinds of investments in life, have to be open†

Xkwisetly Paneful's picture

IMHO Once the fed steps aside prices are coming down.

QE started and equities and commodities have appreciated dramatically when QE stops they will be coming back to earth.

Besides the obvious mania/panic depending on perspective taking place.

rich_wicks's picture

The Federal Reserve will never step aside.

Their function is the preservation of the banking sector, that's their only function.  The Federal Reserve will do whatever it takes to keep the banking system solvent, up to, and including, impoverishing you, and destroying the nation as you know it.

Xkwisetly Paneful's picture

Every month a different fed member balks at QE to infinity,

at some point it will stop and so will the mania/panic IMO.

TwoShortPlanks's picture

IMHO, when QE ends, Commodity prices will collapse, Bonds will collapse, Property value will implode (fully this time) and then the fire-works I've personally been waiting for, the unwinding of Derivatives. Paper metal will collapse too, and this collapse will further stoke demand for the physical. The price will go through the roof. Anything built upon Leverage ("multiple claim of underlying real wealth") will reset to zero where it belongs.

Once Fiat Atlantis has slid into the sea and the [demand] wave displacement has shot physical precious metals sky high, and the dust starts to settle, Agricultural assets will be King.

I think there's a growing realisation that the longer QE goes, the steeper the downward slope will eventually be...question is-is the slope a cliff face already, or worse? I'm guessing the economic ground we currently walk is a large, thin cornice over a 1000ft drop...'Dead Budgie!'

Forget US$100 per oz Silver, try US$1,000+. Go ahead and laugh if you so wish, but I know that the steeper that cliff is, the greater the physical will be propelled (temporarily).

P.S. The value of $1,000 is meaningless anyway, more accurate to say an ounce of Silver is equal to a sack of potatoes...but at least it can buy that sack of potatoes, unlike paper!

Xkwisetly Paneful's picture

Except that commodities have gone up dramatically with QE.

Popo's picture

So you see commodities performing equally well under inflation and deflation?

 

 

 

wintermute's picture

The Fed cannot stand aside until Congress stops running deficits.

The deficit is $1,640 billion, the Republicans want to cut $100 billion, but can't even stomach the fight with Obama to cut $50 billion. These amounts are nothing compared to the belt tightening required.

 

Freddie's picture

Does James Osterberg Jr. own precious metals?  Did he wear a shirt of dates?

What are the paper alternatives that own real bullion?  CEF?  Sprott's PHYS that Fred Hickey was buying?

I do not want to be stuck with Barack Mugabe dollars.

 

GeorgeHayduke's picture

About 3 years ago was the last time I talked about silver to folks who I know have a lot of money (my in-laws). They just kind of laughed me off with one of those "isn't he cute thinking he knows about investing real money" smirks. They then told me all about how they lost money investing in silver in the early 80's (they bought in late), and how it's a sucker investment, yadda, yadda.

Today, they know we hold physical and that my silver stocks have been kicking ass the past several months while their "safe" investments have been crap. But they have not yet conceded that I made a better investment choice. I doubt they ever will and I don't care. I'm doing what I think is best for my family. I'm not out to prove how much more correct I was.

Still, it's interesting to watch the people who really believed in the system getting their asses handed to them. They still equate it to Democrats, or socialism, or crap they hear on Faux News without really looking at what's happening. Hang on, it's going to get worse and most of those folks will be looking for someone to take it out on. Interesting times surround us in every direction!

Triggernometry's picture

George;

I just want to say that "Don't Get Angry, Get Even" is one of the funniest, informative books I've read.

-Trigg

DoChenRollingBearing's picture

tmosley, if I had to pick a number of people I "know" (meaning I know them well enough to have a normal kind of conversation, with someone, who, well, I know), then that would perhaps be 100 - 150 people.  No way 300, in my case.

Three own gold and/or silver.  3 / 120 (say) would be a bit over 2%.

We're both right!

I wish I had a reference for you re reading that approx. 3% own physical PMs.  If I ever see it again, I'll drop into a future conversation.

The Navigator's picture

Where I live, (in Extremistan) I only know 3 people who own physical PMs - but I know about 150 people (living in Mediocrastan) who are totally oblivious to the coming deluge. So 1-2% is about right.

PY-129-20's picture

If you buy silver or gold in Germany, you are regarded by normal citizens as a crazy person. Furthermore, you will find many articles about why buying silver or gold is only for people that believe the end is nigh [which is, according to the media, of course absolutely ridiculous]. The mainstream media is still very happy to print all these record numbers. Mood is very bullish. Even average people are thinking that the worst is over.

So you are either a conspiracy nut or a doomer. Although I can confirm that there is a stronger demand for PM lately.

You would think that after years of being lied to, frauds and whatelse, people would be more clever, more cautious. And given the Euro outlook, you would also think that people wouldn't be too optimistic about that.

The average American person might be entertained by the demise of Charlie Sheen or NFL. The average German person is entertained by Bundesliga (soccer) and the demise of the politician Guttenberg. But I've got the feeling that owning Gold and Silver is more accepted in the United States. Correct me, if I am wrong.

misterc's picture

It's a different mentality. Americans seem to distrust the state itself in general. Germans on the other hand like to put their faith in the hands of "Vater (daddy) Staat". The €uro might be in trouble, gasoline prices might be exploding, but ultimately, the government will somehow take care of it and shield its citizens from the fallout. That's the common opinion.

