Transcription
Hello everybody and welcome into Commodity Culture, where we break down commodity markets, sound money principles, and geopolitics, all with the goal of making you a better investor in the commodities sector. My name is Jesse Day. Today is April 28th, 2026, and I'm thrilled to be joined by Matthew Pipenberg, an author, former hedge fund manager, expert on the precious metals sector, and a partner at Von Grayers. Matthew believes $300 silver is a "when," not "if" question. And he sees a major supply deficit for the metal that is only worsening, leading to a world where supply-demand fundamentals trump paper manipulation, as shorts are forced to cover or implode. Matthew also covers why the war in Iran hasn't sent gold into overdrive yet. Why perhaps the main market to watch is government debt, as yields rise around the world, threatening a massive credit crisis when the broad market could finally roll over, and so much more. So strap yourselves in for my conversation with Matthew Pipenberg.
Matthew Pipenberg, it is great to have you back on Commodity Culture. I want to kick the conversation off with discussing precious metals markets, starting with silver. It's been a long time since I had you on the show, so I'd love to get your take on the roller coaster ride silver has been on, from around $30 at the start of last year to a close of over $116, a new all-time high at the end of January this year, subsequently crashing 26% in a single trading day, currently hovering around $73 an ounce. What do you make of this price action? And do you think we make new all-time highs in 2026?
Well, the short answer is yes. And we'll get into the longer answers. Of course, again, I always have to caveat, I'm selling my book, but a lot of us in the space are very bullish on silver. And of course, we have a bias, and of course, we have a conviction. Uh, I think when you're talking about silver, whether you're talking about any commodity, and we're talking about precious metals, it's a different answer depending on the audience, depending on what kind of investor they are, whether they're swing trading, or they're traders, or they're long-term investors, they're wealth preservationists. What is their time horizon? Is it a month, a quarter, a trading day, an hour? Is it 20 years? Um, so it's a different answer depending on, uh, who's listening, in a sense. But of course, at Von Grayers, it's we're purely wealth preservation. We've been that for decades, and that's not going to change. We understand silver as the, you know, the mama metal is gold, and the baby metal is silver. It has a much better beta when gold's on a bull run. But we look at silver and gold as monetary metals, and we look at them as wealth preservation tools. And so our horizon is many, many years. So, I have to caveat by saying that because I think if you're trading or arbitrageing or spread trading it, uh, even the best traders I've seen in this space, I know a lot of them aren't very successful because there is a lot of volatility based on headlines and price moves and commodities in general, and silver in particular, with all the mechanizations in the Comex market starting in '24, which I've written about a lot. But I think at at 30,000 feet, keep it simple, stupid, because we understand it as a simple long-term play. I mean, know, silver is a supply and demand mismatch that has a fantastic setup if you're patient and you have a longer time horizon. And for me, you know, again, silver has seen five consecutive years of 200 million ounce supply deficits. And, you know, by Silver Friday of this January, we're looking at a billion dollars in silver deficits. And and that that supply crunch with that demand rising is a perfect setup. Longer term, you know, we saw the LBMA seize up last October. There just wasn't enough metals to meet delivery, uh, in New York, on the New York exchange, whatever you think of it, and gosh knows I don't think very highly of it. You had a a ratio of, you know, the Comex is registered silver, that's available silver for delivery, versus the open interest, which was the paper claim demand for delivery. You had a ratio of 7 to 1 at some point. And again, regardless of whether you're bullish or bearish or cynical or not, um, that supply and demand mismatch has to play out in normal price discovery, despite all the mechanizations we've seen on the Comex, really since Trump was elected in November of '24 and into the into the first year of his term. The the mechanizations we saw in December of of 2025, and then again in January on Silver Friday, when they were raising the margin hikes, all these efforts to manipulate the silver price because they had to raise margins because they didn't have enough actual physical gold to lever the paper price. So it was a fascinating moment. I think these exchanges are really pacing towards a cash settlement only exchange. You know, in January, we saw 20% of gold leave, in a week, of their available, excuse me, of silver, of their available silver in a week. I think that was JP Morgan. I can't, you don't know. They don't have to report it. But the big banks were pushing the price down to get themselves out of a massive short squeeze where they were upside down to a survival level. And then once they pushed the price down with the margin hikes, uh, they then were accumulating the metals. And so, it is an insider game. We could spend hours on that, but there's no doubt that there was a need to save the banks in a bailout in January on the silver market in New York. They did these margin hikes that they've done many times in the past. Those mechanizations may seem too big to fail or too powerful to beat. I disagree. I think the Comex and the LBMA markets and the silver space in particular are losing credibility as fast as they're losing actual silver. And I think you're going to see from India to the Spymex to the Shanghai exchange, whatever