Decades of Lies, Debt, and Denial, Now Comes the Reckoning | Matthew Piepenburg
Summary
Government Shutdown Impact: The US government shutdown is causing delays in data collection, affecting the Fed's ability to make informed rate decisions, highlighting the political polarization and its impact on markets.
Gold and Silver Trends: Gold is rallying and becoming more important as a reserve asset, surpassing the US dollar in significance for central banks, indicating a shift in trust towards precious metals.
US Dollar and De-dollarization: The Swiss National Bank's move to buy euros over dollars and the global trend of central banks holding more gold than US treasuries signal a decline in the dollar's dominance.
Debt Crisis: The US is facing a severe debt crisis, described as a "debt trap," which is influencing political, social, and economic policies, with no easy solutions in sight.
Fed's Dilemma: The Federal Reserve is criticized for short-term policies that benefit Wall Street at the expense of long-term economic stability, with debates on whether rates should be higher or lower.
Market Outlook: There is a potential for a market correction, with some experts predicting a temporary spike in the US dollar as a safe haven, but overall, the trend is towards a weaker dollar and stronger gold.
Global Economic Shifts: The weaponization of the US dollar and increasing distrust in US treasuries are accelerating the move towards alternative reserve assets like gold, impacting global economic dynamics.
Investment Strategy: Despite differing views on the dollar's future, there is consensus on the rising importance of gold as a hedge against currency debasement and economic uncertainty.
Transcript
The US government is shut down. We won't be getting any data for quite a while. It seems gold is rallying. Silver is catching up. What is happening in the world? There's it's really really interesting. And I've invited a fantastic guest on the show, Matthew Peepenberg. He's a partner over at Fayat Gold and we're going to chat about all these factors. What's the impact of the government shutdown in the US? The Fed won't be getting any data anytime soon, it seems, to make the next rate decision here at the end of October. And then I also want to discuss with him the US dollar. The Swiss National Bank just uh just just recently announced that they're not buying any more dollars. They're buying euros and they already own more euros than US dollars. It's an interesting trend that sort of aligns with the trend that we're seeing from the gold buyers. Gold is now more important for Fed as a reserve than the US dollar as well. Seems there is a trend. Let's discuss. Before I switch over though, hit that like and subscribe button. Helps us out tremendously and we much much appreciate. Now, thanks Matthew. Thank you so much for joining us. It's always great to see you. Thanks for making the time. >> Of course, Kai. It really is always a pleasure talking with you. Glad to be here. >> Yeah, really looking forward to catching up. Maybe we'll start, you know, at the at the beginning with a government shutdown. Um >> uh it's an interesting story. We're in day two whereas we're recording this. Nobody really knows how long it's going to last. Of course, it's Democrats versus Republicans. They don't seem to be finding any common ground. If you listen to the Democrats, they don't want to budge at all. Um of course, the blame game is being played here. But what is your assessment? What do you think is the effect on markets? >> Well, look, I used to joke you could drop a nuclear bomb in Cleveland, it wouldn't affect the markets as long as rates are low and the Fed is supporting it. In terms of in terms of politics in the US, I mean, certainly anyone familiar with the US who's lived there or living there now, we we we're both pretty familiar, but obviously spent more time in Europe. But look, it's an incredibly polarizing time. I don't want to be too reductionalist. Um but this type of extreme uh leftright debates is nothing new but it's just becoming the degree of it's becoming worse because the degree of desperation is becoming worse. The the narratives are becoming less trustworthy. There's a lot of strings to pull on but at 30,000 ft I'd say uh polarization partisan polarization is the problem but or the symptom the problem is we're in a debt corner a debt trap. We've talked at Nauseium about this debt, the statistics, the data. I won't get into that now. The obvious unsustainable unhalpa debt in the US um and and the desperate type of measures to fix it and the desperate types of lies to hide it. Uh which we can get into. But in my opinion, I can reduce things to debt that affects politics. It affects the culture comp the struggle socially, the polarization socially. It affects the policies from the Fed to tariffs to stable coin to the US dollar. So all of these things are tied together. I think at the base of this is a debt crisis that's becoming a debt trap which is becoming um extreme. And so even if the plumbing is complex in the comics or the plumbing is complex at the Fed or the Treasury or yield curves or rate moves or dollar discussions, citizens definitely feel angry and they feel the purchasing power hurting them. They feel inflation as it's not reported in real terms. They certainly feel it in their daily lives and they're angry and they're looking for reasons and they're looking for blame. Whether that's at the social level, the political level, and of course at the partisan level at the House and the Senate, uh it's an absolute mess. It's more so than ever before, but we're used to that in the US. The degree of it just gotten worse. And again, we can pull on different strings, but I I do say it's coming down, you know, we can call the fourth turning, the great taking, the cycles of history, but it's coming down to a crisis that we can no longer hide. Even the 60 2020 20 portfolio at Morgan Stanley where Wales are admitting we need to buy or we need to hold US gold. That's not even coming from the top down. That's coming from the bottom up. Uh clients, high net worth clients are actually undeniably seeing the rise of gold. They're undeni they're undeniably seeing that for 20 years the Wall Street has been poo pooing gold as a pawn shop asset. It's too volatile when it's outperformed even this S&P bubble for a quarter of a century. So you can't hide what gold is doing in price moves. If you look a little deeper, you can't hide why gold is rising because trust in fiat money in general and trust in the world reserve currency weaponized, debased, overind is now becoming obvious. It's felt by everyone as becoming more obvious to investors, even to Wall Street banks and frankly even to politicians. Uh even Bent, I I don't have a lot of respect for his honesty, but it's certainly more honest than yelling that we have a debt crisis. Trump certainly knows we're in a debt crisis. He's got all these policies, US aid, Doge, stable coin, tariffs, gold revaluation, all these things to save us. None of them will because we're we're past the Rubicon. But long answer, short question. A lot of polarization, a lot of frustration, a lot of infighting. I personally think it's coming from the financial effect of feeling stressed from Main Street to Wall Street and in certainly in DC. And I think that stress emanates from the ripple effect of a debt crisis that is now a debt trap. >> Absolutely. Yeah. No winners here. US politicians in blame game over shutdown is the Financial Times headline. sort of exactly what I just said without knowing um exactly what I was >> knowing knowing the headline here obviously but my my point is like you you you brought up Doge and before you mentioned it I had actually written it down as well President Trump has been I don't I want to use the word threatening but he's been mentioning like well this is an opportunity for layoffs on the government side as well let's let's call the herd um terrible term to use here but do you see any effect coming from that shutdown is there anything more than that than besides the polarization on both sides of the aisle here. Um, do is there a chance like I'm always grasping at straws here and glimmers of hope, but uh, is there a chance to turn things around on the budget side potentially? >> I mean, look, you can cut you can pink slip 75% of the bureaucracy in DC, which is a bureaucracy. It almost makes the Soviet bureaucracy of old look tame. I mean, there's no doubt there's a lot of fat and waste in DC. Then again, 75% pink slips uh, create a lot of unhappy citizens of DC and in the in the agency class, so to speak. these kind of bureaucrats on Route 66 and Route 60. I see used to see them every day when I live in Virginia. A lot of them really have nothing to do that will upset some of them listening. But we know that there can be cuts cutting some spending there. But again, that kind of savings and spending at the Doge level you could get also by just cutting rates by 25 basis points. That gives you billions of new dollars that you could spend just by having rate cuts. So Trump has been for he's been trying to do both. Cut the fat at Doge, cut