Why Gold Is Intentionally Misunderstood

By Matthew Piepenburg

Partner

July 10, 2024

In this compelling conversation with Tom Bodrovics of Palisades Gold, VON GREYERZ partner, Matthew Piepenburg, bluntly dissects the empirical realities from the main stream fantasies regarding the risk-asset and economic narratives making the current headlines. He touches upon risk asset facts, the deep implications of debt-to-GDP levels globally, the real rather than sensational consequences of ongoing de-dollarization and the now undeniable fact that gold is replacing the UST as a global reserve asset.

The conversation opens with a candid assessment of the common denominator (and common sense) reality of unsustainable debt and its now obvious ripple effects on all the current narratives and debates regarding stocks, bonds, currencies, deflation/inflation and sound vs. fiat money, all of which culminate in a realistic and sober discussion of gold. 

As Piepenburg reminds, the outsized risks in credit and equity markets (from scary “private credit pools” and “low-yield” junk bonds to dangerously narrow/tech-meme-driven stock indexes) can no longer be relegated to the cynicism of “gold bug” thinking, as even the finest minds in the stock and bond markets are drawing the same clear conclusions. 

Piepenburg makes an equally blunt case for the risks facing paper money in a global backdrop of open currency debasement. He shares his views on how even the “smartest money” in the room continues to deny or avoid these realities by measuring their wealth in currencies (melting like ice cubes) and chasing yield in increasingly more dangerous corners of the credit and equity markets. 

Toward this end, Piepenburg gives his views on family office dynamics and allocations derived from direct managerial experience and a host of recent conversations around the world with many principals in this space. Their relatively low allocations to physical gold in a world otherwise replete with debt, risk-asset and currency risk is fascinating yet otherwise understandable given how fundamentally misunderstood gold remains as an asset class. 

Piepenburg holds nothing back in explaining just how and why gold is in fact intentionally misunderstood by many of the most sophisticated investors.