you think of those jurisdictions or those governments, you're going to see fair price discovery and you're going to see a point where supply and demand actually matter again, despite the paper trade. You know, you could get into the technicals on the futures market. There was backwardization. I mean, the current prices were higher than the future prices. Uh, that always, for me, as a technical trader, signals a higher demand and a supply shortage. And, you know, when you look at the lease rates of silver, I mean, my whole career, they were never above 2%. They went well above 8%. Uh, in fact, they were usually less than 1%. Um, so again, whether you're looking at it as a trader, and we're looking at it far more as a long-term play, as a monetary metal, you simply can't print more silver, just like you can't print more gold. And I think the military and industrial demand, uh, for silver is going to increase. I mean, silver, as you many of your viewers know, is a byproduct. It's mined. It's a byproduct element. And 70% is byproduct. You mind. You just can't increase the supply with a button. You can't mouse-click it. You can only play with the paper prices. And I think whatever we think of this war, which we can get into, or whatever we think of inflation or the deflation, you know, crude at $100, and and what's where silver going to go longer term? Oil inflation is not the kind of inflation the Fed can fix. It's not the kind of inflation that can be cured. And for each $10 price in oil, inflation raises by a 10 b, you know, 0.1%. But again, the longer inflation deflation discussion comes in for both gold and silver. But silver is going to outpace gold in that next bull run. It doesn't mean gold or silver go in a straight line. You could say silver's broke a lot of hearts. But if you bought it at $15 or $20 or $30, you know, are you not entertained? Even with the pullbacks, if you are a long-term investor, you're not the least bit worried. If you're a trader trying to get out and get into mining, that's you have to call it. I think at some point, we always think of gold though as the ultimate preservation asset, and silver, as Egon says, can is not for widows and orphans. It can break hearts. But when you get to ratios, the gold-silver ratio, I think we're going to see new compression, new record compressions in the next real bull market in gold. And at some point, as we say, you'll make a very good return on silver. We don't like to price target because we're measuring that in fiat currencies. You know, I I'd rather measure silver and gold and how many barrels of oil it can buy, how much real estate it can buy, um, how much assets it can buy, not what the monetary price is in some fiat currency. But $300 silver, $400 silver, these aren't exaggerations. If you're playing the long game and you're not trading, it's just a question of when, because the fundamentals for the monetary system and for paper currencies haven't changed. And so silver will have its time. It's it's not as discussed. I'm interested. I'm glad you asked that question about silver first, because very few people do. But for the patient investor, not the trader, who understands the story or the narrative for precious metals in general, including gold, silver is still very much in the first innings. And again, we're selling our book, but it's an absolute conviction. We're not alone. And then whether it's gold or silver, you got to watch what the banks and the traders are doing versus what they're saying. And you got to look at the supply and demand forces, which still matter. And you have to have you have to determine for yourself what your time horizon is. For any of us who bought silver, whether we bought it at $70, $60, $50, or $90, or $10, or $5, uh, we're patiently waiting for that compression in the ratios. Probably at that point, when I see a silver-gold silver ratio in the 20s, 30s, or below, I'd sell some silver and just buy more gold. Um, but it's a long answer to a short question. But the the short answer is, we're very bullish on silver. Egon is particularly bullish on silver right now, and uh, and we're not alone. Outside of the commodities space or the precious metal space, a lot of equities and credit jocks are are accumulating silver at pretty rapid amounts right now. In this, I think it's a Boxing Day, Boxing Day sale for silver right now, if you understand it's long-term play.
The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 307-264-9441 or by email at ian@archsg.com. Make sure to tell him, of course, that Commodity Culture sent you. And now back to the interview.
Yeah, some great thoughts. And I like your comment of "Are you not entertained?" because it's really funny how when silver was around the $30 level, I would get comments on every video about silver when the guests were discussing a $50 price target as that's ridiculous. Silver's manipulated. It will never go to $50. Now that we're at $73 and people are talking about going higher, I'm getting those same comments saying silver's useless. It's manipulated. I'm I'm telling these people, I comment back to them. I'm saying silver was $30 and you're the type of person who would say it would never go to $50. Now we're at $73 and you're saying it won't go past $100 again. I mean, it's it's it's very interesting the psychology behind it. But you mentioned the war, and I want to get into that, particularly in its relationship with the gold market. Um, because gold, of course, also hitting new all-time highs at the end of January this year, also correcting fairly significantly, but proving far less volatile than silver, both on the upswing and subsequent downturn, hovering around $4,700 right now. Now, many expected gold to go ballistic when the war in Iran started, and yet gold has been down to sideways since the conflict began. Why do you think that is? And what is your overall assessment of the gold market at present?
