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

It all comes back to "too much debt"

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 & wealth inequality in the present, and destroying the purchasing power of their fiat currencies in the long term.

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 in protecting those savvy enough to own them?

For answers, we welcome back to the program Matthew Piepenburg, Partner at Von Greyerz AG.

Matt explains why there is “no way out” of currency debasement at this point and discusses what action those who understand this today can do to protect & ensure their wealth tomorrow.

To hear it, click here or on the video below:

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Adam’s Notes: Matthew Piepenburg (recorded 6.10.25)

EXECUTIVE SUMMARY:

• Global Debt Crisis: Matt Piepenburg warns of a revolutionary debt crisis, with global debt at $300 trillion, driving currency debasement, austerity, and market volatility.

• No Way Out: The scale of debt (120% U.S. debt-to-GDP) precludes easy solutions, with bond markets constraining policy options, leading to inevitable economic pain.

• Social and Political Shifts: Rising debt fuels social unrest and a global shift from globalism to protectionist nationalism, seen in leaders like Trump, Milei, and Farage.

• Precious Metals Surge: Gold hit 78 record highs in 2025, outperforming all assets, driven by central bank buying (290 tons post-2022) and distrust in fiat currencies.

• Silver Breakout: Silver has broken above $35/oz, with potential to reach

  $60/oz, as miners and silver outpace gold in the precious metals bull market.

• Currency Debasement: Fiat currencies face ongoing purchasing power loss, with gold as a hedge, despite underallocation by family offices (1%).

• Remonetization Prospects: Piepenburg sees gold as a coverage asset in future digital currencies (e.g., CBDCs), not fully remonetized, enhancing its long-term value.

• Investment Strategy: New Harbor Financial emphasizes disciplined precious metals exposure, warning against emotional overreactions to debt fears, with active hedging.

FULL NOTES:

What’s your current assessment of the global economy and financial markets?

Matt Piepenburg delivers a starkly negative outlook, describing a revolutionary debt crisis unfolding in real-time, with global debt soaring from $30 trillion in 1997 to $300 trillion today. He argues that bond markets now dictate policy, forcing pivots from leaders like Powell (abandoning high-rate inflation fights) and Trump (softening tariff bravado on Liberation Day), as debt levels (U.S. at 120% debt-to-GDP) overwhelm fiscal options. This “debt karma” stems from decades of deficit spending and currency debasement, unshackled by the 1971 gold standard exit, creating a fantasy of growth now facing a painful hangover.

The crisis manifests in social unrest, wealth inequality (10% own 90% of U.S. stock wealth), and a global shift from globalism to protectionist nationalism, evident in leaders like Milei (Argentina), Meloni (Italy), and Farage (UK). Piepenburg sees no escape, likening it to a “No Way Out” moment, with austerity, market mean reversion, and political centralization inevitable. He cites experts like Dalio, Grantham, and Gundlach, noting even non-gold advocates acknowledge the debt-driven risks, from geopolitics to currency erosion, affecting all asset classes.

Are we at a flash point where the debt crisis accelerates, and could fiscal reform delay it?

Piepenburg asserts we’re nearing Hemingway’s “slowly, then all at once” debt crisis acceleration, with U.S. debt-to-GDP (120%) rivaling WWII levels without a justifying emergency. He dismisses fiscal reforms like DOGE’s $2 trillion spending cut or Trump’s policies as “guppy solutions” to a “whale” problem, citing math: annual deficits doubled from $1 trillion post-COVID to $2 trillion.

The bond market’s rejection of U.S. treasuries post-Liberation Day, with weak auctions, signals global distrust, exacerbated by 2022’s weaponization of dollar reserves. He sees no delay potential, as political will falters against entrenched vote-buying via deficits. Even promising optics—tax cuts, deregulation, reshoring—can’t offset decades of myopic policy, starting with Nixon’s gold standard exit, which unleashed unchecked money supply growth (Bernanke’s $2 trillion QE in four years to Powell’s $5 trillion in 18 months). Wealth inequality (20% of Americans pay rent-only salaries) and social unrest fuel protectionist surges globally, but these shifts don’t solve the debt equation, only amplify volatility.

