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Larry Lepard
Café Bitcoin | Larry Lepard on the Debasement Trade, Global Bond Yields, and the Big Print | Day 41 of 50
- Warsh's Jackson Hole speech was hawkish rhetoric designed to talk down the debasement trade after Bitcoin and gold surged in early August, but Lepard believes Warsh is trapped and unlikely to follow through on rate hikes on September 16. - The bond market is signaling loss of confidence in the Fed; all major global 10-year yields (US, German, French, Italian, Japanese) are at or near multi-year highs, and every maturity on the US curve prices above the current 3.45% average cost of outstanding debt. - Yield curve control is the inevitable destination because the math is undefeated; once formally imposed, the Fed's balance sheet will explode—this is "the big print." - Lepard expects the big print within 6–12 months, compared to his earlier 3-year timeline; gold up 65% last year signals the debasement race has begun. - The World War II precedent—120% debt-to-GDP, ~18% inflation in 1951–52, yield curve control through 1952—is the template for how governments escape debt traps without collapse. - Private equity has infiltrated the insurance business, misallocating assets tied to pension and annuity obligations that face nominal-only payouts in a currency-debasement scenario.
#277: Slowly getting bitcoin, why gold is already demonetized, and the virtue of Bitcoin with Larry Lepard
- Government manipulation of gold: The Fed has systematically suppressed the gold price through paper gold creation and policy, stripping away its monetary premium (gold should trade at ~$10,000 today based on historical money supply ratios). - Bitcoin's volatility as an advantage: Unlike gold, Bitcoin's extreme volatility (500% moves in six months) makes it harder for governments to suppress via short-selling, creating a structural defense against manipulation. - Sound money as moral imperative: Both Bitcoin and gold represent non-state money and freedom from central bank control; sound money advocates (the "Remnant") should unite regardless of asset preference rather than fight over which will win. - Deflationary future and low time preference: A Bitcoin standard enables deflation, savings rewards, and long-term thinking—the opposite of Keynesian "growth at all costs" that has destroyed savers, retirees, and the middle class. - Coming monetary reset (10–15 years): Runaway deficit spending (spending 2x tax revenue), accelerating money supply growth, and breaking bond markets will force a return to sound money; inflation will far exceed the 1970s. - Asset allocation wisdom: Hold both Bitcoin and gold without leverage; use gold's stability to buy Bitcoin dips and vice versa (suggested mix: 60–80% gold, 20–40% Bitcoin, or personal preference 60% Bitcoin, 40% gold).