Gold’s Historical Rise Amidst Wall Street Socialism, Main Street Feudalism & a Dying Dollar

By Matthew Piepenburg

Partner

April 10, 2024

In this full-ranging discussion with Anthony Fatseas of WT Finance, VON GREYERZ partner, Matthew Piepenburg, squarely addresses the financial, market, currency and central bank forces which evidence an embarrassing disconnect between markets at blow-off tops and a Main Street economy openly blowing away…In this backdrop, the direction and role of gold is now undeniably significant.

Piepenburg opens by distinguishing a rising market from a so-called “resilient” economy by citing recessionary facts and math against the so-called “full employment” and “robust GDP” public narrative. Piepenburg sees a dangerously narrow S&P “ripping” in a Pavlovian response to promises of 2024 rate cuts and what he describes as “backdoor QE” trending toward direct QE to “save” broke(n) credit markets at the expense of the USD. These facts explain gold’s secular move north. As for markets, once net-income margins in the S&P 5 transition from expansion to contraction, stocks will fall in the backdrop of a global rather than regional recession, which makes the current bubble far more dangerous than prior market reversals/mean-reversions in 2000 or 2008.

Piepenburg cites the lessons of math (trillions in debt-based “growth”) and history (from 18^th century France to today) to plainly reveal what Hemingway described as the sad transition from “temporary prosperity to permanent ruin” via an historically repeated template of debasing the currency (inflation) and going to war (proxy or direct)  to distract a centralized public from the debt failures of their weak leaders. Toward this end, Piepenburg addresses all the forces destroying the USD (debt, de-dollarization, petrodollar shifts, example after example of hidden, “backdoor” QE, record-high T-Bill issuance and unlimited yet hidden leverage permission by the big banks to buy unloved government debt off the Fed’s balance sheet).

Piepenburg makes an open joke of “reported inflation” and gets to the honest data to explain why the US needs a weaker USD. Gold, of course, is rising, and will continue to rise, simply because the USD is now, and will continue to be, inherently weaker, regardless of its relative strength.  Again: “It’s common sense” colliding with the lessons of basic math & history.

The discussion closes with the unspoken danger (and current reality) of increased centralization, grotesque wealth inequality and less freedoms, the evidence of which is sadly everywhere. Is there a “way out” of currency debasement, economic risk and continued social unrest? Piepenburg is not so hopeful, as leadership today, across the world, is largely devoid of basic honesty, economic savvy or a respect for history. 

Preparation is up to each of us, not our leaders.