'No Way Out' As Debt Crisis Looms | Matt Piepenburg

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**Matthew Piepenburg** (0:58)
There is no easy way out. It doesn't mean the end of the dollar, or the end of America, or the end of the world. It just means we're going to head into periods of austerity, market mean reversion, poor currency behavior, volatility, political centralization most likely. That's what happens in this cycle from debt to social unrest, to centralization, the symptoms of which are many places. I just don't think there's a way to avoid that. And it's not being cynical or pessimistic. It's just to have preparation. There are great opportunities in such crises too. Don't get me wrong.

**Adam Taggart** (1:36)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Today's guest expert has long warned about the dangers of too much debt in the global economy. The ever-growing mountain of it enables nations to spend beyond their means, creating asset price bubbles and wealth inequality in the present, but destroying the purchasing power of their fiat currencies in the long run. So where are we today on the timeline of debt-driven monetary decline? And how are precious metals, the historic defense against such currency debasement, faring this year and protecting those savvy enough to own them? For answers, we welcome back to the program Matthew Piepenburg, partner at VonGreyerz Gold. Matt, thanks so much for joining us today, all the way from Europe.

**Matthew Piepenburg** (2:21)
All the way from Europe. It's great to be back, Adam. Looking forward to it. Absolutely.

**Adam Taggart** (2:25)
Thanks. Well, it's been too long, so I'm very glad that we were able to make this happen. You look great, by the way, my friend. All right. Well, look, lots to get into, and obviously it's been a big year for the precious metals, so I'm sure we have a lot to talk about there. But I haven't done this in a while in this program, Matt, but because you take such a high level of view of the whole economic financial system, and it's been so long since you've been in the program, I am going to revert back to my old standard opening question. What's your current assessment of the global economy and financial markets?

**Matthew Piepenburg** (2:57)
Well, it's very negative as you can imagine, and it's nothing new. The facts haven't changed, they've gotten worse, and all my opinions have just become more entrenched. I think, again, it's a moment of debt karma that is not at all theoretical, it is literally happening in real time. It's been happening, frankly, for years. We're at a revolutionary moment where the hangover for drinking the fantasy that we could monetize debt by debasing currencies and really run deficits without tears, as David Stockman said. I think that jig is up, and many times we've spoken, but I think one of our first interviews who said we were quoting a film title called No Way Out, and I think we're at that no way out moment where it's becoming quite obvious that the bond market, and it sounds boring, but because we're in a debt cycle, in a credit cycle that's nearing an end, the bond market has more power than the bravado of a politician left or right. The bond market told Powell, for example, that he couldn't win the war on inflation by higher for longer, because the rate hikes were too painful for our debt levels.
And the bond market just told Trump on Liberation Day that he couldn't speak loudly and carry a big stick and dictate trade policy globally, because the bond market wouldn't allow him. So like Powell, Trump had to pivot regardless of their motives, good or bad, smart or genius, stupid or not. We're at a point where we don't have the power we might have had in 1944 and 1971 as a nation. But globally, again, Adam, it was just 1997, global debt was about 30 trillion. Today, it's 300 trillion. If you look at the chart, it's absolutely fantastic. It just goes straight up into the right after 1997 You cannot run those debts without the P and GDP, without the income commensurate with the spending. Because we have done that as a nation and because the world has done that in general, we are in a debt crisis. In the US., as the home of the world is our currency and the 10-year US. Treasury, is in a particular crisis and that crisis has ripple effects. I'll stop in two minutes, but I just want to be very clear. It sounds, as I've said many times, very reductionalist, very first derivative, just to say everything's about debt. I was talking to John Robino not too long ago, and he sent me something recently. A difference between a billion and a trillion is theoretical. It's just a B versus a T, maybe sounds just academic. But I think a billion seconds ago was like 1997 or something, or 1993, but a trillion seconds ago was 30,000 BC. So, I mean, this is extraordinary. These numbers are not just things we throw out there. It's hard to conceptualize the level of debt we're in. And the second and third derivative impacts that debt has on geopolitics, on stocks and bonds, on precious metals, on currencies, on social unrest, whatever thread we want to pull on today, Adam, they're all tied to the fact that we have lived beyond our means and fantasized and had too many martinis without that hangover, that constructive destruction that Schumpeter of the Austin School and Von Mises and David Hume and Hemingway warned of. And we're in it now. And again, we're seeing that we don't have the biceps that we thought we had geopolitically or financially just in our inflation fight and in our tariff policies. And also in the social unrest, which is everywhere, not just in the US. And as an American living now many years overseas, I can tell you, it's not just the US that's going from this massive shift towards this globalism, which was a pejorative thing, towards the more nationalism, protectionism, or you could call it mercantilism, that this is real. It's not theoretical. There's a shift. And I've said many times we're at that Gettysburg moment or that Waterloo moment or that Stalingrad moment where we are changing, but things don't like to change and accept that they're changing. They keep fighting on. They resist the change. It's a revolutionary moment in our global financial and geopolitical history right now. And the powers that be, whatever you think of their ideology, have failed. And the powers to come, whatever you think of their ideology, are going to come. You could be optimistic, but in every revolution, I'm sorry, you don't have revolutionary change overnight, and you never have it without a mess. And we're heading into the messy stages right now. It's obvious to me, whatever thread I pull on, again, socially, financially, politically, currency, even in our hopes and dreams, there's a definite turning point now that it's palpable. And again, you can say it's the Trump effect. That's too simple, or it's the tariffs. That's too simple. Why did Malay come in power recently in Argentina? Why did Maloney come in power in Italy? Why did Maloki just get elected in Poland or Orban in Hungary? Or Nigel Farage now is a new power that's replacing the Tories in labor, which was sacrosanct for years. Why is Marine Le Pen being law-fared out of the office? Why is the AFD party in Germany not being taken seriously? Why are the people, whatever you think of the politics, left or right, why is the voice of the people ignored and band-aid coalitions from the Trudeau, Fauci, Biden era to today being still resisting this change? And I'm not saying the change is all good. I'm not saying that the Trump effect or this new pendulum swing towards a more protectionist nation first mentality, towards a more anti-immigrant or anti-left policy. I'm not saying that's good or bad. I'm saying it's clearly happened. And there's a change in our cooperative spirit and our trading spirit. All of these things are happening so fast because all of these countries, in the US included, are in a desperate corner. And countries in desperate corners do desperate things, and they elect desperate ideas and desperate fantasies, left or right. I'm not making a partisan stance here. And I can understand all the criticisms of Trump and all the criticisms of Biden or Trudeau or the AFD in Germany versus Maertz. It's past that now. We're past that because it doesn't matter, as I've said many times, to the no way out thesis that you and I talked about years back.