Mark Yusko: Fed Destruction of the Dollar is Creating an Explosive Situation for Silver
Tom welcomes Mark Yusko, CEO and Chief Investment Officer of Morgan Creek Capital Management, back to the show. Mark discusses why stocks may not be that viable in a low bond rate environment. The Fed’s job is to enrich the bankers. When governments become despotic and crony, they eventually fail, usually due to too much debt and spending. Governments today can’t pay their debts in an environment with declining trade and low-interest rates; this is not a sign of strength. We are in Ponzi finance territory today, which always ends badly.
Mark uses copper, ten-year interest rates, the oil price, and technology companies that manufacture components as a baseline for determining economic activity. He is not optimistic about a significant rebound in the economy, as many small businesses are closed forever.
The S&P in nominal terms appears to be back at highs, but if you price it in gold or bitcoin, it is down materially. People may believe they are better off, but there is stealthy destruction of value occurring.
Ultimately the world today has been financialized to the extent that the banks are too big to fail. This is why alternative forms of money like bitcoin are emerging and why gold and silver will ultimately be arbiters of value in the world.
Silver has explosive upside potential. Commodities are at their lowest value in history, and they will beat paper assets.
Mark says, “People today are drowning in information and thirsting for knowledge. It’s important to know what to ignore and where to focus your attention.”
Time Stamp References:
1:30 – Fed models and interest rates.
5:45 – Zombie markets and zombie companies.
9:00 – Four horseman of the growth apocalypse.
13:45 – S&P contrasted with gold.
20:50 – Banking risks and JP Morgan.
24:10 – Reverting to a gold standard.
27:55 – Gold Silver Ratio
33:00 – Focusing on whats important.
Talking Points From This Episode
• Crony governments and declining trade.
• Today, we are at Ponzi finance levels.
• Economy is not likely to rebound soon.
• Why gold and silver is the place to be.
Mark Yusko is the Founder, CEO, and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets. Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Before founding Morgan Creek, Mr. Yusko was the CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office.
Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation. Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early-stage investor in blockchain technology, digital currency, and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.
Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.