Gold’s Historic Rise as the S&P Teeters Toward Mean-Reverting Pain

By Matthew Piepenburg

Partner

March 6, 2024

In this engaging, 30-minute conversation, VON GREYERZ partner, Matthew Piepenburg, sits down with Liberty Finance’s Elijah Johnson to discuss Gold’s recent surpassing of the 2100 (USD) marker in the backdrop of an S&P totally disconnected from global and national economic warning signs. For Piepenburg, such price action in gold is no surprise, and in fact, is only just beginning as global and US debt levels tip toward the absurd while credit markets, currency markets and central bank policies near their cracking points. In addition to these much-discussed trends, Piepenburg also addresses the historical changes in the London and New York gold and silver exchanges, each of which are seeing massive (and one-way) deliveries OUT of their exchanges and into the waiting arms of central and commercial banks losing faith in the USD/UST. Instead, the bigger names are gathering a far safer Tier-1 asset (gold) in anticipation of seismic shifts in the global economy and financial markets. The implications of these deliveries out of the OTC exchanges are immense, as they strongly curtail the ability of the bullion banks to manipulate honest pricing in precious metals. 

Piepenburg turns an equally concerned (yet characteristically blunt) eye toward an S&P breaking all-time highs on the backs of only five, highly over-valued names. For Piepenburg, this so-called “bullish” move in equities could not be further from the truth, as once this bubble “pops,” as all bubbles do (and Piepenburg explains HOW), there is literally no good “narrative” left for the US to cling to in its desperate attempts to confuse a bloated stock market with a “resilient” economy. For Piepenburg, such warnings are not just felt and shared by “gold bulls,” but equally so by a long list of esteemed portfolio managers, from Jeremy Grantham to Paul Singer. In short, the evidence of a dangerously topping and soon-to-be mean-reverting S&P are now undeniable. 

The outlook for gold is ultimately so convincing and so strong because the outlook for cornered Fed officials and an openly trapped and bankrupt US economy is so week. As always, Piepenburg addresses these sober realities with facts rather than hyperbole. He closes the conversation reminding viewers that understanding WHY investors need gold is now fairly obvious, but further reminds that it is equally important to understand HOW to own/hold gold outside of the banking system, which of course, includes ETF or “paper” gold.