Headwinds, Tailwinds & the Winds of War
Matthew Piepenburg, Partner at VON GREYERZ, joins Commodity Culture’s Jesse Day to offer perspective in a time of extreme political, financial, market and precious metal volatility. Piepenburg bluntly addresses rising yields and forced sell-offs in gold in a time of war as temporary headwinds for the metal. Ironically, however, each of these headwinds is ultimately set up for larger tailwinds.
Rising yields, for example, simply presage rising debt costs, which broken balance sheets like that of the U.S. can not sustain through tax receipts, GDP growth or other political ruses. This means inevitable monetary expansion masquerading as “support” for the UST market will add momentum to the debasement of the USD and hence reignite the secular direction north for anti-fiat assets in general and precious metals in particular.
Piepenburg walks through all the now undeniably clear evidence that the world is marching away from USTs and towards gold. This historical shift will place even more pressure on the U.S. to debase its dollar to inflate away its growing debt burden as bond yields rise in a setting of tanking bond demand.
Understanding bond cycles and currency policies gives investors enhanced perspective as well as conviction in periods of metal shakeouts. More importantly, such conviction allows for patience, one of the most misunderstood investment skills.
Piepenburg also addresses other asset classes outside of the precious metals space which deserve attention in the current and foreseeable global financial setting.
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