Tariffs & Gold Revaluation Won’t Stop a Systemic Reckoning
Matthew Piepenberg

VON GREYERZ partner, Matthew Piepenburg, joins Michelle Makori of The Real Story in part one of a thorough, two-part assessment of the key macro themes impacting global currency, debt and precious metals markets – from tariff dynamics and stablecoin legislation to potential gold revaluation signposts out of DC.

For Piepenburg, the 50,000-foot macro assessment boils soberly down to this: The math and facts behind current headline policy-boldness smacks more of desperation than salvation.

US debt levels, for which both left and right administrations are historically culpable, have crossed the Rubicon of any easy, near-term solutions. He warns that hard facts are far more essential today than partisan bias, hope or critique. Mathematically, the home of the World Reserve Currency has created a debt-backdrop/trap for which no single policy or leader can magically resolve without interim pain in currency, debt and risk asset markets, all of which share objectively high and unprecedented risk profiles.

Makori begins with the potential and real-time revenues from positive trade deals emerging from Trump’s aggressive tariff policies. Does the numerical upside of such revenues suggest that these measures could postpone or prevent a systemic reckoning? Piepenburg recognizes the historical lessons, current justifications, and even revenue gains behind policies laudably intended to reshore American manufacturing. Unfortunately, however, current deficit spending far surpasses even the most optimistic tariff revenues. More importantly, and objectively, Piepenburg reminds us that current debt/GDP ratios make economic growth mathematically impossible, regardless of which party or leader sits in the Oval Office.  Until and unless debt/GDP levels fall well below the 100% level, no miracle solution exists. Given that the real spending cuts need to come from politically critical military and entitlement expenses, such cuts are unlikely, and thus so are such miracle solutions.

In this backdrop of a debt-trap, there is growing talk of bringing US debt/GDP levels within a workable growth model (i.e., well below 100%) by simply re-valuing US gold reserves to entirely new (i.e., higher than current spot-price) levels, thereby putting a sizable dent in US debt by effectively “doing QE with gold rather than a Fed-money-mouse-clicker.” Piepenburg cautiously recognizes that such an OVER-NIGHT revaluation (and “instant US piggy-bank filler”) is entirely plausible, which would create a massive and new price floor for gold (and boon for gold owners).

But then what? As Kissinger warned decades ago, such a measure would dramatically create an OVER-NIGHT global POWER-SHIFT if other nations like China and Russia, in fact, own more gold than the US. Here, Piepenburg believes China owns far more gold than reported, and would hence become the global winner in a setting wherein “he owns the most gold wins.”

Piepenburg closes Part-1 by further reminding that the very fact that the US is considering such a gold revaluation (and even a possible gold-backed UST) is a constructive admission that gold has more trust, merit, confidence and strength than a debased USD and unloved UST.

Part 1 (of 2):

Part 2 (of 2):

Matt began his finance career as a transactional attorney before launching his first hedge fund during the NASDAQ bubble of 1999-2001

Thereafter, he began investing his own and other HNW family funds into alternative investment vehicles while operating as a General Counsel, CIO and later Managing Director of a single and multi-family office. Matthew worked closely as well with Morgan Stanley’s hedge fund platform in building a multi-strat/multi-manager fund to better manage risk in a market backdrop of extreme central bank intervention/support. The conviction that precious metals provides the most reliable and longer-term protection against potential systemic risk led Matt to join VON GREYERZ.

The author of the Amazon No#1 Release, Rigged to Fail, Matt is fluent in French, German and English; he is a graduate of Brown (BA), Harvard (MA) and the University of Michigan (JD). His widely respected reports on macro conditions and the changing behaviour of risk assets are published regularly at SignalsMatter.com.

Matthew Piepenburg, Commercial Director at Matterhorn Asset Management and co-founder of SignalsMatter.com, has extensive experience in alternative investments, law, and finance, with particular expertise in managed futures, credit and equity investing. He also has years of experience researching, evaluating and investing in alternative investments: hedge funds, private equity vehicles, VC and real estate. Matthew Piepenburg's skills include asset allocation, portfolio management and macro economic analysis. He has written numerous white papers on the long-term distortions of central bank policies here and abroad. He has guest lectured at numerous family office forums, law firms and universities, including Georgetown, Brown, Harvard and Cal State. Matthew Piepenburg is also a published author and regular contributor to The Good Men Project and the author of the Amazon No1 New Release “Rigged to Fail,” which bluntly details the systemic and structural flaws behind central-bank distorted capital markets. 

All of these combined monetary distortions are directly responsible for the staggering level of currency debasement ignored in plain sight by a majority of policy makers and investors, which is why Matthew is committed to informing of, as well as addressing solutions to, these systemic fault-lines in the global system. Toward this end, all rivers flow toward precious metals as currency insurance (hence Matterhorn role in Zurich) as well as sober yet actively managed portfolio construction (hence the SignalsMatter service). 

 

 

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