Energy Transition as Economic Shock Absorber

Good Morning Ladies and Gentlemen

“Countries moving away from oil and gas are shielding their economies against the kinds of price shocks that we’re seeing currently.”

Dutch Climate Minister Stientje van Veldhoven

Many thanks for all the generous feedback on my last “Stefan’s Weekly” and especially on my daughter Lucie’s second song. To me, the song is very catchy, and I am happy that so many of you feel the same. Thank you very much!
Now, let us dig into today’s topic, which I find particularly interesting. I was inspired to write about it thanks to the quote above by the Dutch Climate Minister Stientje van Veldhoven. But before we jump into today’s topic, let me come back to a phenomenon I have never really experienced like this before.

The Wall of Worry

In financial markets, the term “wall of worry” describes a scenario in which asset prices continue to rise despite investors’ ongoing concerns about economic, political, or geopolitical risks that, in theory, should lead to lower prices. It is said that markets “climb” this wall as these fears are gradually taken into account and discounted.

Climbing The Wall of Worry

For an extended period, investors adapted to a market dynamic characterised by sharp declines and gradual recoveries, visualised as an elevator descending and an escalator ascending. However, the months of March and April disrupted this pattern. Prices not only rose rapidly; they surged past multiple levels in a single leap. Instead of climbing the wall of worry, which is usually tedious, investors vaulted over it. The outcome is a market that seems less deliberate and more frenetic, attempting to catch up with the present rather than thoughtfully pricing in future expectations. I wonder where this leads to.

Transition to Renewable Energy

The ongoing conflict in Iran appears to be “supercharging” the global shift towards renewable energy, prompting governments to accelerate the deployment of wind and solar technologies to reduce their reliance on fossil fuels. Attempts to maintain dependence on fossil fuels are increasingly seen as counterproductive, a sentiment echoed by United Nations climate official Simon Stiell. This also subtly critiques the sitting U.S. President Donald Trump, who has famously disregarded renewable energy in favour of oil and gas. While the advent of a new multipolar world order presents certain challenges for this transition, evidence suggests that significant changes are indeed taking place. Fossil fuels, once regarded as reliable and cost-effective, are now viewed through a more critical lens. As Lara Williams notes in Bloomberg Opinion, “we are beginning to realise that dependence on hydrocarbons is no longer a sustainable path for economic growth.” Before the conflict with Iran, we might not have paid much attention to these perspectives; however, it always makes sense when governments are striving for energy autonomy. However, the effectiveness of solar and wind as solutions to this issue remains to be seen.

Conclusion

In summary, these developments reveal a shared theme: periods of uncertainty often serve as potent catalysts for change rather than obstacles. In the realm of energy policy, geopolitical tensions are accelerating the pursuit of greater autonomy and renewable energy sources. Similarly, in financial markets, ongoing concerns have not deterred price increases, at least until recently, when markets seemed to advance in anticipation of future gains rather than steadily navigating through worries. Whether this indicates a fundamental shift in market dynamics or simply a momentary surge of enthusiasm will become clearer over time. For the moment, it is crucial for us, as investors, to remain focused, disciplined, and mindful that genuine progress, whether economic or environmental, seldom follows a straightforward or easy trajectory.

Latest Incrementum Gold Compass

As we look impatiently ahead to the 2026 Incrementum In Gold We Trust Report, I am sharing the link to the latest edition of the Incrementum Gold Compass.
You can access it here: https://ingoldwetrust.report/monthly-gold-compass/?lang=en
The Incrementum In Gold We Trust Report 2026 is scheduled for publication on May 20, 2026.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

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Mail: smk@incrementum.li