Kategorie: Stefan’s Weekly

Good Morning Ladies and Gentlemen

”To love or have loved, that is enough. Ask nothing further. There exists no other pearl to be discovered within the dark folds of life.”

Victor Hugo, Les Misérables

Welcome to the concluding article in our series on the intriguing topic of wealth. In our previous three articles, we have examined wealth from philosophical, metaphysical, and cultural perspectives, notably through the lens of literature. We have aimed to illuminate the multifaceted nature of wealth. This article will serve as the final chapter in our exploration, and as with the first three parts, Anton provided the text while I handled the editing.

A recent piece by DE Shaw made a compelling observation regarding wealth and its most traditional symbol: gold. In “https://www.deshaw.com/library/worth-its-weight”, the authors noted, “The growth rate of gold’s aggregate value should, over ultra-long horizons, correspond with the rate of global wealth growth.”

As one might expect, the paper refers to material wealth. Interestingly, the growth rate of wealth could be (or ought to be) mirrored in the growth rate of gold’s value. The reason why this is interesting comes once more from the article. The authors ask: “Where does the value of gold come from?”, and they answer: “[…] society has deemed [it] valuable and reasonably secure over time.”

What is not clear from DE Shaw’s piece is whether the increase in material wealth was first followed by society’s collective assent that the value of gold should represent this growth, or if it was the other way around: society deemed gold to have value, and because of this consensus, the changes in its value were taken to reflect fluctuations in material wealth. This sort of thinking may seem a tad pedantic. However, language is essential, and details matter in getting to the root of things. If we take aside the term “society”, it is impossible not to ask: What does it actually mean when we say that “society” has deemed something? It must be a metaphor for some consensus.

Unlike the scientific consensus that the earth is round, based on tested observations, the consensus underpinning the value of gold is different. Remember what we said in the first article: “value is intrinsically linked to perceptions, human psychology, economic activity, and legal systems.”

In other words, if we apply our observation on value to DE Shaw’s statement above, we shall have something like this: The changes in perceptions, human psychology, economic activity, and laws should reflect, over long time periods, the changes in material wealth. If we agree with the authors of the above article, most people will agree with this link. Once more, we can see how multifaceted the concept of wealth is. However, so far, we have spoken only of material wealth. As we argued in the previous article, in which we explored wealth from a cultural perspective through the lens of literary works, wealth goes beyond the material elements.

An interesting exercise would be to consider what benchmarks we may use to measure how much we value relationships like friendship and family and virtues like honour and honesty. If the value of gold is to be a benchmark for material wealth, how could we measure non-material wealth? Would there also be a societal consensus about these measurements?

Perhaps our personal happiness and fulfilment in life are the benchmarks for wealth? If we are to take the studies highlighted by the American Psychological Association, then our own happiness is a benchmark for the wealth that friendship relationships bless us with. And if we are to take Plato’s words, as recorded in “The Republic” and “Philebus”, then indeed a person of virtue would be a happy, wealthy man or woman. For Plato, true happiness was impossible without virtue.

However, studies show that people, especially the young, are increasingly less happy despite growth in material wealth. For example, the recent World Happiness Report found this to be true in the United States. Meanwhile, young and old Americans have gotten materially wealthier, at least according to a recent article by the New York Times. We can see a similar trend across other nations if we dig further.

Why this apparent discrepancy between happiness and richness? Material wealth growth also means immaterial wealth growth, if happiness is a benchmark for the latter. However, that point differs from individual to individual because lifestyles and consumption habits are not the same for all. The conclusive point is that there is a point in a person’s life when more material wealth does not mean more happiness.

Throughout this series, we have essentially tried to argue that there is more than one kind of gold by looking at the concept of wealth more deeply. There is the tangible asset, labelled DE Shaw with the acronym NPSOV (which, despite its unfriendly look, stands for non-productive store of value). Then there is the intangible asset, the invisible type of gold: friendship, virtue, love.

Dare I say it is the latter kind of intangible gold that ought to be valued more? After all, what good is it to have all the world’s riches but nobody to share it with?

For the world to be truly wealthy, material possessions will not suffice; the voice of the world’s greatest literary authors from ancient times to today is in complete accord. The reason for this is that wealth is closely linked to the nature of the human person, as we have argued in the second article of this series, and the human person needs more than material possessions to feel (and to be) truly wealthy: we need one another, we need love.

Thank you all for reading.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”In the real world, nothing happens at the right place and time. It is the job of journalists and historians to correct that.”

Mark Twain 

The Financial Times reported that for individuals purchasing health insurance in the U.S. through government exchanges, the median increase in 2026 is 18%, more than double last year’s rise of 7%. Simultaneously, we’ve received the most significant negative revision to U.S. employment statistics, with nearly a million jobs adjusted downward.

Rate Cuts by the U.S. Federal Reserve

On Wednesday, the US Federal Reserve reduced interest rates by a quarter of a percentage point, bringing the new range to 4.00% to 4.25%, which investors anticipated. This marks the first change in interest rates since December 2024. During the announcement, Jerome Powell described the decision as a ‚risk management rate cut‘. The Fed also signalled expectations for two additional rate cuts of 25 basis points each at its upcoming meetings in October and December, a forecast supported by market expectations. Looking at the two-year U.S. Treasuries, the Fed seems to be still behind the curve. Why is this the case, you may ask?