the fat in the bureaucracy and get rate cuts. But again, and again, I'm not saying it's the end of the dollar or the end of America or even the end of the world reserve currency, which we'll get into the dollar. But there's no doubt that the dollar its respect, its hedgeimony is in open decline. There's no doubt that there's a reason central banks hold more gold now since first time since 1996 than they hold US treasuries. There's no doubt that Ddallization is more than a headline. There's no doubt that the BIS making gold a tier one asset next to the US tenure has a reason. So all these things from Morgan Stanley to the BIS uh to the man on the street to to Wall Street. The dollar is under under reinvestigation review because it's debased and debasement comes from debt. So this is nothing new. And spending cuts to cut spending to try and help our deficit to try and help our debt problem is a band-aid solution to an open chest wound. It's not going to be enough. And it it's not even partisan anymore because left or right, it doesn't matter. And I've said this smuggly. It doesn't matter who's in the White House. Doesn't matter what party. It doesn't matter if it's Santa Claus or Papa Smurf. There is no easy solution. There is no quick solution without some constructive destruction, some austerity, more currency debasement, further desperation. Of course, gold's only rising because dollars, like all fiat money, are becoming less and less effective. And and that's not an argument for the gold bug school, the cooks. It's it's it's an argument of history. It's an argument of basic math. We know this. We've tried a lot of desperate attempts. You got to give credit to Trump. You can say they did a heck of a lot more than the last administration. You could say a headless chicken from Doge, US aid, tariffs, etc. It's too little too late. We've crossed the Rubicon when you get to 120% debt to GDP. And you get these 37 trillion debt levels. You get these trade deficits. You want the world to buy your US treasuries. At the same time, you're tariffing them. At the same time, you're trying to get trades. You know, with Triffin, Robert Triffin, you can't have a you can't you're gonna have a trade deficit if you've got a strong currency if it's a world reserve currency. So, blaming that on the rest of the world is a failed policy. Punishing the rest of the world is a failed policy. And expecting them to buy your IUs, when you're weaponizing that IOU and when you're so in debt at historically unprecedented levels, the world's catching on. Banks are catching on. Citizens are catching on. Politicians are, of course, never taking any accountability. And the Fed and the Treasury and the White House are fighting. So, it's a bunch of children trying to blame each other when the bathroom mirror would do for any of them because all of them are to blame and they're all responsible and it's been generations before then we're to blame. So, we're we're at a turning point. Uh, and the degree of which we can talk about with the dollar, of course, >> it feels like we're at the tip at the tip of a triangle. So, like what's the technical at the tip of a flag? Whether it's bull or bear, we we need to figure that one out because it feels more bearish than anything else. >> But, it feels like something is about to give here and uh we're very close. Um maybe allow me one followup uh before we get to the US dollar in more detail here. Um is really the Fed funds rate. What is your stance on it? Like should it be higher? Should it be lower? You've been hinting at the government obviously wants lower rates to get more financial flexibility. But uh what is your stance? What what should the Fed do if it was truly independent? Look, if it was truly a fiduciary, if it was truly a strict parent, if it was truly there to do what's right in the long term, 10, 15, 20 years out for our country, as Thomas Hernig warned, if it was really a fiduciary to the nation as opposed to the rich uncle to Wall Street, which is really what it is, and uh a truly um dependent part. It's the fourth branch of government. Um it's just not officially so. I mean, I've joked it's the Federal Reserve, but it's not Federal. It's not a reserve. It's unconstitutional AB and it's not even constitutional. So, it's really it's done a fantastic job of manipulating its way into something official when it's actually an independent private bank, which has completely distorted price discovery in the markets and has completely spoiled Wall Street and completely ruined uh fiscal common sense for every administration since it came into being. Certainly since Nixon decoupled from the gold, every every member of the White House, red or blue, has come in and spent beyond his or his means because they always knew the Fed was there to monetize whatever debt with a unshaperowned fiat currency. So the Fed will not do the right thing. It never has. It's only benefited the Wall Street class, my class, and we can spend hours on that. But to your point, did they do the right thing? Of course not. They did the simplest thing, the fastest thing, the easiest thing because the Fed looks two or three months ahead. It doesn't look two or three decades ahead as Tom Mcernic said they should. And he was one of the few Fed, you know, FOMC presidents who actually vetoed everything Bernank and Yellen were trying to do because it was such short-term quick fix dopamine rush for the markets and for their quote unquote thermostat on inflation, unemployment. But look, at these debt levels, what can the Fed do? Uh when you're looking at 37 trillion bar tap from Uncle Sam, uh you you can't really raise rates. Uh because they tried that in 2022 and 2023. It just was a disaster. They never did beat inflation. The bond market wouldn't let them. The debt market wouldn't let them. Trump couldn't beat or prosecute a tariff war because the bond market wouldn't let him. In April, Liberation Day, you know what wasn't what caused 10 trillion in market loss wasn't Trump's tariffs. It was the bond market, the Treasury auctions going silent the next day. Yields spiking. When yields spike, that scares the hell out of the government because that means the cost of debt spikes, their bar tab spikes. So even though Trump is calling uh Powell a loser and and an idiot and a and in tweets or ex whatever you call them nowadays, the simple fact is Powell's under a lot of political pressure. He's caved to the fact that we can't have higher rates with debt levels this high. And of course he'll use the employment data dependent employment data which was horrible to justify lower rates. What the Fed should be doing and should have been doing a long time ago is recognizing that we have a debaseed currency. We have a stock bubble from low rates for decades. We have a massive wealth inequality. We have a loss of confidence in our treasury. We should be raising rates. But they can't afford to raise rates. And they're in this trap where the world wants higher yields to have an interest in these US treasuries. So you need higher yields or higher rates to get those interest. But at the same time, 13 trillion international debt is dollar denominated. So higher rates makes the world have to pay high higher bills. So they're damned if they do, damned if they don't with the world. Internally, America can't afford higher rates. And and so they brought down rates using the data dependence of unemployment problems or or labor fears. But really they're surrendering. They're admitting that our war on transitory inflation. First transitory inflation was another lie like the recession. We've lost that war. We've given up on that war. We now have an inflationary policy. We're having a low rate policy. Technically, that means a weaker dollar in most cases. And so, uh, they should have raised rates to try and slow down the speed of the bubble, to try and slow to try and restrain deficit spending to try and get us into a real into a into a much stabler debt and deficit spending policy. But no politician left or right can control themselves from deficit spending. So, they need lower rates. It's a short-term dopamine rush. Long term, it just means more currency debasement, more asset bubble inflation. There's benefits the top 10% and and hurts the bottom 90% with inflation. It's it's nothing new. Nothing surprising. And you know, Powell tried this again. He had he tried to reload his guns. He tried in 2018 with QT and rate hikes. Then there was a December panic. Then there was a 2019 pause. And then by 2020, there was QE to the moon. He tried higher for longer from March of 22 to June of 23. That didn't last. caused the worst nominal returns of stocks and bonds since 1870s. He he has no room to move. So, it's it's now the tools are getting less and less powerful. Rates are coming down. The balance sheet will soon get fatter and we'll be right back to currency debasement 101. Inflate your way out of date out of debt negative real rates which we won't report honestly because we won't give the honest number of inflation and we'll screw the middle class as we've done throughout history. It's just nothing new. >> Matthew, I could chat