Matt Piepenburg: The Fed Will Only Change Course After a Market Drawdown of 30-40%

by | Oct 8, 2023 | Invest During Inflation | 45 comments

Matt Piepenburg: The Fed Will Only Change Course After a Market Drawdown of 30-40%




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Monetary expert Matthew Piepenburg of GoldSwitzerland.com returns for Part 2 of our interview with him in which he explains why, whenever countries become too indebted (as we are now) it’s ALWAYS the currency that’s sacrificed. In the long run, hyperinflation is likely to be the end result.

But in the near term, a recession & bear market correction look quite likely. Which makes the current environment a highly uncertain one for the individual investor.

To listen to Part 1 of this interview with Matt, go to:

Follow Matt at
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It Will Take A 30-40% Market Drawdown Before The Fed Pivots | Matt Piepenburg

In the unpredictable world of finance, market fluctuations are inevitable. However, according to Matt Piepenburg, a well-known investor and writer, it will take a significant market drawdown of 30-40% before the Federal Reserve (Fed) changes its monetary policies.

Piepenburg’s argument is based on the observation that the Fed has become increasingly reliant on its easy-money policies, particularly low interest rates and quantitative easing (QE), to support the markets. These policies have been in place since the 2008 financial crisis, and any deviation from them could have substantial consequences for the economy.

What Piepenburg highlights is that as long as the stock market remains relatively stable, the Fed has little incentive to alter its current monetary stance. The central bank is content with the status quo, as it believes that the current policies stimulate economic growth and maintain a positive sentiment in the markets.

However, as the saying goes, “what goes up must come down,” and market downturns are an inherent part of the financial system. Piepenburg argues that once the market experiences a significant drawdown, one in the range of 30-40%, the pressure on the Fed to pivot and change its policies will become undeniable.

At this point, Piepenburg believes that the Fed will have no choice but to shift its strategy to protect the economy from further damage. As market volatility and uncertainty increase, the Fed will likely consider raising interest rates and reducing its reliance on QE.

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This view, while seemingly logical, faces its share of skepticism. Critics argue that the Fed has a profound influence on the markets and exercises ample discretion in deciding when to intervene. They believe that the central bank will act preemptively to prevent a significant downturn, rather than waiting for it to happen.

However, Piepenburg counters this argument by pointing out that the Fed has historically been reactive rather than proactive when it comes to market events. The central bank often adjusts its policies after significant downturns or economic shocks, rather than taking preemptive measures to avoid them.

Additionally, Piepenburg emphasizes that the current market conditions are not sustainable in the long term. The combination of an extended bull market, increasing levels of debt, and elevated valuations raises concerns over the market’s stability. Therefore, a significant drawdown becomes increasingly likely as time goes on.

While the idea of a 30-40% market downturn may worry investors, Piepenburg sees it as a necessary catalyst for changing the Fed’s approach. He believes that a more cautious and balanced monetary policy would help stabilize the markets and ensure long-term sustainable growth.

In conclusion, Matt Piepenburg’s argument about the Fed’s pivot is grounded in the notion that it will take a significant market drawdown of 30-40% before the central bank alters its monetary policies. While the future is uncertain, his analysis emphasizes the need for the Fed to proactively address market stability to protect the economy from potential downturns. Only time will tell whether his predictions come to fruition, but understanding these dynamics provides investors with valuable insights into the potential shifts in the market.

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45 Comments

  1. Rick Lange

    Great interview! Please bring him back

  2. Pray4us100

    You can't have a political democracy without an economic democracy. It's time to pass the Economic Democracy Act.

  3. Freedom

    I agree with you 100% until you go to "Vivak is factually based"…the dude is a CRAZY LOONEY and he's probably a Russian asset…

  4. Deb

    Watching the extreme concern about Jamie Dimon's projection of the interest rate maybe reaching 7%, I wonder who recalls the 12/5/1980 meeting that set the rate at 19-20%? (It hit 19.99% on 6/1/81).

