Special Report on Inflation
Our special report on inflation is now finally available, learn why inflation is becoming one of the big issues of the coming decade.
Month: November 2020
Gold the big beneficiary
Gold the big beneficiary
Ronald Stöferle and Mark Valek have published an article. In which they outline why gold is the big beneficiary of the current crisis and economic developments.
Year-End Competition Update III
| Dear Ladies and Gentlemen
Time for one last update on our year-end competition before the final contender for the one-ounce Silver coin will be elected. The estimates are still wide-spread; this is great and as I had mentioned before, makes it more fun than if everybody is around the same numbers. We had some new readers joining in, and there is a new “highest” estimate for Gold, no changes, however, for the prices for Silver and the S&P. Gold: Silver: S&P 500: Currently (at the time when I was finishing writing this message) Gold stands at USD 1’811.10, Silver at USD 23.32, and the S&P at 3’629.65. Since my last update on October 16, 2020, the prices for Gold and Silver have gone down, while the prices for the S&P 500 has moved up. Because trading for the year 2020 ends in approximately four weeks, I do not let new people join in our competition. Do not worry; there is most probably going to be a new competition around the corner, i.e. in 2021. As always, please feel free to share your ideas and thoughts with me, but please do not forget (instead of hitting the reply button) to send your messages to: smk@incrementum.li Many thanks, indeed! Ladies and Gentlemen, I wish you a good start into the day, a wonderful weekend, and above all, good health! Yours truly, Stefan M. Kremeth Tel.: +423 237 26 60 |
Inflation on the rise
Inflation on the rise
Ronald Stöferle talks with and Elijah K. Johnson and Andy Schectman about lockdowns, inflation and its consequences and the future of our monetary system.
Powerplay
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The Rebel Capitalist
The Rebel Capitalist
Once again Ronald Stöferle joins George Gammon on his show “The Rebel Capitalist” to talk about Gold, Bitcoin as well as many other topics.
Quarantine Your Mind
| Dear Ladies and Gentlemen
I continuously receive many, many emails from our readers with questions on various asset classes and sometimes even on what seems specific investment opportunities. For regulatory reasons, I cannot possibly get into such potential suggestions or recommendations as I am not allowed to give specific advice in the format of my weekly emails. Thank you for your understanding. However, when it comes to the greater picture, I am allowed to share my personal view, and this is what I am happy to do from time to time. As it happens, I did I receive a question on the quality of banks in Europe. Now, banks are no homogeneous group. There are indeed large differences between different banks. Yet, many banks in Europe have significantly improved their balance sheet quality since the financial crisis, and the supervision of banks in Europe is much stricter than before the financial crisis. I, therefore, consider the banking landscape to be reasonably OK, although there may be large differences between single banks and between the various jurisdictions as well and no matter by how much the balance sheets have improved, I would not consider investing in banks for our customers. One topic to keep an eye on in this regard is a possible impending wave of covid-19 induced bankruptcies that may harm bank balance sheets. Although I personally think governments and central banks would intervene, the risk of failure cannot be denied. It seems governments and central banks have abolished de facto, a large part of the free markets, and yet, the risk of failure of non-system relevant banks is existing. From an investor’s point of view, government and central bank intervention is not necessarily a bad thing at all. There is much hypocrisy out there and to be very blunt it is probably mostly thanks to governments’ and central banks’ flooding the markets with big heaps of money that asset classes like gold, equtîties, and crypto-assets gained in value over the last years. If you hold one or more of these asset classes, do not complain too much. You know, Ladies and Gentlemen, in 1986/87 I spent 12 months in Toronto as an intern in the securities department of UBS Toronto. Our office was located right in the center of Toronto’s banking district, directly above the stock exchange. I witnessed the legendary crash of 1987. At that time, there was a classy, somewhat nervous but bright-eyed stock exchange trader working for the bank who smoked out tons of cigarettes. While the most significant panic on the stock exchanges since the 1930s unfolded, he told me over and over again almost mantra-like: “do not worry, in 24 months, probably even before that, people will have forgotten” (I do not know the exact wording anymore, but +/- this is it). What can I say, he was right, and since then there have been over 20 stock market crashes, and the result is and remains the same. Those who hold a good selection of equities in a balanced portfolio are usually doing well in the long run. However, to be able to stick to your investment principles when everyone around you is panicking, you probably need to be able to quarantine your mind for as much as possible. Please feel free to share your ideas and thoughts with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li Many thanks, indeed! And now, Ladies and Gentlemen I wish you a great day and weekend. Yours truly, Stefan M. Kremeth Tel.: +423 237 26 60 |
Hard talk with Václav Klaus
| Dear Ladies and Gentlemen
