The world is in a mess economically, financially, politically and morally. The excesses and moral decadence of the magnitude the world is experiencing today can never vanish in an orderly way. Sadly, only a total economic collapse can solve the problem and this is, of course, inevitable. No government, no corporation and no individual can or will ever repay the $250 trillion debt that is owed.

This version of the original article, by Egon von Greyerz, has been edited* here by munKNEE.com for length (?) and clarity ([ ]) to provide a fast & easy read. Sign up in the top right hand corner of this page and receive our FREE bi-weekly newsletter (see sample here)

Global debt must implode together with all the assets that the debt…[is] artificially underpinning…

The world needs bad times to come back to real values and morality. Only from that level can we get back to genuine growth at all levels. The suffering to get there is of course going to be horrible for the world but this is the price that we must all pay for the untenable situation we are in. All of this can happen very quickly or it can be a slow and torturous process. In the meantime, we must prepare to the best of our ability.

The trends in the next few years will be similar to the 1970s:

? Rates surging
? Dollar collapsing
? Stocks crashing
? Gold and Silver exploding

Although it is impossible to predict what the catalyst will be for the coming economic cataclysm, there are innumerable candidates:

1. The EU is a total disaster from Brussels policies, Brexit, migration, deficits, banking problems and much more.
2. Italy's populist government has just pushed through a spending splurge. That means still higher deficits and debts, but what does it matter since Italy is already bankrupt with debts of EUR 2.4 trillion, 140% of GDP. Add to that non performing bank loans of 20% which if recognised would shut down the banking system. In addition Italian banks have borrowed EUR 500 billion from the ECB via Target2. This is another disaster waiting to happen that no one dares to even discuss.
3. The U.S. is, of course, the biggest potential disaster with debts and deficits running out of control. The budget deficit for 11 months of 2018 is $900 billion. It will clearly break $1 trillion. The August deficit alone was $214 billion. In the last 12 months U.S. debt is up by $1.6 trillion…and will increase by at least $2 trillion per year in coming years. As rates rise, tax revenue won't even cover the interest costs.

…As we most probably are at the end of a secular super-cycle in the world economy, the topping action could last a bit longer, especially in stocks, but risk in markets are now at an extreme and investors must consider if they should ride a potential final small wave or batten down the hatches and take all the protective measures at their disposal.

With risk at an historical extreme, wealth protection is critical. In virtually every crisis in history physical gold and silver have served as the best insurance available. There is no reason why it would be different this time.

(*The author's views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)

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The post What Will the Catalyst Be For the Coming Economic Cataclysm? Here Are Some Suggestions appeared first on munKNEE.com.