Matthew Piepenburg: “This Is The End Of Dollar Hegemony”

Added: 2026-05-15

[00:00:00]Gold will continue to rise because paper money, including the US dollar, will continue to historically debase itself to inflate its way out of an unsustainable, unprecedented debt crisis. It is not a bull market in gold.

[00:00:13]It is a bare market in paper money.

[00:00:16]Trump and a big squad of US CEOs are in China right now to meet with President Xi. The S&P 500 keeps making new highs, but is this euphoric rush going to fade?

[00:00:26]And will the dollar stay king of the hill once all of these deals get made?

[00:00:29]Hello and welcome to Milk Road Macro, the podcast that knows that the Bears will need to hibernate for a long time after this spring. I'm your host, John Gillan. Today is Wednesday, April 13th, and today we are joined by Matthew Pipenberg. Matthew is a finance veteran and macroeconomist who began his career as an attorney before launching his first hedge fund. He later spent time in the family office space overseeing more than $5 billion. Uh he is currently a partner at Von Greer's AG in Switzerland where he champions precious metals while authoring best-selling books on a variety of subjects. Matthew is going to give us a lot of great insight and guidance on how to protect capital in this volatile environment. So if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it.

[00:01:09]Today's episode is brought to you by Nexo. Earn interest, borrow, and trade crypto. And without further ado, welcome to Milk Road Macro. Matthew, how are you, sir?

[00:01:18]>> Very well. Thanks for having me. I'm always pleased to talk about the topics dour and there's plenty to talk about.

[00:01:23]So, thank you.

[00:01:24]>> There certainly is. Matthew, I think something that a lot of people have lost focus on but is still a major issue is this closure of the straight of Hormuz.

[00:01:31]It's still not fully reopened. I've heard you talking about how the longer this goes on, the bigger this becomes a risk to the dollar system itself. Why is this such a crisis moment for a dollar and for the dollar and and what is at stake here? There's so much at stake here and clearly the dollar because we're talking about the pro dollar. This is a hot war, hot conflict uh between the US and Iran or Israel and the US and Iran, but it's really an indirect war with China. Uh it's a deadly serious game, the petro dollar. Um it's deadly serious for Libya. It was deadly serious for Iraq. It was professionally serious for um Maduro and Venezuela. And it was certainly deadly serious for the Ayatollah who was recently killed in the bombing. So, I'm not a military expert.

[00:02:15]I'm not an armchair quarterback on military strategies or motives and all the conspiracy theories, but I can speak to the economics of this. The petro dollar is a pillar to US dollar hedgeimony and as a result, it's a pillar to US hedgeimonyy. So, the petro dollar is of critical importance to the US and it has been for decades and certainly since the petro dollar was created in the early 70s. So to keep that in 30,000 foot perspective, listeners need to understand that the petro dollar means that the world uh has to buy energy or oil in US dollars, whether that's in Europe or Asia or in the US too. So it's an incredibly important sponge for US dollar demand and that makes the dollar stronger.

[00:03:00]Obviously it has for decades. Uh it was created in the early 70s with under Nixon and Kissinger and his team. It was effectively, if you read the history of OPEC, it was effectively made at knife point for Saudi Arabia and the OPEC members uh in exchange for agreeing to sell uh oil and US dollars. Uh OPEC and its members in Saudi Arabia was promised military support visav the US against the Soviet Union, which was a bigger threat at the time in the 1970s than it is in 2026. So there was this very important part of American hedgeimonyy was the dollar hedgeimonyy which was tied really to oil was no longer goldbacked now it was oilbacked and in addition um to having oil bought in US dollars the producers of that oil in the GCC you know these OPEC nations also agreed to use some of their revenue to buy US treasuries which was another massive win-win for the US in that quote unquote negotiation in the 70s so that was absolutely essential for decades and again any country that tried to break out of that uh relationship that dollar centered oil relationship usually found the wrath of the US military and I don't think it's a big coincidence that we've gone from Iraq uh and Libya even indirectly Venezuela and now to Iran with guns blazing in an oil richch country that doesn't create a huge leap of the imagination to see that so it is extremely important and because 45% of Chinese oil comes from Iran and 95% of Iran's oil goes to China. When you that's a huge threat to the petrol because the Chinese don't want to pay for oil in dollars anymore. Kyle Bass saw this many years ago. Chinese have been looking for a non-dollar energy solution. So this is you can say a proxy war with China economically. It's a hot war with Iran militarily. But you cannot underestimate enough or overstate enough how important the petro dollar is to the dollar and how important the dollar is to US hedgeimonyy. And that hedgeimony has been whittleled away slowly but surely since 2022 when we weaponized the world reserve currency uh against Russia during the Putin conflict which is continuing to drag out. uh when we weaponized that world reserve currency, that was really when ddollarization became a meme and a headline and a trend and now is becoming a reality. It's not the end of the US dollar. It's not the end of the US world reserve currency, but the data is fairly evident that there's been a slow move away from the US dollar denominated trade and there's been a slow move away from the petro dollar. By 2023, 20% of global oil was sold outside of the US dollar. that would have been unheard of five or 10 years ago. So clearly what's happening in Iran, this is a long answer to a short question.

[00:05:54]Has a lot to do with the US dollar, with the US Treasury, and with oil. Um, it has a lot at stake. War is always a tragedy, no matter how you look at it.