with you for hours. just questions pop in my head just constantly and one one is like should the Fed more focus on inflation or unemployment maybe is the last question here on the Fed and their policies. >> Well the real you know if you actually look back to 1913 you look at the documents at the Congress you look at the the Federal Reserve Act they say they have two mandates employment and inflation their real mandate is the bond market. Their real mandate is Wall Street. They are a creature of Jackal Island, but they are a father of of of cartel bankers that's from Europe and the US. And it's a very select type of mentality. It's like a it's like a a gang really. It's it's it's like a mafia. And I know that sounds exaggerated, but again, if you if you look under the hood, this is not not not a shocking surprise. Their real mandate is to keep the cost of debt lower and to keep the bond market legitimate because they don't want those yields to to spike. That makes debt too expensive. That makes leverage harder. That makes the bubbles harder. That makes markets lower. That makes their bonuses smaller and banks less profitable. That's my very cynical view. You can argue that all day long. I don't think it's a fiduciary. I think it's an insider trade. And I think the Fed isn't really data dependent. Hell, even even Powell admitted that the the employment data they got completely wrong last year. He says our data isn't that reliable. Even our forecasts aren't that reliable. He literally said that. Well, then what is it? Are you stupid or are you lying? because you're supposed to be a data dependent body. What the real mandate will always be is monetizing the debt market. Now with with some sympathy for the devil, Powell in particular has spent a lot of time criticizing Powell, but even Thomas Rick would admit if the Congress or the Senate and the White House are going to consistently spend beyond their means and then look to the Fed to bail them out with mouseclick money. Is that entirely the Fed's fault? No. You could blame that on the politicians, but it's it's it's a vicious circle because politicians know the Fed is there and the Fed has always been there to bail out the markets, to keep rates low when necessary, to create market bubbles, to create debt that's affordable, so that we can live on the temporary prosperity of debt, what Hemiway called, but they're ignoring the permanent ruin of currency debasement and war, which Hemway also warned, and which many many economists have warned for centuries. We're basically living on the short-term high of short of low rates for four decades. we're now paying the piper and the victims of that aren't the Wall Street and the 90% who've the top 10% who got 90% of the inflation in the stock market because they own those stocks before QE1 234 and in infinite QE. So that top top 10% as the Canillian effect warned in the 18th century inflation is not opportunity blind. It's very class-sensitive. It benefits the early money first, which is Wall Street and the banks. And it screws the middle class with the with the with the debasement of the currency and the unreported misreported inflation. Uh, and that's what's happening right now. And it's it's it's very sad. And no, they've done the wrong thing. And they're going to debase the currency. They're going to inflate their way out of this debt with negative real rates. They're going to lie about the inflation. And if inflation is as John Williams and everyone knows on Wall Street closer to 10%, nowhere on the yield curve are you beating inflation. Every bond you own is losing money. And uh effectively it's a it's a defaulting bond and the main street economy doesn't understand the complexity of the Fed or of the yield curve or rates or negative real rates understandably so. It's meant to be complex and they look around feeling poor. They don't quite know why. They blame each other. They they get into all these identity politics. But the real cause is financial and it's it starts with our central banks and our politicians who spend and then monetize that spending with money created out of nowhere and then pretend that inflation isn't real. It's an absolute fiction. It's an absolute crime. It's drunken, crimly negligent uh driving it monetary policy. But this is again neither red nor blue Trump nor Harris nor Biden nor Bush nor Clinton, they've all done it. Reagan, the great hero, did it. So it's uh it's a it's an insider game. I wrote about this in 2019. It's rigged to fail and it's failing now. It's failing now. >> Maybe another sign of that is let's discuss that. Let me bring that up on screen. I saw an interesting article ju just today actually. It's a it's a commentary on Reuters and I think it fits that thematic perfectly. It's just the sign of the times is Swiss buy euros not dollars and uh that also fits the theme and let me bring that graphic up here real quick as well is that the US dollar >> has surpassed US treasuries as a form of for foreign holdings. Um which is another interesting trend. So I want to touch with you on that. >> Yeah. >> Dolorization how strong is that trend? I remember last year we that was the buzzword the bar none. Um it's it's quiet down. I'm not sure if the media got it got an email to quiet down about the dolorization but uh it disappeared from headlines. I tell you that. Um so I'm curious but looking at this here the trend is intact. >> Well it's a lot of the fascinating things. I mean certainly yes this is the first time since 96 that central banks hold more gold than US treasuries. That's a massive sign. A lot of reasons. The the trend really began all the way back in 2014 when central banks were net sellers of treasuries and net buyers of gold. Now the gold has surpassed the treasuries and in actual holdings. This process of of kind of moving away from this slowly overinded US treasury which was in line because QE2 was starting around that time. The world was saying boy this country's in a lot of debt. They're printing a lot of money. They're issuing a lot of debt a lot of IUS. The eyebrows were raised as far back as 11 years ago. Obviously 2014 is when the when the data really started to come in certainly by 2022 which I said and many others not just me said that was the seinal moment in my life watching the macros when we weaponized the US dollar against a major nuclear power in the R in the bricks already in bed with China which is the C in the bricks. When we weaponized the dollar, we also constructively defaulted on a bond there, but we weaponized an already indebted dollar. And that's when distrust for the US Treasury accelerated a higher pace. When gold stacking by central banks tripled overnight and for the next, you know, since 2022, gold has been stacked at an incredible historical rate again. And around that time, the BIS came in and gave gold to tier one status. And then we saw these problems on the comics. But this this distrust of the Treasury comes from two places. A, there's too much debt. They don't trust the issuer. It's just becoming too desperate. And B, they weaponized that in 2022. Again, regardless of what you think of Putin or Zalinski in that rabbit hole, it was, as Robert Triffin warned in the 1960s, the biggest mistake you could do with a neutral reserve asset. If the if the US Treasury becomes a non-neutral asset, a weaponized asset, the world will go to a neutral asset with no counterparty risk, and that's physical gold. That's why we're seeing the stacking by central banks. That's why we're seeing the BIS give it credit and that's why we see the comics seeing this panic and and the LBMA bank seeing this panic and why we see Spyx and in St. Petersburg and the Shanghai exchange getting more credibility because the world is as predicted moving to a more trusted um strategic reserve asset and moving away from this US Treasury and of course that has an impact on the dollar but we did this to ourselves. we we went too far in debt and we weaponized that uh that so-called neutral reserve asset and the world's responding and ddollarization which you said everyone's trying to ignore or downplay as just something that would take years and years and we could talk about the dollar more detail. It's it's actually happening much faster than even I thought but I knew that 2022 was as big a turning point for the dollar as 1971. And you know I've got the receipts and again I'm not alone. We all saw this who were tracking gold and tracking the the the collision of politics, monetary policy and gold and it it wasn't a gold bug case. It was just understanding history. >> Yeah, absolutely. Let's take a look at the Dixie together maybe as well. Um let's take a look. Um let me take silver out of here this chart. Add it here. Here. There we go. And we do this. Nope. We got to remove this. And then we add this. There you go. Too many too many buttons. Too many things. But let's look at the Dixie here over the last what is it? five six years here or seven years in this chart and especially this year year-to- date performance. >> Yeah. >> Um I know year to date is a bit unfair because it's very short term if you in the overall scheme of things