>> Again, when it comes to the war, that's a that's a rabbit hole. And of course, when it predicting the war, criticizing the war, praising the war, debating the war, I'm the last person to give an opinion on, probably the last person anyone wants to hear that opinion on. So I try to stay out of the armchair quarterbacking on on the war and my views of it or its duration or its or its goodness or badness. We all have very strong opinions on that. What folks like I can do is certainly look at it economically, and not just in terms of precious metals. And again, you could spend hours on it. Um, you know, you can look at the parties of this war. You can look at the economic risks of this war. But I think, you know, what we saw, and I've said this many times, it wasn't a necessary shock. You would think if gold loves chaos, what can be more chaotic than a major military conflict in the Middle East at the Strait of Hormuz with a supply shock in oil? And why wasn't gold ripping? And the sad reality is, um, there were sell-offs in oil, excuse me, in gold, not because it was a desired sell-off, but because it was a forced sell-off. And and and you I did a lot of different reports on different countries like Turkey, which, you know, has to import the vast majority of its oil and gas through the Middle East. When this war lasted more than two weeks, and the last ships came through the Strait in late February, there was an uh-oh moment in a lot of parts of the world. And Turkey is in a classic example of having stacked gold religiously, metaphorically, but, you know, at a fundamentally meaningful level. They saw the writing on the wall for the Lira and paper currencies, and they were stacking gold significantly prior to the war. Had to sell 10% of their oil early on just, excuse me, I keep, had to sell 10% of their gold early on just so they could afford to buy higher priced oil. And and they needed that oil to function as a nation. So that was an example of a for sale of oil of gold. Again, I keep confusing a for sale of gold to buy oil. But what was interesting, when Turkey did that, it was a swap through Switzerland. A swap about getting into all the weeds is kind of like a pawn shop. You could you could say, "I'm going to sell you some gold. I want to buy it back later." They did a swap for 10% of their gold holdings just to survive on, because the world survives on energy, despite what Greta Thunberg says. We need oil. We need energy. And so that was kind of a for sale because they needed to sell gold to buy oil. On the flip side, you see a lot of the GCC countries, including Saudi Arabia, having to sell some of their gold, over 50 tons, we think, um, not to buy oil. Obviously, they have the oil, but they needed it to buy everything else because they don't have, they import most of their food and other products. And so they had to sell their good assets, their most valuable assets, their most liquid assets that they didn't want to sell, um, to to to buy products. So you have two extreme examples of Saudi Arabia and Turkey, who are very fundamentally in favor of gold, forced to sell it because it is their most valuable and liquid asset. And if this war drags on, you could see that. So that was one clear cause. Those are large amounts of gold sales. And when you have large sell-offs, you have a price reduction. You also saw a lot of levered ETF, I call tourists in the gold space, that saw the all-time highs in 2025 and we're in levered ETFs, two to three times levered. Those rebalance daily. If you're a genius when gold is ripping, you look very less intelligent when gold is falling, because they rebalance daily. There was massive ETF sell-offs. That was clearly another force on the downward pressure of gold during the fog of war. And of course, a lot of this, the shadow banks, the hedge funds, uh, they're not holding gold as a preservation asset. They were trading it for arbitrage. They were very levered. They all track the same algo signals, the same stop-loss signals. And when they hit those, they started to sell on mass as well. So between the institutional hedge fund smart money, between the ETF tourist trade, the speculators levered, and between the forced sales in the Middle East and other parts of the world to pay for other products, there was a a sell-off in gold at a time when you thought it would rip. Um, it's certainly not peak gold, and we can get into that, and there's a lot of reasons. But the sell-offs were not a shocking surprise. It's just like you see when you see the S&P get an uh-oh moment. It's not uncommon. It's a margin call. You have to sell the good to cover the losses of the bad. So your best assets are paying for the sins of your worst assets. And that, you know, we talk to clients all the time. You know, in the next uh-oh moment in the S&P, the Dow, the NASDAQ, if we see a retracement, you're going to see likely sell-off in gold, too. The question is a sell-off from what price? If you're trying to time that as a trader, will will gold sell off again? When will the market crash? When gold's at $5,500, $6,000, $5,700? Nobody knows. If it's sold off today, of course, you would use that as a sale price. But if you're a long-term investor, uh, and we're looking 10, 20 years out, whether you bought gold at $4,500, $3,800, $5,200, or $6,000, yes, of course, I would have liked to bought gold at $300 like Egon, but I'm still glad I bought it. I'm saying for the long-term investor, not the trader. I'm no help to the trader. For the long-term investor, we see gold at significantly higher prices than we do today. War confuses a lot of things. We're not panicking by sell-offs. In fact, most of us and a lot of our clients are buying in these sell-offs. But not everyone can afford that. Not everyone