[00:06:04]It's not an extension of politics. It's an extension of economics. And that's kind of derivative of that. And I've been speaking about this since it started. We all thought nobody knew how long it was going to end despite the headlines. the S&P, the pundits in DC were telegraphing a two-week war. That was pretty naive even at the time. But I said even if the war ended in the first two weeks uh and hormos were to open, it would just delay inflation. It would still give momentum to a petrol yuan, not a replacement of the petro dollar.

[00:06:34]But the dollar would weaken and if the war continued, things would start to break. Uh you'd see the bond markets break in the UK, in the European Union.

[00:06:44]uh a lot of those countries would have to sell US treasuries for liquidity that would create a bond stress in the US.

[00:06:50]And if the war dragged out, which it seems to be doing, I see massive spikes in the US Treasury, which is very dangerous. When yields spike, that means the cost of debt spikes at 40 trillion in US debt. We simply can't afford rising yields. We would have to take emergency measures. We'd have to do more money money printing or mouse clicking of dollars for the balance sheet at the Fed. we'd expand the money supply. We'd probably have to go into yield curve control or even a soft default on the US Treasury by capping yields and certainly there'd be an extreme expansion of the balance sheet, the Fed, etc. So, there would be a dovish reaction if this war drags out, which it seems to be doing.

[00:07:29]So it's a massive impact and I think there are other second and third order effects uh if this war drags out because let's be honest I mean even simple headlines like Spirit Airlines being carried off on its shield. It's not a massive leading indicator but you know in Asia the Far East Turkey there's been 2 million seats canled by global airlines. That's still a very small percentage but it's kind of a indication because 10% of global GDP is travel.

[00:07:55]That's kind of one of the few small obvious canaries we see in the coal mine. But I think the bigger cracks are in supply chains. Again, you don't need a gold expert or precious metal expert to explain that when you cut off 20% of the global oil flow that has an impact on energy costs and transportation costs and supply chains. And we've all seen this the stories about the fertilizer shortages, the crop risks, and those things if this war drags out become very slowly dangerous and then massively dangerous all at once. Kind of like Hemiway's description of poverty. It starts slowly and then happens all at once. You know, we're seeing again massive inflation, fertilizer, and food shortages in developing economies and soon in developed economies. So, you know, this idea that we're playing the US is playing 4D chess to attack the Chinese supply chains or to create demand for US oil, those are, you know, all things we can discuss and but now gas is higher than it was in 2022. And all this filters into the supply chains and I think disrupting a supply chain right now doesn't seem like a good idea or a good inflation plan in the home of the world reserve currency in the in the USA. Um the USA is definitely trying to save the petro dollar and China is trying to move away from the petro dollar. Um and China has a parallel swift system, a parallel payment system.

[00:09:16]It's growing. Those powers are growing exponentially. Iran again sells so much oil in yuan to to China. And I think Iran doesn't need to win this war. Much like in Afghanistan with the Taliban or in North Vietnam with the Vietnamese, they didn't have to win Vietnam or Afghanistan and defeat the US on the battlefield. They just had to endure long enough to exhaust US resources. And I think Iran sees the logistics in this.

[00:09:40]I I don't know their entire strategy, but at the most dark level, it would be to to crash the global economy and see the US markets go no bid and see the Fed forced to print more money and to base its currency even more. So again, there's a lot at stake here. Uh from the petro dollar, the rise of China, supply chain blockages, fertilizer, food costs, the cost of everything. uh because the world may be dollar ccentric or some would argue gold centric but it's really energy ccentric and when you put a when you put a clip on the energy and you put a clip on transportation and supply you put a clip on everything. It's just who can endure the longest and and that's what we're going to be looking at depending on how this thing unfolds.

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[00:10:50]>> Matthew, that's a very comprehensive answer. I want to take some of these things one at a time and kind of unpack this some more. Um, you spoke a little bit about like there have been historical efforts to conduct business trade in oil in non-dollar transactions.

[00:11:04]A lot of these have been stopped or or stemmed. Do you see any evidence of this really mounting this time and some real momentum behind this and and what does that look like in terms of that actually beginning to become a trend in the markets?

[00:11:17]>> Yeah, the evidence is very clear. Again, I think and I'm not alone in this. In 2022, when we weaponized the US dollar and we froze the FX reserves of a major nuclear power, uh, Russia, which is the R in bricks, uh, and it only created eyebrows to raise internationally, whether you were a friend of America or not.

[00:11:38]China was certainly the the sea in bricks was was watching this very carefully, too. And even the the Middle Eastern oil producers were watching this. So, you know, if if I've said if you have a bank account at City Bank or Wells Fargo and for some reason you wrote an article and they froze your account, you probably wouldn't recommend that bank. When we froze the FX reserves of Russia, again, this is regardless of what you think of the war, good or bad, Zalinsky, Putin, good or bad, that debate is a rabbit hole. But regardless of that, weaponizing the neutral reserve currency uh created distrust in that currency. So, it wasn't just a meme or a buzzword. The ddollarization evidence was rapid and empirical from 2022 on.

