In a constantly changing world, in times of both political and economic instability, it is very important for people to be aware of the many risks and make the right decisions that will allow them not to lose their savings and remain financially solvent.
Today, financial risks have reached unprecedented proportions, and the personal savings of every individual are at stake.
In the article we want to cite the views of Egon von Greyerz, the Head of the Swiss management company Matterhorn Asset Management.
The expert provides his forecast regarding the events that may affect the financial world. According to Mr. Greyerz, the following factors pose the greatest threat to people's money.
Countries can’t pay off the external debt (aka foreign debt)
The debts of various countries have grown exponentially over the past 20 years, and the governments can’t settle debts with creditors. The payment of interest is out of the question. For this reason, negative interest rates have been introduced in many countries.
Generally, this means that at the moment investors are paying bankrupt states for the privilege of owning their absolutely useless securities. They have no chance of receiving income or get the invested capital back.
The table shows the top 10 countries with the largest external debt as of December 2017.
Banks won’t give the money back to depositors
Depositors store nearly 200 trillion dollars in the financial system, but they do not realize one fact: no bank will give them their money back.
Stock prices of many European banks, including the German Deutsche Bank and the Italian Monte Paschi continue to decline at a record pace. The price of shares of the largest US banks, namely the Bank of America and Citigroup, has fallen by 70-95% over the past 12 years.
Stock markets will crash
The global economic conditions are worsening every year, but stock markets continue their dizzying rise. This year, the governments of many countries plan to launch the biggest money-printing program of all time, but this won’t stabilize the global economy.
The excess of printed banknotes will only exacerbate the problem, which will be followed by the major stock market crash – more than 90-percent collapse in equity prices. Soon the world will realize that overcoming financial difficulties using the same methods that caused the problem in the first place is absolutely impossible.
Currencies will collapse
The huge debts of various countries and the budget deficit affect the global currency exchange rates to a greater extent. In the last century, many monetary units have already lost up to 98% of their initial value.
The loss of the remaining 2% is likely to happen in the next 5-7 years. This means that currencies are doomed, dropping all the way to zero. Consequently, all the savings will go to waste.
Geopolitical risks will increase
Currently, the political relations between many world powers are strained. Frequent civil and social unrest happen across many countries. The terrorism threat level is ever-growing.
The world is no longer safe. As a result: significant financial losses in the tourism industry and commercial aviation sector. People do not want to endanger themselves, they travel less and stay at home more often.
What should be done?
The factors listed by the expert are rather pessimistic. Mr. Greyerz is convinced that the high instability of the global economy poses a major threat to personal savings of people.
Egon von Greyerz:
“Both experienced investors and ordinary people need to take all the possible measures to protect their savings. The best tool for preserving savings is gold. The yellow metal will not be able to solve all the potential problems that humanity may face in the near future, but it is the best insurance against the most massive purge of capital that the world has ever seen. ”
We do not give an assessment of whether the forecasts are actually correct or not. However, Global InterGold agrees with Egon's opinion that in the conditions of the modern economy everyone needs to protect personal capital from impending financial risks.
Gold is the most promising asset of our time, providing reliable protection for people's savings.
Gold will be the ideal insurance
against future economic problems.