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Greyertz forecast: what awaits the world in 2023
Material posted: Publication date: 08-12-2022
In anticipation of the inevitable explosion of American and global debt, as well as the collapse of assets, Egon von Greyerz considers the catastrophic consequences for the world. The current monetary era began with the founding of the Fed in 1913 and the acceleration of debt accumulation and currency depreciation since 1971, when Nixon closed the golden window. A little over 100 years have passed since the beginning of this era, and now it is approaching a destructive end, as always.

The world's currencies have already lost 97%-99% of their value since 1971, and now we can expect a final collapse when all the money will become practically useless. This, of course, is nothing new in history, since each individual currency has always depreciated.

The final collapse is always the fastest, so it can easily happen in the next 2-5 years. As the widening gap between debt and GDP in the graph above shows, more and more debt is now needed to achieve GDP growth. Thus, without printing useless money, real GDP will decline. So that's what our politicians are doing, buying votes and fake growth by printing money.

This gives the voter the illusion of increasing income and wealth. Unfortunately, he does not understand that the illusory increase in living standards is entirely based on debts and devalued money. Let's also look at the US federal debt. This catastrophic prosperity of borrowing with zero ability to repay the growing debt will lead to one of the three consequences listed below:
  1. The US dollar will completely depreciate;
  2. US default;
  3. Both.
The most likely outcome, in my opinion, is number 3. The dollar will depreciate to zero, and the US will default. Many people say that the US will never be able to default. This is of course absolute nonsense. If a country prints worthless debts that no one buys in a currency that no one wants to hold, the country will definitely be in default, no matter what the politicians call it.

In the next few years, not only the United States, but the entire sovereign debt will have only one buyer — the country that issued the debt. And every time a sovereign state buys its own debts, it has to issue new useless debts. And that's how money dies. This has been the case throughout history.

Increase global liquidity by $25 trillion dollars at zero cost

Central banks are always wrong and always lagging behind. They have kept short-term rates at zero or negative levels for more than a decade. From 2009 to 2019, the balance sheets of major Central banks has increased by $13 trillion dollars. But then, from August 2019 to 2022, there was an explosion of central banks' debt, as a result of which their balance sheets increased by $23 trillion dollars from $13 trillion to $36 trillion dollars.

All the same reasons that I considered in the previous paragraph regarding the US money supply are obviously valid for the growth of global debt. There is nothing better than free money! Banks created this money at zero cost. They did not work and did not produce any goods or services. All they had to do was press the button. And with zero or negative interest rates, many central banks actually received interest from lenders.

What a beautiful Ponzi scheme. Central banks print/lend money, and then they are paid for the pleasure of borrowing this money. Any private fraudster who launched a scheme like Ponzi or Madoff would spend the rest of his life in prison, but bankers are praised for "saving" the system.

What almost no one understands is that this free money then enters the financial system as having real intrinsic value. Like all Ponzi schemes, the current financial system will also collapse, as holders of counterfeit paper money realize that money is worthless, and the king is completely naked. This will be the final phase of the current monetary system with unlimited money printing, when the debt pyramid of $2.3 quadrillion dollars collapses.


But before that, the world must pay for the excesses of the last 50 years. The consequences will be dire as we face a major cataclysm or a disorderly reboot that will include:
  • Defaults on debt, sovereign, corporate and private;
  • Explosions of epic bubbles of stocks, bonds and real estate;
  • The main geopolitical conflicts without the desire for peace;
  • Constant decline in living standards due to rising energy costs and energy shortages;
  • Food shortages leading to famine and civil unrest;
  • Political and economic instability and corruption;
  • Pensions or social security will not be provided in any country;
  • Hyperinflation and the subsequent deflationary explosion.
I sincerely hope that these predictions will not come true. Because if this happens, everyone will suffer greatly for a long period of time. No one, rich or poor, will escape these problems. Only historians of the future will tell us what really happened. But I want to say that the risk of a major disaster has never been so high.

Egon von Greyerz


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