can think that way. And certainly, if you're looking to get rich on gold, we're not the people to give advice or to trade on gold or to lever it. We're not the ones to talk to. But war has certainly confused a lot of things. It wasn't a shocker to see the sell-offs. We're not worried about it. I am much more worried about what the war will do to the markets and to the economy longer term as this war drags out. Again, whatever you think of it, most people are against it, understandably. Uh, as Clausewitz had said, war is an extension of, uh, politics by another means, but politics are an extension of economics. And the economics of this war, it is an oil war. It is a dollar war. It is a US Treasury war. It is a petrodollar war. Again, whatever you think of the ideologies behind it, the economics of it are fairly simple. And the longer this drags out, the more stress it puts on the markets and on the economies of the world. Recessions, market drawdowns, the inevitable fiscal and monetary stimulus to follow. Whether it ends tomorrow or whether it ends in a month, that stimulus, that expansion of the money supply, that balance sheet expansion, and that uh-oh moment is ultimately going to be a massive tailwind for gold over the many years to come. And as as I as I'd like to say, we ain't seen nothing yet. And again, that's selling my book, but that's understanding history. And uh, we're far, far from peak gold. Even even I think the the bears can expect that. And when you see Goldman Sachs or UBS or JP Morgan, especially at Goldman, the world's greatest investment bank, the massive bank we're all familiar with, when you see their head commodity trader or their CIO, more bullish on gold than half the gold camp for year-end targets, I'm not a big fan of these banks. I'm not a big fan of the BIS. I'm not a big fan of central banking in general or commercial banks for a lot of different reasons. But I even have to agree with them. They're starting to see what they wouldn't admit years ago. So whether it's a gold bug, whether it's a bond jock, or whether it's a Goldman Sachs commodity trader, we're all kind of aligned now where gold is going longer term. I don't think anymore it's an apology for the metal.
Well, I didn't have this question prepared, but you you brought up the implications of the war on the global economy. So I'd love to to pull on that thread and get your thoughts as we see the Strait of Hormuz continuing to, we're seeing back and forth, obviously, between the the Trump administration, the Iranian regime on what's going to happen. Is there going to be peace talks? Is there not going to be peace talks? Is the Strait going to be open? Is it not? The the US has put on essentially a blockade of a blockade in the region. And it looks like, um, not enough ships are being able to transit through that area yet. Obviously, we also saw destruction of a lot of energy infrastructure. Um, the last Rafah area in Qatar, the Qatar energy shuttering a lot of their, or if not all of their natural gas production. That LNG is is not going to be getting out anytime soon. Some estimates place three to five years before this LNG could come back online. What do you think are the long-term implications of that for the global economy and financial markets, and assuming the war drags on? Because if you put a gun to my head, I'd say it could be measured in years as opposed to weeks or months. So, if if we do see a longer term protracted conflict, how would that affect things?
Well, it could be disastrous again. And, you know, like Duneberg, the talking chicken, I love talking to him. You know, um, he clearly understands the energy space. We we talk about a gold-centric world in the past, or a dollar-centric world since 1944, but to be really honest, we're in an energy-centric world. The world runs on energy. It ships everything. Anything that's got plastic wrapping around it, whether it's fertilizer, whether it's toys, whether it's food, uh, whether it's water containers, globally, they rely on the movement of of of shipping and containers that are driven by energy. It's kind of when you have a shock in the energy, you can talk about what oil shocks do to inflation or the dollar, and that's a separate topic. When you talk about the global economy, this is a critical keystone to that economy. When it stalls, where where 25% or 20% of the world's energy stalls in a clog in the Strait of Hormuz, that is going to have ramifications. Again, even if the war ended today, the delay effect of what that's going to mean for the cost of products and supply chains and infrastructure builds, not even to mention AI and Nvidia energy sources. So it so many areas, Jesse, it'll hit. It's kind of like when, you know, you catch a a flu or a virus. You may have caught it on Monday. You don't, you may not feel sick until Wednesday or Thursday. And you may think you're healthy Monday and Tuesday morning, and you may have plans for the weekend, but by Thursday, you're sick. And this notion that there's immunity or impunity for the what we're doing with our foreign policy that won't affect the global markets is naive. U you could argue, as Kissinger in his bio famously said, and Nixon understood this, well, the US is a net exporter of oil, and we have a lot of oil. You can certainly imagine that the US, and under the Trump administration, don't really care about the rest of the world because what's bad for Iran and the Strait of Hormuz could be good for us. We're going to crank out more of the shale. We're going to crank out more of the oil. We'll export. We'll profit. Um, but it's not, and I'm not trying to be Pollyannaish, but it's a very humanitarian issue as well. When there's certain countries, developing countries, who even if they can go