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Ronald-Peter Stöeferle: Current Monetary System Makes Gold Even Safer

Ronald returns to the program to discuss Incrementum’s annual “In Gold we Trust” report. This year’s theme and title is “Monetary Climate Change,” and the reports cover shows the Statue of Liberty drowning in debt. They wanted to convey the lack of sustainability of the US monetary system.

We are seeing sovereign debts moving much higher and the strengthening of big government. Fiscal responsibility no longer exists in this environment. Ronald cautions that trust that takes decades to build can be lost very quickly. We see a merger of fiscal and monetary policy, which is increasingly dangerous as the independence of central banks is ending.

Inflation is becoming structural, mainstream, and will likely not be transitory. Inflationary forces are now stronger than the deflationary forces of the past. Monetary velocity will begin to increase, and “Asian countries are starting to export their inflation rather than deflation.” In addition, the US dollar is showing signs of structural weakness over the medium to long term. There is also cooling of relations between the US, China, and other nations. Investors should pay closer attention to their government’s policies on spending.

He compares and contrasts Central Bank Digital Currencies with decentralized cryptocurrencies. There are concerns they will use these new digital currencies to control the flow of funds. Resulting in more centralization, regulation, and potential loss of freedoms.

Ronald discusses the current debt to GDP levels and contrasts those with the debts after World War II. Government’s will have to use yield curve controls to place a cap on debt payments. This results in low rates indefinitely and has adverse effects on the overall economy. Over the long term, the place to be will be commodities and specifically gold.

Talking Points From This Week’s Episode

  • Changing climate of monetary and fiscal policies.
  • Lack of fiscal policy and confidence risks with the dollar.
  • Inflation is becoming a structural problem.
  • Central Bank Digital Currencies compared with Cryptocurrencies

Time Stamp References:
0:00 – Introduction
0:35 – Monetary Climate
2:56 – Five Pillars
7:40 – Race to Deflate
13:20 – Inflation Signals
17:40 – Central Banks Purpose
20:49 – Digital Currencies
27:23 – YCC & Concerns
39:21 – Everything Bubble
42:43 – Resource Equities
46:15 – Confiscation Risk
52:04 – Wrap Up

Guest Links:

Ronald-Peter Stöeferle is a Chartered Market Technician and a Certified Financial Technician. During his studies in business administration and finance at the Vienna University of Economics and the University of Illinois at Urbana-Champaign, he worked for Raiffeisen Zentralbank in Fixed Income/Credit Investments. After graduating from university, Stoeferle joined Vienna-based Erste Group Bank, covering International Equities, especially Asia. In 2006 he began writing reports on gold and gained media attention when he expected gold to rise to USD 2,300/ounce when the current price was only at USD 500. His six benchmark reports called “In Gold we Trust,” drew international coverage on CNBC, Bloomberg, the Wall Street Journal, Economist, and the Financial Times.

In 2013 he became managing director and partner of Incrementum AG, based in the Principality of Liechtenstein. The company focuses on asset management and wealth management and is one hundred percent owned by its partners. In addition, he continues to write the annual “In Gold we Trust” as a senior advisor to Erste Group.

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