May 19, 2021
By Egon von Greyerz
“Everything is on fire” – Heraclitus (535-475 BC)
What Heraclitus meant was that the world is in a constant state of flux. But the big problem in the next few years is that the world will experience a fire of a magnitude never seen before in history.
I have in many articles and interviews pointed out how predictable events are (and people). This is particularly true in the world economy. Empires come and go, economies boom and bust and new currencies come and without fail always go. All this happens with regularity.
A GLOBAL FIRE IS COMING
But at certain times in history, the fire will be cataclysmic. And that is where the world is now.
Explosive fires have started everywhere already. Stock markets are on fire and so are property markets, as well as bond and debt markets. The problem is that fires are initially explosive but always end up implosive.
So right now we are in the explosive phase of the fires with markets all going parabolically exponential or should it be exponentially parabolic!
We are now at the end of a secular bull market in the world economy which on a global level has reached extremes never seen before in history.
Never before has the world seen an explosive fire of this magnitude, fuelled by uber-profligate money printing and credit expansion by central and commercial banks.
We have talked about inflation running wild and it is not just happening in stocks. Property markets are literarily exploding, especially the high end. We see this all over the world and not just in the US. In the UK for example, HSBC stated that March saw the highest number of mortgages EVER issued. In Sweden properties sell for up to 40% above asking price in a frenzied bidding war and second hand leisure boats are in such demand that they cost virtually the same as a new boat. And if you want a new boat, there is none available until 2022. It also seems that people are desperate for company after the lockdowns as prices for puppies in the UK are up to 100% higher than last year.
Yes, everything is really on fire as people are desperate to just spend, spend, spend after a year of lockdowns and restrictions.
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