of course um seems to be bottoming out here a little bit. Um what do you make of the Dixie in comparison to other currencies? Um the dollar in comparison to other currencies here. >> Yeah, let's just start by let me be very clear. I'm not saying this is the end of the dollar. The dollar goes to zero. The world reserve currency ends tomorrow. the yuan or the ruble comes in and the world lives happily ever after. And and and we need to talk about this. I've had many conversations, many of them interviews that have been published on YouTube. I with Brent Johnson years back about the dollar and then and the Dixie and just recently in South Africa with Hinrich Zeber, very smart guys who have a very strong thesis. I'm not even saying they're wrong. I just want to I want to set it up so that we know that there is a strong dollar camp out there. Ultimately, all of them are pro gold. I think of Brent Johnson. He's very eloquent. He's very smart. He's not necessarily wrong. And I it's the same thing with Hinrich Zeberg. Uh he has a very similar argument to to Brent. So I want to give credit due and I'll simplify their argument. It's not a stupid argument. I'm not saying I told you so or that I'm right. I will say that when I had that first conversation with Brent a few years back, I think the DXY was at 109. Now it's in the 97 range. Does that mean I won the milkshake debate? Not at all. It just means that for the last few years the DXY has gone where I thought it would for the reasons we can get into what what Brent Johnson and Heinrich are both I think saying is yeah dorization's real. Yes, debt is real. Yes, the dollar is a real beast. It's a real mean weaponized unfair currency. And there's a lot of reasons to hate it. But there are things you can't deny about the dollar. And and these are kind of the the core and again I'm simplifying so I'm sure Brent is rolling his eyes but it is true that 58% of global FX reserves are in US dollars that 80% of global trade finance is in US dollars there's 13 trillion in global debt that's denominated in US dollars there's 90 trillion in FX swaps that are traded there's this massive Euro dollar market the derivative market they're all demanding dollars it's like the the Euro dollar it's like a $10 trillion market. It's it's like I think my buddy Alistister Mloud calls it the Hotel California. You can check in anytime, but you can never leave. There's all these, you know, dollars going out and they're staying there. They're not going to be repatriated back. They're tied up in derivatives. In other words, there's this great big straw sucking demand for US dollars. Love it or hate it. It's part of the world currency. It's part of the system the world's relied on. It ain't going anywhere soon and it's going to always be strong. And what they're also saying and what Henrik Zeberg is saying clearly with a strong argument again all of them ultimately pro gold. But what Henrik is saying is there's going to be mean reversion in this overinflated market at some point some point very soon in his opinion. When markets crash in 225 2026 they're going to be a lot like 2008 where there's going to be one last rush back to the lifeboat of the US dollar and the US Treasury because there's relatively nothing better to go to. And so we'll see a massive retracement in the gold price and a and a spike in the DXY. And that's the argument for the strong dollar. I've I will give a different argument, but as you've already heard, I think the dollar is so distrusted, unloved, and weaponized now that the game has changed significantly and that the signs we're seeing right now in the DXY, in the gold market, in the COMX with stable coin as a desperate attempt in the Doge spending cuts. All these things to save the dollar are too little too late. But what I will say to Heinrich in in Brent's theory is it's very plausible theory and it is possible that in another market mean reversion the dollar becomes the safe haven. The US Treasury becomes the safe haven. It's arguably plausible that that could happen. What I'm saying is very different in 2008 and this is this conversation from 2008. What's very different in 2025 and Francis Hunt and I kind of double team poor Heinrich in this in this conversation is it's not the same world. Um what's happened between 208 and 2025 first in US debt level it's gone up exponentially. What's also happened is the weaponization of the dollar. What's also happened is we pushed the bricks in the east too far. Um when we weaponized that dollar that was kind of the last straw in trusting this neutral reserve currency. In the meantime, the countries of the east, the central banks of the east, even pre-weaponization, even pre2022 have been playing what I call chess. While the west and the US play checkers, they have been silently stacking their gold internally, unreporting that gold to the world, the world gold council. They've seen the longer arc of history, the longer direction of the hockey puck for years. It was hard to talk about this when the DXY was strong and gold was getting pressed down and the comics was repressing the price. No one wanted to believe this. It seemed like kooky theories, but I think these things are now playing out, especially post 20 2022 at a rapid pace. The bricks, the ddollarization, the the the rise of the Spyx in St. Petersburg, the rise of the Shanghai gold exchange now letting foreigners come in who don't have to be Chinese entities, getting freer price discovery with with the outflows in the comics too in the silver and gold space. The ability to artificially short those metals is significantly different today than it was in 2008. You've got again 3x expansion in the central bank, gold purchases, the tier one status at the BIS, etc. All these things to me make make me less hopeful that Heinrich and Brent are going to be right about the DXY spiking to 130 140 >> for a lot of reasons. Most importantly, I don't think the US could allow the DXY to spike to 130 or 140. There would be an immediate yield curve control, an immediate currency debasement, not years or months later, but immediate. But what we all >> deficit I don't see it. Does that mean I'm right? No. I'm just giving a different argument. I want to give respect to their argument and they're g I'm simplifying their argument, but they're basing that in some sense the dollar's too big to fail for now and eventually it will weaken but not before one last dance is is as Hinrich calls it. The last dance. I think their dance card's already been punched. I could be wrong. Either way, Brent Heinrich, myself, Francis, and many others, Jim Ricker, we all agree on one thing. Whether you think there's not enough dollars or too many dollars, the gold is going to rise in this market secularly, directionally because fiat money has, as it does throughout history, as it does from Trippin's dilemma, as it does from uh, you know, all the things that we learned from David Hume to Gresham's law to Richard Carlton. The dollar is just going to melt like an ice cube and have less purchase power just like the euro, just like the all the paper money. And so we're all pro gold at the end. The debate on the dollar is still um open. I think there's a credit cycle clearly ending and the dollar is just credit. So there's a dollar cycle ending. I think the fact that Judy Shelton rightfully wants to have a gold back bond and that many say that's going to happen whether it happens or not is already an admission of guilt. It means we need a gold back long end on the treasury gold back treasury because our dollar and fiat back treasury is no longer trusted. It's just that simple. Central banks are telling us right now they'd rather have gold than US treasuries. The US is saying we'd need a gold back bond. It's literally saying the quiet part out loud that gold is trusted more than than our IUs and our and our green back. So, you know, look, it's >> here. Let me bring that graphic back. That's exactly the point. Let me bring this back. And uh we got to end on that note as well. But uh we're right on that. That's exactly it. So, gold is more trusted than any uh >> yeah, >> toilet paper, >> for a lack of better term. So, uh I had a prop prepared as well. We'll get to that next time here. I was just going to show it real quick, but it was uh >> yeah, >> stable coins will preserve the dollar's dominance, says Trump Jr., so that's another topic for debate for next time. Matthew, >> that would have been fun. >> Matthew, what a wonderful conversation. I love chatting with you as, as I said, like we could chat for hours. I tremendously appreciate your insights. Where can we send our audience to follow more of your work? Yeah, von Greers obviously is voner.gold or vg.gov. Von Greer is hard for a lot of people to spell and uh so vg.g gold or goldswitzerland.com is still our URL too. And all our articles, interviews, videos, thoughts, you can debate them all day long, but they're there. Decades of them are there to be read and uh yeah, we can find us there. Yep. >> Awesome. Matthew, really appreciate your time. It's always great to catch up. Looking forward to seeing you in November in Zurich. I hear we're having dinner together. It'll be great. Yeah, >> I hear we're having dinner. So, I'm looking forward to that. Thanks so much. And uh everybody else, thank you so much for tuning in. Really insightful conversation with Matthew Peepenberg. He's a wealth of knowledge. Always appreciate his insights. Go check out gold fungias gold or VG. Gold. Visible gold. Eh, that's that's what that stands for as well. Not too bad. Well played. Um and also let let us know down below. Maybe we can discuss the stable coin debate here a bit more in the in the future on with our next guests. Definitely talk about whether stable coins will save the US dollar because that doesn't bode well for gold. theoretically. So, thank you so much for tuning in. We'll be back with lots more. Take care out there. [Music]
