0:00?EUR< - Intro0:38?EUR< - Global Debt Bubble6:10?EUR< - Price Fixing13:55?EUR< - Money Expansion17:28?EUR< - Currency Revaluation20:45?EUR< - Money Velocity33:08?EUR< - Sentiment & Hedging39:57?EUR< - Bitcoin & Pullbacks43:00?EUR< - Mining Equities & Risk51:32?EUR< - Mining Equity Picks55:10?EUR< - Wrap Up
Talking Points From This Episode- Global Debt, Inflation, and Bonds.- Market distortion and price-fixing.- Employment and money velocity.- Metal ownership and mining equity speculation.
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Tom welcomes Lawrence Lepard of Equity Management Associates back to the show. Lawrence discusses the collapsing global debt bubble and what it would take to avoid a a major economic collapse. The system would need to generate enough inflation to grow GDP, but that would likely require further debt. The US had similar debt levels after World War II, and they successfully worked through the problem. There was a lot of inflation, and bondholders took big hits. They are likely to do something similar this time, but many things are different today, including the mindset of the population.
Lawrence discusses how free markets should operate and how price fixing distorts markets. Central banks have created enormous debt structures by holding interest rates low, which generated excess capacity. Money grows along with debt, and forty percent of all money has been created in the past year. The entire commodity complex is moving up rapidly and likely prices on everything.
Businesses are having a hard time filling low-end jobs because of various stimulus programs and unemployment benefits. We see shrink-inflation with goods becoming smaller or reduced quality. We are well above the government's official inflation statistics and likely heading into a time not unlike the old Russian saying of "They pretend to pay us and we pretend to work."
He says, "The underlying problem in the world today is that the money is no good as politicans have taken advantage."
Lawrence explains how money velocity drives inflation and velocity has been plummeting. When people realize inflation is running hot, they will want to get rid of dollars, and velocity will pick up. We need sound money. The solution is that simple.
Today, Gold markets are not free markets, and many banks have admitted to manipulation. Governments have figured how to suppress gold markets over the past forty years, and today, there are multiple paper claims for every ounce. Gold should be up at $3000 or $4000.
Central Bankers are spreading uncertainty regarding Bitcoin, and he believes they are beginning to panic.
Investors should start by having a considerable position in physical metal, and then they can look at speculating in mining equities. These companies come with significant risk but also excellent potential for reward. Lawrence discusses what to look for in the mining sector and mentions some specific companies that interest him.
Lawrence W. Lepard founded Equity Management Associates LLC. Currently, he is Managing Partner at Equity Management Associates LLC and Limited Partner at Johns Creek Partners LLC. He is also on the board of Amarillo Gold Corp. and Rise Gold Corp. In his past career he occupied the position of Principal at The Cue Ball Group LLC, Partner at Summit Partners LP, Managing General Partner at Geocapital Partners LLC, Investment Associate at Continental Illinois Venture Corp., Financial Analyst at Smith Barney Harris Upham & Co., Inc. and Financial Analyst of Citigroup Global Markets, Inc. (Broker). Mr. Lepard received an undergraduate degree from Colgate University and an MBA from Harvard Business School.