RE:This Business Model Its called 'Wealth preservation' Bastille ... to quote KWN ... excerpts:
" ... physical gold is the best way to insure against the total currency destruction that we will see in coming years … Before the coming hyperinflationary phase is over, gold will reach levels that none of us can imagine. … What is extremely important is that physical gold stored outside the banking system will act as insurance and protection against the total wealth destruction we will see in coming years.”
All Bank Deposits At Risk
Any money “lent” to a bank by a depositor in any country will be at risk. In my view investors should not keep major amounts in any bank. That money will eitherbe bailed-in, lost in a bank failure or inflated away by massive money printing. Remember also that the exchange controls that are now being introduced in many emerging countries will soon reach the US and Europe. At that point investors will not be able to transfer any money out of the country or there will be a tax on foreign transfers like the 20% tax in Azerbaijan.
… hyperinflation is now starting in a number of countries around the world. And no one should have the illusion that this is just an emerging market phenomenon. No, what is now starting in the periphery is going to reach the center. And it will be a lot worse of course as the $1.75 quadrillion debt and derivatives start to implode. Can you imagine the money printing bonanza that all the major Central Banks and the IMF are going to embark on?
What investors have to be aware of is that most banks will go bust before this is over. Take Italy. Their banking system is already bankrupt. €350 billion or 17% of all Italian loans are non- performing. They will now be sold off to investors with a government guarantee. So that’s another certain write-off for the Italian government on their way to bankruptcy.
25% of government bonds are now negative around the world. On Friday morning Bank of Japan was the latest country to introduce negative rates. There are now 13 countries with yields up to 2 years being negative and 10 countries with negative yields up to 10 years.
A Triple Threat To The United States
But the real dilemma in the US is of course the subprime problems that are now developing in student loans as well as in car loans and fracking loans. Add these three sectors together and we are already looking at several hundred billions of dollars of potential defaults. Before this credit cycle is over that will rise to trillions of dollars of real defaults, including derivatives in these markets.
Central banks have no other tools left in their armory to avoid a total collapse of the financial system. The dilemma they have is of course that you don’t solve a $230 trillion debt problem and a $1.5 quadrillion derivatives bubble by producing more of the same that caused the problem in the first place. Instead, the inevitable outcome of their attempted rescue will be currencies going to zero and inflation to infinity.