I think the card wins. Okay. But, but I’m also in the gold business as well. And gold stock investing and 2018 was when gold started to move and it started to work and it could kind of smell what was coming. And so I, my fund had a really good year in 2019 when we were up 97% or something. And then in 2020, we were up 120%, but in 20, you know, but throughout that whole timeframe, if you look, go to the chart of the price of Bitcoin from 2019 and 2020, it was kind of stuck between 500.
You know, it just kind of bounced around, back and forth, back and forth. And then as you recall, in late 2020 it really took off like a, you know, like a bat out of hell. And it went from, you know, five or 10 up to 50 quickly. And, but at that point in time, gold had already made its move and gold kind of stalled out at 2050.
So my point is I think, and this is true. I’ve observed this. Having been an investor in Goldmark 20 years, gold can look around the gold smells was coming and it looks around the corner. Even before something happens. If the price of gold is going up, you know, something’s gonna happen. And so it just tends to be more fully distributed and it tends to kind of be a good leading indicator what’s going on.
And if the price of gold is going up, there’s trouble somewhere coming. It’s almost a guarantee. And so, and what I think is with the Bitcoin case, it came after the fact. So, you know, gold worked for two years, it went from 1365 into the 19 hundreds. And then 2000 in 2019 to 2020 Bitcoin was stuck for all of 2019 and the first three quarters of 2020.
And then it exploded to the upside. So I just, you know, based on Mac, you know, market patterns and the way things happen have happened in the past, I tend to think that gold is going to lead this next upturn in the sound money category. And it’s going to people in the Bitcoin community are going to go, Hey, what the hell is going on?
Gold’s working in are things not. And then eventually Gold’s going to start to slow down and go, and Bitcoin’s going to come in and just kind of blow it away. And you know, so in my view in this next leg up gold will probably go up to 2,500 to 3000 and Bitcoin was probably going to go to 200,000, but I don’t think Bitcoin is going to do the 200.
I think Bitcoin’s going to find a level around 30 or 40 sometime in the next year or two and bounce around in there for. As gold continues to March. And then at some point, Bitcoin is going to go from 40 to 200, just the way it went from 10 to 50, because that’s the pattern that seems to follow it. It you know, basically it’ll, it’ll trade sideways for quite some time.
And then suddenly, you know, everybody realizes what it is and it just takes off like crazy. And you know, there’s a fixed supply, right? That’s the bottom line, there’s a fixed supply. So that’s kind of how I see it.
[00:34:10] Q: Interesting. I just want to, sorry to cut you off, Pete. I want to remind everyone. I see a lot of people asking the chats.
We are five minutes away from the fed minutes being released, and then we will get the official word on what these rate hikes are. Please, if you are not already feel free to subscribe, press the subscribe button down below. Lawrence, I want to pose unless you have more thoughts on the gold of it all.
I wanted to pose a question now just about the possibility again, playing devil’s advocate here, not my personal belief, but the possibility that somehow the fed actually gets this right. That, you know, a broken clock is right. Twice a day and somehow drum howl. Got it. Right. And in my opinion, I kind of think this scenario, they need to get it right, is actually a world war.
Like we need to enter a full, full blown war to ramp up all of our production capabilities and in turn, revitalize the economy no different in the same way that we kind of got out of the great depression by getting so heavily involved in world war II. Do you think that’s a legitimate thing, Disney discuss?
[00:35:18] Lawrence Lepard: I don’t think that’s, I wouldn’t call it getting it right. I think that And I think, but I do think a war is a possibility. Yeah. It’s yeah. I, I wouldn’t, I wouldn’t, I, I think there’s almost no chance the fed gets it right here because I don’t think they know what they’re dealing with. And I don’t think, I really don’t think, I mean, the only way that they could quote unquote, get it right.
And the odds of this are zero is they could, they could confess to what they’ve done wrong and they could do what Roosevelt did. And they could do a monitor. They could try and have like a Plaza court. They could do a monetary reset, right. And have another Bretton woods and say, okay, look, we built up too much credit.