Decades of Lies, Debt, and Denial, Now Comes the Reckoning | Matthew Piepenburg
Summary
Transcript
The US government is shut down. We won't be getting any data for quite a while. It seems gold is rallying. Silver is catching up. What is happening in the world? There's it's really really interesting. And I've invited a fantastic guest on the show, Matthew Peepenberg. He's a partner over at Fayat Gold and we're going to chat about all these factors. What's the impact of the government shutdown in the US? The Fed won't be getting any data anytime soon, it seems, to make the next rate decision here at the end of October. And then I also want to discuss with him the US dollar. The Swiss National Bank just uh just just recently announced that they're not buying any more dollars. They're buying euros and they already own more euros than US dollars. It's an interesting trend that sort of aligns with the trend that we're seeing from the gold buyers. Gold is now more important for Fed as a reserve than the US dollar as well. Seems there is a trend. Let's discuss. Before I switch over though, hit that like and subscribe button. Helps us out tremendously and we much much appreciate. Now, thanks Matthew. Thank you so much for joining us. It's always great to see you. Thanks for making the time. >> Of course, Kai. It really is always a pleasure talking with you. Glad to be here. >> Yeah, really looking forward to catching up. Maybe we'll start, you know, at the at the beginning with a government shutdown. Um >> uh it's an interesting story. We're in day two whereas we're recording this. Nobody really knows how long it's going to last. Of course, it's Democrats versus Republicans. They don't seem to be finding any common ground. If you listen to the Democrats, they don't want to budge at all. Um of course, the blame game is being played here. But what is your assessment? What do you think is the effect on markets? >> Well, look, I used to joke you could drop a nuclear bomb in Cleveland, it wouldn't affect the markets as long as rates are low and the Fed is supporting it. In terms of in terms of politics in the US, I mean, certainly anyone familiar with the US who's lived there or living there now, we we we're both pretty familiar, but obviously spent more time in Europe. But look, it's an incredibly polarizing time. I don't want to be too reductionalist. Um but this type of extreme uh leftright debates is nothing new but it's just becoming the degree of it's becoming worse because the degree of desperation is becoming worse. The the narratives are becoming less trustworthy. There's a lot of strings to pull on but at 30,000 ft I'd say uh polarization partisan polarization is the problem but or the symptom the problem is we're in a debt corner a debt trap. We've talked at Nauseium about this debt, the statistics, the data. I won't get into that now. The obvious unsustainable unhalpa debt in the US um and and the desperate type of measures to fix it and the desperate types of lies to hide it. Uh which we can get into. But in my opinion, I can reduce things to debt that affects politics. It affects the culture comp the struggle socially, the polarization socially. It affects the policies from the Fed to tariffs to stable coin to the US dollar. So all of these things are tied together. I think at the base of this is a debt crisis that's becoming a debt trap which is becoming um extreme. And so even if the plumbing is complex in the comics or the plumbing is complex at the Fed or the Treasury or yield curves or rate moves or dollar discussions, citizens definitely feel angry and they feel the purchasing power hurting them. They feel inflation as it's not reported in real terms. They certainly feel it in their daily lives and they're angry and they're looking for reasons and they're looking for blame. Whether that's at the social level, the political level, and of course at the partisan level at the House and the Senate, uh it's an absolute mess. It's more so than ever before, but we're used to that in the US. The degree of it just gotten worse. And again, we can pull on different strings, but I I do say it's coming down, you know, we can call the fourth turning, the great taking, the cycles of history, but it's coming down to a crisis that we can no longer hide. Even the 60 2020 20 portfolio at Morgan Stanley where Wales are admitting we need to buy or we need to hold US gold. That's not even coming from the top down. That's coming from the bottom up. Uh clients, high net worth clients are actually undeniably seeing the rise of gold. They're undeni they're undeniably seeing that for 20 years the Wall Street has been poo pooing gold as a pawn shop asset. It's too volatile when it's outperformed even this S&P bubble for a quarter of a century. So you can't hide what gold is doing in price moves. If you look a little deeper, you can't hide why gold is rising because trust in fiat money in general and trust in the world reserve currency weaponized, debased, overind is now becoming obvious. It's felt by everyone as becoming more obvious to investors, even to Wall Street banks and frankly even to politicians. Uh even Bent, I I don't have a lot of respect for his honesty, but it's certainly more honest than yelling that we have a debt crisis. Trump certainly knows we're in a debt crisis. He's got all these policies, US aid, Doge, stable coin, tariffs, gold revaluation, all these things to save us. None of them will because we're we're past the Rubicon. But long answer, short question. A lot of polarization, a lot of frustration, a lot of infighting. I personally think it's coming from the financial effect of feeling stressed from Main Street to Wall Street and in certainly in DC. And I think that stress emanates from the ripple effect of a debt crisis that is now a debt trap. >> Absolutely. Yeah. No winners here. US politicians in blame game over shutdown is the Financial Times headline. sort of exactly what I just said without knowing um exactly what I was >> knowing knowing the headline here obviously but my my point is like you you you brought up Doge and before you mentioned it I had actually written it down as well President Trump has been I don't I want to use the word threatening but he's been mentioning like well this is an opportunity for layoffs on the government side as well let's let's call the herd um terrible term to use here but do you see any effect coming from that shutdown is there anything more than that than besides the polarization on both sides of the aisle here. Um, do is there a chance like I'm always grasping at straws here and glimmers of hope, but uh, is there a chance to turn things around on the budget side potentially? >> I mean, look, you can cut you can pink slip 75% of the bureaucracy in DC, which is a bureaucracy. It almost makes the Soviet bureaucracy of old look tame. I mean, there's no doubt there's a lot of fat and waste in DC. Then again, 75% pink slips uh, create a lot of unhappy citizens of DC and in the in the agency class, so to speak. these kind of bureaucrats on Route 66 and Route 60. I see used to see them every day when I live in Virginia. A lot of them really have nothing to do that will upset some of them listening. But we know that there can be cuts cutting some spending there. But again, that kind of savings and spending at the Doge level you could get also by just cutting rates by 25 basis points. That gives you billions of new dollars that you could spend just by having rate cuts. So Trump has been for he's been trying to do both. Cut the fat at Doge, cut the fat in the bureaucracy and get rate cuts. But again, and again, I'm not saying it's the end of the dollar or the end of America or even the end of the world reserve currency, which we'll get into the dollar. But there's no doubt that the dollar its respect, its hedgeimony is in open decline. There's no doubt that there's a reason central banks hold more gold now since first time since 1996 than they hold US treasuries. There's no doubt that Ddallization is more than a headline. There's no doubt that the BIS making gold a tier one asset next to the US tenure has a reason. So all these things from Morgan Stanley to the BIS uh to the man on the street to to Wall Street. The dollar is under under reinvestigation review because it's debased and debasement comes from debt. So this is nothing new. And