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The Coming World Debt Cliff

The Coming World Debt Cliff

It has been a while since I put out a news letter on the world ‘s financial situation and for that I apologize.

In the mean time we have seen a 10% market correction in October. The question however is whether this was A correction or THE correction. In my humble opinion this was A correction. We have now had two warnings! Beware the third one! My big concern is that the world’s dire financial situation has not changed at all. In fact, it is worsening by the day! One of the most frightening things you can look at is the US DEBT CLOCK.

Time Bomb!!!

The simple fact is that the US used to create $1 of debt for every $1 of growth. Not anymore folks! According to the IMF and the International Institute of Finance, the US is now creating $6 of debt for every $1 of growth. Consider the Global Debt vs GDP Increase graph below courtesy SRSrocco report.

 

 

 

 

 

 

 

 

 

 

It is very obvious that this situation cannot continue for very much longer. A huge portion of this debt is underpinned by the inflated stock markets. Once the stock markets start to correct seriously, the debt will collapse and cause worldwide panic.

Gold and Silver Investment

I have been writing about the money flow movement from stocks to precious metal for a while now. This is now starting to happen. Demand trends form The World Gold Council noted that in Q3 2018, Gold ETF’s investors liquidated 103 metric tons of gold to move to stocks. This is why the gold price is so depressed. The Council also stated that gold investment jumped 27% in Q3 2018 to 211 metric tons from 165 Mt compared to the same period last year. Money is starting to flow into precious metals. Soon the volume of money will by far overpower the supply and prices will sky rocket to unbelievable heights.

Seldom before has there been a better time to invest in precious metals especially silver as the all in production price at the moment is $16.02. The current silver price is below the cost of production. This is a great buying opportunity.

A wise investor buys when there is blood in the streets. Gold and silver is bleeding!