The Next Big Money Printing Cycle Is Almost Here | Lawrence Lepard

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**Adam Taggart** (0:45)
To use the War Games analogy, DEFCON 1 through 5, DEFCON 5, everything's great, DEFCON 1, we've got our finger over the button. Where are you in terms of your level of alertness?

**Lawrence Lepard** (0:54)
I think we're at 2 I think we're at 2, and maybe 1, and I'm misreading it, but I think we're at 2

**Adam Taggart** (1:06)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcome you here for what I hope will be a fantastic discussion with the wonderful Lawrence Lepard, author of the great book, The Big Print. Larry, how are you doing?

**Lawrence Lepard** (1:21)
I'm doing great, Adam. Thank you. Very kind to use those adjectives.

**Adam Taggart** (1:25)
Oh, the book is a fantastic book, and we've talked about it here on this channel before, and you've got a lot of big fans, both of your work in general, but of that book specifically here watching this video right now. Why don't we just start there?

**Lawrence Lepard** (1:42)
Yeah, let's dive in.

**Adam Taggart** (1:43)
You've got the premise of The Big Print. In a second, if you can maybe just give the 30-second version of, in your words, what The Big Print is and why you've got such confidence that's coming.
But one of the things I want to get into with you, Larry, is are you shifting your timing at all of it? There are a couple of reasons why you might. One could be the new Fed Chair, Kevin Warsh, who on the surface at least, is presented as somebody who is less likely to engage in The Big Print than his immediate predecessors. First, let's start. What's the 30-second version of The Big Print?

**Lawrence Lepard** (2:20)
Great question. The quick overview on The Big Print, the thesis is that in a credit-driven system where all new money has to be borrowed into existence, so to speak, the money supply needs to continue to grow at a rate that supports the increased credit. Well, credit and money supply track one another, and the problem arises, and I put this in my, it used to be in my pin tweet, I put it up recently on my thread on X, is that the problem we've got is that debt is growing faster than the underlying GDP growth, and that ultimately will lead to a sovereign debt crisis or a currency crisis in the dollar.
And in order to support the credit structure that's been developed and is growing more rapidly than GDP, the only solution is to print money. And historically, what they've done is they've tried to avoid that because printing money is inflationary and no one likes inflation. But then, of course, they get to the point at which the lines cross, and they just can't do it anymore, and they're forced into a big print. And there have been two of them so far. There was one in 2008, and the banking system collapsed based on the housing credit bubble. And then, of course, there's the second one in COVID, which was larger, and that was based on the shutdown of the COVID crisis. And I've over the past, and it's in my thread, it's a ways back, but you can find charts. One great one done by Myrmecan, Lynn Alden did a similar one, that basically show that we're very extended in terms of the amount of money outstanding in debt compared to the amount of money supply. And so at some point, another quote unquote big print is coming. And it tracks really the mandate of the Fed, which is they have three mandates, as you know, inflation and employment, the two stated ones, but the third is financial stability.
And it's actually, Hank Paulson recently alluded to it in an interview. He said, you know, we've got, he alluded to this very same problem and said, we could be approaching a break the glass moment in the credit market, in the debt market. And I thought that was very interesting because he's been quite silent for a long time and here he comes forward and publicly signals that this issue might arise.