Matthew Piepenburg: Debt and War – The Signs of a Dying Empire
Tom welcomes back Michael Piepenburg Commercial Director of Matterhorn Asset Management to the show.
Sadly the decline of empires is often associated with war and debts. We’re seeing a lot of polarized thinking in the West and not much in the way of understanding. The war has shown how unprepared and weak much of the west has become. We are pointing a gun at Putin and shooting ourselves in the foot with these sanctions. The financial weapons that are being deployed against Russia are backfiring in a very serious way.
We are forcing Russia to move closer to China and the West has shown it’s willingness to freeze and steal reserves. This has not gone unnoticed by a number of countries. We’re seeing a lot of spin and virtue signalling from Western governments.
The West can’t use the same approach on larger countries that we’ve used on small ones in the past. We’re moving towards a multi-currency system due to the decline of the U.S. dollar. Russia’s FX reserves are the highest they have ever been. Saudi Arabia is now conversing with China to sell oil in Yuan and other nations are doing likewise. This means the end of the petrodollar which has massive implications.
U.S. Treasuries are now some of the most unloved IOU’s in the world. We’re seeing the consequences in the yield curve. If no one buys your debt than you have to buy it yourself. The market fears rising rates and their are no good solutions for the Fed. Inflation is therefore inevitable and intentional.
Matthew discusses how gold is ‘the’ monetary metal and he no longer has faith in any currencies. Count your wealth in ounces and grams not dollars. Gold is the insurance policy with the largest history.
Price discovery for gold is improving as more countries actively begin to use it. Gold always gets the last laugh.
Many Gold ETFs claim to provide ownership but is not true in fact. They may not have the gold and it’s probably stored at a commercial bank with derivative risks.
Lastly, try to stay positive and look for informed opinions.
Time Stamp References:
0:00 – Introduction
1:10 – War & Cornered Empires
3:45 – Two Perspectives
13:13 – Sanctions & Financial Weapons
19:06 – FX Reserves Seizure
26:56 – Dollar Exportation
32:10 – Unintended Consequences
36:36 – Mutual MAD Finance
40:00 – Gold Vs. Currencies
44:12 – A Perfect Storm
49:40 – Gold ETFs & Central Banks
54:36 – ITEOTWAWKI AIFF
57:09 – Informed Opinions
59:25 – Wrap Up
Talking Points From This Episode
- Why empires end in debt and wars.
- The problems with economic sanctions.
- Gold’s role in wealth protection and why their is no perfect solutions.
Book (Amazon): https://tinyurl.com/pvpfmy8c
Matthew Piepenburg is the Commercial Director of Matterhorn Asset Management AG and the author of the popular book, “Rigged to Fail”. Matt is fluent in French, German, and English. He is a graduate of Brown (BA), Harvard (MA), and the University of Michigan (JD). His widely-respected reports on macro conditions and the changing behavior of risk assets are published regularly at SignalsMatter.com.