Dear PGM-Capital Blog readers,
During this weekend we took some time to read the book “Der Staatsbankrott kommt” (The state bankruptcy is coming!) by Michael Grandt, with the fitting sub-title
“Retten Sie Ihr Vermögen, solange Sie es noch können!”
(Save your wealth as long this is still possible).
Using lots of examples taken from Greece, Michael Grant shows that what’s happening there is only a foretaste of what will follow. The book explains that the fear of a national bankruptcy is quite real. Government expenses that again and again turn out to be much bigger than desirable, the same as the almost unlimited printing of money as a consequence thereof, as well as the practically unlimited printing to ‘help out’ the ‘victims’, will have disastrous consequences for the inflation.
The book has been written from a German perspective as a warning for the German consumer. The reality is, in our opnion, that in the Western World (USA, EU & Japan), it is precisely Germany, with a trade surplus, AAA credit rating and a high savings quota, they will have to worry about the least.
The USA with a trade deficit of US$124.1 billion, a current account deficit of
US$473.4 billion and a Debt to GDP of over 100% is spiralling down to disaster, which will not be restricted to its own territory. Every country is in danger, and no one knows when it will happen.
Grandt ask some fundamental questions with these grim perspectives in mind:
- How long will the US-Dollar remain as the reserve currency?
- How long will the euro exist?
- Will there be another inflation?
- May we expect a currency reform?
- What have we learned from Japan (1990)? Russia (1998)? Argentine (2001)? Iceland (2008)? Zimbabwe (2009)?
Based on most currency reforms we have seen during the last one hundred years, Michael Grandt gives a carefully executed and coherent analysis.
The government will lay its hands on our wealth if the going gets tough and there is no other way out.
If only because politicians hardly ever manage to learn form the past, or because they only deal in short-term solutions.
A default of the government or of our currency will affect us personally, although only few people seem to realize this. Grandt describes what you must do and how to react adequately:
- See to it that you’re not stuck with government bonds
- See to it that you have as little debt as possible
- See to it that you convert your savings into gold and/or silver
- As to equities, value stocks are to be preferred
- Do not buy with borrowed money, so that you are free to sell your possession when you decide
- See to it that you have a small stock of silver/gold within reach, should your bank not be available all of a sudden.
For the sake of humanity we hope that the points discussed in this blog, based on Grandt’s article, which has a lot in common with our own analysis, will never happen.
But if after reading this you agree with the content, please feel free to contact us, for us to talk with you about your future and the best investment plan that meets your profile to protect you and your loved ones against the disaster that lies ahead.
Yours sincerely
Eric Panneflek
Chairman