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CNBC Squawk Box. Anchored by veterans Martin Soong and Karen Tso, the new "Squawk Box" continues to be the jumpstart on the business day for the corporate and financial communities. CNBC's signature show is better than ever, providing viewers with the edge to stay ahead: breaking news, connecting with newsmakers and chasing the hottest stories, as well as the ones that aren't hot... yet.

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Host: Martin Soong

Host: Our next guest says gold is going to be the asset to watch and he believes the US dollar, the Euro and the pound are going to be destroyed Zimbabwe-style. Martin Hennecke, he is Senior Manager Private Clients at the Investment Advisors TYCHE, he joins us live from our studio up in Hong Kong staying with us a couple of feet from him is Todd Everts, president and CEO at Wall Street Global.

Host: Martin, good to have you with us. First off, before we get to gold why do you think dollar, Euro and Sterling are going to get destroyed?

Martin Hennecke: Well as a result of this financial crisis we have recently seen interesting processes starting and Iceland has bailed out first, you know the first major bank that was about to collapse and they have had to bail out the other ones and then you have seen a down-grading of Iceland and the national bankruptcy of Iceland being discussed. Now in the case of Iceland they have quite a lot of external debt in other currency so they wouldn’t be able to print up more of their own currency which mean they have inflation to get out of their debt but the UK, the rest of Europe and the US could do it and we see the same process is there now, $700 billion bailout money and now it has been decided a lot more bailout money to come, to privatize banks, guarantee the bank deposits and so on so this money has to be sold as new debt in the market. We have just had the chairman of the sovereign rating of Standard and Poor’s saying that there was a lot of pressure on the triple A rating of the United States and that it was not God-given so I think we are starting to see the same process as with Iceland and the currencies are getting sold off in the process as this privatization of the banks is first step down the road to hyper-inflation.

Host: Okay so if dollar, Euro and Sterling are all going down the tubes and leaves by default gold as the go-to asset. Let’s pull up the charts on and give the viewers a look. It’s not just oil popping back it’s also gold that we’re seeing a sharp move higher there as well. We’ve also talked about it this morning, there’s almost a gold rush or panic-buying on the yellow metal. What’s going on?

Martin Hennecke: That’s exactly true and it’s quite interesting that actually its price itself hasn’t yet exploded. It has been very stable and has slightly risen yet today but it hasn’t been exploding yet partly because of the leveraging shortly, partly perhaps because of manipulation. The Central Bank and the politicians don’t really want you to panic out of their debt and go into gold. If people see gold rising a lot, that makes it quite attractive but you’re exactly right, there’s basically been a panic-buying frenzy across the Western markets in particular because most dealers completely sold out. You look at Germany because I’m looking at the situation pretty closely. The two major dealers have closed shop there even in the US, dealers hardly return calls because they’re completely out of metals so I think this will intensify considerably again even with those new plans that have been formalized over the weekend which again just means next printed up money is being shown as the problem and inflation going forwards to accelerate very sharply.

Host: Todd, jump in.

Todd G. Everts: But Martin…obviously as Martin was introducing you, there’s a little bit of headline that the US and the Euro is going to have the same effect as the Zimbabwe currency. Coincidentally I’m worth a hundred billion Zimbabwe dollars because I bought four 25 billion dollar notes on eBay earlier this year, so I put them on my wall..you really believe that the US dollar and the Euro could go to that extent?

Martin Hennecke: Actually as a matter of fact it’s interesting to know that the world’s leading rating agency or one of them anyway, Standard and Poor’s has actually projected in March 2005 that all major governments are heading towards the fall on the sovereign bonds. And again that’s the world’s major rating agency so now that was predicted right before the crisis even started and now these text revenues are obviously drying up and much, much more money are needed for all these bailouts and privatization of the banks to prevent literally a bank-run. Clearly if anything is likely to be happening earlier than later so maybe we are not seeing exactly a Zimbabwe style thing but inflation definitely is a major risk and investors should look at this very carefully because most investors have been saving now, cash is the safest thing but it might just turn around and cash being one of the highest risks, investments of this inflation accelerating.

Host: And gold being the go-to asset. Understood. Martin got to go, great to talk to you sir. Thank you for your ideas. Martin Hennecke, Senior manager private Clients at TYCHE Investment Advisors.