[00:12:19]And part of that evidence was the number of countries trading or net settling outside of the US dollar and net settling in gold trying to trade. There were over 41 countries trying to trade outside of the dollar within months of 2022 when weaponized it. Um we saw a great deal of movement out of the Middle East in conversations even Pakistan, France, other countries talking about selling uh or buying oil outside of the dollar because that dollar and US treasury became distrusted once it was weaponized. And again remember when we created the petro dollar the US was a hegeimon. Um there was power in its military, respect for its military. The US treasury was actually yielding a positive yield. the dollar hadn't been debased and China was effectively a backwoods country at that time in the early 70s. It was nothing as developed as it is today. So there was a a bully power that the US had that it just doesn't have today. And we see that in the ddollarization. We see that in the in the sales outside of the petro dollar. We see that in the United Arab Emirates leaving OPEC. That's a massive event, a massive headline. It should be front and center because that's the first crack, a real significant crack in the petro dollar system. I think many countries at in the OPEC or the GCC areas and the oil producers in the Middle East aren't really the truest friend of the United States. They don't fear it like they did in the 70s. We saw that famous fist pump with the crown prince in Saudi Arabia and Joe Biden kind of waddling into the into the into the lobby there and it's just a fist pump and we saw that same crown prince give a very warm handshake to Xi because I think many of these oil producers in the Middle East not overnight and for not a number of reasons aren't going to just leave the petro dollar but they don't trust the US Treasury and the US dollar nearly as much and they are making moves to look east rather than west to sell their oil. There's a big market for that in China. And rather than just say that, you can look at the data. You can look at the numbers and really look at what the the the politicians are doing. That's a very slow drip indicator to where the the pendulum is swinging from west to east.

[00:14:29]Obviously, the Trump administration is aware of that. Whatever their skill or lack of skill in economics may be, they know how important this is. So, you know, when you see these kind of movements geopolitically and these kind of movements financially, um, it's not a gold bug case because it's just the clear facts are that the dollar isn't trusted as much. It isn't feared as much and that is why we're trying so hard to keep Iran in compliance, to keep Venezuela in compliance, and we tried very hard to keep Libya and Iraq in compliance. It was all oil driven. And I think I think these countries have been rethinking this for a while. to see the UAE be the first to basically pull the trigger and say that they're kind of tired of having OPEC control them. But they did tell the Treasury Department of the US that the UAE is now considering selling oil outside the dollar. That's a very polite way of saying we're thinking about selling oil to China because while the US has spent 8 trillion in all kinds of foreign wars, China has been patiently building infrastructure from Africa to South and Central America, winning hearts and minds while we have been losing hearts and minds. And you know, Kissinger famously said, "To be a to be a an enemy of America is dangerous. To be a friend is fatal." I think the the oil countries in the Middle East are starting to be tired after five decades of being the the dog wagged by the tail of the US dollar and US policy. And I think that's what the UA just UAE just did is very clear. And I think the oil countries are also very clear. They look at the math. They look at the volatility of the oil price once the dollar decoupled from from gold.

[00:16:06]When it was just a US dollarbacked oil trade, the volatility was extraordinary.

[00:16:10]And if you look at the chart, when it was net settled in gold or in gold backed dollars, the oil price was very stable. Um, and again, fast forward 50 years since the OPEC deal was created with petro dollar. That dollar just isn't that powerful. That US Treasury doesn't give a lot of yield. it's being issued by a country that's over its over its skis in debt. The dollar just doesn't command the same respect. And that's not anti-American. It's just math. Um, and I think a lot of people aren't getting the headlines on that because no one's really talking about it.

[00:16:40]>> So, how does all this factor into the discussions that are going on in China right now? Obviously, Trump is over there with a lot of CEOs. There's expectations by many people that a lot of big deals are going to be announced.

[00:16:51]What are you watching for as an outcome from this meeting and and how does this factor into those discussions?

[00:16:56]>> Yeah, it's it's it's no coincidence that Trump you I don't want to say tail between his legs, but certainly with a serious intent is making his second visit to China. It's his first, I think, in this term, but it's his second visit and it's the first of four expected for 2026.

[00:17:10]I think the main goal for Trump is not to worsen things. I think the United States, and again, I'm not pro-China.

[00:17:17]I'm not pro anything but the US, but you have to be cynical and you have to be critical if you want to really be clear about what the US is facing. I don't think the US is bargaining from a position of strength. It's really bargain from position of weakness. And there's a lot of things it's bargaining from trade to AI to to oil, I'm sure, in the straight of horror movies. But the US is bogged down in a war again. It's spent trillions while China has been building infrastructure. We've been we've been creating gunm smoke all over the place. Um, so I think China's going to be very happy to buy US corn and beef and soybeans and Boeing jets, but China's going to want some concessions and and and I we can talk about what I think they're really looking at is is Taiwan and Hormuz as as major issues.

[00:18:00]They want um to deal with those topics.

[00:18:04]They're not necessarily in a position of weakness in terms of trade. You know, only 14% of Chinese exports go to the US. They certainly would like a better trade deal with the US, but they're not worried because global trade in China is significantly stronger in its surpluses and it its infrastructure than US trade outside of the US. So, China's not necessarily coming into this nervous, but I think John, I mean, the key points obviously the trade of hormones and oil supply, you know, China again is is is Iran's biggest buyer. So, they have major leverage in this conversation and and Taiwan of course is a major issue too. China wants the US to oppose Taiwan's independence. Uh not just not support it, but to openly oppose it. Uh it's a long history since the 70s between the US, Taiwan, and China. Uh the US has been selling arms to Taiwan.

