Presented by Fringe Finance at QTR
This is part 2 of except marginal financing An interview with fund manager Lawrence Leppard, where we discuss the state of the economy, gold, bitcoin, the disastrous market and supply chain outcomes in the country, and more. The first part can be found here.
Larry manages EMA GARP Fund, a Boston-based investment management firm. Their strategy focuses on providing “cash discount insurance”. He has 38 years of experience and an MBA from Harvard Business School. He is on Twitter too Tweet embed.
Q: For all our rants, metal prices still seem to be the only commodity that hasn’t caught inflation yet. Why is that, do you think?
Metal was early for the party and is now taking a break while all other commodities are catching up.
Gold is up more than 50% in a two-year period. It’s down 15% in the last year. It’s crazy partly due to price suppression by central banks, but they can’t hold it forever and the next run will take it to new all-time highs quickly in my opinion.
What cryptocurrency-related US stocks do you own or monitor, if any?
This is not something we focus on very much. We have some of the best bitcoin mining operators like Hut 8 and Bitfarms.
Sometimes we trade GBTC to add to your bitcoin exposure when the discount makes it more convincing than just buying more coins.
Have you ever looked at uranium space? Do you own anything in space? Why and why not?
I think uranium is very interesting and obviously in a bull market. Having said that, we don’t own any of it because it takes 100% of our efforts to stay on top of precious metals and bitcoin miners.
If we had more bandwidth, we’d look at it.
What do you think of energy? The price of oil has skyrocketed and is now over $80 a barrel. Are you exposed to any oil/energy? What is your view of the space in the short and long term?
We love energy and oil a lot, too. Like uranium, they are in a bull market. But again, we don’t own any of them due to time and bandwidth constraints. We stay in the sound money lane.
In general, if we are looking to go elsewhere, we will focus on the goods which in our view are all tempting and undervalued.
Oil, uranium, soft materials, they’ll all do well in an inflationary environment and we’re definitely in an inflationary environment that we think will last for years.
Ultimately, do you see all commodities trending upwards to a place where they cannot return to their previous lows? Is this the kind of inflation we are seeing right now?
Yes, that’s how we see it.
We believe the commodity cycle bottomed in 2019/early 2020 and we will never go back to those prices in our lifetime. 40 years of deflation is over given what we see.
Congratulations on getting some love recently from @Jack On Twitter for your views on hyperinflation. Do you think Jack is right, is hyperinflation here? How did you get @Jack For your note – did you speak to him directly?
No, I haven’t spoken to Jack directly and you haven’t interacted with him. I guess I was fortunate that he loves Marty Bennett, and Marty has included me on his podcast.
As for hyperinflation, yes, I think he’s absolutely right but the time frame is tough.
They might be able to keep this thing together for another 5 years, maybe even 10. But I kind of doubt that. It’s all about trust and faith. When people lose completely that dollar goes to zero. My working estimate is 3-4 years we’ll have a currency reset or hyperinflation (actually the same). It could happen sooner but I think it will take a few years to unfold.
We are in the early days of the Weimar Scheme. 1919, 1920 and the Deutsche Mark didn’t fail until 1923.
Thanks Chris for hosting us as part of your show.
The first part of this interview can be found here.
This is the second part of the interview. You can read Parts 1 and 2 and all of my archives by subscribing. Zerohedge readers get 10% off their lifetime subscription using this link.