spending cuts to cut spending to try and help our deficit to try and help our debt problem is a band-aid solution to an open chest wound. It's not going to be enough. And it it's not even partisan anymore because left or right, it doesn't matter. And I've said this smuggly. It doesn't matter who's in the White House. Doesn't matter what party. It doesn't matter if it's Santa Claus or Papa Smurf. There is no easy solution. There is no quick solution without some constructive destruction, some austerity, more currency debasement, further desperation. Of course, gold's only rising because dollars, like all fiat money, are becoming less and less effective. And and that's not an argument for the gold bug school, the cooks. It's it's it's an argument of history. It's an argument of basic math. We know this. We've tried a lot of desperate attempts. You got to give credit to Trump. You can say they did a heck of a lot more than the last administration. You could say a headless chicken from Doge, US aid, tariffs, etc. It's too little too late. We've crossed the Rubicon when you get to 120% debt to GDP. And you get these 37 trillion debt levels. You get these trade deficits. You want the world to buy your US treasuries. At the same time, you're tariffing them. At the same time, you're trying to get trades. You know, with Triffin, Robert Triffin, you can't have a you can't you're gonna have a trade deficit if you've got a strong currency if it's a world reserve currency. So, blaming that on the rest of the world is a failed policy. Punishing the rest of the world is a failed policy. And expecting them to buy your IUs, when you're weaponizing that IOU and when you're so in debt at historically unprecedented levels, the world's catching on. Banks are catching on. Citizens are catching on. Politicians are, of course, never taking any accountability. And the Fed and the Treasury and the White House are fighting. So, it's a bunch of children trying to blame each other when the bathroom mirror would do for any of them because all of them are to blame and they're all responsible and it's been generations before then we're to blame. So, we're we're at a turning point. Uh, and the degree of which we can talk about with the dollar, of course, >> it feels like we're at the tip at the tip of a triangle. So, like what's the technical at the tip of a flag? Whether it's bull or bear, we we need to figure that one out because it feels more bearish than anything else. >> But, it feels like something is about to give here and uh we're very close. Um maybe allow me one followup uh before we get to the US dollar in more detail here. Um is really the Fed funds rate. What is your stance on it? Like should it be higher? Should it be lower? You've been hinting at the government obviously wants lower rates to get more financial flexibility. But uh what is your stance? What what should the Fed do if it was truly independent? Look, if it was truly a fiduciary, if it was truly a strict parent, if it was truly there to do what's right in the long term, 10, 15, 20 years out for our country, as Thomas Hernig warned, if it was really a fiduciary to the nation as opposed to the rich uncle to Wall Street, which is really what it is, and uh a truly um dependent part. It's the fourth branch of government. Um it's just not officially so. I mean, I've joked it's the Federal Reserve, but it's not Federal. It's not a reserve. It's unconstitutional AB and it's not even constitutional. So, it's really it's done a fantastic job of manipulating its way into something official when it's actually an independent private bank, which has completely distorted price discovery in the markets and has completely spoiled Wall Street and completely ruined uh fiscal common sense for every administration since it came into being. Certainly since Nixon decoupled from the gold, every every member of the White House, red or blue, has come in and spent beyond his or his means because they always knew the Fed was there to monetize whatever debt with a unshaperowned fiat currency. So the Fed will not do the right thing. It never has. It's only benefited the Wall Street class, my class, and we can spend hours on that. But to your point, did they do the right thing? Of course not. They did the simplest thing, the fastest thing, the easiest thing because the Fed looks two or three months ahead. It doesn't look two or three decades ahead as Tom Mcernic said they should. And he was one of the few Fed, you know, FOMC presidents who actually vetoed everything Bernank and Yellen were trying to do because it was such short-term quick fix dopamine rush for the markets and for their quote unquote thermostat on inflation, unemployment. But look, at these debt levels, what can the Fed do? Uh when you're looking at 37 trillion bar tap from Uncle Sam, uh you you can't really raise rates. Uh because they tried that in 2022 and 2023. It just was a disaster. They never did beat inflation. The bond market wouldn't let them. The debt market wouldn't let them. Trump couldn't beat or prosecute a tariff war because the bond market wouldn't let him. In April, Liberation Day, you know what wasn't what caused 10 trillion in market loss wasn't Trump's tariffs. It was the bond market, the Treasury auctions going silent the next day. Yields spiking. When yields spike, that scares the hell out of the government because that means the cost of debt spikes, their bar tab spikes. So even though Trump is calling uh Powell a loser and and an idiot and a and in tweets or ex whatever you call them nowadays, the simple fact is Powell's under a lot of political pressure. He's caved to the fact that we can't have higher rates with debt levels this high. And of course he'll use the employment data dependent employment data which was horrible to justify lower rates. What the Fed should be doing and should have been doing a long time ago is recognizing that we have a debaseed currency. We have a stock bubble from low rates for decades. We have a massive wealth inequality. We have a loss of confidence in our treasury. We should be raising rates. But they can't afford to raise rates. And they're in this trap where the world wants higher yields to have an interest in these US treasuries. So you need higher yields or higher rates to get those interest. But at the same time, 13 trillion international debt is dollar denominated. So higher rates makes the world have to pay high higher bills. So they're damned if they do, damned if they don't with the world. Internally, America can't afford higher rates. And and so they brought down rates using the data dependence of unemployment problems or or labor fears. But really they're surrendering. They're admitting that our war on transitory inflation. First transitory inflation was another lie like the recession. We've lost that war. We've given up on that war. We now have an inflationary policy. We're having a low rate policy. Technically, that means a weaker dollar in most cases. And so, uh, they should have raised rates to try and slow down the speed of the bubble, to try and slow to try and restrain deficit spending to try and get us into a real into a into a much stabler debt and deficit spending policy. But no politician left or right can control themselves from deficit spending. So, they need lower rates. It's a short-term dopamine rush. Long term, it just means more currency debasement, more asset bubble inflation. There's benefits the top 10% and and hurts the bottom 90% with inflation. It's it's nothing new. Nothing surprising. And you know, Powell tried this again. He had he tried to reload his guns. He tried in 2018 with QT and rate hikes. Then there was a December panic. Then there was a 2019 pause. And then by 2020, there was QE to the moon. He tried higher for longer from March of 22 to June of 23. That didn't last. caused the worst nominal returns of stocks and bonds since 1870s. He he has no room to move. So, it's it's now the tools are getting less and less powerful. Rates are coming down. The balance sheet will soon get fatter and we'll be right back to currency debasement 101. Inflate your way out of date out of debt negative real rates which we won't report honestly because we won't give the honest number of inflation and we'll screw the middle class as we've done throughout history. It's just nothing new. >> Matthew, I could chat with you for hours. just questions pop in my head just constantly and one one is like should the Fed more focus on inflation or unemployment maybe is the last question here on the Fed and their policies. >> Well the real you know if you actually look back to 1913 you look at the documents at the Congress you look at the the Federal Reserve Act they say they have two mandates employment and inflation their real mandate is the bond market. Their real mandate is Wall Street. They are a creature of Jackal Island, but they are a father of of of cartel bankers that's from Europe and the US. And it's a very select type of mentality. It's like a it's like a a gang really. It's it's it's like a mafia. And I know that sounds exaggerated, but again, if you if you look under the hood, this is not not not a