Did we seal our fate by normalizing trillion-dollar debts, and what are the implications?

Piepenburg agrees that normalizing trillion-dollar debts, post-1971 gold standard exit, sealed a calamitous fate, as politicians, lacking economic literacy, treated trillions as mere “bigger numbers.” The scale—a trillion dollars equating to 67 miles of stacked $1,000 bills versus a million’s 4 inches—defies human comprehension, enabling cavalier borrowing.

Nixon’s “temporary” gold decoupling unleashed debt addiction, with Bernanke’s $780 billion GFC bailout dwarfed by Powell’s $5 trillion COVID response, turning QE into a “charade” that eroded dollar trust and purchasing power.

The implications are dire: currency debasement erodes wealth invisibly, taxing Americans without representation, hitting the middle class hardest (90% of stock wealth held by 10%). Global distrust, seen in weak treasury auctions and 2022’s dollar weaponization, drives central banks to gold (290 tons bought post-2022 vs. 118 pre-2022). Social unrest, from U.S. riots to Europe’s nationalist surges, follows, risking centralization (e.g., CBDCs). Piepenburg sees no escape, only austerity and volatility, as debt’s gravitational pull—akin to WWII levels—crushes growth (Lacy Hunt’s negative multiplier).

What’s the current state of the precious metals sector in 2025?

Piepenburg highlights a robust precious metals sector in 2025, with gold hitting 78 record highs and outperforming all assets, driven by central bank buying (290 tons post-2022) and fiat distrust. Silver broke above $35/oz, signaling a bull market breakout, with miners leading due to stronger relative strength. The sector’s rise reflects exponential debt ($300 trillion) debasing currencies, with gold’s $3,400/oz and silver’s $36/oz driven not by speculation but by value preservation, as central banks and eastern investors stack gold over treasuries.

Despite gold’s 20-year outperformance (beating S&P annualized), Western family offices underallocate (1%), misled by advisors citing volatility (gold less volatile than S&P). Piepenburg notes deliberate misunderstanding, as gold exposes monetary policy failures, with banks like Goldman dismissing it despite clients storing gold in Von Greyerz vaults. Central banks, BIS, and IMF recognize gold as a tier-one asset, with Comex outflows and Shanghai’s rising exchange power signaling a secular shift toward gold as a trusted store of value.

What trends are you seeing among your wealthy clients at Von Greyerz regarding gold buying?

Piepenburg reports a busy 2025 at Von Greyerz, with wealthy clients accelerating gold purchases despite prices rising from $2,600 to $3,600/oz. Clients prioritize long-term preservation over price, viewing gold as a legacy asset for decades, not a short-term trade. Even at $2,600, some hesitated, but Piepenburg’s counsel—gold’s secular rise is early—convinced them, with purchases continuing unabated for generational wealth transfer, often converting gains to fiat for purchases like homes while retaining core gold holdings.

The smart money’s conviction stems from understanding debt-driven currency debasement, with clients (in 90 countries) storing gold in Zurich vaults, bypassing advisors at firms like Goldman who downplay gold’s role. Unlike family offices (1% allocated), Von Greyerz clients, including hedge fund managers and bankers, quietly accumulate gold, recognizing its outperformance (20-year S&P beating) and hedge against fiat’s decline. This trend, intensifying in 2025, reflects growing awareness of gold’s role as central banks and BIS elevate it to tier-one status.

What are the odds of gold being remonetized, and could it drive significant price appreciation?

Piepenburg doubts full gold remonetization (e.g., gold-backed dollar or yuan), as governments cherish currency debasement power, citing William Jennings Bryan’s “cross of gold” speech on credit limits. However, he sees gold as a coverage asset in future digital currencies, like IMF’s proposed CBDC with gold backing, telegraphed in 2020’s Bretton Woods 2.0 video. BRICS nations use gold for trade settlement coverage, not redeemable currency, signaling a rising role, with Shanghai’s exchange overtaking London and New York. This partial remonetization—gold as a trust anchor for CBDCs or BRICS settlements—enhances gold’s optionality, potentially driving appreciation beyond inflation protection.