  5. Enlightened

    I would pay to listen to Matt weekly

  6. American Prepper

    If mkts drop 30% the majority of boomers will never invest in mkt again. They can get 5% or more in near risk free rate of return in money market etc and they are known as being selfish…they will enjoy their lives leaving little to nothing behind to their heirs due to inflation. Then the Boleshivik democrats will own the usa

  7. Sameera I

    Matt has some great points, but still talks and feels like an uninformed MBA at many points.

  8. Brenda Lovrien

    Highly intelligent, economically savvy, blunt-speaking leadership – Matt Piepenburg for President!

  9. Maree Crick

    Please have Matt back.

    More on the social side, you what bothers me… so many intelligent thinkers of integrity out there – just not in gvt.

  10. Wayne Faulkner

    All our leaders for the 50 years in US have been Puppets, what we need is a new Puppeteer.
    Think World Peace ✌️
    Reduce the military bases over seas from 150 plus to zero.
    Protect your own southern border.
    We need to go back on the gold standard, then you will get real leaders.

  11. 4000angels

    Matt Piepenburg is my new favorite guest on Welthion.

  12. Vanderson Hefeltin

    Adam, Excellent second session follow up, discussion is much broader than just financial/investment The macro world/history view is needed to understand the challenging times we face.. One favor, stop calling politicians "leaders" they are not!

  13. Wilson Scott

    I personally think that we are going back to an aggressive bull market again in 2 months. trading went smooth for me but all thanks to Luciana cruz for her amazing skills that helped in earning massively for me. Invest now rather than hoard for a future you aren't sure about.

  14. PChal 024

    Круто братан твои видео суперские реально если бы я смотрел тебя не знаю кто ты я бы угадал что у тебя 900.000 подписчиков реально даже больше!!!

  15. Howard Huang

    Sincere???? So was Hitler ! It is not just the sincerity. It is the core ideology that matters most !

  16. Sue Kleiman

    He is the best I have heard on your show by far!

  17. Icarium

    Did he say we need more AOC’s lmao. Well that’s where I stop watching.

  18. george thorn

    As important as this conversation has been why is it that all that is discussed comes down to "where do I park my stuff so that I don't lose everything". What variables might we be missing? For instance, who saw B Clintons luck coming along with the internet insanity until the 2000 correction but by then we had a surplus? What is the real danger of climate change, isn't it crop failures? What about the lack of fresh potable water? What are the basics for survival? How many will survive planetary crop failures, how many won't? Migrations are being driven by food and water insecurity and terrible governance. All the money in the world can't buy you food and water if there isn't any which may be a very real possibility for up to 5 billion people and we have idiots out there saying our birth rate is too low, and they're saying it because of greed, they want bigger markets for their gizmos. We can solve our problem and we will and, honestly, it may come to pitchforks.

  19. Fish Ventura

    Yes please, we need better leaders

  20. Geoffrey Mak

    Lost me at the RFK pumping

  21. tc102167

    The Fed has already created more liquidity in pockets and that’s y the markets surged.

  22. Tass Rainey

    Your best interview.

  23. whitespot88

    Matt is a bitcoiner , mic drop

  24. Hoofdogg

    Matt knows life. Well rounded.

  25. fishtherapy100

    “FINANCIAL ADVISORS”. RARELY…. AS IN 5% RUN A LONG/SHORT STRATEGY. THEY DONT HAVE THE SKILLS TO SHORT THE MARKET. STAYING LONG REQUIRES NO INTELLIGENCE. MOST OPERATE A LONG BUY & HOLD WHICH KEEPS THE CLIENT ON A LONG FUND…WHICH MEANS THEY CAN CHARGE FEES. THE 60/40 PORTFOLIO MODEL THEY RUN AND HAVE BEEN RUNNING FOR 30 YEARS HAS FAILED MISERABLY. HOW DO I KNOW? I USED TO BE A UK WEALTH MANAGER FOR 35 YEARS.