[00:18:54]There was a 11 or 14 billion sale at the end of last year. That was a big problem for China. Uh this relationship is very ambiguous. Again, they've had three agreements, 72, 79, and 82, um, where the US broke relations with Taiwan, but it was still selling arms to Taiwan. Uh, so China will put a lot of pressure on that because China put pressure on Reagan to reduce those arm sales. But the way Alexander Heg and Reagan worked it out is well, that'll we'll do that as long as China takes a peaceful approach in the straight of horror movies. So, it's very convoluted, but there's there's excuses for both parties to basically break their agreements or distrust each other. Um, obviously a trade truce is going to be a big part of the conversation. I don't know how it's going to end. I'm not going to be there.

[00:19:37]Um, you know, last October there was a trade agreement or truce reached in South Korea that expires this year.

[00:19:43]China would like that extended. Uh, Trump is talking about a board of trade uh with China where the where the US wants to distinguish less um and more important or more sensitive goods under different restrictions. And again, the dialogue is always a good start, but I think without high level Chinese involvement, it'll just be dialogue because I think again, China can walk away from these negotiations with much more p much more peace in their mind than the US. Um, I think another kind of less sexy topic will be AI safety.

[00:20:13]There's a lot of talk about that being a key issue. Um, whether humans or AI robots will have control over nuclear launch codes. That's a baseline thing that even Biden got them to agree on.

[00:20:24]Again, uh I think AI for both China and the US is important. They're worried about cyber attacks or cyber fraud.

[00:20:30]They're worried about the AI potential for non-state actors to develop pathogens. So, there is some common grounds to discuss certain topics where Trump can come back home with a victory in his hand. He needs the optics of a victory. But really, the key issue is the straight of horn moves and it's the petro dollar and it's trade. And uh you know I don't think China after decades of looking for a non-dollar energy solution is going to budge on that. I that would be a shocker and I don't really think they're going to make massive trade concessions. But again I don't know. I've talked to folks I know in China. They're not impressed when Trump brings a bunch of billionaires especially to control economy like China. That's not to them intimidating.

[00:21:13]Um uh but how this plays out uh is for all of us to see. I really don't know.

[00:21:20]But if I had to guess my personal opinion and the economic strength and again China is not perfect. It has a lot of demographic, environmental and debt problems, but its trade issues and its oil issues and its options I think are stronger than the US wants to publicly admit. And that's why Trump is there because I'm not saying he's going there with his tail between his legs, but he's stuck in a in a forever war that doesn't look easily to get out of without embarrassment. And he's watching this petro dollar weaken. He's watching trust in the dollar weaken for reasons that go way back primarily to the US Fed and the US White House since 1971. We've just been spending more than we incur in income or tax receipts and we've debased our currency by 99% versus gold and 94% versus oil. We have done this to our dollar. We have done this to oursel.

[00:22:09]China's been patiently watching us shoot us in the foot. Shoot ourselves in the foot in the Chinese art of war. Sun Sue, if your adversary is shooting itself, let him keep going. Don't get in his way. So again, it's not meant to be anti-American, but we're not coming there with a lot of strength. We're seeing the petro dollar weaken. We're seeing the UAE leave OPEC looking towards the yuan. We've seen other countries do it. Uh it's a slow drip away from the US dollar. Again, not the yuan replacing the dollar as the world reserve currency. not the end of the US dollar or not even the end of America but a far weaker less hegemonic America that's undeniable at this point >> I think some people would push back on this to say that the closure of Hormuz obviously impacts China a lot more and the United States has now got a blockade there and we've made deals with Indonesia to get some you know presence over the straight of Mala and as a result the US oil exports from North America and from the United States have reached all-time highs and there's a lot of tankers now are rewriting to the United States and so the argument could that now we have more of an energy leverage on China and the world is more dependent on North American oil and American energy. Do you see any credence to that or or just how do you factor that into your thinking here?

[00:23:18]>> Well, look, it's certainly a pro-American stance. It's the it's the it's the it's the official stance. It's the positive stance. It's the optimistic stance and it's the patriotic stance. I don't mock it. Uh again, I'm not trying to just be anti-American or anti-d dollar because it it's it's sensational.

[00:23:35]I'm an American. I may live overseas half of my life, but I'm at the end of the day fully American. Um, and there's some merit to that and we should break it down. Um, you know, Kissinger in his biography very openly said when he was when he was looking at the oil embargo of the 70s or the or the Iranian revolution and what America could produce oil and these oil shocks hurt everyone including the US, but it hurt the US less than all our allies or adversaries because we still had a decent amount of oil and we could stomach this uh better than other countries. and Kissinger openly admitted it didn't matter to the US if our allies were suffering more as long as we were more powerful on a relative basis and that's just real politique again neither permanent friends nor permanent enemies just permanent interests and you could argue that the US is in a great position and the ships will be lining up outside of the Gulf of Texas or taking US oil um and that's a good thing for America I think that's underestimating uh what the um oil producing states in the Middle police were going to how they're going to react. It's underestimating how China can react. And that's an endless debate if you're very pro-American.

[00:24:43]But again, look at what they're doing, not what they're saying. And there's a difference between different oil types and different refined oil types. And there is a strategic reserve of petroleum in America that doesn't hurt us right now. We're in a we're in a deficit, not a shortage. So we can still take 11 billion or 11 million draw downs barrels in oil because we have the strategic reserve still and we can always produce more oil. Uh so there's no real sense of panic yet. But I think if this war drags out, I don't think China's going to cry uncle and just start buying US dollar oil again. I don't think the GCC states are going to be able to deny the pressure um to sell their own oil. They're not going to like having their flows of oil stopped by the US or Iran. I'm speculating, but I don't think the US has that big stick that it used to have in the early 70s. I don't think uh the Middle Eastern, even the allies of the US, which are getting weaker and weaker in terms of allegiance. Again, look at what the UAE just did. Uh even Saudi Arabia, I think, will have a say. And no, we're not just going to rely on US oil. And I think um the Chinese are not going to bend on this. Again, I don't know. There could be massive concessions, but China's looking, I think, many chess moves ahead. I've said cryptically that the US with its foreign policy and economic policy has been playing checkers, while China and Russia are playing chess.

