NEW YORK - August 19, 2010 - The decline of the western economic model will bring about hyperinflation and decades of painful readjustment, Egon von Greyerz, founder of gold investment intermediary Goldswitzerland.com told CNBC Thursday.

Fear of inflation causes investors to take refuge in gold. However, another analyst told CNBC that buying gold now is as pointless as the rush to buy tulips was in the 1630s.

From 1971, when President Richard Nixon's regime decided to take the U.S. dollar off the gold standard, economic growth in the western world has been spurred by a massive increase in credit, according to von Greyerz.

The U.S. debt increased from $9 trillion in 1971 to $59 trillion currently, while nominal gross domestic product rose only from $1.1 trillion to $14.5 trillion in the same period, according to a research paper written by von Greyerz.

"The wealth that has been created in the last 40 years is not due to good times. The good times were created by credit creation," he said.