Macro Voices #221 Ronald Stöferle: In Gold We Trust

Ronald Stöferle postulates a secular change in precious metals

This year’s In Gold We Trust report is based on the leitmotif of the dawning of a golden decade. It is in this spirit that Ronald Stöferle discusses the environment for gold, looking ahead to the next decade. In contrast to fiat money, gold cannot be inflated at the push of a button. Furthermore, the Covid-19 crisis is expected to lead to a stronger devaluation of money. Linked to this is also the fact that Western nations could reach the limit of debt sustainability. Moreover, the Covid-19 crisis heralded the end of central bank independence. All these factors are the perfect breeding ground for gold and precious metals.

Drastic measures in the wake of the Covid-19 crisis

In the wake of the Covid-19 crisis, the world saw an unprecedented level of intervention. Central banks had learned their lesson and intervened much earlier and much more aggressively than in 2008/9. As Ronald Stöferle discusses, this time it was not only central bank intervention but also fiscal policy. By the end of April alone, around 20% of world GDP was pumped into the system to counteract the strong deflationary forces. Ronald Stöferle foresees that we are possibly at the tipping point into the third phase of the inflation cycle described by Murray Rothbard and that the subsequent inflation will not hit us until the next few years due to delayed effects.

Ronald Stöferle describes the turbulent times for commodities

The raw materials sector is currently going through difficult times. As Ronald Stöferle compares, the world seems to be upside down. We have seen negative oil prices and negative returns. Ronald Stöferle describes how many people almost react with mockery at the thought of being bullish in areas like copper, silver or oil. However, if the inflation forecasts are correct and the major infrastructure plans that are currently being planned are implemented, this would almost certainly be accompanied by rising commodity prices.

Can gold replace bonds in the portfolio?

As Ronald Stöferle points out, the historical argument against gold is that it doesn’t generate returns. But those times are over. When gold broke through the resistance zone last year, we moved into the next phase of the bull market. Generalists and some well-known people returned to the gold market. The Covid-19 crisis also showed well, how well gold can stabilize against falling stock prices and that it was a good defender of your portfolio. Because of the poor returns in many other areas, more people will look to gold again in the future.

Aren’t cryptocurrencies the new gold? Ronald Stöferle explains!

The alleged competition between gold and Bitcoin is not real. As Ronald Stöferle points out, Bitcoin was designed to represent digital gold. Bitcoin will also become a much harder currency in the near future. Moreover, just like gold, Bitcoin has shown that it performs very well in crisis situations. This was also a factor that led Ronald Stöferle to design his own fund combining gold and Bitcoin. This fund is currently performing very well. Ronald Stöferle also emphasized that it is nice to see that so many young innovative people have entered the market on crypto-currencies, which contribute a lot to the critical discussion of our current financial system.

Source: https://www.macrovoices.com/853-macrovoices-221-ronald-stoeferle-in-gold-we-trust