[00:26:06]Doesn't mean I'm pro-Chinese or pro-Russian. Again, they're countries who have a long history of suffering, have a long history of watching the US bully the rest of the world, export its inflation, force a petro dollar on them.

[00:26:18]I think now they see how weak the US has become in its extended wars in its foreign policy in its debt levels.

[00:26:26]That's a key issue in its currency. The debasement trade has called that because we have debased the dollar to monetize our debt. And all of this combines to make America again a lot less influential than it was when I was growing up in the 70s. Again, that's not trying to be anti-American, but we have spent ourselves into a corner. We've lost credibility. Our greenback has lost credibility. Our military has lost credibility. This has nothing to do with the men and women who serve. Most of the people I know have served in the military. There I've said many times lions being led by donkeys in foreign policy. But I think our our policies have backfired for the most part um for many many years. And that includes our monetary and fiscal policies and what it's done to our dollar. Without that strong dollar, we're nothing. But as Kissinger said, you can't be a world reserved currency without a strongest military. So it's all in it's all blended together. But our military again, its leadership, not its soldiers, isn't led very intelligently. Its foreign policy isn't embraced by the world or by many Americans and frankly many people serving in the military that I've talked to. So again, these are just extreme views. There are plenty of patriots who see this as a good thing for America. Mathematically and economically, I don't uh I just don't.

[00:27:46]It doesn't again mean the end of the dollar or the end of the petro dollar.

[00:27:49]It's still a six shooter. As I've said many times, it's like a six shooter, but we have less bullets in that six shooter in 2026 than we had in 1974.

[00:27:58]>> I appreciate you giving some nuance to those things and sort of that circumspect view. I I want to ask you some questions about the Fed, the Treasury, and then ultimately bring this back to gold here. But um former US Treasury Secretary Hank Pollson broke a long stretch of keeping silent about commenting on markets to give an interview recently, and one of the things he said was he's he's, you know, maybe not worried about, but foresees a situation where it's possible that the US government could go to sell some debt and have the Fed be the only buyer.

[00:28:25]Basically saying that the US government is going to hit a situation where it won't be able to fund itself without buying its own debt. What do you make of his decision to make these comments and of the comments themselves? And do you think that this is becoming a more materially like like possible scenario playing out in in the markets here?

[00:28:41]>> Well, it's a very important statement coming from Hank Pollson obviously. Um, it's also been something that Jerome Powell has been admitting in the last few weeks. And Jerome Powell, of course, you could always argue, is no friend of Donald Trump's and is just saying that for optics that the only buyers of our own debt are ourselves and that poses a problem that that's just political optics. I have many things about Hank Pollson that trouble me and what happened in the troubled asset relief program in 2008. I have many frustrations with the insider bailout in 2008 and what we did uh in at that time in history and Hank Pollson and Gitener and others were part of that. So, I'm not a big fan, but I think he's speaking the truth. It's not something that's happening though in 2026 where there's less buyers of US treasuries and that the only buyer is the Fed. This has been happening for well over a decade. uh by 2014 the central banks of the world had already begun net dumping US treasuries and net stacking physical gold. That began over a decade ago. And that was primarily because QE which was supposed to be QE1 in 2009 and 10 became QE2, QE3, QE3 and QE4. And the world already in 2014 was saying this idea of printing money to pay down your to buy your own debt and and and calling that a solution to a debt crisis was going to lead to a debasement of the dollar and and and in and a debasement of the US IOU that 10 years. So that started very slowly in 2014 that net stacking of gold and the net dumping by central banks of US treasuries. In 2022, of course, when we weaponized the US dollar and froze the FX reserves of a major nuclear power in bed with the bricks in bed with China looking to trade outside the dollar, the the level of dumping of US treasuries and the level of stacking of physical gold went from incremental to exponential. Uh central bank purchasing of gold since we weaponized the dollar against Putin has increased by 5x since 2022. That's not a coincidence. Again, it's not that gold replaces the dollar or that the the ruble or the yuan replace the dollar. It means trust in the US dollar in the US Treasury was dramatically dissipating starting in 2022, arguably in 2014, and became exponential by 2026. So, for Hank Pollson to say that is true, but it's been true for a long time. It's just more true today, more obvious, more undeniable. Even Jerome Powell had to say it. It's amazing what Fed chairman or former Treasury secretaries will admit once they leave office because when you're in office, of course, you have to stay calm and carry on and effectively lie to stay in position to be the maven to the system. That's not cynical. That's politics. Alan Greenspan had a whole view of gold that changed dramatically as soon as he was in the Fed seat. The same thing is true of Pollson and Jerome Powell. I don't really respect that. I think there should be more transparency, but the truth is the Fed has been monetizing its own Uncle Sam's debt for many, many years. And that has distorted free market price discovery. That has distorted the stock markets. It has certainly distorted the bond markets.

