Safety in a Time of Madness: Why, Where and How to Own Gold as Banks Lose All Credibility

In this brief yet timely MAMChat, Matterhorn Asset Management principals, Egon von Greyerz and Matthew Piepenburg, squarely tackle the global banking crisis from Credit Suisse to Silicon Valley. Now, more than ever, clear analysis, honest math and historical context are needed to prepare investors for what is happening in real time, as well as addressing what lies beneath the future cracks of a clearly broken (and broke) financial system.

Egon opens with a Swiss perspective on the headlines surrounding the failures at Credit Suisse (CS), reminding us that the long list of banking (and bond market) sins within CS (and other EU banks) is not a uniquely Swiss problem, but far more importantly, just another symptom of a global banking sickness, of which he’s warned for years. The reckless leverage (and counter-party risk) in derivative exposure along with the rise of non-performing loans is nothing new to CS in particular or the larger global banks in general.

Turning toward an American perspective and the American banking fiasco, Matthew compares the current crisis in the U.S. regional banking sector to the 2008 crisis in the TBTF larger banks. What is particularly unique to the 2023 liquidity crisis is that the toxins are no longer about sub-prime credits, but the UST market, allegedly the most important and safe bond instrument in the world. But as Matthew reminds, the so-called “risk-free-returns” of Uncle Sam’s infamous IOUs are nothing more than “return-free-risk” thanks to the Fed’s overly high and rapid rate hike policies of 2022.

What lies ahead is more consolidation among the larger banks and more centralization by the Fed over the banking system, as evidenced by the slow-creep toward CBDC and the Fed Now program to launch this year.

Naturally, the conversation and themes all turn toward physical gold held safely outside this fracturing financial system. Expertise, professionalism and objective guidance for gold acquisition, storage, insurance and transportation are essential today, and Egon addresses these themes with precisely that: Experience.

Gold Switzerland

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