We’ve we’ve levered the thing up way too much. You know, the money’s on sound. We all know it. It’s all gonna fall to shit. You know, here’s what we’re gonna do. We’re gonna, we’re going to have, you know, five old dollars equals two new dollars. And the new dollar is going to be backed by a basket of gold and Bitcoin and oil or whatever.
We’re going to pick. We’re going to create a sound money standard on a go-forward basis. And we’re going to migrate to. And there would obviously be winners and losers in that, but on the other side of it we’d have a sound money which would lead to this kind of a problem, this kind of, you know, unsound money and swings and credit creation and everything that we’ve had.
It wouldn’t occur again. And so, so that’s the correct solution. The odds that they choose that, I mean, there’s zero. They’re gonna, they’re gonna run the thing into the ditch, you know, one way or the other, either through hyperinflation depression, or probably some combination of both and then perhaps yeah.
We have a war to get us out of it or to, or to end it with finality who the hell knows. I think war is a little harder. I mean, I, so, you know, there are psychopaths in the world and there’s no doubt that, you know, in a centralized world You know, psychopaths can do a lot of damage. I mean, you know, take, you know, mile or Hitler, Stalin or anything else.
I mean, I think we’ve evolved beyond that a little bit and in the sense that we have nuclear weapons, you know, and even psychopaths don’t want to blow each other up, you know, and the world is, we know it. So I, I tend to think that, and we all need each other in terms of supply lines and so on and so forth.
I mean, we couldn’t really even have a war with China right now, because half the stuff we’d need to fight it, they produce. So, and I think the Pentagon knows that. And in turn, I think, you know, they know that they they’ve got one hell of a social problem, you know, if they don’t, I mean, they’ve given their people a, a big, you know, I’ve been to China many times and they’ve given their people in an enormous increase in living standards over the past 20 or 30 years.
But those people are really appreciative of it enjoy. And if suddenly that starts to go away, you know, they’re not going to be happy campers either on the communist party is not going to have as much power as. The thing we’re seeing going on in my view is we’re going from centralized systems to decentralized systems.
I mean, that’s, you know, we reached peak centralization in the 20th century, right. Or two was the culmination of, you know, we can kill 50 million people in five years. Wow. Aren’t we great. And, and since then, you know, everything is w w you know, we we’ve seen the diseconomies of centralization and decentralization was great when Henry Ford figured out how to put people in a line having do the same thing over and over again, I can produce a ton of cars, very cheaply, right.
So, you know, centralization is bad when, you know, it gets so big. So sclerotic, so political that, you know, and so available to abuse that you can get a guy like a Hitler who can get control of a big industrial economy and decide to start killing people on mass. And so, you know, fortunately we’ve got these two decentralizing trends, which I think are going to save the world.
The first is the. And the second is Bitcoin. The internet is going to save the world because it’s made Joe Rogan more powerful than network news and the you know, the entire you know, the entire you know, mainstream media and, and it’s allowed us all to share information. And then, you know, Bitcoin is important because it’s, it’s sound money that the government can’t fuck with, you know, and, and gold money.
Gold was sound money that the government theoretically couldn’t fuck with it because it was, you know, centralized and kept involved. And because they created a paper gold you know, they, they learned how to fuck with it pretty well, because if, if gold were priced today, the way it was priced in 1971, it would be $80,000 an ounce.
And it’s two. So they’ve got a pretty good job of suppressing the gold price in order to keep, you know, their Fiat system going. And by the way, they’re going to try the same thing in Bitcoin. I mean, there’s a, there’s a futures market developing in Bitcoin. There’s no. That there are projects within all of the governments that are in the theatrical business to figure out how to, how to grab and participate as much as possible in that futures market to discourage people from, you know, from buying Bitcoin.
So, you know, it’s, it’s tricky, it’s tricky, but I, but I think, I think, you know, the thing that the people who run the system have is they’ve got a lot of the power. They got all the levers, they got a lot of money and they’re going to cheat. But the thing that we have is, is we’ve got truth on our side and there are a lot more of us than there are of them.
And, you know, the pitchforks are gonna come out. I mean, when things get pretty tough, you know, I wouldn’t want to be them I I’d much rather be us. So, you know, it it’s, I, I, I think there is a good resolution to this problem. But that’s not to suggest that it’s just going to be a walk in the park for the next five or 10 years as we solve it.
