GoldSwitzerland

In this year-end MAMChat, Matterhorn Asset Management principals, Egon von Greyerz and Matthew Piepenburg, round up 2021 by discussing the critical issues leading us into the new year. Toward this end, Matthew is tracking four specific themes into 2022, namely: 1) inflation ripple effects; 2) Dollar illiquidity; Dollar relative strength; and 4) tapering into a grossly over-valued risk asset bubble. Despite staggering levels of monetary expansion and fiscal spending, the indicators (and implications) coming from the repo and Euro Dollar markets suggest an ironic unavailability of Dollars otherwise tangled up in toxic and complex derivative markets. The impact such illiquidity can have upon objectively (and grossly) over-valued equity markets and over-indebted global credit markets will be a key issue for 2022—a year whose risk potentials will only be exacerbated by a well-telegraphed Fed taper. Paramount to Egon’s thoughts heading into the new year are the ignored warnings of past years. In short, history’s lessons cannot be over-stated enough. From Jefferson’s prescient warnings of central bank controls over sovereign wealth to the cyclical consistency of the debasement of currencies which always follow in the wake of extreme debt, the past has much to tell us of the future. Debt, as Egon reminds, is the core driver as well as core risk trigger of every market bubble. Of course, the current “forever bubble” is no exception to this historical lesson and trend. Egon sees 2022 as a potential setting for this bubble’s looming expiration date, recognizing, however, that central banks will do everything in their currency-debasing power to postpone inevitable breakdowns in fractured markets. Toward this end, Egon reminds that the imbedded (and mis-reported) risk in the global derivatives trade is among the greatest risks of all. Egon and Matthew close with a brief discussion of true wealth, namely the invisible wealth of time and connection with those people, ideas and passions which can’t be tracked or valued by rate hikes, inflation scales or asset prices. The holidays remind us that preserving financial wealth is simply a means toward preserving more time with, and priority for, those who matter most to us in ways no currency can measure. Despite the financial and economic challenges facing 2022, we wish you a rich new year in every sense of the word. We are experts in wealth preservation through physical silver and gold storage in Switzerland. Visit our website here: https://goldswitzerland.com/

Egon von Greyerz and Stoeferle conclude their two-part Zurich discussion by addressing gold’s role in the context of current rate, currency and bond market forces. Both see a future of negative real rates and increased centralized controls as inevitable. But Egon asks if central banks can truly control rates forever? He feels eventually there will be a sell-off in the long end of the bond market, which will send bond yields and rates to unpayable levels. Ronni agrees, but in the interim foresees greater forms of yield curve controls to stem this inevitable rate tide. Each discuss the various reasons such policies will eventually fail. Rate and currency forces, of course, are highly inter-related. As yields on the 10-Year Treasury surpass 2%, the Fed will be forced to buy these bonds via unlimited QE, which is expansion is extremely destructive too currencies seeking to prop otherwise unloved bonds. As to bonds, both Stoeferle and von Greyerz see the bond market as the most important (yet most ignored) force in the financial world today. The irrational yet desperate efforts central banks are making to “support” (i.e., subsidize) that market with fake money always ends badly, but not without a fight. Toward this end, Ronni and Egon foresee more financial repression in the form of increasing capital controls. Pension funds, for example, are allowed to purchase Treasuries, but not physical gold. Such insanity is increasingly becoming policy. Meanwhile, and despite such obvious currency, debt and financial risk, the world appears to be deliberately distracted by climate change summits as the currency (and hence financial system) beneath their feet is rotting at warp speed. Ronni and Egon close by discussing their unique and respective services (and asset focus) to inflation-protect investors, from fund management and wealth management to exceptional and transparent market/macro reporting. Ronni sees a particularly solid set-up in the gold mining space, and explains why. Ultimately, both concede that gold will rise for no other reason that sovereign currencies are already falling, and set to fall much further. We are experts in wealth preservation through physical silver and gold storage in Switzerland. Visit our website here: https://goldswitzerland.com/

In part I of this unique two-part discussion, Matterhorn Asset Management founder, Egon von Greyerz, joins Ronni Stoeferle, author of the internationally acclaimed In Gold We Trust Report to exchange informal yet deeply insightful perspectives on the current and future direction of gold and the global financial system. As two of the world’s leading authorities on precious metals, von Greyerz and Stoeferle offer invaluable insights on the key issues related to precious metal investing in the backdrop of central-bank-driven market forces. Egon and Ronni discuss their individual journeys toward recognizing the timeless, paramount, yet oft ignored, role that gold plays in intelligent wealth preservation and risk hedging in a market landscape that is becoming increasingly centralized. As Ronni observes, real capitalism requires failure, or what the Austrian School of Economics would describe as “constructive destruction.” Today, however, central banks have “broken all taboos” to provide instant liquidity whenever the market begins to crack. Such “support,” which will likely include direct equity purchases and yield-caps by central banks, can buy markets more time, but such measures only make the end result far more perilous. As Egon reminds, the recent “Fed taper” was essentially a “fake taper.” Whether that is understood by the markets, however, is another matter, and Ronni discusses the risks and optics of “tapering” into a weak economy. As for rate discussions in the backdrop of rising inflation, each discuss the conundrum central banks have placed themselves. The bottom line: It’s too late. There is no way to have a “Volker-like” rate hike in a world saturated in debt. A re-set of the monetary system is thus historically inevitable. This transition phase makes gold ownership essential. Ronni strongly believes that gold will play a monetary role again. As to currencies, Egon bluntly addresses the central bank failure in allowing global debt levels to surpass $300T. History confirms the currency debasement needed to “cover” that debt points to gold. As monetary policies reach an exhaustion point, fiscal policies (i.e., deficit spending) are becoming the newest drug for hubris-infected political actors forever seeking to outlaw recessions. All these stimulus packages, of course, require money, most likely to be in the form of CBDC. This raises numerous civil and economic concerns, as central bank money increases central bank controls over individual spending. Using the U.S. as proxy for developing nations, both agree that decades of running deficits and increasing the money supply is unsustainable. Egon asks: “Don’t the policy makers see the disaster they’ve created?” Von Greyerz feels we are approaching the end of an era and the risk of a major collapse, postponed, perhaps, with more central bank “tricks” like CBDC. But for how long? Ronni’s response: Despite central bank creativity, natural forces and historical lessons can’t be cured with words and creative policy titles. We are experts in wealth preservation through physical silver and gold storage in Switzerland. Visit our website here: https://goldswitzerland.com/