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As we enter 2024, the dramatic divergence between profoundly dark geopolitical, debt, currency and recessionary signals and
US stock markets reaching all-time highs is not only alarming, but portends unprecedented dysfunction ahead.


Thus, despite the bullish euphoria on the stock indexes, the bearish (and inflationary) end-game is not only baked-in/inevitable for both the economy and markets, but proports to be greater in scope and pain than anything seen in the prior market implosions of April 2000 or September 2008.

Of course, most will attribute such views to the “doom” profiles of precious metal bulls, but facts, as well as history and math, are stubborn things, and the facts we share below are not only undeniable, but troublesome.


Based on M2 declines, inverted yield curves and a Conference Board of Leading Indicators that dipped below its 4% threshold over a year ago, we calmly maintain that the recession which DC still denies is already here. Add to that the headline layoffs and record-breaking corporate bankruptcies of 2023 (highest in 13 years), and the still-debated notion of a “soft or no landing” is not only laughable, but in our mind, entirely false.


Meanwhile, the statisticians out of DC’s Bureau of Labor Statistics would also have us believe that the labor market is strong, pointing out recent “new jobs” reports in the 200,000 range. What those experts neglected to contextualise, however, was the 1.4M lost jobs for the same period and the 700,000 part-time jobs overlapping the “data.”

The net math of these numbers is anything but “strong” for labor; in fact, it simply means more folks are working more than 1 job, and many more are not working at all. Workers on the ground already feel the stress of reality, rather than the desperate words of cornered DC mouthpieces.



Turning from Main Street to a global distrust in the UST and its now weaponised USD, the hard reality of simple math gets even more surreal. 2023 saw 20% of global oil sales made outside of the USD, something otherwise unheard of/unthinkable prior to the Putin sanctions.

Saudi Arabia and the UAE are making open overtures away from the petrodollar and closer to China, its favoured trading partner. We are not saying the petrodollar is dead (yet), but the slow limping away from the USD should be of massive concern.

Meanwhile, the BRICS + narrative of de-dollarisation is no longer a fringe concept but an undeniable reality as more transactions and bilateral trade deals are settled outside of the USD. Countries are filling trade deltas with real assets (gold) rather than paper dollars. This does not mean the sudden end of the USD, but as more central banks are stacking physical gold and dumping USTs at net negative levels since 2014, the trend away from the distrusted USD and over-indebted UST should be obvious rather than ignored.


US public debt is ripping past $35T as Powell’s higher-for-longer trap continues, at least for now, which makes the cost of this debt almost fatal to Uncle Sam. Meanwhile, the Congressional Budget Office is projecting another $20T in IOUs for the next 10 years, but seems to have ignored the fact that this IOU is increasingly less loved overseas. This is a problem.

Debt, as warned by von Mises or even David Hume, always destroys nations, and the US is clearly within the end of its fourth-turning and slow death by a thousand debt cuts. What Powell and the main stream media are either ignoring or downplaying today is the $8.9T in government debt and $740B in corporate debt which matures in 2024. Unless Powell cuts rates dramatically, the re-pricing of this debt will be brutal to the S&P and Uncle Sam.


Powell is trapped. If he raises rates or keeps them at current levels, Uncle Sam, the stock market, commercial real estate and all the regional/smaller banks top-heavy in CRE (and non-performing) loans die a slow death; if, however, he cuts rates and eventually/inevitably pivots to outright QE, he kills the purchasing power of the currency.

We maintain that the currency will eventually be sacrificed to save this now openly broke(n) US “system.” It’s an historical template without exception among bankrupt nations. Already Powell has projected rate cuts for 2024, and for the reasons outlined above, we think he will have no choice but to do so, although he may now have to wait until markets tank—and right now they are ripping.

This projected (dovish) rate cut has already made stock markets (which live and die on cheap debt rather than productivity) giddy, as stock indexes rip. In a Fed-centralised market, fundamentals like FCF are irrelevant. Instead, and like Pavlov’s dogs, the market goes up or down based on hawkish or dovish Fed-speak. This ain’t capitalism folks. It’s centralisation.

Of course, Pavlovian top-chasers don’t care about such things—they simply see a ripping, Fed-supported market and cry “all is well!” Nothing, however, could be further from the truth. In fact, markets needle-peaking in the backdrop of obvious economic pain are a tragic, rather than positive harbinger of things to come.


Today, about the only positive sign from the US is its stock exchanges, whose collective valuation outpaces global equity markets by 7.5X. This just screams over-valuation. The stock bulls, of course, will cling to the “Magnificent 7” and say the current bubble is different from prior bubbles, all of which, by the way, “pop.”

What’s particularly disturbing about the current euphoria is that the S&P 500 is effectively a tech ETF led by 5 tech names and an investor class which believes AI can only go up. Tech is now 1/3 of the equity market cap in the US, surpassing the mania and going more than 70 days without even a 2% pullback. But if you take away just a handful of tech names from the US “stock market,” you quickly realise that US stocks are in fact net negative since 2021, but for a few names.

This concentration risk is not only fatal, it’s foreseeable. I traded the wave and remember well how Cisco was today’s NVDA. Then, as now, the cry was “this time is different!”

Current bulls argue that unlike 2000, the current bubble is driven by revenues and earnings, not herd hysteria. In fact, the bubbles of 1999 were also driven by companies (think Microsoft, Qualcomm or Cisco) that were profitable—for a short while at least. In fact, all bubbles are born from profitable companies which then become the sirens for FOMO.



The current bubble is nothing new or unique, it’s just more fat and dangerous, because it’s appearing at the same time the world and US economy is debt-on-arrival. Of course, the bulls also denied recent bubbles in IPO’s, Coinbase, ARKK, Zoom and Peloton. In actual fact, the NVDA-AI lead euphoria today is just the last of the stock bubbles to pop (2023 saw only 4 IPOs…)

Only a few bubble names hold up the entire S&P, and when net-income goes south rather than north and the margins (price, volume, cost) naturally pop (who knows when), then everything else sinks with it. Think about that a second. We now have a major stock bubble in the backdrop of a debt crisis, a currency crisis and a geopolitical setting of a land war in Europe, disfunction in Israel, and growing tensions in Taiwan at the same time the world is slowly losing faith in the UST and USD.


Now add an inevitably popping US stock bubble to this already chaotic mix and you get some real, well: Chaos.

Gold, of course, is the antidote to financial chaos. It is trusted far more than sovereign bonds and increasingly neutered fiat currencies, from DC to Tokyo. Again, that is why central banks are stacking gold and dumping USTs.

As more and more false idols, from the UST and Powell to the S&P, fall from grace in a backdrop of unprecedented geopolitical and financial strife, we will not be smiling just because gold will reach unprecedented highs. The rise, in fact, will be bittersweet, because the world we live in will be, and already is, sinking into unprecedented lows.

Our entity, Matterhorn Asset Management, AG was recently re-named to VON GREYERZ, AG in honour of our chairman and founder, Egon von Greyerz. Egon’s warnings decades ago, are as true than as they are today. What we are seeing above, Egon had long ago foreseen because he understood the history and math of debt. Yet both Egon and myself, along with rest of our team, are not happy to see the global markets this distorted. But we are not surprised.

More importantly, and at least when it comes to currency risk, we are prepared by gold-backing (and hence preserving) our own wealth in ways our leaders and bankers have failed to do.   EG

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