to the US and and get US oil, and if the US policy is to strangle Iran and strangle China, it's still causing not only economic crises in the developing world. I'm not just talking Cuba and Venezuela. I'm talking about the Far East. And so, is that a is that really a humane and economically sound policy? It could be good for America, but bad for everyone else, including the UK and Australia. They're going to have to pay more. But as Kissinger and Nixon and Kissinger admitted, we knew it was going to hurt the US to have an oil shock or an oil embargo in the Middle East, but it would hurt us less than everyone else. That's just being realistic. Um, again, America will not be destroyed by the Strait of Hormuz. The rest of the world will feel the pinch. America could even profit to some extent. But as Kissinger also said, and I've said many times, you know, to be a friend of America is a dangerous thing. And he said, to be an enemy is dangerous, to be a friend is fatal. I mean, the UK and other countries are effectively now going to be relying on US oil through no choice of their own. And whether you think this is a 3D chess play by the US to squeeze out Iran's oil, when, by the way, 45% of China's oil comes from the Strait and from from that area, and therefore we're squeezing Iran, the big bad boy, and we're going to also squeeze China, our biggest economic uh adversary and competitor. That's one way to look at this. But I think it's you're going to break a lot of things along the way. And and and you can say, I don't care about those things, but I think we are putting the US credibility, the US petrodollar at tremendous risk. It doesn't mean the end of the petrodollar. China clearly wants a non-dollar energy solution. This is something Kyle Bass has been saying for years. I completely agree. They will find a way to buy oil outside of the dollar, regardless. And they're going to work and they're going to compete with the US. They're going to work with Iran, other nations. I don't know how it plays out. But, you know, as the US is playing supposedly 3D chess here to beat Iran and squeeze China, you could argue the first lesson you learn in chess is always assume the opposing player has a better move. The case for Iran is they don't need to win this war. They just need to endure long enough. They see the logistics and their strategy is to crash the global economy, see the NASDAQ and the bond market go no bid, and see QE to the moon, and not see the end of the petrodollar, but see a reduction in its strength and its hegemony. And again, I don't know which chess player is going to win. It's hard to predict, and no one can say with certainty. Most, whether you're listening to Jeffrey Sachs or Mshimer or Colonel McGregor, will say we're going to lose. Again, I'm not here to say that. I don't know what that even means. But I think economically, there's going to be very few winners, and not even the US. But we're going to see a real risk of a global recession at a time when interest rates are rising, debt levels are unsustainable, unprecedented, unimaginable. And that sounds fair gloom and doom. It's hard to put a rosy scenario on this. This isn't a war over just pork bellies. This is a war over energy. And to me, it couldn't be a more fragile time to have this conflict. But desperate nations do desperate things. And there's clearly, among the many motives which I can't even get into the economic motives, I can't. And there is the one of the pillars of American hegemony is its US Treasury and its US dollar, and the oil trade is absolutely linked to that. So, I don't think it's a coincidence that we're in the Strait of Hormuz right now, just like it wasn't a coincidence that we were in Libya or in Iraq or in Venezuela. These are deadly serious games. And we know what happened to Moammar Gaddafi and Saddam Hussein and the Ayatollah in Iran. It's a deadly serious game. The US is playing, I don't think, 3D chess. They're playing a blitzkrieg right now among many other motives. Again, I'm not here to talk about Israel and influence. I don't know. But I do know economically, uh, the petrodollar is critical. It's a six-shooter. And if you have six bullets in that petrodollar, you can export inflation. The world buys your do the oil in your dollar, and then the oil producers buy your US Treasury. It makes you a hegemon. If you take some of the bullets out of that six-shooter, whether it's the BRICS or China, and they start net settling oil outside the dollar, that is a threat to the US dollar and therefore a threat to US hegemony. So there's absolutely no coincidence that we're in the Strait of Hormuz right now. But we're playing chicken with strong adversaries. Not just Iran having to outendure us like the Vietnamese did, but whether China and these other countries will find alternative ways to get oil out of Iran or get oil outside of the dollar. That's the big question. It's not the end of the world for America or the end of the dollar, but it'll be a massive repricing of the dollar, a weakening of the dollar, and it'll be a critical gut punch to continued American hegemony in the world. I think we're at a turning point right now.
I was watching some interviews you'd done earlier in the year to prepare for this, and a theme that kept coming up was a potential bond market crisis. Nowhere has this been more pronounced than where I'm sitting today, which is in Japan, as almost all maturities of government bonds are at their highest levels in 30 years. We've also seen UK 10-year gilts rise dramatically, and across the board, we are seeing yields rise on government debt. How bad could this get? And and assuming we do get an outright crisis in bond markets, what does that mean for broader financial markets and gold as well?