shocking surprise. Their real mandate is to keep the cost of debt lower and to keep the bond market legitimate because they don't want those yields to to spike. That makes debt too expensive. That makes leverage harder. That makes the bubbles harder. That makes markets lower. That makes their bonuses smaller and banks less profitable. That's my very cynical view. You can argue that all day long. I don't think it's a fiduciary. I think it's an insider trade. And I think the Fed isn't really data dependent. Hell, even even Powell admitted that the the employment data they got completely wrong last year. He says our data isn't that reliable. Even our forecasts aren't that reliable. He literally said that. Well, then what is it? Are you stupid or are you lying? because you're supposed to be a data dependent body. What the real mandate will always be is monetizing the debt market. Now with with some sympathy for the devil, Powell in particular has spent a lot of time criticizing Powell, but even Thomas Rick would admit if the Congress or the Senate and the White House are going to consistently spend beyond their means and then look to the Fed to bail them out with mouseclick money. Is that entirely the Fed's fault? No. You could blame that on the politicians, but it's it's it's a vicious circle because politicians know the Fed is there and the Fed has always been there to bail out the markets, to keep rates low when necessary, to create market bubbles, to create debt that's affordable, so that we can live on the temporary prosperity of debt, what Hemiway called, but they're ignoring the permanent ruin of currency debasement and war, which Hemway also warned, and which many many economists have warned for centuries. We're basically living on the short-term high of short of low rates for four decades. we're now paying the piper and the victims of that aren't the Wall Street and the 90% who've the top 10% who got 90% of the inflation in the stock market because they own those stocks before QE1 234 and in infinite QE. So that top top 10% as the Canillian effect warned in the 18th century inflation is not opportunity blind. It's very class-sensitive. It benefits the early money first, which is Wall Street and the banks. And it screws the middle class with the with the with the debasement of the currency and the unreported misreported inflation. Uh, and that's what's happening right now. And it's it's it's very sad. And no, they've done the wrong thing. And they're going to debase the currency. They're going to inflate their way out of this debt with negative real rates. They're going to lie about the inflation. And if inflation is as John Williams and everyone knows on Wall Street closer to 10%, nowhere on the yield curve are you beating inflation. Every bond you own is losing money. And uh effectively it's a it's a defaulting bond and the main street economy doesn't understand the complexity of the Fed or of the yield curve or rates or negative real rates understandably so. It's meant to be complex and they look around feeling poor. They don't quite know why. They blame each other. They they get into all these identity politics. But the real cause is financial and it's it starts with our central banks and our politicians who spend and then monetize that spending with money created out of nowhere and then pretend that inflation isn't real. It's an absolute fiction. It's an absolute crime. It's drunken, crimly negligent uh driving it monetary policy. But this is again neither red nor blue Trump nor Harris nor Biden nor Bush nor Clinton, they've all done it. Reagan, the great hero, did it. So it's uh it's a it's an insider game. I wrote about this in 2019. It's rigged to fail and it's failing now. It's failing now. >> Maybe another sign of that is let's discuss that. Let me bring that up on screen. I saw an interesting article ju just today actually. It's a it's a commentary on Reuters and I think it fits that thematic perfectly. It's just the sign of the times is Swiss buy euros not dollars and uh that also fits the theme and let me bring that graphic up here real quick as well is that the US dollar >> has surpassed US treasuries as a form of for foreign holdings. Um which is another interesting trend. So I want to touch with you on that. >> Yeah. >> Dolorization how strong is that trend? I remember last year we that was the buzzword the bar none. Um it's it's quiet down. I'm not sure if the media got it got an email to quiet down about the dolorization but uh it disappeared from headlines. I tell you that. Um so I'm curious but looking at this here the trend is intact. >> Well it's a lot of the fascinating things. I mean certainly yes this is the first time since 96 that central banks hold more gold than US treasuries. That's a massive sign. A lot of reasons. The the trend really began all the way back in 2014 when central banks were net sellers of treasuries and net buyers of gold. Now the gold has surpassed the treasuries and in actual holdings. This process of of kind of moving away from this slowly overinded US treasury which was in line because QE2 was starting around that time. The world was saying boy this country's in a lot of debt. They're printing a lot of money. They're issuing a lot of debt a lot of IUS. The eyebrows were raised as far back as 11 years ago. Obviously 2014 is when the when the data really started to come in certainly by 2022 which I said and many others not just me said that was the seinal moment in my life watching the macros when we weaponized the US dollar against a major nuclear power in the R in the bricks already in bed with China which is the C in the bricks. When we weaponized the dollar, we also constructively defaulted on a bond there, but we weaponized an already indebted dollar. And that's when distrust for the US Treasury accelerated a higher pace. When gold stacking by central banks tripled overnight and for the next, you know, since 2022, gold has been stacked at an incredible historical rate again. And around that time, the BIS came in and gave gold to tier one status. And then we saw these problems on the comics. But this this distrust of the Treasury comes from two places. A, there's too much debt. They don't trust the issuer. It's just becoming too desperate. And B, they weaponized that in 2022. Again, regardless of what you think of Putin or Zalinski in that rabbit hole, it was, as Robert Triffin warned in the 1960s, the biggest mistake you could do with a neutral reserve asset. If the if the US Treasury becomes a non-neutral asset, a weaponized asset, the world will go to a neutral asset with no counterparty risk, and that's physical gold. That's why we're seeing the stacking by central banks. That's why we're seeing the BIS give it credit and that's why we see the comics seeing this panic and and the LBMA bank seeing this panic and why we see Spyx and in St. Petersburg and the Shanghai exchange getting more credibility because the world is as predicted moving to a more trusted um strategic reserve asset and moving away from this US Treasury and of course that has an impact on the dollar but we did this to ourselves. we we went too far in debt and we weaponized that uh that so-called neutral reserve asset and the world's responding and ddollarization which you said everyone's trying to ignore or downplay as just something that would take years and years and we could talk about the dollar more detail. It's it's actually happening much faster than even I thought but I knew that 2022 was as big a turning point for the dollar as 1971. And you know I've got the receipts and again I'm not alone. We all saw this who were tracking gold and tracking the the the collision of politics, monetary policy and gold and it it wasn't a gold bug case. It was just understanding history. >> Yeah, absolutely. Let's take a look at the Dixie together maybe as well. Um let's take a look. Um let me take silver out of here this chart. Add it here. Here. There we go. And we do this. Nope. We got to remove this. And then we add this. There you go. Too many too many buttons. Too many things. But let's look at the Dixie here over the last what is it? five six years here or seven years in this chart and especially this year year-to- date performance. >> Yeah. >> Um I know year to date is a bit unfair because it's very short term if you in the overall scheme of things of course um seems to be bottoming out here a little bit. Um what do you make of the Dixie in comparison to other currencies? Um the dollar in comparison to other currencies here. >> Yeah, let's just start by let me be very clear. I'm not saying this is the end of the dollar. The dollar goes to zero. The world reserve currency ends tomorrow. the yuan or the ruble comes in and the world lives happily ever after. And and and we need to talk about this. I've had many conversations, many of them interviews that have been published on YouTube. I with Brent Johnson years back about the dollar and then and the Dixie and just recently in South Africa with Hinrich Zeber, very smart guys who have a very strong thesis. I'm not even saying they're wrong. I just want to I want to set it up so that we know