Ronald-Peter Stöferle: Our Inflation Signal Just Reached Maximum Strength
Ronald joins us to discuss his free annual report called “In Gold We Trust” which this year has expanded to more than 230 pages. He feels that the gold market is currently extremely dull with few investors interested. However, last year gold was up 14% in dollar terms and this year is down slightly but up compared to many other currencies. There is massive inflation beginning to show up, and they detail that in the report.
This year they have identified three significant changes. Globally central bank monetary policy seems to be growing hawkish as they tighten policy. This year the Fed will reduce their balance sheet by 430 billion. The liquidity that we all got used to is ending and people are at risk of underestimating the effects of this tightening.
Secondly, de-dollarization continues with countries like Russia having sold a lot of treasuries and continue to accumulate gold. The Petro-Yuan is now a major factor that helps countries to circumvent the US Dollar.
Lastly, there is a technological shift with new technology such as bitcoin and cryptocurrencies. He feels that they are just competition for gold and could become a potent tool for improving the usability of gold.
Many markets are trading at or near all-time highs which is a consequence of loose monetary policy. This tightening will have a major effect on markets particularly as consumer interest rates rise.
He discusses why recessions can be good for precious metals. They are monitoring various leading inflation indicators which they say have reached a maximum. They document this in their report which you can find here.
Talking Points From This Week’s Episode
• We are in or leaving the longest bull market.
• Markets are increasingly sensitive to changes.
• Quantitative tightening is here.
• A recession is likely coming and the market is not prepared for it.
• Some sort of monetary reset may be in our future.
Ronald-Peter Stoeferle, 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 the field of 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 the price of 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. He continues to write the annual “In Gold We Trust” as a senior advisor to Erste Group.