[00:31:56]And it's debased the dollar. That's not a statement of a gold bug. That's history and math. It's undeniable how much we've debased the dollar because the Fed mouse clicks mouse clicks money to expand uh the balance sheet to buy US treasuries. This is why QE went to QE234 operation twist and unlimited QE during COVID. That's undeniable. And the correlation to the Fed printing money or mouse clicking money and the S&P ripping to all-time highs is one to one. The Fed has basically made the S&P, the Dow, and the NASDAQ a Fed market. It has nothing to do with supply and demand. And the market's either dovish or hawkish or bullish or bearish because if the Fed is dovish, the market's bullish. If the Fed is hawkish, the market's bearish. It's a switch, not a it's a switch. It's a lever. It's not a dial. That's how much the Fed influences the stock market. And printing money expands credit. And the expansion of credit uh also leads to the expansion of the dollar. And and and the M2 money supply is has gone up by 5x in the last 20 years. So, you can't have M2 money supply expand that much. You can't have the Fed balance sheet expand that much. You can't have credit expansion that much without debasing the dollar.

[00:33:09]And that weak dollar makes America weaker. Again, goes back to our original conversation. And what Paulson and now Jerome are admitting is what we've been arguing at Vongards for for years. We've just been watching this play out. It's an historical cycle. It's very familiar to history. And as Ray Dalio says, if you understand history and economics, you'll understand gold. We are at that fourth turning right now. We are at the end of a credit cycle. It's not the end of America. It's not the end of the dollar, but it's the end of its hedgeimony. It's the end of its temporary prosperity followed by the permanent ruin of currency debasement and war, which was what Hemiway warned of 70 80 years ago. So, this is again nothing new. Not not surprised that Hank Pollson said it. It's just a little too late because this has been true for years. The way we build wealth is changing. stocks, savings accounts, real estate, that playbook is getting rewritten in real time. Nexo is the platform built for what's next. It's an all-in-one digital wealth platform where you can earn interest on your crypto, borrow against it without selling, and trade a wide range of assets all in one place with 24/7 support and institutional grade security. Oh, and by the way, Nexo is back in the US with new US clients getting 30 days of Wealth Club Premier access. That means elevated interest rates, lower borrowing costs, and crypto cash back on trades. Benefits usually reserved for loyalty program members. Get started at milkroad.com/nexo.

[00:34:31]This week, we got a CPI print and a PPI print that shows that inflation is hot and running even hotter than analyst expectations. Um, we're also likely going to see a new chairman of the Federal Reserve confirmed, Kevin Walsh.

[00:34:43]I believe he's right on the goal line right now. Um, obvious he's had some very public discussions about different ideas around balance sheet management and so forth, but he's walking into a situation as you've described where inflation is spiking um and there's a lot of pressures on the Fed around monetary policy. What what path do you expect him to take as chairman and where does the Fed go from here?

[00:35:03]>> You know, again, I'm not alone in this, but it's pretty cynical. It really doesn't matter who's at the Fed, and I've said very kind of cryptically, it could be Santa Claus or Papa Smurf. it doesn't have many tools left at this point. Uh drone pal's lucky to have gotten out when he did in a lot of ways so he won't be blamed when this thing breaks. Um you know Kevin has, you know, Wars has set over to take over as chairman. Remember he is the chairman but it still you know other members of the FOMC who he just has one vote among others. He certainly influences policy but they don't have a lot of choices. I mean, Wars has talked about regime change, uh, cutting rates to two and 3/4 and reducing the Fed balance sheet, but that's no secret plan. The bottom line is at these debt levels at 40 trillion and climbing of US public or government debt, we can't afford rising rates to fight inflation. When Vulkar was fighting inflation, public debt was less than a trillion. Uh, so you could raise rates. We literally can't afford rates over 4.8% 8% on the 10-year or the markets tank and the bond markets tank and bank failures follow and stock prices tank and bonds tank. We don't have the same tools as we did under Vulker. So, there'll never be a Vulkar 2.0 for higher for longer. Powell failed at that miserably 2022 and 2023.

[00:36:22]Wars is inheriting that. He has no choice. You can do something momentarily hawkish, but the end result is we have to monetize those IUs that treasury market. We live and breathe on the issuance of debt in the US. We live and breathe by US Treasury purchases. As to your earlier point, when there's less foreign buyers of those US treasuries, the Fed becomes the buyer of last resort and we'll have financial repression.

[00:36:47]We'll be printing money. We'll run negative real rates. That means we'll have higher inflation than interest rates. That's a negative real rate.

[00:36:55]That's a way of inflating our way out of debt. That's exactly what Worsh is going to do. It's what any central banker would have to do in these circumstances.

[00:37:02]It's been done throughout history to run. Again, the fancy lads on Wall Street call that negative real rates or financial repression. All it means is inflation is higher than the than the interest rates. What they do, which I think is very brilliant, very disingenuous and devious, is they just they run negative real rates. They inflate away the debt. That affects every man on the street, every woman on the street, everyone watching this that inflate inflating away Uncle Sam's debt is really your problem because that just means your currency buys a lot less every year. And that compounding effect is an invisible theft. But they run much higher inflation than they report. So they'll report CPI at X, which everyone on Wall Street knows that the CPI scale is an open fiction. Everyone knows that.

[00:37:48]Larry Summers knows that. He's admitted as much. You said a couple years ago it was probably 18% not 4%. If we use the same scale that Vulkar used, we have doubledigit inflation right now. So the government is covertly running negative real weight negative real rates. It's covertly seeking inflation but it has the audacity to openly misreport that inflation or lie about that inflation.

