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Crack-Up Boom in Bloom - Market End Game Series with Egon von Greyerz - YouTube
Channel: GoldSwitzerland with Egon von Greyerz
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the m1 money supply in the us grew by an
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exponential rate of 126 percent per
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annum between august 2019 to august 2021
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five times higher than the compounded
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annual m1 growth rate of the previous 10
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years and 20 times higher than the
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average of 40 years before that
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m2 for 2020 grew by 25 percent in a
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single year whether we look at m0 m1 or
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m2 there is no doubt money supply has
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grown faster than ever in the last two
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years this has naturally sparked worries
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among investors about an inflation hike
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in this video we asked three
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macroeconomic experts for their views on
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inflation their evaluation of a crack up
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boom prospect and their advice on how to
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position investment portfolios amid
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rising inflation fears
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egon von grays is the founder and
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managing partner of matahorn asset
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management and a leading financial
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expert in macroeconomic risk and
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precious metal markets
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ronnie stefaler is managing partner of
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incrementum a.g in liechtenstein
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international bestseller author and
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advisor and board member of multiple
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reputable financial institutions
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including matahorn asset management
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grant williams is a senior investment
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advisor a portfolio and strategy advisor
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co-founder of financial news
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broadcasting channel real vision tv
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author and publisher of things that make
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you go hmm
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he too is an advisor to matahorn asset
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management
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in egon von griez's view inflation
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doesn't come from higher prices but from
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the collapse of the underlying
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currencies
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history lessons and his technical and
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fundamental reading of the current
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economy all point to an inevitable
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currency collapse and a future of
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inflation and hyperinflation
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but you know you know if we look at back
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and we can we can look back to the the
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roman empire in the second and third
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century we can look back to the 1720s
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and john law in france or or or the the
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south sea bubble in the uk or any
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inflationary
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event in the world or hyperinflationary
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event you know it's
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nobody wanted to raise interest rates uh
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and and
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inflation as we know that doesn't come
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from higher prices inflation comes from
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a collapsing currency and i think a lot
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of people are totally forgetting this
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and even even you know when lazy hunt
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talks he says he said i don't know if
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you still have that opinion that you
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know the fed the fed only uh only buys
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assets they can't actually uh uh print
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money or or
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because they can only buy existing
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assets and therefore he says that
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therefore you can't create any inflation
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as long as that happens and no and um
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you you cut so but why
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you know i think he's totally
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disregarded the currency aspect because
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i mean i see some of the questions
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coming up here and say why isn't the
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dollar falling why isn't the dollar
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falling i mean the dollar has fallen 98
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since 1971. you know it's fallen 85
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percent since uh 2000 uh that that is in
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real terms measured in gold which is the
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only way we look at it so nobody can say
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that the dollar isn't falling it's just
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not going down in a straight line but in
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my view and i'm looking at it both
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fundamentally and technically i think
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the next state the next fall of the
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dollar is not far away i know we have
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our friend brent johnson's uh
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milkshake theory that the dollar is
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going to go up first before it goes down
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it's always possible that it goes up a
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bit but it's inevitable that the dollar
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and all the other currencies will fall
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and this is what will create
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the inflation and the hyperinflation uh
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not
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not gradually gradually increase in
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prices
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grant williams reminds investors of the
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lessons from the lehman brothers crisis
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history is repeating itself today in the
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flashing signs from the reverse repo
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market and growing liquidity contraction
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in the broader markets signals that
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retail investors often miss
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what people need to understand is away
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from those headlines about markets at
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all-time highs
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what the professionals see what the
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professionals have access to is
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information that resell investors don't
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have and that information
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reverse repos being one of them
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suggests that there are warning signs
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flashing about liquidity and if
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liquidity dissipates in this market
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then the markets will go lower make no
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bones about it if there isn't ample
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liquidity then markets are going to
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struggle so you're right what we're
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seeing is a sign that
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that liquidity is contracting there are
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plenty of other signs um that you as i
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say you won't really see unless you
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really dig into the plumbing but they're
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quite consistent across the board um and
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so that's another signal that it's it's
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a time to be cautious it's a time to
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understand that you know the the the the
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free market um
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free money the wild markets crescendoing
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day after day after day it doesn't go on
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forever you have to understand a little
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bit of history to see that
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so i think reverse repo is is a flashing
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warning sign that something's not right
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with the plumbing of the system
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and when something's not right with the
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plumbing of the system generally that's
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a problem for the system overall you
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know lehman was a plumbing problem
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really
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that's what took lehman under
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ronnie stefan urges market watchers to
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assess inflation prospects by looking
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beyond cpi and at inflation-sensitive
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asset classes such as precious metals
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and agricultural commodities he
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forecasts a crack up boom in full bloom
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with central banks now backed by
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governments to have unlimited credit
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supply power
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in a crack up boom scenario money and
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credit supply keeps expanding at an
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accelerated rate this puts a strain on a
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country's fiscal capacity leading to
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unsustainable and rapid price increases
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or inflation the loop keeps playing and
