Lawrence Lepard: The World in Monetary Chaos
Tom welcomes Lawrence Lepard back once again to discuss the markets, mining industry, and the fragile state of the economy.
Lawrence discusses the supposed massive discovery of gold in Uganda and why it’s hype and absurd. It would have to be about a hundred times the richest mines in production today.
A high dollar encourages countries to find alternatives. We’re living in a world of monetary chaos and enormous debt structures. ZIRP and NIRP have created enormous financial distortions which are only getting worse. We never imagined that money could get this cheap and markets could get so overvalued. The bubble has found a pin and everything is down twenty plus percent. If they don’t pivot, we’re looking at a major recession or depression because a Ponzi can’t be tapered.
Markets are going to go to zero if Powell maintains his approach. We’ve seen 31 trillion in valuation loss worldwide in equities. We’ve wiped out one and half times total annual U.S. GDP in paper wealth in six months. Gold in comparison is only down six or seven percent over the past year. Gold is hanging in and is likely finding a base for the next leg up.
Gold and Bitcoin are non-state money alternatives. The Fed is trying to make the dollar more sound, and the next act this fall will see another big leg down in equities. Housing will continue to decline as mortgage rates climb. This fall, they will realize the economy is crumbling, and they will pivot. Then we will see gold and Bitcoin will go to the moon. They have to pivot, the only question is when.
The old world is gone, and we’re not going back to two percent inflation. We may have reached peak house inflation as that market had gone parabolic. This environment will be very choppy. Those that control the economy, default policy will be to debase the currency.
We’ve had certain sector almost express hyperinflation over short time-frames. High inflation leads to hyperinflation.
We need nuclear power and a more sober approach to energy investment globally.
The Fed creates bubbles that naturally lead to busts, which can devastate the average person who is trying to make correct choices.
Time Stamp References
0:00 – Introduction
0:34 – Uganda Finding Gold?
5:43 – Fed & Dollar Strength
17:40 – Hard vs Soft Money
23:47 – Pause the Taper?
28:07 – Inflation + Deflation
31:54 – Defining Hyperinflation
32:56 – Channeling Volcker
36:07 – Sizing Positions
38:04 – ESG & Energy
41:20 – Nuclear & Geothermal
44:35 – Roaring 20s Story
47:50 – Sound Money Fix
54:17 – Wrap Up
Talking Points From This Episode
- The dollar and why the Fed is certain to pivot.
- Sound money alternatives and the next leg down in equities.
- Energy markets and the need for nuclear.
Guest Links:
Newsletter: http://eepurl.com/gOf1dT
Website: http://www.ema2.com
Twitter: https://twitter.com/LawrenceLepard
Lawrence W. Lepard is the Founder and Managing Partner of Equity Management Associates. He has spent his entire 38-year career as an investor, principally focusing on venture capital opportunities.
Before co-founding EMA, Mr. Lepard spent 13 years at Geocapital Partners, in Fort Lee, NJ. There he was one of two Managing General Partners and was responsible for several venture capital funds. Before Geocapital, Mr. Lepard spent seven years at Summit Partners in Boston and California, where he was a General Partner at Summit I and Summit II.
Mr. Lepard received his BA in Economics from Colgate University, and he received an MBA with Academic Distinction from Harvard Business School.