I think it’s going to be pretty fucking cool. Oh, absolutely.
[00:40:28] Q: Yeah. Sorry to interrupt you guys. I want to make this as, as timely as possible. It is now made official that the fed is going to raise rates 75 basis points. So this is in line with the market expectations. I’m keeping an eye on just, you know, the broader indices and it’s been a green day.
And my expectation quite frankly, going in today into today was to long as the market is not shocked, it will respond positively. And then tomorrow, when everyone wakes up and realizes what actually a, what a 75 basis point rate hike actually means I expect more blood in the streets tomorrow. So, Laurie earlier you mentioned a possibility of a hundred basis point rate hike.
I was kind of hoping for that, quite frankly. Where, where do you think, what are your initial thoughts hearing that it’s now
[00:41:14] Lawrence Lepard: for sure, I’m surprised. I thought he was gonna, I thought he was going to go a hundred as well. You know, you just don’t know. I mean, these guys, they, you know, and what, what will actually matter more too is, is, is the press the press conference.
So you know, that’s gonna come out half an hour. We’re going to get a little bit more color on, on what he’s thinking. I mean, if he, if he says they become data dependent, he might as well have said, you know, they’re gonna tape her very soon. In which case everything’s going to rip to the upside gold, silver, Bitcoin, you know, the market, you name it.
You know, we’ll see. I mean, the, the thing, that’s the thing that’s so tricky about this whole problem with this whole issue is it’s all iterative. I mean, they, you know, just like we do, they watch the markets and if th if they don’t get the reaction they want out of all of these different statements and moves and they send guys out a day later to start making statements, you know, that officer dovish to try and, you know, they’re, they’re trying to try to manage the markets too.
I mean, it’s all in narrative. Yeah. To your point about, you know, can they stick the landing? I mean, yeah. I mean, look, it’s, it’s theoretically possible that they can continue to kick the can down the road. I mean, they, you know, I thought it was all over in 2008, so, you know, I mean, they’ve, they’ve done a lot of canned kicking and, and they’ll probably do some more canned kicking.
I mean, we know they’re going to try but you know, with, with every, with every kick and every, you know, every problem that gets slightly larger and know as the credit gets bigger and bigger, I mean, look, we started off back in 2000 with the fed balance sheet of $800 billion, and now it’s 9 trillion, you know, and, and the next big mistake or blow up, they’re going to have, I mean, when, when something occurs here, the market falls a lot or, you know, Japan goes tits up or something else.
I mean, you know, I mean, there’s a possibility we’re going to start buying Japanese government bonds to prevent Japan from failing. So, you know, the 9 trillion is going to become 13 and then the 13 is going to become. And, you know, eventually it’s going to be a hundred trillion dollars and, you know, gasoline is going to be $15 a gallon, not five.
So, you know, you can kind of see where this is going. What you don’t really know is the slope and the steps. I mean, that’s you know, they, they, they do their best to, you know, to try and, you know, like I say, the driving a clown car on an icy road, and they’ve got the two guard rails. One’s extremely inflation, the other’s extreme deflation, and they’re just trying to keep the car on the road.
And so they’ll, you know, they’ll jump on and do whatever they have. If it looks too deflationary, you know, they’ll have a Plaza court or they’ll do a Shanghai court like they did in 2016, when oil was 30 bucks in U S shell was gonna go under, can you,
[00:43:56] Q: what was it specifically? What was the accord?
[00:43:59] Lawrence Lepard: Well, the Plaza court goes back even further, but the one I’m the one that’s really more relevant as the.
Accord in 2016. I mean, in 2016 they had serious deflation, gold was down, everything was down. And there was a real, it was really a deflationary time and they knew it and they realized that if they didn’t get some inflation going get the animal spirits going that, you know, they were going to the whole entire us shale industry was going to fail.
And so, you know, they, they basically went out. So, you know, we got a weekend, the dollar and they took all kinds of actions in the FX markets to do so collectively. And that’s the thing, the thing that we don’t see, and we don’t know is we, you know, and, and, and they have, you know, they have a lot of tools and they have a lot of off shore counts and they have all the big banks to do their bidding for them.