  26. muzehack

    This one really went off the rails. So disappointing.

  27. Xavier Verbeke

    Hedgeye is exactly the advisor Matt so aptly describes. Risk management, based on numbers and a system, no storytelling, no hidden agenda and honest principles.

  28. Frank Russo

    What's going on is the squandering of their inheritances on superficial crap, bling, and McMansions.

  29. Zorro's Sword

    Careful, Matt, you will be labeled an antisemite for advocating for common sense and the betterment of the United States.

  30. Nathan Dale

    Another point, a democracy requires a demos. As Matt is intonating… the west is so divided with so little in common its is getting difficult to talk rationally about nations having a demos. Since its inception the US was fundamentally Christian and typically welcomed Christians of varying flavours, those fleeing tyranny and those motivated to build new lives. Right there are the foundational precepts of America. A nation of industrious, opened armed migrants with a common sense of morals, faith and destiny. Whether you like it or not, that Christian identity enabled trust, it established common values, common stories of hope, trial and redemption, care for the Other and welcome to the stranger. It was strong and glued disparate peoples together but more importantly it provided a framework of belonging for everyone of differing faiths and not at all. This is the story of "Christendom" but without a common history, language, origin story, cuisine or cultural attire it was especially important to the USA. Without Christianity the future of the West looks rocky, especially in the New World. It would be sadly poetic to watch society disassemble as relgious affiliation declines in stark reflection of the original religious forces that established the very first permanent human communities 12,000 years ago in modern day Turkey. The human origin story, the story of communities, nations and cities turns out to be religious and not economic. Perhaps the recent discoveries in Turkey which yielded this insight also explain why modern Western societies are struggling to maintain cohesion. Surely the only wealth that transcends such societal upheavals is physical assets: farms, mines and precious metals. My instinct is the future will look a lot more like city states, adjacent to coherent, religious nations operating in loose confederations. In the absence of common religious frameworks, the days of continent spanning countries is time limited. The balkanisation of the Western project seems likely.

  31. Nathan Dale

    Anortion rates go up, fertility rates go down, births per woman are collapsing… what evidence do we jave that society is interested in propogating itself, let alone planning for future generations?

  32. Armed Resistance

    There is no political solution to abject evil.

  33. william fox

    The FED is more concerned with the stock market than its legal obligation to address inflation and employment. The FED has lost its way. The FED should stop inflation or the consequences will be disastrous.

  34. Daniel anderson

    It's always an honor to have you here as a mentor I learn a lot watching your videos and it has encourage me expecially in decisions making. Investing in the financial market that changed my life forever.

  35. Secretariat Girl

    RFk, Jr.? Really? West? That performance artist Vivek?
    Well, you demeaned Biden…but he's taken the gloves off and is speaking the truth about Trump. Your faves sure don't. Honestly, you want to hand the election to the autocrat,/fraud/ rapistTrump? Sorry you are not serious. ..Go listen to Steve Schmidt or Meidas Touch and learn about the threat to democracy we are facing. PS ..I'm summa cum laude/Mortarboard Cornell..but never worked for Goldman Sachs!

  36. ПЧел 009

    Броты лучший монтаж10/10 гемплей10/10 реклама 10/9 АААА

  37. Jenny Adams

    Matt made so much sense. It's a really great interview. Thanks Adam

  38. Matt Anderson

    I agree with a lot of what Matt said
    Thanks for having him on, get him back soon.

  39. Edwin Pink

    He lost me when he says he likes Kennedy and Ramaswamy.

  40. Michael Reif

    The laundry list of what needs to be done to get out of our massive debt with your guests never includes any mention of changes to the tax system. Not even a nod to eliminating such vast inequality. Yet you talk about the “pitch forks” coming out? What a crock of shit your broadcast has been turning into.

  41. Jordan Chaney

    He lost me with the political talk.

  42. Manfred Jolley

    Yes please invite him back.

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