Bank Crisis and Debt Explosion as Billionaires keep buying Gold and Silver
There have been a number of points of interest since our last newsletter which should give you a continued reason to add to your stack of silver and gold bullion. There are more billionaires and the only trillionaire in the world now accumulating gold and silver in their portfolios. At the end of our seven points that will be discussed, we will reveal the trillionaire.
The banking crises around the world are now starting to reach mainstream news. Of major note is the Royal Bank of Scotland, where another 900 workers have been laid off. That makes a total of 2,700 staff in the last 4 months. They have now reported their 8th consecutive annual loss and it's only getting worse.
The Deutsche Bank of Germany with nearly US$70 trillion in derivatives, which is almost as much as the GDP of the world has had its stock price fall since the GFC of 2008 from around $120 to $12.50. In Italy, where 17% of all loans are non-performing (under water), the largest and third biggest banks have lost their share value by 69% and 85% respectively. This is 10 times the level that the US experienced in 2008 - 2009. Italy accounts for nearly half of Europe's bad loans.
Here is an updated figure on Debt to GDP for countries that are supposedly enjoying growth. Japan's debt has now reached 250% from 240%, and according to Jim Rickards, China's repeat debt is now approaching 300% (including corporate, government and individual). By the way, Greece has a debt of 160%. Brexit has now come and gone, but the fall out is still there. Countries that now want a referendum to exit the EU are France, Netherlands, Czech Republic, Italy and Denmark. Remember when Britain voted, the price of Silver went up $2.50 in just 2 hours!
Alan Greenspan, the former US Federal Reserve chairman says he believes another debt crisis is inevitable. He believes it will lead to high levels of inflation. His solution? Gold. Two of his quotes:
"If you look at human history, there are times where we thought that there was no inflation and everything was going fine. The oil prices have had a terrific impact on global inflation and I would not be surprised to see the next unexpected move to be on the inflation side. You don't have it until it happens."
"Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed, let's say prior to 1913, we'd be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we've had in the US, and that was a golden period of the gold standard."
If history is a guide, the higher gold goes, the more attractive silver becomes!
To illustrate, in the recent gold bull market, gold rose from about US$270 in June 2001 to a high in August 2011 of US$1,889, a 600% gain. Over the same period, silver moved from about US$4 to over US$43, a 975% gain. In the most speculative part of this precious metals upward movement, from October 2008 to August 2011, gold rose 165% and Silver surged 400%. E.B. Tucker from 'The Casey Report' advised that of 639 US companies with market capitalisations of at least $1 billion had declining sales, compared to one year prior. Last year, the number was only 324. Nearly twice as many! Corporate earnings are on track to decline for the fifth straight quarter. That hasn't happened since the 2008 - 2009 financial crisis. He says; to take cover in physical gold and silver!
Getting back to naming the wealthy elite who are now recommending precious metals of up to 20% in their portfolios. They are as follows:
Bill Gross, Jeff Gundlach, George Soros, Stanley Druckenmiller, Hugo Salinas Price, Ray Dalio. Jacob Rothschild (from the famous Rothschild banking family) and the only trillionaire has told his clients that at least 8% is necessary.
We at As Good As Gold Australia don't recommend going against this very wealthy group of investors.
To finish with, Venezuela is in a terrible situation. They have above 700% inflation and in the city of Valencia, a 1 oz Silver coin is buying up to 6 months of basic food supplies. As of the time of writing, there is little food, barely any electricity and no rule of law. Why's that not being reported on main stream media?