[00:38:12]And Wars will be no different with the Bureau of Labor Statistics, Labor Statistics giving him fictional CPI numbers so he can say we're beating inflation, running positive rates. When in fact, in reality, we're intentionally running negative real rates. We're intentionally letting inflation run.

[00:38:28]We're just misreporting it. That's my strong view. There'll be winners and losers in that. Of course, the winners will be the government. Uh there'll certainly be those who hold hard assets like precious metals uh and certain other assets, but the losers will be savers. The people that believe in saving their dollars, saving their paper money in a checking account or a savings account and doing what their grandparents told them, save for a rainy day. I absolutely agree with that. The only problem is your government is stealing that money from you invisibly because the compounding effect of inflation means you're losing 10, 15, 12% of the purchasing power of that dollar in that savings account or in that 401k. every year. Uh, that adds up real fast. That's that's to me criminal negligence and it's also open theft.

[00:39:12]It's just invisible.

[00:39:14]>> Matthew, you've been very focused on gold as a an asset to have in a portfolio to help protect investors and their capital from a lot of these changes you've described here. Um, at the time of recording, gold is trading at around $4,700 an ounce, almost on the nose. Um, and a lot of people are are speculating that the the mania for gold for this year is behind us. I'm curious your outlook for gold here. Do you think we're going to see a new all-time high in 2026? Are you kind of agnostic about that and just, you know, think it's a good long-term hedge here for a portfolio? What's your views on gold here?

[00:39:44]>> Well, I don't I definitely don't think it's a mania and I understand that perception. When I was, you know, at the end of 25, you're looking at 5,500 in gold. It doubled so quickly. Silver was ripping. It's normal to think of this is just another bubble. Uh, and I understand that, but uh and and clearly I I have a bias. I have a conviction.

[00:40:01]You could say, "I'm selling my book."

[00:40:03]All of us at Von Greerts come from banking or hedge fund backgrounds. We could easily be working for a big bank, selling bonds, flopping bonds to the world. We just don't believe in that anymore. We have a high conviction on gold that's beyond selling our book. Uh I can understand this thought that it's a mania. I'll start by saying you ain't seen nothing yet. And again, that sounds, you know, sensational. This is the first innings, the first chapters of gold. And and I and I I do understand the skepticism on that. We don't look at the daily gold price at all at Von Craz.

[00:40:34]Uh you know, we know we know longer term that gold will continue to rise because paper money, including the US dollar, will continue to historically debase itself to inflate its way out of an unsustainable, unprecedented debt crisis. It is not a bull market in gold.

[00:40:50]It is a bare market in paper money. Um you know, the fundamentals simply haven't changed. And and again, it's not just us gold guys in Zurich or in Switzerland. You know, the central banks of the world, of which I'm no fan, including the BIS, which made gold a tier one asset a couple years ago, are finally confessing to gold. They're not saying it always out loud, but the central banks have just done 15 straight months of gold buying. Uh the gold was up based on central bank buying. And gold production is, you know, 3,800 tons last year. Nearly half of that went to the central banks. Again, I'm not a fan of the central banks, but you got to watch what they're doing, not what they're saying. There's a reason they're stacking um that gold. There's a reason the FX reserves and the central bank reserves are far more in gold. As dollar and US treasuries go far down, gold is rising. There is a gradual but real preference for a store of value like gold over a melting ice cube like a US dollar. So again, this may sound like a defense or an apology, but this is nothing new in 2025 246.

[00:41:54]Uh while Morgan Stanley, Goldman Sachs, and JP Morgan, the banks I bank through, prime broker through or worked at were poo pooing gold, they were doing that because they had to because there's no money in gold for them. And gold is the is the the anti-d dollar. So it was if you worked at a bank, you didn't talk about gold. as of last year. Now, all the big banks are talking about gold's a 20% allocation. UBS, Morgan Stanley, Goldman Sachs, JP Morgan, their projections for gold this year actually higher than mine. This is a watershed moment when you see JP Morgan uh talking about $8,300 gold. We don't care what the dollar price is because you're measuring gold in in an asset that's losing value as as we speak. But again, it's not just something that's happened in the last couple years since 2000. So at the beginning of this century, for the first part of the 21st century since 2000, gold is up over 1580%.

[00:42:49]And it's got an annual growth rate of 11%. When you compare that against paper money, you know, for that same period, paper currencies, while gold was up, 1580%, paper currencies around the world are down 94%. And they have an annual growth rate which is negative 10%. So what I'm saying here isn't a gold pug apology. It isn't even a case for gold this month or this week or this quarter.

[00:43:12]What I'm saying is it's it's not that gold and silver are becoming so mania.

[00:43:18]It's that the paper currencies that you grew up trusting understandably because you had a smart central bank or a smart person in the Senate or the White House that you naturally trusted. No, they have mismanaged this money. They have mismanaged our our dollar so profoundly.

[00:43:34]It was such criminal negligence that it's not that gold is rising. It's that paper currencies are dying. And again, that's so hard to believe for the average citizen who who's brought up to believe in the full faith and credit of the US Treasury. I get that. Uh that's why we look at gold many, many years ahead. We've been right. Egon bought gold at 300. People laughed at him at weddings. He's a former banker. He's a former market guy when I was a hedge fund trader. When I was trading stocks and bonds, I'm not against speculation.

