Ronald Stöferle on Sprott Gold Talk Radio

The great Debate

Depending on who you talk to, several scenarios are being discussed. Deflation as well as stagflation to name two. But without any doubt, the biggest topic of all of them is inflation. The comeback of inflation was not seen by many people, and only a few years before our current year people talked about inflation as if it was eradicated. In our view, several factors have ushered in this new age of inflation. First, we have to mention the extremely aggressive monetary policy. Secondly, central bank policy has changed. The Fed is currently operating with an average inflation target. Then we also see a new Cold War between the great powers. Last but not least, we are also experiencing labour shortages, increasing minimum wages, demographics problems and many small things, which together all paint the same picture, inflation.

A golden future

While this bad for many assets, gold, silver as well as the mining sector should profit immensely from this climate. They are share one thing; in that they are inflation hedges. With rising inflation anticipated by many market participants expecting higher prolonged inflation, we are already experiencing rising prices in all of these fields. Currently, gold is near its all-time high and nobody cares. This is a great set up for the future. If market participants realize, that inflation is not all that temporary they will move to these traditional inflation hedges.

Silvers silver lining

Last year this was the title of our first chapter, which dealt with silver and only silver. We wrote about the fact that the gold silver ratio was at its highest last year and that going forward we would expect it to decline sharply. So, it did. We currently think that the expectations for the future silver price are way too conservative. Not only is silver a great inflation hedge, it also is in hedge demand with many of the products and developments being pushed by the green and sustainability agenda. We expect silver to outperform gold and rise drastically in the coming years.

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Source: https://sprott.com/podcast/