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the consequence would be a final and
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total catastrophic crash of the currency
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system involved
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listen to ronnie stefan's analysis here
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we're currently writing a special report
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about inflation
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and and most people that we talk about
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not monetary inflation or asset price
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inflation but real price inflation that
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you measure with you know those pce and
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cpi baskets
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and we could discuss them at length
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but most people think you know there's
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no way that we will really see a
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consumer price inflation coming up and i
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just tell those people first of all
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everybody is saying that secondly have a
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look at at the tips market have a look
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at precious metals have a look at copper
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markets have a look at agricultural
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commodities
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most inflation sensitive asset classes
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are screaming inflation
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so from my point of view
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inflation might really become one of the
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bigger topics going forward and and i
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think russell napier made some um some
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very interesting observations basically
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saying that um
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central banks um
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as well as commercial banks have kind of
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lost control over uh money creation
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and he says that it's basically gonna be
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like like many other things um going
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more into the hands of governments
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um they gave some some uh credit um
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guarantees uh over the last couple of
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months and and and and and he sees that
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this might really become the the big
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trend going forward so the government is
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basically guaranteeing you
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200 billion for i don't know a new green
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deal um
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education deal infrastructure deal
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whatever
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and of course the bank is going to say
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well if the government backs it um of
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course i'm gonna do the uh the loan so
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so i think this is a very interesting
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thought and
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additionally to this inflation driver i
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think also the direction into esg might
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turn out to be inflationary
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and the second thing is um if if you
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follow geopolitics um it seems like a
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proper cold war is is is is getting
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started between china and and the us and
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and from my point of view that that
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should also be
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very very much inflationaries
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how can we protect ourselves against a
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looming inflation and an impending crack
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up boom
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we ask grant williams turns out timing
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and risk appetite are crucial at the end
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of the game the winners are going to be
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those who are prepared with the right
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portfolio mindset holding real assets
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not financial assets and focusing on
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value not growth
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but what all those conversations have
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really hammered home to me is it's about
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timing
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um because you're right ego i think we
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get both
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and do we get one last deflationary
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shock it's it's highly possible that we
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do
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so it really comes down to an individual
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investor and what are you trying to
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manage what's the time horizon you're
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trying to manage here because if you
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have
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i think anything
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past a couple of years is the time
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horizon you're looking to invest along
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then i think you have to be concerned
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about inflation because if we do get
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that deflationary shock
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we've already seen what they're going to
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do they will
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they will go to links that that will
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make what they've done so far seem
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you know trivial so we can expect a
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monetary blitz we can expect a fiscal
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blitz we can expect them to cap yield
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curves we can expect them to do all
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kinds of things they will do anything at
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this point to stop that deflationary
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pulse taking hold
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so while you may get a deflationary um
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outcome in the short term
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i personally have come down on the side
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that long term inflation is is the thing
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i have to be most concerned about and
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i've talked about this before in other
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conversations but the
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the the big thing for investors is to
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understand that that if you've had a
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portfolio that has been set up to
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benefit from a deflationary tailwind
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that portfolio has performed very well
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for 40 years
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um
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it will perform terribly if we have an
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inflationary environment for for obvious
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reasons
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and so this inflection point that we
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seem to be at or close to
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suggests that if if we do shift from
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deflation to inflation
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then that 180 degree shift does the same
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in all kinds of areas it changes the
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focus on away from financial assets and
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towards real assets it changes the focus
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from
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i say it ends that duration bull market
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as as dylan has talked about it it means
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you want to be in value not growth it
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means you want to have active managers
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not passive managers
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and it means that your portfolio
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is potentially set up the exact opposite
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to how it needs to be set up to manage
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the conditions going forward so i think
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everybody has to
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take part in this debate at least listen
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to both sides think it through for
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yourself understand
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what does it mean for my portfolio if
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the inflationists are right
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and then decide if you think they're
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right if you think they're right then
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you have work to do in your portfolio if
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you think they're right but not yet then
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you probably don't have work to do but
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you need to start creating a plan for
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that point in time where you think okay
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now is the time the inflationists are
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going to be right and if you think that
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lacey and david and the and the
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deflationists continue to be right and
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they will be right for the foreseeable
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future
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then frankly you can sit back with your
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portfolio and you'll probably still do
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okay but everybody has to do those
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calculations now it's it's incumbent i
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think on everybody who's investing to
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take this seriously because if this
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inflection point is real it does change
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everything
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for more expert views on macroeconomic
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risks wealth management and precious
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metal investment solutions check out our
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