[00:44:02]I'm not against risk assets. No one talked about gold. No one talked about the paper currencies. No one really talked about the Fed. We were just ingrained to think one way. When you start to look under the hood of the monetary system, when you look at the under the hood of what really is the Fed and how they produce uh policy and how they keep kicking the debt problem by debasing the currency, the case for gold is academic. It's not sensational and it's heartbreaking, but it's nothing new. This is throughout history. Uh you know, Sir Thomas Gresian knew this in the 1500s. David Hume knew this in the 1700s. Van Mises, the Austrian school, knew this in the 19th century, excuse me, the 20th century. When you have debt of this level, you always debase your currency to pay for that debt. And as Gresham said, you'll slowly start saving in real money, which is gold, and spending in paper money or bad money, and then you'll start to replace that paper money altogether. That's exactly what the central banks are doing. That's exactly what our clients are doing. It's exactly what I'm doing. um and and our clients from you know over 90 countries and you know they're pretty sophisticated. The education gap in understanding gold is really understanding monetary policy and sound money. I think that education gap is starting to starting to compress which is fantastic. You know Bitcoin uses the very same narrative as gold. I think that's helped understand monetary policy. Whatever you think of Bitcoin or versus gold that's a whole other subject matter whole other topic whole other hour. But I think the world is catching on that debt has destroyed options. It's destroyed options for central banks.

[00:45:36]They don't have many left other than to continue to debase and then lie about that debasement. Hide that debasement in disingenuous inflation scales and then distract the average citizen whether it's on UFOs, whether it's on wars, whether that's on a new virus. Again, I'm simplifying, but they don't want the world to understand how banking works and how currencies work. As Henry Ford said, I'm not a big fan of him for other reasons, but if if more people understood fractional reserve banking or how banking work, there'd be pitchforks in the street. I'm not asking for pitchforks. I think if people start looking at what is happening to their dollar based on 40 trillion in debt, please realize that at the time I was born, which wasn't that long ago, our debt was less than a trillion dollars.

[00:46:23]And today our d debt is 40 trillion. The interest we pay on annual debt on our annual IUS, just the interest is higher than the debt it was before Reagan was president. Our total debt, that type of exponential, unfathomable growth in debt has nowhere to go but the basement of the currency because we don't have the tax receipts and the GDP to pay for that debt. So, we're going to do what all governments have done since ancient Rome to today, debase our dollar to pay for our debt. And the people that suffer the most are the average persons on the street who believe in saving or measuring their wealth in paper currencies. Which is why the Swiss and those who understand history and those who understand precious metals have always been buying gold. 90% of the time it's like a commodity. But at turning points like this, gold becomes real money, smart money. And the smart money, I can tell you, is coming to gold.

[00:47:15]Certainly in our offices in Zurich, but look what the central banks and even the commercial banks are doing who've always poo pooed gold. Look what the BIS is saying. Look what JP Morgan is saying.

[00:47:25]So, it's a fascinating time for us in the gold space. I know we look like we're selling our book, but we're just tracking history and the sad history of currency destruction.

[00:47:34]>> Matthew Pipenberg, partner at Von Greer's AG. Thank you so much for coming on Milkroad Macro. I really enjoyed this conversation and I think you do a great job of framing a lot of these macro factors that are playing out geopolitically and in you know the bond markets and so forth translating that into how investors protect their capital and think about their allocations. So I really appreciate you being here. Where can we send people to find more of you and your work online?

[00:47:57]>> Yeah, we're at vonarts.gold.

[00:47:59]That's a mouthful but also vg.gold.

[00:48:02]Our website is there. um folks like myself, Egon von Greerts, Alistister Mloud's an adviser, Ronnie Sturfla's adviser. All our articles and interviews, a lot of them are posted there, so you can get a free education.

[00:48:15]Um we clearly have a bias towards precious metals. We have for decades. I think we've been proven correct, but that's not the real point. We want to educate uh folks on precious metals. Our minimums are very high at Von Greys.

[00:48:28]That doesn't mean that the education we have to offer isn't available to anyone.

[00:48:33]And we talk a lot about not just why gold, the historical reasons, the the banking risk, the historical risk, the market risk, the currency risk. There's a lot of free information there about why gold, but it's equally important to understand how to own gold. Again, whether you're in Switzerland, to Ohio, Tuskegee, Alabama, Stevensville, Michigan, or Palm Beach, uh my advice is please don't own gold in an ETF. That's a paper claim. Don't hold your gold in a commercial bank. That's a lot of counterparty risk there. you need to have physical gold outside of the banking system and ina in our case in a jurisdiction where gold is a very protected asset like uh like Zurich or like Switzerland or Singapore. So you know all that is there for free to see again you don't have to m meet our client requirements to get an education and I think Egon and myself for years are well past the need for one more ounce of gold from a client. We're at a position now where we really want people to understand the importance of some allocation to gold to protect yourself from really the open theft that your governments are doing to your paper currencies.

[00:49:36]>> Matthew, thanks for being on Milk Road Macro. I hope we can talk again soon.

[00:49:39]>> My pleasure. Thanks again. I really enjoyed it.

[00:49:42]>> Thank you all for joining us. I hope you all learned something today. So until next time, as I always say, stay safe, stay educated, stay bullish, and we will see you all on the next episode of Milk Road Macro. Thanks for being here everyone. Bye. Want insights on what's really moving markets and how we're trading each event? Subscribe to our channel, then join the Milk Road Macro and Macro Pro newsletters. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.