Bonds Will Not Turn Into a Noah's Flood of Cash

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Published : March 10th, 2017
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Category : Crisis Watch

I enjoyed talking with Greg Hunter, of over a Skype Interview - one of the marvels of our time, where we can see and talk with friends who are thousands of miles away from us.

Unfortunately, Greg caught me off balance at the beginning of our interview, with a question for which I was quite unprepared - I had been expecting to talk about silver and its possible monetization in Mexico.

The question which put me in a momentary fix was, in general and not word-for-word: "What about that enormous black debt cloud that you have said is hanging over the world? What happens when the debt cloud begins to rain debt on the world?"

Well, when clouds release their moisture, it rains. But when a debt cloud is "saturated" so to speak, it does not rain cash, contrary to what I said in the spur of the moment: "We shall have a Noah's flood of cash." My bad!

No, when at some point the total of world debt hanging over humanity has reached a point where the owners of that debt - which consists mainly of bonds - are going to want to sell their bonds, there will be more sellers of bonds than purchasers, and their prices will begin to fall.

At some point, the initial fall in the values of bonds will cause fear that the fall in price may continue, and more sellers will show up.

In short order - fear is very contagious! - sellers will far outnumber purchasers of bonds and their price will collapse - many of the bonds will become worthless, others will lose a large percentage of their value.

The bond rout will wipe out multi-trillions of dollars of what the bond holders thought was wealth.

That is what I think will have to happen, at some point. Bonds will not turn into cash, they will turn into dust.

We won't have a "Noah's flood" of cash. We'll be stuck in the middle of a Sahara Desert of worthless bonds.

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Hugo Salinas Price is the founder of Mexico's Elektra retail chain. Hugo Salinas Price currently is retired from retailing and focuses on being a proponent of a sound financial policy for Mexico[1]. Salianas Price is President, Mexican Civic Association Pro Silver, A.C
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