| Dear Ladies and Gentlemen
This was quite some year! I have never experienced anything like that, and it would be o.k. for me if next year were not going to be all that challenging. In any case, I wish you all the best, a relaxed, funky Christmas and a happy and prosperous New Year. Stay safe and healthy and never stop sharing your ideas, points of view, concerns and experiences. Many thanks for all your contributions! Yours truly, Stefan M. Kremeth Tel.: +423 237 26 60 |
Month: December 2020
Legends never die
| Dear Ladies and Gentlemen
This is to my friend Anton, who not only is a very bright economist but who has a talent for spotting culturally significant pieces of art. According to data published by the Chinese customs administration, China’s imports grew by 4.5% last month, while exports jumped 21.1% versus November 2019. The increase of 21.1% marks the highest since February 2018. The two numbers result in a trade surplus of USD 75.4 billion for November 2020, which by the way, represents the largest number on record in data going back for at least 30 years. Wow! Now that, Ladies and Gentlemen, of course, also means that China is sucking up USD liquidity to an inconceivable extent. Keeping that in mind and thinking back to my weekly mail published in the first half of this year on USD liquidity (and here the circle closes; as that very text was submitted by my friend Anton), consumer price inflation can not only be derived from money supply growth. Many economists have done precisely that for the last twelve years, ever since the Great Financial Crisis, predicting exploding consumer price inflation and were caught on the wrong foot as consumer prices did not show any significant increase whatsoever. Governments and central banks in most G20 nations have undertaken significant efforts to get inflation up and so far failed. I get the impression inflation cannot be planned it is developing. You know, analysts are known for hazy memories when it comes to their predictions that did not turn out to be materialising. Predictions that are not materializing shouldn’t be a problem. As no-one can foresee the future, predictions are nothing more than a very personal interpretation of at the time available data (information) on a given subject and by a given person or an institution at a given moment in time. This is it. People who are taking predictions for more than they are have most probably not understood the concept. How inconvenient it may seem, there is no magic; it is presumably impossible to predict outcomes of any sort, even less, outcomes of complex interrelations with many unknown variables. This is why, when reading research (something I do a lot and truly like doing), I try not to base my investment conclusion on what I have just read but merely look at research as a piece of a puzzle, admittingly not always an easy task. And now, Ladies and Gentlemen, why did I call this weekly “Legends never die”? Please let me know what you think. Thank you so much for your attention and participation. 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 an excellent start to the day, a wonderful weekend, and above all, good health! Yours truly, Stefan M. Kremeth Tel.: +423 237 26 60 |
Austrian school meets Bitcoin
Austrian school meets Bitcoin
Mark Valek, big fan of Bitcoin and representative of the Austrian school in an interview with Real Vision Crypto. He describes why he sees a great future for Bitcoin. Also, our investment fund which combines gold and Bitcoin is a topic.
Risk of Rising Inflation Rates?
| Dear Ladies and Gentlemen
My partners Ronni Stöferle and Mark Valek and many of their helping hands came up with a special report getting somewhat more in-depth into the inflation/deflation topic. I am happy to dedicate this weekly mail to their exciting work, which shares an interesting point of view. Please see for yourself and please enjoy the read: “The extraordinary events of 2020 have motivated us to write an In Gold We Trust special on the heightened risk of rising inflation rates. We chose the classic children’s fable “The Boy Who Cried Wolf”, by Æsop as the leitmotif of this report. Why did we choose this allegory? As the story goes, a boy guarding over sheep jokingly cries wolf, twice. After returning to the village twice, the locals decide not to respond when the boy cries again. Little did the villagers know that this time the wolf was attacking the sheep. Similarly, the global paradigm of the past decades has been disinflationary and occasional warnings about rising consumer price inflation have not materialised. Now, with debts at an all-time high and trust in public institutions eroding, populist policies could serve as the bedrock of a new inflationary paradigm. We suspect that the monetary developments of 2020, coupled with the recent paradigm shift, could soon push inflation rates significantly higher. Policymakers and investors at large are reluctant to acknowledge this possibility. Decades of the deflationary paradigm have rendered them wholly sceptical of a potential wolf attack: spiking inflation. The main topics of this In Gold We Trust special are:
The In Gold We Trust special report can be read and downloaded here: The Boy Who Cried Wolf – Inflationary Decade Ahead? (English) Given the unique combination of circumstances, we are convinced that inflation poses a high risk towards wealth and its creation. Investors would do well to reconsider traditional portfolio theory in favour of something more robust against inflation risk.” 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 |