Egon von Greyerz: 2022, An Epic Risk Moment in History
Tom welcomes back Egon von Greyerz, Founder and Managing Partner of Matterhorn Asset Management AG based in Switzerland.
Systemic risks are increasing but the general investor does not appear concerned. No one knows the size of the derivatives markets but it’s likely in the quadrillions. Sovereign bonds make no sense for investors since the only way they can be paid back is with more money printing. They are extremely poor investments especially when you consider the dismal returns.
Pensions primarily hold bonds and stocks so eventually these funds will go bust. In real terms, Egon expects an eventual 90% decline in stocks. This sounds sensational but we experienced this from 1929 to 1932. The dollar will continue to collapse as it has already lost 98% of its value.
In this environment, your primary goal should be to protect your wealth. Central banks can’t save the system forever eventually debt will collapse. This is the first time we’ve had a global debt system and the risks are enormous. The investment game is easy today because of the money printing. In the end, most investors will probably give back much of their fortunes.
The Fed will be in a serious dilemma this year as inflation will continue to be problematic. They will want to talk about tapering but the Fed can’t afford it. Eventually, they will likely lose control of interest rates starting with the long end of the market.
The problems are already starting as we’re seeing massive problems with energy affordability in Europe.
Gold is as unloved today as it was in 1971 and when it was around $300 in 2000. If a tiny fraction of funds decide to hold gold as a hedge there will be tremendous demand. Silver could be a spectacular investment if timed correctly but it’s not wealth preservation in the same fashion as gold.
He doesn’t expect that cryptocurrencies will operate in the same way as a store of value but anything is possible. Perhaps real wealth shouldn’t be stored in digital form as it seems unlikely that governments will leave them alone.
Time Stamp References:
0:00 – Introduction
0:50 – 2022 & Epic Risk
6:43 – Dow in Real Terms
9:06 – Global Unfunded Liabilities
16:52 – Japan’s Debt Levels
21:41 – Fed Policy Reversal
27:14 – Hyperinflation?
32:05 – Property Values
36:26 – Gold Cycles
41:28 – Gold Vs. Silver
44:32 – Cryptocurrencies
47:32 – Wrap Up
Talking Points From This Episode
- Massive global debt risk and the derivatives markets.
- Pensions, equities, bonds, and the dollar.
- Importance of protecting your wealth in this environment.
Egon von Greyerz is Founder & Managing Partner of Matterhorn Asset Management AG. He started Matterhorn Asset Management (MAM) in 1999 as a private investment company. From the very beginning, wealth preservation was an essential cornerstone of the company. In early 2002, they believed that financial and economic risk in the World was getting uncomfortably high. So that year, they made substantial investments in the physical gold market at $300 on average.
As gold started to rise in the early 2000s, demand for physical gold increased, and in 2005 they set up a regulated company in Zurich – Matterhorn Asset Management AG. A couple of years later, they formed GoldSwitzerland, which is the precious metals division of MAM.
Egon was Born with both Swiss and Swedish citizenship. His education was mainly in Sweden. He started his working life in Geneva as a banker and after he spent 17 years as Finance Director and Executive Vice-Chairman of Dixons Group Plc.
Since the 1990s, Egon has been actively involved with financial investment activities, including mergers and acquisitions and Asset allocation consultancy for private family funds. This led to the creation of MAM, an asset management company based on wealth preservation principles. MAM is now the World’s leading company for physical gold and silver outside the banking system, directly owned by the investor. Their four vaults include the most immense and safest gold vault in the World, located in the Swiss Alps. Clients are High Net Worth Individuals, Family Offices, Pension Funds, Investment Funds, and Trusts in over 75 countries.
Egon makes regular media appearances and speaks at investment conferences around the World. He also publishes articles on precious metals, the world economy, and wealth preservation.