Huge Upside for Silver Prices, Expert
Silver prices could hit $660.00 a troy ounce as the financial crisis rapidly deepens, according to investing legend Egon von Greyerz.
“Gold and silver are now reaching their period of glory. Precious metals will be one of the very few ways to insure yourself against total wealth destruction,” Greyerz, the man who has become legendary for his predictions on quantitative easing, historic moves in currencies, and other significant global market events, said in an interview with King World News.
Last week’s Fed decision not to raise interest rates boosted Greyerz’s belief that the world financial system may melt down soon and send safe-haven assets like silver and gold skyrocketing.
Silver has already rallied 14.9% since the beginning of the year, making it this year’s fourth best-performing investment as of March 22, preceded by lumber (20%), gold (18.2%), and the S&P GSCI (15.9%).
“The Fed last Wednesday did what I had already forecast back in December and did not increase rates,” Greyerz said. (Source: “Legend Warns The Price Of Silver May Hit $660 As The World Financial System Melts Down,” King World News, March 20, 2016.)
The Fed decided on Wednesday to leave its benchmark interest rate in a range of 0.25% to 0.50%. Fed officials also penciled in only two quarter-point increases this year, down from four increases in December.
“They know that the real economic situation in the U.S. and in the world is a lot worse than all the manipulated figures and propaganda,” said Greyerz, who is the founder and managing partner of Zurich, Switzerland-based Matterhorn Asset Management AG and GoldSwitzerland.
Greyerz predicts that central banks will launch the final and most massive money printing spectacular that “will dwarf anything the world has seen before.”
“This will create a colossal global hyperinflation which will be the end of the current monetary system and eventually result in a deflationary collapse,” he said.
“An asset implosion is totally guaranteed in my view and that will also lead to a wealth destruction of a magnitude that very few people can imagine today,” Greyerz said. “I would not be surprised to see assets like stocks and property go down by 75–95% in real terms.”
Greyerz believes silver prices will lead the rally as it has corrected 72% from the $50.00 peak in 2011, whereas gold is down a mere 45% from the $1,920-per-ounce top. The gold/silver ratio is now at 79, which means gold is currently 79 times more expensive than silver. In 2011, at the silver top, the ratio was 30.
“Thus silver will go up twice as fast as gold. Eventually the ratio could reach 15,” Greyerz said. “Even if the gold/silver ratio ‘only’ went to 30, that would mean a silver price of $330.00. And if the ratio goes to 15, we would see a $660.00 silver price.”
But Greyerz stressed that he doesn’t think “we will have today’s money in the next few years, instead it will be hyperinflationary money. This means that we might have to add quite a few zeros to the gold and silver prices.”
The silver price topped $16.00 a troy ounce on the Comex division of the New York Mercantile Exchange on Tuesday. The gold price, meanwhile, was hovering around $1,254 on Tuesday after reaching a 52-week high of $1,287 a troy ounce on March 11.
Greyerz has long forecast the current global economic crisis. In 2002, when gold was $300 per ounce, his company recommended to its investors to put 50% of their investment assets into physical gold stored outside the banking system.
Greyerz makes regular media appearances such as on CNBC, BBC, and King World News and speaks at investment conferences around the world.