In our December 2020 MAMinar, Matterhorn Asset Management (MAM) founder, Egon von Greyerz, sits down with MAM advisors Ronni Stoeferle and Grant Williams. They discuss debt, inflation, “re-sets,” Bitcoin and thoughts on 2021.
Looking forward, each share insights on: continued wealth disparity, the disconnect between rising markets and tanking economic conditions, vaccine hopes, capitalism’s “death” at the hands of central-bank-driven distortions, rate moves, market direction and, of course, the undeniable role of gold in the current and coming backdrop as a currency insurance rather than an instrument of mere speculation.
With global debt having risen from $5T to $280T since 1971, we are witnessing real-time exponential/explosive phases of global debt. COVID has only accelerated this trend, and the fiscal response to it (based upon national budgets) has been 30X that of the Marshall Plan.
Unprecedented monetary and fiscal intervention has thus far only been evidenced in asset price inflation rather than the CPI scales, despite a dramatic increase in global M-1, now at $6.5T.
At to crypto’s, the flash-mob tenor of Bitcoin’s (BTC) rise can’t be ignored. BTC in December of 2020 is not the same bubble of BTC in December of 2017. Each discuss their views on this headline-making crypto.
Looking toward 2021, the risks are significant, despite potential good news from a CV vaccine. The perennial and dangerous ignorance (or ignoring of) the deeper and broken reality of the monetary system leads a majority of investors to focus on markets rather than systemic economic risk, which historically includes a crescendo of new tops preceding a dramatic blow-off top and then bust.
In such a distorted backdrop, fiat currencies will continue to trend further toward zero, which means precious metals will rise comfortably rather than hysterically. The focus is not predicting market-implosion dates, but understanding history to prepare for the future, of which physical gold is the key guarantor of wealth preservation.