Lawrence Lepard: Gold Stocks are the Best Performing Asset Class When Inflation Hits like the 70s

Tom welcomes back Lawrence Lepard from EMA2 Equity Management Associates for a discussion on economic trends and the Federal Reserve's monetary policy. Lepard expresses concerns about the Fed's potential acceptance of a higher inflation rate due to rising U.S. interest expenses and a large budget deficit. Jerome Powell, the Fed chairman, is also contemplating rate cuts to support employment levels and government finances amidst ongoing inflation and uncertainty in unemployment data and Gross Domestic Product growth figures. Larry and Tom contemplate potential rate cut timelines, the possibility of a shift in Fed tactics, concerns over financial crises, and the potential impact of political events on the Fed's decisions before the upcoming election.

The conversation shifts overseas to Japan's economic situation, with Lepard predicting that gold will reach new all-time highs due to Japan's reliance on imported oil and its shift towards purchasing oil in yen instead of dollars, potentially leading to a surge in gold demand and higher prices. Larry anticipates a decade-long bull market for gold and silver stocks as they are expected to double or even triple in value within the next 12 to 18 months due to higher metal prices, increased earnings, and potential dividends or stock buybacks.

Larry expresses his investment preferences, focusing on companies that pay dividends or hold precious metals as treasury assets. He also emphasizes the importance of responsible capital management following lessons learned from previous cycles. Despite concerns about mergers and acquisitions for large companies during this period, Larry suggests they might pay higher prices later in the bull market instead of seizing opportunities at low prices now.

Larry discusses his current projects, which include completing a quarterly report and writing a white paper on why sound money is crucial to solving the world's problems. He proposes making gold, silver, and Bitcoin legal tender, abolishing the Federal Reserve, letting banks fail if they engage in risky practices, and eliminating the Federal Deposit Insurance Corporation as steps towards progressing towards sounder money.

Time Stamp Reference
0:00 - Introduction
0:53 - Rate Expectations
3:05 - Employment Factors
5:06 - Something Will Break
11:00 - Recent Political Events
16:35 - Mathematical Certanties
20:14 - Bonds & Long-Term Demand
23:32 - Stock Concentration
26:00 - Crack-Up Boom Bust?
27:35 - Global Problems
30:55 - Wealth Destruction
33:03 - Silver or Gold First?
37:22 - Miners & Valuations
41:05 - Dividends in Gold?
42:53 - Finding Opportunity
46:23 - Mexico & Mining?
49:53 - Germany & Bitcoin Sales
53:15 - Report & Whitepaper
56:52 - Spreading Awareness
1:00:16 - Wrap Up

Talking Points From This Episode
- Larry discusses Fed's potential acceptance of higher inflation due to US interest expenses, budget deficit & Jerome Powell's rate cuts.
- Lepard predicts a decade-long gold bull market due to Japan's yen oil purchases, higher prices, increased earnings.
- Larry suggests focusing on dividend companies or precious metals; proposed steps towards sounder money, including making gold legal tender.

Guest Links:
Germany Bitcoin Sale: https://finance.yahoo.com/news/germany-sells-off-final-bitcoin-064941448.html
Newsletter: http://eepurl.com/gOf1dT
Website: http://www.ema2.com
Twitter: https://twitter.com/LawrenceLepard

Lawrence W. Lepard is the Founder and Managing Partner of Equity Management Associates. He has spent his entire 38-year career as an investor, principally focusing on venture capital opportunities.

Before co-founding EMA, Mr. Lepard spent 13 years at Geocapital Partners, in Fort Lee, NJ. There he was one of two Managing General Partners and was responsible for several venture capital funds. Before Geocapital, Mr. Lepard spent seven years at Summit Partners in Boston and California, where he was a General Partner at Summit I and Summit II.

Mr. Lepard received his BA in Economics from Colgate University, and he received an MBA with Academic Distinction from Harvard Business School.