Gold Switzerland: “We are in the last 5 minutes of our financial system – the collapse of everything is approaching”

Gold Switzerland, in its recent report, makes ominous predictions that the world is “probably now in the last 5 minutes of the current financial system”!

The downward trend in US interest rates ended in 2020 and they have been on an upward trend since then. The truth is that no central bank can control interest rates when a country's government is recklessly issuing debt and the only buyer is the central bank itself. In essence, this is not a government, but just a Ponzi scheme reminiscent of a “soap bubble,” the Swiss house claims.

It is logical that a sharp increase in yields on long-term interest rates will lead to an increase in yields on short-term interest rates. “Any major power that spends more than it can service its debt cannot remain great for long. This is a universal truth for Habsburg Spain, for the ancient regime of France, for the Ottoman Empire, for the British Empire.”

So, according to the CBO (Congressional Budget Office), at the end of 2024 the United States will spend more on interest than on defense. But, as is often the case, the CBO chooses not to tell inconvenient truths.

He projects interest costs to reach $1.6 trillion by 2034.

But if you set aside deficit trends and apply the current interest rate, annual interest costs would reach $1.6 trillion by the end of 2024, not 2034! In 1980, the federal debt was less than $1 trillion. Currently, interest on debt service is $1.6 trillion. And the debt today stands at $35 trillion and is on track to rise to $100 trillion by 2034!

And since the trend in interest rates, as explained above, is upward, an interest rate of 10% in 2036 or earlier is not realistic. Remember interest rates in the 1970s and early 1980s: they were much higher than 10%, and the debt and deficit were much lower.

According to Gold Switzerland, new US debt issuance is expected to accelerate and, despite recent gains, the value of the dollar will fall. So where are we going? Most likely, we are facing an inflationary period that could lead to hyperinflation. Given that global debt has already more than quadrupled this century, from $80 trillion to $350 trillion, plus a mountain of derivatives worth more than $2 quadrillion, plus unfunded liabilities, the total debt will exceed $3 quadrillion.

While central banks frantically try to save the financial system, much of this money will turn to dust as counterparties fail and banks save themselves by printing money in unlimited quantities.

This is where the expression Banca Rotta “rotten bank” comes from.

But neither a bank nor a sovereign state can be saved by issuing worthless paper or digital money. In March 2023, four American banks collapsed in a matter of days. They were soon followed by Credit Suisse, which had to be rescued. The problems in the banking system were just beginning. Falling bond prices and the collapse of the home equity loan market are just the beginning.

As the Swiss banking house notes, the debt will grow exponentially, as it has already begun to do. Exponential movements start gradually and then suddenly – whether we are talking about debt, inflation or population. According to Gold Switzerland, the world is now probably in the last 5 minutes of our current financial system. The coming final phase is likely to pass very quickly, as it did in the Weimar Republic in 1923. In January 1923, an ounce of gold was worth 372,000 marks, and by the end of November of that year its price was 87 trillion marks!

The consequences of the collapse of the financial system and the global economy, especially in the West, would be catastrophic. It may take many decades for the economy to recover. In any case, bankruptcy and falling asset prices are predicted, as well as a massive contraction of the economy and trade.

The East and South, especially countries with large reserves of raw materials, will recover much faster. For example, Russia has raw material reserves worth $85 trillion – the largest in the world. And owning stocks, bonds or real estate – all “inflated” assets – is likely to lead to massive erosion of wealth as we head towards the “collapse of everything”, Gold Switzerland concludes.

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