Paranoid billionaire or the trade of the decade? By James Sanders

Keith Neumeyer. Google him if you have the time but remember the name.

He thinks we are all in trouble and that the US dollar is headed for collapse,leading to a 'reset' with some assets soaring and others collapsing. He predicts 'riots' when the average person understands what's actually been going on. Scary stuff but Mr Neumeyer is not to be underestimated. He has a fearsome reputation Of course, even billionaires make mistakes and get trades wrong but when some one like Keith Neumeyer decides to make a stand, it's worth digging a little deeper(no pun intended).

Paranoid billionaire or the trade of the decade?

First,a couple of facts about Mr Neumeyer. He is the founder, president and CEO ofFirst Majestic, one of the largest silver mining businesses in the world. Hefounded his firm in 2002 and it is traded on the US stock market with a currentvalue of around $1.3bn. He is yet to cash out and sell a single share in the

business he founded.

“I'm abig bull on gold, I think we're going to see a major reset of the world... Insome of the upper circles, I think it's pretty well understood that the debt in the world is never going to be paid off.

We haveto have some kind of a major reset that's likely going to include gold... I've been quoted many times saying I expect to see triple digit silver, and that's assuming gold doesn't move. If gold goes to $10,000, then silver will be some ridiculous number... could even be $1,000.”

Gold iscurrently trading at $1,293 and silver is $17.15'Ithink there are going to be major revolts'''Negativeinterest rates are a way that governments are trying to tax the people. It'sgoing to start with big corporations that have a lot of cash sitting around in

banks and then it's going to trickle down to the average person on the street,the people that get hurt are the small investor, the people that can least afford it, the retired people that rely on their savings interest for a small income.

Theworld is changing, this is all changing, I think there's going to be a majorrevolt if we see negative interest rates in North America. We're going to seeriots.The Fedis losing credibility and with the talk of negative rates, people are lookingto gold now as a safe haven to be in as protection against major forces thatare occurring in the world.''

If youhad invested $10,000 in Keith's business when he started out 15 years ago, youwould have close to $1m today. To be clear, if he was just another Wall Streetbroker, analyst or banker, it would not be worth repeating his views here. Ofcourse, that doesn't mean he will be correct, even Goldman Sachs hit the stoplosses on all 6 of its ‘trades of the year’ in 2016, but more on those anothertime.

Hebelieves that the world is awash with debt that it can't ever hope to repay. Inhis view, central banks have pumped more money into a system that was alreadybroken. Fundamentally, the economy has stopped working properly and negativeinterest rates and asset bubbles are proof of this.

Paranoid billionaire or the trade of the decade?

He says there is only one way the current situation ends, and that is with debt being-written off and a new global currency mechanism being needed, one that may be part backed by gold. He calculates that to effectively wipe out all debt with anew gold backed currency requires a $10,000 gold price.

Neumeyeris certain that central banks, governments and investment funds know what iscoming and are preparing themselves already. He sees evidence of this in the current 'strength' of stock markets and the US dollar. Rather than a genuine economic recovery, he thinks the real reason the dollar is soaring is simply because Europe, Japan and China simply need weaker currencies, not to thrive,but to survive.

US policymakers recognize the downsides of a strong dollar but perhaps see that'taking one for team' (i.e. the global economy) as being better than widespread depression.

He notes that for the first time ever, central banks are quietly buying as much physical gold as they can, previously they were always sellers.China is thought to be targeting ownership of at least as much physical gold as the US, but calculating exactly how much the Chinese have hidden away in vaults has proven impossible. Conspiracytheorist? Paranoid billionaire? Maybe.

James Sanders is a successful business man who provides the help in property trading and business management in London.