>> Well, Jesse, I've been saying for years that the bond market is everything. And it gets boring. And it is boring. Yields are boring. The inverse relationship between yields and bond prices. You take a few minutes to understand that. But yields represent the cost of debt. And everything is debt-driven. American growth is debt-driven. European growth is debt-driven. Um, and when those yields rise, they're like shark fins, because rising yields just mean rising costs of borrowing, rising costs of debt, and debt is the wind beneath the rotten wings of the G7. And so these yields matter. As you talk about the gilt, the German bund, um, the US Treasury, um, they're all rising. What's interesting is the Chinese tenure, certainly the JGB's yields are rising, but the Chinese tenure is compressing. That doesn't say that the world now prefers the Chinese tenure. There's a lot of problems with the Chinese bond market. But it's fascinating when you talk about the JGB or the Japanese, uh, bonds. That's fascinating. They went nearly 30 years at near zero, and now they're rising. And as their yields are rising, well, that's the end of the Japanese carry trade and Wall Street's carry trade. It's a slow death by a thousand cuts. But now it's becoming obvious. You can't just lever the yen or the, you can't just lever the interest rates out of Tokyo to buy stocks in the US. We saw that a couple years, a year or two back. That was a major uh-oh moment, and now it's becoming normalized. What's also interesting when you see, and Japan and the US are very similar but different in their bond markets. The Japanese bond market is owned primarily by Japanese citizens. The US Treasury market is owned by the rest of the world. But you still have to look at these canaries in the coal mine. The yen and the DXY, or the dollar, they're going down as their yields go up. Again, boring stuff, but typically rising yields mean a stronger paper currency. But now the yen and the dollar are acting like banana republic currencies, like just another asset that can be traded as opposed to a major economic currency or global currency. I think in addition to watching these rising yields like shark fins, which are very destructive to everything, including equity markets, which we should talk about, the stock market, but the bond market, those rising yields, I absolutely agree with Luke Groman and anybody or Jeff Gundlach or anyone who's traded bonds, which I did before I got into precious metals, it is everything. The smartest guys in the equity market were former bond traders because they knew that yields were the signal to go long or short, to be bullish or bearish. If if the US, at $39 to $40 trillion in public debt, sees yields at 4.7, 4.8, 8 on the 10-year, the key bond, the 10-year, the US 10-year, we get past 4.6, 4.8, 5%, we're looking at a disaster like we saw under higher for longer under Powell. You saw banking failures. Those weren't bank failures in '23. Those were bond market failures because that was the underlying collateral. Those banks, you see a tightening of credit liquidity. The expansion or tightening of liquidity is everything. Yields determine whether there's going to be more or less liquidity. That has a direct impact on the stock market, has direct impact on the national government because as yields rise, we can't afford to pay our own bar tab. We have to print more money to fight inflation under, we create more inflation. That's the fiscal dominance argument. So you cannot understate or overstate enough, excuse me, what this boring thing of bond yields means. Those are rising, and those are shark fins to everything, to the national debt, to the US economy, and to this US stock market. And if you combine these rising yields at a time where we're seeing a net loss of jobs in 2025 and a national debt that's grotesquely outpacing our income, you know, you have to remember that even before the war, the kind, the cost of interest on our debt, Social Security, and Medicaid was still 20% higher than incoming tax receipts. That was before the war. So, when you have a national debt crisis, a national labor crisis, and a ticking time bomb, overvalued stock market with rising yields, those are economic risk signals that I've never seen before. And again, you could say I'm crying wolf, and we can talk about why that still matters. And there's even a bull case for the markets if you print enough money, but I'm saying the fundamentals are so broken right now. And those yields are absolutely critical. Just if there's one takeaway, rising yields, the rising yield in the US 10-year in particular, that's the risk-free return, which is really return-free risk. The most sacred bond in the global economy doesn't really beat actual inflation. Its yields are rising, its demand is falling, and the cost of debt is rising globally because of that 10-year. When the cost of debt gets too expensive in a world that lives on debt, you don't need to be an expert to realize that's a a bug looking for a windshield.
Jesse, >> well, I want to talk about the broad market because I have a lineup of guests down the block on this show over the past three years who've been saying it's tremendously overvalued, due for a huge correction, if not major crash. And yet, as war rages in the Middle East, the S&P 500, the Nasdaq, and the Dow Jones recently hit all-time highs. Is this due to market manipulation? Massive inflows through passive ETFs, which which Mike Green has talked a lot about? Is this a hope and a prayer? People are just ignoring reality? Is it something else? Why does the broad market continue to grind higher, given not only the tremendous overvaluation by a number of different metrics, but this war in the Middle East as well?