And so, you know, they, they basically will take steps as necessary to try and influence the markets if they think they’ve gone too far, one way or too far the other way. And so, you know, we can count on that.
[00:45:02] Q: I want to read a couple more statements coming out of the minutes. And just a reminder pal has not yet started his press conference.
That will be at 1130 Pacific, two 30 Eastern time setting up for September meetings that further interest rate hikes will be needed. As inflation still runs high, the quotas, and they anticipate that ongoing increases in the target range will be appropriate. So it looks like these rate hikes are not going to be slowing down.
There were some expectations. I know yesterday we had a conversation with Ansul lender about the possibility that they may just pause, rate hikes. They may not increase. They may not decrease from the sounds of this from their own minutes. It looks like we’re going to see a, another rate hike. We don’t need to speculate on that, but I want to just get your sense of what, what these repeated rate hikes could mean.
I mean, the last time they really tried to do anything like this was 2018 The president at the time through a little bit of a hissy fit and they reverse course very quickly. So what, what do you think is going to happen? We’re leading up to midterm elections September year, two months out from said midterm elections.
So do you think there’s going to be any influence by the president or just Congress in general to see any changes by the fed stance?
[00:46:15] Lawrence Lepard: Yeah, so, so yeah, they, they are political and I believe that, and I do think that there’s a chance that they’re going to feel pressure to do something before the election you know, to pivot or to go the other direction.
And yeah, they say, you know, they have to say, they’re going to do more rate hikes because the inflation problem really hasn’t been fully addressed, whether that really means they will do more rate hikes or not, who knows. You know, as we’ve seen, they can, they can change pretty quickly on a dime. So, you know, one of things you alluded to is that something could break.
And you know, that to me is the interesting question, is something going to break? I mean, you know, you’re already kind of seeing things break. I mean, the Italian yields is blown out. You know, the ECB had to have an emergency meeting to deal with that. Japan has had to spend huge amounts of money to do QE, to keep their bonds in a fixed place.
You know, they want to have the tenure at 25 basis points, which is ridiculous. I mean, the ECB just raise rates from minus rates to zero, you know, it’s is nuts. And the committed that they’re going to do unlimited QE is necessary. I mean, there’s really no slowing down worldwide in the printing of money.
It’s just different countries take different leads at different points in time. I mean, right now, in theory, the fed has started to have their balance sheet run off. We’ll see, there’s a delay in the closing of the mortgages. So as it started fully show up yet, but, but in turn, you know, the ECB and Japan are printing like crazy.
So, so there’s always an, the Euro market Euro dollar market is a huge market. So there’s always more money coming into the system to keep the system okay. So it’s, it’s extremely hard to see, you know, what they’re going to do next. It’s just, in fact it’s impossible and that that’s what makes it so hard for business people and others to efficiently allocate capital and do the right thing.
I mean, we live in this, you know, this matrix, which is a hall of mirrors created by them. And so, you know, to me, you know, the faster the system fails, the better, because we want to get to the other side, the other, side’s got a better system, but guys, I think I told you earlier, I’ve got a hard stop. I got to go for another call and I’m running a little bit late on.
So
[00:48:11] Q: no worries at all, Lawrence. Do you want to just quickly let everyone know where they can stay up to date with you on social? Yeah, so,
[00:48:16] Lawrence Lepard: I’m on Twitter. So at Lauren four-part on Twitter and I tweet a lot. And then if you go to my website E M a to EMA the number two dot. There’s a lot of free stuff on there.
Quarterly reports, Bitcoin papers, macro stuff, it’s all just free. It’s you know, I run a fund that invests in sound money things. So, you know, if you want to see what’s going on you know, in the fund or our views on things, it’s, you can go to the website and check it out there. So. All right. Thank you so much for joining us.
Hey, thanks guys. Really enjoyed it. I’m sorry. I couldn’t stay longer, but we’re going to ping you
[00:48:50] Q: to have you come back, but thank you and keep doing all that you do, man.
[00:48:54] Lawrence Lepard: Take care. Bye-bye adios.
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