Gold Will Play A Role In The New Monetary Regime

McAlvany Weekly Commentary

Steph Pomboy: "The U.S. Fantasy Is That The World Needs The Dollar" Government's Big Mistake Is Financing Our Debt On The Short End Of The Curve "My Hunch Is That What's Coming Will Make 2008 Look Like Child's Play" "Gold is going to play a major role in stabilizing the monetary regime. Whatever that monetary regime looks like on the other side of this bust that I believe we're about to go into. My sense is we're headed into an economic recession, but the financial bubble bust associated with that will compound the damage dramatically. “So, the economy might naturally slow a fair amount, but when you layer on the deflation in financial assets from these spectacularly overvalued levels, you're talking about the repeat of the 2008 economic downturn that will beget massive fiscal and monetary stimulus. Gold is going to have to play a part in that monetary regime. I just don't know how else we can come out of where we're headed." —Steph Pomboy Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick along with David McAlvany. One of the things I've really enjoyed about you, Dave, through the years, is you like to talk to people who don't necessarily agree with you, and we've learned a lot. I mean, there are central bankers that you've interviewed, and I'm thinking, "What in the world are we doing talking to this guy, or whatever?" But there are times when it's a breath of fresh air to talk to somebody who says, "Yeah, yeah, I get what you're doing and I get why you're doing it. And we're in agreement on an awful lot of things." I have to say, Steph Pomboy is probably someone who's going to say, "Yeah, we agree." David: Some of my favorite pictures are panoramic. And it just takes in the full view and duplicates what you have in your mind's eye, which you know to be the reality, and I love that you can capture that. I think I do find that Steph and I have some commonalities. And the fact that there's an analysis of context and comparatively really a lot of complementarity or compatibility, it makes for a comfortable conversation. Kevin: Well, and how many people— David: Not all conversations are comfortable, although all are very important. Kevin: How many people can you talk to that can actually talk about the Dow-gold ratio? I thought you were unique on that. David: Well, it's decades of market experience, and when you have that, you have perspective and you have insight, and Steph has that. So, through the '90s, through the aughts, through the last 10 years, if you start stacking in the decades of learning and reflecting, there is that bird's-eye view, which gives you, I think, an ability to navigate in a different way. * * * David: Well, it's the occasional tweet that catches my eye and I think to myself, "She gets it." Maybe there's a little confirmation bias on my part. But Steph, your observations are intriguing. It was one of my colleagues that met you at a conference recently and inspired this interview. Obviously, the precious metals arbitrage and the money management business that we do a little bit differently might've been intriguing to you as well, but regardless, here we are. Economics is something you focused on for a lot of years. You've been interested in economics. MacroMavens is something you've been writing now for a good long while. Tell us a little bit about MacroMavens and about yourself. Steph: Well, thanks for not revealing my precise age in that introduction. David, you're right. I've been doing this longer than I care to count, and thank you so much for having me on your podcast. I did get to enjoy meeting one of your colleagues at a conference in May sometime, and found what you guys were doing there very interesting. And it's no secret that I'm a real gold bull, so we were kindred spirits in that regard. But as relates to MacroMavens, life takes you on these paths and then you pick your head up decades later and go,