On May 4, 2020, my old friend Claudio Grass published an interview he had conducted with former President of the Czech Republic, Prof. Ing. Václav Klaus. Amid a second Covid-19 wave, the interview has not lost any of its relevance. Claudio Grass acts as an independent advisor to high net worth individuals for well over a decade. Please enjoy the read: “Claudio Grass (CG): The magnitude and the global scale of the lockdown and shutdown measures we have seen during this corona-crisis are unprecedented. How do you evaluate the response compared to the threat itself? Do you believe it is justified? Václav Klaus (VK): I do not pretend to be an expert in epidemiology, but my background in economics and statistics tells me that the threat is smaller than the consequences “organised “by governments all over the world as a reaction to this pandemic. I would add unnecessary consequences. The authorities reacted in an exorbitant way, in a moment of fear. This is partly the result of the current “online democracy “. CG: The “emergency measures” and the restrictions that have been imposed on civilians’ basic rights have served as a reminder of the true extent of the state’s powers. Do you find this worrying and do you see a risk that these new, extraordinary powers might not be as easy to roll back once the crisis is over? VK: The restrictions on basic civil rights that were introduced so swiftly and so easily demonstrate the power of the modern state, with all its new, “smart” technologies and drastically expanded enforcement capabilities. Economists often talk about the so-called “ratchet effect”, or the limited ability of existing processes and dynamics to be reversed and to return to normal once a specific event has radically altered them. It is true of prices, of productivity, and it is also true of social and political systems. Therefore, I am afraid it will be very difficult, if not impossible, to return to the pre-corona days. CG: On an economic level, what is your assessment of the impact of the shutdown measures? VK: Most, if not all, of the circulating quantitative estimates and forecasts, are wrong. The “experts” should first say how long the quarantine restrictions will last and when the economic shutdown will be fully lifted. Their economic forecasts depend on the length of the quarantine period. They should announce explicitly when they plan to end it. Until this is established and known, the current forecasts are economically meaningless. CG: The monetary and fiscal interventions that we have seen so far are as extreme and as shocking as the shutdown policies themselves. Do you think they will be enough to keep the economy afloat though, or is a deep and long recession simply inevitable? VK: The monetary and fiscal measures – unacceptable for the true democrats – may have positive short-term effects, but they will destabilise the economy and public finances for a very long period of time. They could lead to very high inflation. CG: Trillions upon trillions are being injected into the system, while wild ideas like the Universal Basic Income have become mainstream. Apart from the obvious monetary and economic risks of these policies, do you also foresee political and social implications? VK: Those of us in the ex-communist countries were used to living in a world of something like “Universal Basic Income”. We wanted to get rid of communism because of principles like this. These principles destroyed the motivation to work, which proved to be ruinous. VK: I would not call it “central planning” yet. I prefer Walter Eucken’s term (used for the description of the German economy in Hitler’s time), “centrally administrated economy”. It is not planning in its original meaning. It is the very heavy and visible hand of the government at work, instead of the “invisible hand” of the market. CG: The corona-crisis has also had some very serious geopolitical ramifications, especially vis-à-vis China. What are the main changes that you expect to see going forward in this arena? VK: We should not use this situation for the introduction of new dangerous foreign relations policies and to strengthen the demonisation of countries such as China and Russia. To my great regret, however, we see this is already happening. CG: What about the future of the EU? Do you think this crisis has further weakened it and what is your outlook for the bloc? VK: The EU will – unfortunately, in my view – survive the corona-crisis. Its exponents will use it to further weaken nation-states. They are on the defensive now, but they will reemerge again in full strength very soon. I wish I will be proven wrong, but I do believe they will use this crisis to their advantage and I fear they will do so successfully. CG: Citizens, investors and savers everywhere are justifiably scared, if not of the virus itself then certainly of financial ruin. In your view, what can we do to take back at least some control of our own future? VK: It is quite simple. The people should say “NO” to all of it. Otherwise, what lies ahead is a real-life approximation of the dystopian “Brave New World” of Aldous Huxley.” Thank you very much, Claudio for letting me use your interview with former President of the Czech Republic, Prof. Ing. Václav Klaus. Regular readers of my weekly emails know that I cannot entirely agree with all of it and yet, the interview carries an alternative perspective to what can generally be found in mainstream media and is therefore not only interesting but also meaningful. Please feel free to share your ideas and thoughts with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li And now, Ladies and Gentlemen I wish you a great day and weekend. Yours truly Stefan M. Kremeth Tel.: +423 237 26 60 |
All roads lead to gold
All roads lead to gold
Ronald Stöferle gave a keynote speech at the digital 2020 Precious Metals Summit Europe. He discussed the golden decade that lies ahead.