And yes, to own Silver or Gold seems very disturbing to most people. Like exchanging good money for useless crap, basically throwing it out of the window.

feelingspicy's picture

This might be true for the older generation. I think this is changing alot with younger people. Since we dont have to rely on the 8oclock news in the first program or have to read the big newspapers faz and sz for getting valueable information.

I would say that if you cast a vote for the 18-29 year old the christian democrats would find it hard to enter the parliament by overcoming the 5% barrier.

The two 'Volks'partys as they liked to be reffered to are in a major decline. CDU and SPD could combine almost 90% of the votes in 1970. Now they are at 56% and this will go on.

But it's ture that most people don't have a feeling for the urgency to protect against the loss of purchasing power.

MrSteve's picture

A while ago a ZH post documented German Landesbanks (state banks) being leveraged 10X  to 25X than US hedge funds. I can't see such poorly capitalized , under-reserved banks surviving the Euro bust unwinding now in Ireland and soon, Italy and Greece.

dalkrin's picture

Komisch, ich dachte nach dem Weimar Republik sollen die Deutsche echt wissen, wie das Papier gegen Gold und Silber steht. 

Of all people, the Germans should be aware of the dangers of hyperinflation.  I guess memory of the past has been blotted out.  Don't worry what others think, just keep it as your secret but keep buying.  Looks like the train is already leaving the station.

Pegasus Muse's picture

"If you buy silver or gold in Germany, you are regarded by normal citizens as a crazy person."

Nay, nay.  Bought gold in Germany in the last 6 months through a local German bank.  The officer manager was not the least phased.  Many people ordering gold.  Not so much silver though.  But that was a few months ago.  It has probably picked now that the prices are higher.  

A German friend is a lawyer.  Many of his clients own PMs.  Some store in Switzerland, Lichtenstein, or with Goldmoney.com.  Other have their own personal vaults in their homes or elsewhere. 

Many Germans remember the stories passed down by their elders about the hard times during the Weimar period. 

Confused's picture

Yes they do remember. I'm not sure that Germans exactly trust the state as many here seem to think. Google maps, for example, does not have street view available in Germany (I'm not sure if its still wide spread, as I haven't had to use it) or Austria. Similarly, you cannot find public transportation schedules on Google maps in parts of Germany or in Austria. And its not because Google hasn't had the time.

 

http://german-way.com/blog/2010/04/12/no-google-street-view-in-germany-a...

misterc's picture

You're reading ZeroHedge. Your friend is a lawyer. That tells me you're at least part of the top 25% intellect-wise of the population. Same goes for your friend's clients'.

I'm talking about J6P, who might have, at best, a few thousand Euro in his savings account. To him, it still seems idiotic to buy Gold. Especially since price have gone up so much. Gold is perceived as too expensive.

Oh, and Google Maps IS available in Germany. They recently started it with the biggest cities (Berlin, Hamburg an so forth). But it's an American company. Many people distrust Google and had their houses blurred. I guess every 20th house is blurred out (they look like blurred licence tags on TV).

Freddie's picture

I think the evil elites control the news media and TV in Germany, UK, USA, Canada, Australia, NZ, Europe et al.    They use idiot sports to brainwash the sheep like Stalin and others before.

IQ 145's picture

 I would like to dis-agree, respectfully. I appreciate your posts, and especially your position as a listening post in Belgium; but "these things take time". It's very un-wise of the author of the post to refer to "hyper-inflation"; what he is discussing is plain old inflation; which  of course, is with us. This can go on for many years. The most probable outcome, is that it will.

chumbawamba's picture

While you were pretending to be paying attention, hyperinflation came up behind you and stole your wallet.

I am Chumbawamba.

aerojet's picture

It doesn't matter because gold and silver are not going to save you. 

akak's picture

Oh, "this time it's different", eh?

Care to explain your flyby denial of 2000+ years of monetary history?

Yen Cross's picture

You are not tricking anyone! Don't get smart with me. I love ya! The third eye should be red.

Miles Kendig's picture

If you're gonna get all breathless akak .... Collect those coins

http://www.youtube.com/watch?v=F7qMybIxLiE

 

Reptil's picture

I agree, aerojet. That alone is not enough. But it helps.

IQ 145's picture

 "exponentially higher"; and not, thank God, parabolically higher. Educated in Europe; isn't it wonderful. Pleaase, everyone remember, there are no parabolic price charts. none. not one. not anywhere. OK? thank you.

tmosley's picture

Eh?  A parabola is an exponential function.  I don't know why people get their knickers in a twist over this stuff.  When they say "parabola" they are talking about the rough shape, not the mathematical formula of the line, which is near infinitely complex.

Gigliola Cinquetti's picture

No it's not . A  parabola is this : y=a*¨x^2+b*x+c

An exponential function is this : y=b*e^ax

toto's picture

Sometimes the term exponential function is used more generally for functions of the form cbx, where the base b is any positive real number, not necessarily e.

From wiki

Goldilocks's picture

x^2 ... is an exponent ... hence it is exponential.

BTW … without brackets (order of operations) those equations are a mess.

Yen Cross's picture

send your law degree girlfriends. You sexy VIXEN.

StychoKiller's picture

Sorry, but 2 ^ x is an exponential function, x ^ 2 is a simple parabola.

DoChenRollingBearing's picture

That is my understanding as well.

Variance Doc's picture

A parabola does not follow your first equation.  The first equation is a quadratic function.  At least you got the second right.  You're lucky that 50% is still a passing rate in most schools.

JW n FL's picture

Play nice V Doc... you are above being dragged into anything with regard to math.

Variance Doc's picture

Thanks, but sometimes the gods have to set the mortals straight.  :)