Successful Asset Management

EG: What three fundamental characteristics would you say that comprise a successful asset manager in 2023?

MP: 1) Genuine conviction. 2) Acknowledged and objectively clear expertise. 3) Client service as an operational priority

EG: Freedom and liberty MUST reign over Communism! As Russia and China continue to stack gold and dump U.S. Treasuries, what should Western Governments and central banks be doing to ensure the continued stability and resilience of our economies?
 

MP: Western governments need to rule by informed action rather than consensus-friendly platitudes and economically novice leadership. There needs to be more transparency as to national debt and spending failures, along with greater accountability for the policy makers who created the greatest debt bubble (and credit distortion) in the history of capital markets. True capitalism demands free price discovery and natural, rather than centralised, supply and demand forces. By its very name, a central bank, and hence a centralised economy, is an open anathema to genuine capitalism, which effectively died in December of 1913.

Capitalism requires a fair rather than rigged playing field, which means a return to otherwise extinct anti-trust principles. Furthermore, policy makers need to confess that exporting labor costs overseas has effectively destroyed national productivity and manufacturing advantages to the tragic point that the “American Dream” is now effectively “Made in China.”
 

EG: How do you think the U.S. 10-Year Treasury note will fare in the next decade as the Fed continues to monetise debt and Western economies seemingly head into a BRICS wall?
 

MP: At the current pace, the convergence of grotesque public debt levels alongside a rate-hike strengthened as well as weaponised USD has deteriorated foreign interest and trust in the once revered American IOU. Although inflation is only temporarily (and mis-reportedly) lower, investors around the world recognise that the UST’s prior boast of “risk-free-return” has been reduced in real terms to “return-free-risk.” Sustaining otherwise unpayable twin deficits with more desperate bond issuance will only weaken future demand for USTs, thereby forcing the Fed to monetise the same with “mouse-click” money, an inflationary policy which will then weaken an already weak US10-Year in the debt-soaked years ahead.
 

EG: Compromising the security protocols you have undertaken at Matterhorn would be a challenge to make even James Bond, Ethan Hunt, or Raymond Reddington wince! How might your Swiss Alp vaults be the best solution for wealthy clients at a time of geopolitical risk, confiscation and upheaval?
 

MP: Since MAM was founded, Egon von Greyerz, who came up through the banking system before becoming the Vice-Chair of a FTSE 100 company, knew better than most about the alarming cracks in the ice of the global banking, currency, market and political systems. Thus, he immediately recognised the need to store precious metal wealth outside of this open circus where one’s gold could be otherwise comingled, hypothecated or even lost to failing bank operations. More than one commercial bank during the 2008 crisis, for example, was unable to provide gold delivery precisely when needed most.

We, however, avoid such risk. Our Swiss Vault is not only the most secure vault in the world, but the gold held within its 007 walls is owned directly, with no intermediary parties, shared assets or limits to direct access. In short, what Egon designed for his own family funds and investor circles, is the very same service he created for MAM clients. If risk levels rise, clients can always access our partners, as well as their gold. We have a private airstrip, luxury accommodations and even satellite phones for the worst-case scenarios, which we all hope, will never be needed. Hope, however, is never part of farsighted a wealth preservation plan. 

   

EG: Ralph Waldo Emerson states ‘the desire for gold is not for gold itself, but for the means of freedom and benefit.’ What pertinent trends do you currently see amongst your elite institutional and ultra high net worth clients?

MP: Our clients have always understood the lessons of math and history, and hence the universal error of measuring wealth in paper money. As currency, market, banking and political risks reach new highs, they see these risks soberly. They are calmly ensuring against such risks in gold allocations while confirming their own Emersonian freedoms by simply freeing themselves from these broken systems and currencies.

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EG: Industrialist Hugo Stinnes in the 1920s could see the hyperinflation coming in his time, taking enormous loans to buy industrial assets and paying them back in worthless Reichmarks, eventually becoming Germany’s richest man. How may prudent investors utilise leverage in this manner today?

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MP: Gold makes up less than 0.5% of all financial assets, so clearly, as well as historically, the smart minority (as opposed to just the contrarian minority) is always comprised of profiles similar to Hugo Stinnes.
 

EG: Financial expert Jim Rickards mentions dynastic wealth as being that which has existed in families for 300 years or longer, typically consisting of land, gold and art. Why is it so important to remain ‘analogue’ in this digital age of foolish CBDCs?
 

MP: Digital evolutions, like any evolution, can create progress as well as fiat wealth, both near and long-term. And digital Trojan horses, like CBDC, can always distort and control wealth. But whether evolving from horse to buggy, buggy to steam, or rotary to cell phone, dynastic wealth will always be measured by real assets rather than paper or digital trends. Gold, like earth and art, are not outdated relics of preservation, but rather their very bedrocks.
 

EG: Switzerland is renowned not only for quality watches and chocolate, but also the finest quality gold. As Swiss Bullion Experts with direct access to refineries based in Switzerland, what additional advantages are offered to clients?
 

MP: We get better access, better premiums and better metals. Furthermore, as a Swiss entity rather than a foreign entity operating in Switzerland, we operate under far less regulatory hurdles and restrictions.
 

EG: Having earned decades of trust from sophisticated investors across 90 countries. Halfway through 2023, with scary macros and geopolitical risk mounting, what should informed investors be doing concerning the weighting of their portfolios?
 

MP: Traditional risk assets (and risk parity allocations) are both over-priced and correlated, and should be limited in size. Smart, long-term portfolios buy bottoms rather than tops. Thus commodities should be a priority, as their cycle is yet to begin in earnest. Portfolios should include large allocations to cash equivalents (short-duration sovereigns), only to be employed when markets mean-revert. Active rather than passive management is key as markets reach bubble heights.
 

EG: Looking at how world events are unfolding, if you could serve in an advisory capacity to the President of the United States on markets and the economy, what would your advice be and why?

MP: We’d tell the current President to resign and advise the next president to prove an advanced understanding of history, math and currency cycles. We’d then advise him/her to seek what is best for the country, not what is best for re-election. An ounce or two of honesty, blunt-speak and accountability wouldn’t hurt either.   EG