Really, it is the question on everyone's mind who's looking at stock markets, of course, this complete disconnect, not only between the S&P and war, although if you look at the war dividend from World War I to Vietnam to World War II to Korea, stock markets tend to do very well during times of war. There is a dividend in there, and then they fall quite dramatically after the war. But I've also said cryptically that you could have a mushroom cloud over Cleveland and the markets would still rip, as long as the central bank was accommodative or dovish or easing. And because the markets are no longer driven by earnings or price to earnings or cyclically adjusted price to earnings or book value, the markets, and this is very simplistic, are driven by the Fed. They're centralized markets. They're a matter of national security for tax receipts. It's our only good story. If the Fed is accommodative, you can literally track the markets Pavlovian. Lower rates, higher market. Higher rates, lower market. Broader balance sheet at the Fed, better market. Tightening balance sheet at the Fed, worse market. So the Fed is now the key lever. It's not even a dial. It is a switch for bull risk on or risk off. That's very dangerous longer term. And of course, we can get into other things like passive ETF flows from every 401k and IRA and the baby boomer generation. Every Friday, there's an allocation made. Doesn't matter whether the fundamentals are good. Even if even as money is leaking out of the system or the markets are losing value, there's always that influx. In a recession, that ETF passive Michael Bur shock thing ends, though, because then people have to start selling their IRAs, their 401ks, take penalties. But it is really a Fed-driven market. That's the most simplistic thing. Um, and I hate to be that simplistic, but that's where we've come since 2008 in particular. It's just a Fed market, and that is that simple. But in terms of the case of the markets now, uh, again, there's nothing a money printer can't solve. That is true. The markets can, every V-shaped recovery can be or every dip can be a V-shaped recovery if we're willing to debase the currency and print dollars out of nowhere and expand credit through the commercial banks. That's that's possible to save the markets, but it will always be at the expense of the currency, without exception. In terms of this market right now, for, you know, for years, the smartest guys in the room have just said, "I don't understand this. I'm not trying to time it. I don't understand it. I'm out." That includes Warren Buffett. That includes Jeremy Grantham. That includes Jeffrey Gundlach. It includes a lot of very smart equity traders and bond traders. So, it's not just the gold bug case of trying to scream sensationalism. No one understands this market in terms of fundamentals. But as a former hedge fund guy, I say lottery ticket winner. I'm not nearly the Jeffrey Gundlach or Jeremy Grantham, although I've invested with them. As a former risk asset trader, in addition to saying the Fed is the market, what I want your audience to take away is the question they should be asking about these markets, not trying to time them, but to prepare for them, is credit and liquidity expanding or is it contracting? It's that simple. And clearly, credit and liquidity are contracting right now. That should be a major red flag to anyone thinking they're going to get rich buying at these tops. Most retail investors, I hate to say it, everyone on Wall Street knows, they buy at the tops and they sell at bottoms. That's not trying to be condescending. They are the plankton to Wall Street's distribution whales. So, please understand, just ask yourself, is credit and liquidity expanding or contracting? Clearly, if you dig a little bit of time beyond just one YouTube interview, liquidity and credit are contracting. That's major bad news. You can look at the private credit illiquidity or the private equity illiquidity. Right now you've got $15 billion dollars of gated redemptions in private credit, private credit, uh, and not to mention private equity. Moody's recently came out, just so your audience can say I'm not just making this up, they can check this for themselves, that private credit and private equity funds are now borrowing money to manage liquidity needs. So they're adding leverage on top of leverage to get out of a problem that is not a solution. The Harvard Endowment can't sell its private credit book. You could literally do a whole show, Jesse, on the Harvard Endowment's mistakes since the 1980s, since Larry Summers, but that's a separate issue. But as one other canary in the coal mine, Harvard, the smartest guys in the room at the classroom and at the endowment, can't sell their private credit books. So, they're actually taking out billion-dollar loans to cover their illiquidity in private credit. And the Fed is now in, guess investigating, whatever you think of a Fed investigation. Wall Street is repackaging crappy subprime private credit loans into asset-backed securities, which is exactly what they did with mortgage-backed securities in 2006, 2007. That didn't end well. That's a game. Um, and so, and you've got record margin loans right now, all-time leverage in the S&P. You've got a cyclically adjusted PE ratio at 39. You've got Palantir trading at 300 PEs. You've got a Buffett indicator of market cap to GDP at record highs. You've got the highest Wall Street overvaluation history. Does that mean you can time the needle or the event or the day of an uh-oh moment? No. But it clearly means you should be preparing yourselves to not be chasing these tops. That's my opinion on the market. The markets are hitting a distribution phase. And since last June, the smart guys, I don't say the smart, the inside guys have been dumping. They've been dumping since last June. Someone has to buy that dumping. So like Andrew Mellon in the 1920s, they'll be going around saying, "Economy has never been better. Markets have never been stronger." Well, Andrew Mellon sold his entire book before the crash. Don't trust Wall Street and don't trust