U.S. Dollar & Sovereign Debt Endgame
Mining the brains of two of my favorite economists, Larry Lepard & Andy Schectman.
The regional bank crisis is continuing on, or ahead, of schedule. Not wanting to live in an echo chamber - but also mindful of the fact that I’m in the minority with how I think about the economy - I wanted to have a long-form discussion with two of my friends, Andy Schectman and Larry Lepard, to discuss the state of the U.S.
We talked about the blowoff valve for the economy - something I wrote about days ago - as gold and precious metals.
“When we take out 2100 with authority, it’s game on,” Larry says. “That’ll be a clear historical breakout. When that occurs, we’re going to squirt up to 2500 or 3000 very quickly.”
“Where else do you go beside gold and silver? Yes I own a precious metals company, but I try to be objective. Where do you go in the system where rising rates inversely affect stocks and bonds?” Schectman asks.
“The blowoff valve is the value of the currency and the easiest measure of that is gold,” Lepard adds.
We also discussed the regional banking crisis. “How is it that anyone isn’t freaking out that the Fed is basically bailing out the FDIC? The FDIC is, in essence, insolvent,” Andy Schectman asked me. “They’re going to blow up the regional banks.”
“Everyone is leaving the regional banks because Janet told us they won’t be safe”
We also discussed the state of the Fed and the global economy.
“The Fed is really playing with fire with this tight monetary policy. They are solving the problem in the short term but compounding the problem in the long term. They’re going to be forced into yield curve control,” Larry adds. “The next QE will take the Fed’s balance sheet from $9 trillion to $25 trillion.”
“Hyperinflation occurs when everybody becomes convinced that there is no way out other than printing the currency,” he adds. “I think it’s kind of inevitable. Everyone can read the signals and the signals are going to be there.”
We talked about how the BRICS nations are trying to move away from the U.S. dollar. “When you look at countries that have expressed interest in joining BRICS, they all have substantial gold holdings,” Andy told me about the global economy. “The numbers are increasing among those who want to join, there’s over 60 countries they have lined up in a queue [to join BRICS].”
“I do believe it’ll be a Sunday night. OPEC, the BRICS nations, Saudi Arabia - they come out and say on a Sunday night, we’re taking other currency for oil - and everything blows up Monday morning. It’s a tsunami of dollars,” Andy concluded. “The pieces are being put into place right now. Nobody is going to have time to react.”
“Why the hell would Central Banks be buying more gold now than ever? They’re frontrunning. They don’t care about the technicals, they’re using the Western suppression of gold prices to de-dollarize. What does that look like when the world completely sheds dollars because they no longer need them to buy oil?”
We also discussed:
the end of the U.S. dollar's dominance
the geopolitical divide taking place
gold & silver markets and manipulation
politics into 2024
banking collapses & equity markets
the future of bitcoin & crypto
You can listen to my full interview with Larry and Andy on Spotify here, Apple Podcasts here, and streaming on YouTube here:
Larry manages the EMA GARP Fund, a Boston based investment management firm. Their strategy is focused on providing "Monetary Debasement Insurance". He has 38 years experience and an MBA from Harvard Business School. And he likes to curse. On Twitter he is @LawrenceLepard
Andy is the President & Owner of Miles Franklin Precious Metal Investments. Prior to starting Miles Franklin, Ltd. in 1989, Andrew became a Licensed Financial Planner, specializing in Swiss Franc Investments and alternative investments. At Miles Franklin Ltd., a company that has eclipsed $5 billion in sales, Andrew has developed an operation that maintains trust, collaboration, and ethical behavior, superior customer service and satisfaction to better serve their clients. He is responsible for overseeing the firm’s operations and business functions; including strategy and planning, account management, finance, and new business. He is email@example.com on email.
QTR’s Disclaimer: I am not a guru or an expert. I am an idiot writing a blog and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning and generally trade like a degenerate psychopath. This is not a recommendation to buy or sell any stocks or securities or any asset class - just my opinions of me and my guests. I often lose money on positions I trade/invest in and I’m sure have lost more than I’ve made in my time in markets. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. Positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it three times because it’s that important.
That is some good information, but I don't understand the comment about "when" BRICS and OPEC start taking other currencies for oil. They are doing that now. Hence the need to implement QT and rate increases to maintain dollar dominance for as long as possible. I believe things are "exploding" and a tsunami of dollars is already hitting. The Fed is trying to burn some of them down to stave off the hyperbolic moves we keep talking about. The explosion is picking up speed. Look at the meltdown in the banking sector............. that is just getting started. The banking industry and the Fed are taking that in stride as if it is nothing. They are doing this because it is a planned culling.
Just read a report that demonstrated that at $26 an oz., the known, above-ground silver is around $137 billion dollars in value. Report went on to say that over the past 20 years, major central banks have printed up around $120 trillion dollars in fiat around the world.
Imagine what happens to the price of gold and silver if a trillion of that comes looking to invest in precious metals. Right now, all the silver in the world is around $137 billion, but if some serious money starts looking for a safe haven in metals, prices could explode.......overnight.
Excellent episode!! One hates to contemplate doom and gloom but I’d rather have eyes wide open to address the malady of a dollar collapse coming our way (as well as the evil potentially orchestrating it).