Piepenburg speculates a debt-driven reset (Bretton Woods 2.0) could impose CBDCs with gold coverage, as fiat alone lacks credibility post-2022 dollar weaponization. China’s gold reserves and BIS’s tier-one designation bolster this trend, but U.S. gold backing is unlikely due to lower reserves, limiting Trump’s options to avoid self-inflicted harm.

New Harbor: What were your key takeaways from Matt Piepenburg’s discussion?

John Lodra resonates with Piepenburg’s focus on the intractable $36 trillion U.S. debt (120% debt-to-GDP), noting its exponential growth since the 1980s, yet persistent political inaction, as seen in Moody’s 2025 downgrade echoing 2011 S&P and 2023 Fitch cuts. He shares Piepenburg’s frustration, citing college students’ shock at debt and dollar purchasing power charts, underscoring society’s failure to address obvious unsustainability. Lobra agrees gold, outperforming the S&P since 2000, is underallocated (1% in family offices), offering protection in risk-off scenarios.

Lodra cautions against premature Armageddon trades, as debt crises may unfold slower than expected, citing 15 years of status quo persistence despite warnings. He echoes Piepenburg’s Hemingway analogy—slowly, then all at once—warning investors against emotional overreactions to debt fears, as markets can defy fundamentals longer than anticipated. Social Security’s projected 2033-2034 shortfall highlights political avoidance, reinforcing Piepenburg’s view that solutions require decades, not one term, with gold as a hedge against inevitable currency erosion.

What’s happening in the precious metals sector, particularly with silver’s recent breakout?

Mike Preston confirms a robust precious metals sector, with gold at $3,386/oz and silver breaking above $35/oz to $36, marking a triple-top breakout from a decade-long cup-and-handle pattern. Silver’s surge, lagging gold’s 2022 breakout ($2,000 to $3,400), signals a bull market’s next phase, with miners outperforming bullion due to stronger relative strength. New Harbor added a 2.5% silver position, complementing a 10% miner stake, expecting silver to hit $38-$40 soon and low $40s in months, potentially reaching $60 to match gold’s prior gains.

Preston attributes the sector’s strength to Piepenburg’s debt thesis, with central banks (290 tons post-2022) and eastern investors driving demand amid fiat distrust (93:1 gold-to-silver ratio, down from 123 in 2020). Western investors, historically skeptical, are awakening, but the sector’s tiny size (miners and silver dwarfed by gold, itself small vs. stocks/bonds) means minimal capital inflows could double or triple prices. He warns of volatility, noting silver’s 80% 2011 crash, urging dollar-cost averaging to manage psychological and financial stress.

How will you decide when to exit precious metals positions and shift capital elsewhere?

Mike Preston admits pinpointing a precious metals market top is challenging, as macro conditions (debt, currency debasement) have signaled a top for over a decade, yet policy “charades” (Piepenburg’s term) delay corrections. He anticipates a potential S&P vertical blowoff top (e.g., 500-point monthly surge) as a sell signal, indicating euphoric overcrowding, or a break below key support levels, prompting stops and cash raises. New Harbor’s 45% market exposure, with hedges (options, 10% miners, 2.5% silver), allows flexibility to reduce positions if momentum fades or markets crash. Preston emphasizes disciplined rebalancing, noting silver’s breakout ($36/oz) and miners’ strength suggest further upside ($60 for silver, new highs above $50). He avoids calling tops prematurely, as policy distortions (e.g., preventing S&P drops over 30%) could extend rallies, but currency destruction ensures gold’s long-term relevance. A climactic phase, with Western capital flooding the tiny precious metals sector, could amplify gains, requiring active monitoring of relative strength and market sentiment to time exits.

Investors should engage New Harbor Financial (thoughtfulmoney.com) for exit strategies, as 2025’s volatility looms. Retail investors, chasing tops, risk mistiming, with historical bubbles supporting advisors for hedged portfolios. Preston’s approach—watch for blowoffs or breaks—urges patience, with gold, miners, and silver offering upside, but requiring stops to shift to undervalued assets post-peak, balancing Piepenburg’s long-term debt thesis with near-term tactics.

If you have substantial net worth to protect, learn more about Matt’s firm here.

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