that there is a strong dollar camp out there. Ultimately, all of them are pro gold. I think of Brent Johnson. He's very eloquent. He's very smart. He's not necessarily wrong. And I it's the same thing with Hinrich Zeberg. Uh he has a very similar argument to to Brent. So I want to give credit due and I'll simplify their argument. It's not a stupid argument. I'm not saying I told you so or that I'm right. I will say that when I had that first conversation with Brent a few years back, I think the DXY was at 109. Now it's in the 97 range. Does that mean I won the milkshake debate? Not at all. It just means that for the last few years the DXY has gone where I thought it would for the reasons we can get into what what Brent Johnson and Heinrich are both I think saying is yeah dorization's real. Yes, debt is real. Yes, the dollar is a real beast. It's a real mean weaponized unfair currency. And there's a lot of reasons to hate it. But there are things you can't deny about the dollar. And and these are kind of the the core and again I'm simplifying so I'm sure Brent is rolling his eyes but it is true that 58% of global FX reserves are in US dollars that 80% of global trade finance is in US dollars there's 13 trillion in global debt that's denominated in US dollars there's 90 trillion in FX swaps that are traded there's this massive Euro dollar market the derivative market they're all demanding dollars it's like the the Euro dollar it's like a $10 trillion market. It's it's like I think my buddy Alistister Mloud calls it the Hotel California. You can check in anytime, but you can never leave. There's all these, you know, dollars going out and they're staying there. They're not going to be repatriated back. They're tied up in derivatives. In other words, there's this great big straw sucking demand for US dollars. Love it or hate it. It's part of the world currency. It's part of the system the world's relied on. It ain't going anywhere soon and it's going to always be strong. And what they're also saying and what Henrik Zeberg is saying clearly with a strong argument again all of them ultimately pro gold. But what Henrik is saying is there's going to be mean reversion in this overinflated market at some point some point very soon in his opinion. When markets crash in 225 2026 they're going to be a lot like 2008 where there's going to be one last rush back to the lifeboat of the US dollar and the US Treasury because there's relatively nothing better to go to. And so we'll see a massive retracement in the gold price and a and a spike in the DXY. And that's the argument for the strong dollar. I've I will give a different argument, but as you've already heard, I think the dollar is so distrusted, unloved, and weaponized now that the game has changed significantly and that the signs we're seeing right now in the DXY, in the gold market, in the COMX with stable coin as a desperate attempt in the Doge spending cuts. All these things to save the dollar are too little too late. But what I will say to Heinrich in in Brent's theory is it's very plausible theory and it is possible that in another market mean reversion the dollar becomes the safe haven. The US Treasury becomes the safe haven. It's arguably plausible that that could happen. What I'm saying is very different in 2008 and this is this conversation from 2008. What's very different in 2025 and Francis Hunt and I kind of double team poor Heinrich in this in this conversation is it's not the same world. Um what's happened between 208 and 2025 first in US debt level it's gone up exponentially. What's also happened is the weaponization of the dollar. What's also happened is we pushed the bricks in the east too far. Um when we weaponized that dollar that was kind of the last straw in trusting this neutral reserve currency. In the meantime, the countries of the east, the central banks of the east, even pre-weaponization, even pre2022 have been playing what I call chess. While the west and the US play checkers, they have been silently stacking their gold internally, unreporting that gold to the world, the world gold council. They've seen the longer arc of history, the longer direction of the hockey puck for years. It was hard to talk about this when the DXY was strong and gold was getting pressed down and the comics was repressing the price. No one wanted to believe this. It seemed like kooky theories, but I think these things are now playing out, especially post 20 2022 at a rapid pace. The bricks, the ddollarization, the the the rise of the Spyx in St. Petersburg, the rise of the Shanghai gold exchange now letting foreigners come in who don't have to be Chinese entities, getting freer price discovery with with the outflows in the comics too in the silver and gold space. The ability to artificially short those metals is significantly different today than it was in 2008. You've got again 3x expansion in the central bank, gold purchases, the tier one status at the BIS, etc. All these things to me make make me less hopeful that Heinrich and Brent are going to be right about the DXY spiking to 130 140 >> for a lot of reasons. Most importantly, I don't think the US could allow the DXY to spike to 130 or 140. There would be an immediate yield curve control, an immediate currency debasement, not years or months later, but immediate. But what we all >> deficit I don't see it. Does that mean I'm right? No. I'm just giving a different argument. I want to give respect to their argument and they're g I'm simplifying their argument, but they're basing that in some sense the dollar's too big to fail for now and eventually it will weaken but not before one last dance is is as Hinrich calls it. The last dance. I think their dance card's already been punched. I could be wrong. Either way, Brent Heinrich, myself, Francis, and many others, Jim Ricker, we all agree on one thing. Whether you think there's not enough dollars or too many dollars, the gold is going to rise in this market secularly, directionally because fiat money has, as it does throughout history, as it does from Trippin's dilemma, as it does from uh, you know, all the things that we learned from David Hume to Gresham's law to Richard Carlton. The dollar is just going to melt like an ice cube and have less purchase power just like the euro, just like the all the paper money. And so we're all pro gold at the end. The debate on the dollar is still um open. I think there's a credit cycle clearly ending and the dollar is just credit. So there's a dollar cycle ending. I think the fact that Judy Shelton rightfully wants to have a gold back bond and that many say that's going to happen whether it happens or not is already an admission of guilt. It means we need a gold back long end on the treasury gold back treasury because our dollar and fiat back treasury is no longer trusted. It's just that simple. Central banks are telling us right now they'd rather have gold than US treasuries. The US is saying we'd need a gold back bond. It's literally saying the quiet part out loud that gold is trusted more than than our IUs and our and our green back. So, you know, look, it's >> here. Let me bring that graphic back. That's exactly the point. Let me bring this back. And uh we got to end on that note as well. But uh we're right on that. That's exactly it. So, gold is more trusted than any uh >> yeah, >> toilet paper, >> for a lack of better term. So, uh I had a prop prepared as well. We'll get to that next time here. I was just going to show it real quick, but it was uh >> yeah, >> stable coins will preserve the dollar's dominance, says Trump Jr., so that's another topic for debate for next time. Matthew, >> that would have been fun. >> Matthew, what a wonderful conversation. I love chatting with you as, as I said, like we could chat for hours. I tremendously appreciate your insights. Where can we send our audience to follow more of your work? Yeah, von Greers obviously is voner.gold or vg.gov. Von Greer is hard for a lot of people to spell and uh so vg.g gold or goldswitzerland.com is still our URL too. And all our articles, interviews, videos, thoughts, you can debate them all day long, but they're there. Decades of them are there to be read and uh yeah, we can find us there. Yep. >> Awesome. Matthew, really appreciate your time. It's always great to catch up. Looking forward to seeing you in November in Zurich. I hear we're having dinner together. It'll be great. Yeah, >> I hear we're having dinner. So, I'm looking forward to that. Thanks so much. And uh everybody else, thank you so much for tuning in. Really insightful conversation with Matthew Peepenberg. He's a wealth of knowledge. Always appreciate his insights. Go check out gold fungias gold or VG. Gold. Visible gold. Eh, that's that's what that stands for as well. Not too bad. Well played. Um and also let let us know down below. Maybe we can discuss the stable coin debate here a bit more in the in the future on with our next guests. Definitely talk about whether stable coins will save the US dollar because that doesn't bode well for gold. theoretically. So, thank you so much for tuning in. We'll be back with lots more. Take care out there. [Music]