The Slow End of Fantasy, U.S. Hegemony and Historically Over-Valued Markets

By Egon von Greyerz

Founder and Chairman

July 4, 2022

In this 30-minute discussion with Elijah Johnson of Liberty Finance, Matterhorn Asset Management principal Matthew Piepenburg tackles the seismic changes in the current macro setting, namely: a global debt crisis, a pending monetary “reset,” market volatility, social unrest, “fantasy” monetary policies, euphoria-to-panic cycles, declining U.S. (and USD) financial hegemony, a multi-polar new currency system, cornered (complicit) central banks, backfiring Western sanctions and, of course, precious metal ownership and price levels.

Matthew places the eventual monetary “reset” (aka: “Bretton Woods 2.0”) in the context of historical trends in tragically unsustainable debt levels, which always lead to market, currency, social and political crises, the early stages of which are already playing out in real-time. Matthew addresses the grotesque mis-management of global monetary and fiscal policies well in play pre-COVID and pre-Ukrainian war which are trending toward a new (and disorderly) currency system, which will require a gold linkage to have any credibility whatsoever. As for the “reset” itself, it will be anything but simple, and will only follow further pains in the global financial system, the open failure of which lies within desperate polices not COVID or Putin.

Matthew discusses the key indicators (negative real rates and unsustainable PE levels) in confirming grossly over-valued securities markets, which are driven first by/with artificial bond markets/indicators, which then directly influence stock over-valuations. Both markets (credit & equity) are poised for further pain ahead. Matthew discusses how precious metals ultimately get the last laugh as markets and currencies follow their historical pattern downwards. In the interim, gold’s current price doesn’t reflect fair price discovery and Matthew discusses current gold headwinds and later tailwinds.