the private wealth management arms of the two big banks to keep you all in in this market. If you want to pick up quarters, dollars, and dimes in front of a moving train, that's up to you. They want you to. That doesn't mean I'm timing the market to crash tomorrow. There is so many needles pointing at this market and this overvalued market and and you got to look at the volume. Again, if you're a trader, you'd be crazy to be bullish right now. That said, anything can be saved by an accommodative central bank. I think there's a moral hazard that many feel that now if we have another '08 moment, it doesn't really matter because the Fed will save the market. There is some possible truth to that. Or we could have a 1989 Nikkei where there just isn't an ability to save that kind of loss. Where the markets were down for 30 years and hadn't recovered. Japan is like a time machine. It stopped in 1989 when you walk through Tokyo. So if you want to believe the Fed will save you, that's a personal choice. Technically, they can, but they'll be doing that at the expense of the very currency you measure your returns in. So you're running uphill in roller skates, in my opinion, which is why we've always favored gold as a major allocation. But technically, you could save any market crash with trillions of mouse-click dollars, yen, euros, Swiss francs, Australian, Canadian, American. You could technically save it, but my god, nothing comes for free. That's no free lunch. That's at the expense of the very paper currency that you think makes you wealthy. So again, I'm not anymore a long-short equity or credit guy, but I it's in my DNA to think about these things. It's a lot to throw at the audience, and I know that I'm not trying to show off everything I might know about stocks and bonds, but I keep it simple. Is credit and liquidity expanding or contracting? Does the Fed have a legitimate solution? Answer that for yourself. Um, but the headlines we're seeing in private credit are eerily reminiscent of the pre-08 headlines I was starting to see in subprime mortgages. It's about the same market cap. It's major overlevered. We have 10 times more notional derivative trades today than we did pre-08. We learned nothing from Dodd-Frank. Is it a derivatives bubble which is four times global everything? Um, is it a subprime credit market? Is it private credit and private equity? Is it a black swan that we can't imagine coming out of the headlines in the Middle East? I can't time or predict that. What I'm saying is the ice has never been thinner to have so much risk weight put on top of it. I just ask people in the markets to be far
more cautious than what their advisor is saying down the street, whose entire modus operandi is to keep you all in all the time in the markets and to ask you to bite a stick in the next draw down because it will recover.
If it does recover, it'll be at the expense of your currency, or it may not recover at all because, like '89 Nikkei, it's just too big to save at that point. The, the, the blood in the streets is too severe. I don't know. But there is no easy solution. There is no miracle left, and no one's going to save you.
So, you have to have dry powder and buy when there's blood in the streets. But dry powder and cash means it's eaten by inflation. You could buy short-term treasuries. You could put into silver and gold and then go long when you see PE ratios in single digits, not triple digits. It's common sense, but very few people do that. It's very sad.
>> Some great thoughts. Matthew, tell us about Von Greer's AG and anywhere else people can go to follow your work.
>> Yeah, Von Greer's, uh, we're based out of Zurich. We're all about the fundamentals of gold as a wealth preservation asset. You know, for us, it's not that gold is rising, the dollar is falling. Since 2000, gold is up 1580%. The US dollar is down 99%. Since 1971, the US dollar, in terms of what it can buy with gold, is down. It's down 96% with oil. It's down 89% with copper. It's down 76% with wheat. What we're saying is gold isn't rising. Your dollar and your paper currencies are getting weaker because of the debt sins.
And our thesis has been the same for decades. You need to have a sizable allocation to a store of value in a jurisdiction that has political and economic stability and protection, and a gold hub protection for those assets. You need a legal firewall between yourself and your government because I think capital controls, yield curve controls, financial repression are coming. So, we are really, uh, I'd say evangelical, and we have been for decades, about gold as a store of value, not as a speculation trade, not as a get-rich trade.
All of our articles and interviews can be found at vonartertz.gold or vg.gold. Um, we have a whole section on not just why gold, but how to own gold. That's for free. Our minimums are very high, so it's for a wealthier clientele. That doesn't mean our advice on the metals can't apply to everyone. We really are sincere about that. There are so many articles. We've got advisors like Ronnie Sturfla from the Engold We Trust report. We've got Alistair Mcloud as advisor. Myself and Egon, a brilliant young new partner. Johnny Hock from the banking system is very eloquent on gold. So, you know, there's a lot of free information there to understand the space, and we think everyone has to be informed, whether you're a client or not. So, there's decades of information there. And of course, Egon is an icon in the space. He saw this well before us. But we always saw debt risk, currency risk, historical risk, military risk, and banking risk as inevitable. And here we are. They're culminating right now. It's not the end of the world, but you have to be prepared for the monetary system changing, and our website gives you a lot of that for free.
>> Well, I'm going to put a link in the description below to Von Greer's website so people can check that out. Thank you once again, Matthew, for coming on. It's always a blast talking with you.
>> Thank you, Jesse. It was always, always a pleasure.
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