The Fed’s Dual Mandate

Powell reiterated the Fed’s dual mandate of maintaining price stability and supporting the labour market, describing the balancing act as challenging given that inflation remains above the target level. The target inflation rate is 2%, but the current rate is 2.9%. This is probably the best explanation for why the Fed still seems behind the curve. Regarding inflation, examining grocery item price fluctuations reveals significant year-over-year increases in various categories. For instance, coffee has experienced a remarkable escalation of 20.9%, while steaks have risen by 16.6%. Furthermore, apples and bananas have seen increases of 9.6% and 6.6%, respectively. Notably, these price adjustments occur although less than 50% of tariff-related costs have been transmitted to consumers thus far. This trend underscores the complexities of supply chain dynamics and consumer pricing in the current economic landscape.

Future Interest Rate Path in the U.S.

A likely future interest path in the U.S. Looking ahead to 2026, the Federal Reserve anticipates only a single rate cut, while the futures market predicts three. Following Wednesday’s 25 basis point cut, the market has assigned high probabilities of 88% and 82% for further rate reductions in October and December, respectively.

The Bank of England

The Bank of England, in contrast, chose not to lower interest rates during today’s meeting, citing persistently high inflation in the UK. The monetary authorities maintained the key rate at 4.00%. Nonetheless, the decision by the Bank of England’s (BoE) Monetary Policy Committee (MPC) sparked internal controversy, with seven members voting for the decision and two against it. Monetary policymakers Swati Dhingra and Alan Taylor advocated for a rate cut. Following the easing measures implemented in August, the BoE refrained from taking additional steps, largely due to ongoing inflationary pressures. Central bank governor Andrew Bailey remarked, „We expect inflation to return to our 2% target, but we are not out of the woods yet. Any future cuts must, therefore, be gradual and cautious“.

Today’s Quote

Today’s quote, “In the real world, nothing happens at the right place and time. It is the job of journalists and historians to correct that,” carries a significant philosophical weight. Was Mark Twain being cynical, ignorant, or far-sighted? Personally, I believe that, unfortunately, in many instances, journalists prioritise moral-ethical arguments over pure fact-based reporting. In political discourse, I seek less personal opinion and more factual information, but I rarely find it. Conversely, political leaders and journalists seem increasingly willing to dismiss anything that does not align with their narrative. I find this troubling, as the absence of freedom of expression stifles political competition and constrains diplomacy. This is a precarious situation because, in a democratic environment, diplomacy serves as a means of civilising conflict and revolution. Think about it.

Next Week

Next week, we will publish the fourth and final instalment of our four-article series, which has been unfolding over the summer. In collaboration with my friend Anton, who resides in Oxford (UK) and works in the financial services sector, we have been examining the familiar term “wealth” to gain a deeper understanding of its meaning.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”The greatest mistake you can make in life is to be continually fearing you will make one.”

Elbert Hubbard 

The first article in our series exploring a broader conceptualisation of wealth was published in Executive Global Magazine. Just in case you feel like spending a moment reading it, feel free to click on the following link:

A Philosophical Approach To Wealth – Part I – Incrementum

Update

Anyway, I thought it would be a good time to provide an update on the Incrementum 2025 Year-End Competition. As I write this edition of „Stefan’s Weekly,“ the prices are as follows: silver is USD 41.49, the Shanghai Composite is 3,812.22 points, and the 10-year U.S. Treasury yields 4.12%.

Silver

No modifications have been made to our „betting landscape“ thus far. Hans continues to hold the highest bid at USD 47.80, while Mark has submitted the lowest bid at USD 35.77. If Silver performs the way it did the last few weeks, Hans will take that one home on December 31, 2025.                 

Shanghai Composite

The same principle applies to the Shanghai Composite Index, where my associate, Hans, submitted the highest bid at 3’980 points, marginally higher, approximately five points, than the corresponding bid submitted by Mark. In stark contrast, Niklas’s lowest recorded bid stands at 2’950 points.

10-Year U.S. Treasury  

In the 10-year U.S. Treasury securities market, Mike has the highest recorded bet at 5.55%, while Hans maintains the lowest at 3.8%. Again, this disparity highlights a significant divergence in the gentlemen’s expectations regarding future interest rates and, thus, economic conditions. To me, this is still the most interesting bet. I am curious if we will see inflation kick in before year-end.

Closed Competition

The competition has officially closed, and I appreciate your understanding.
Data will be sourced from https://marktdaten.fuw.ch/.

Fingers Crossed  

I’m keeping my fingers crossed for all participants, and I look forward to sending the winner this one-ounce silver coin at the end of the year.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”And I’ll keep my cool, but I’m feigning.”

Macy Gray in her iconic song “I Try”

An editor at the Frankfurter Allgemeine Zeitung newspaper once coined the term ‘insufficiency terrorists’ (Insuffizienz-Terroristen) to describe a phenomenon. It refers to managers who fail to recognise their shortcomings and force those around them to adapt to their weaknesses. What causes frustration in companies and leads to economic decline becomes a national threat in the government apparatus. Incompetent ministry leadership can plunge an entire state into chaos.

A Slump in Corporate Earnings

Regrettably, we do not reside in a perfect world, and we acknowledge that. While many people remember the global financial crisis, they tend to overlook that from 2000 to 2002, corporate earnings fell by 40%, much like during the global financial crisis. The question is, why did this downturn happen?

The Reason

The primary cause of this downturn was the significant reduction in capital expenditure (capex) in 2001, which resulted in an immediate and sharp decline in earnings. When investment spending came to a halt, earnings followed suit without delay. Business leaders require a baseline of rule-based political and economic stability to feel assured that investments in new production facilities, infrastructure, information technology, and workforce development will yield positive returns over time. I am concerned that the current U.S. administration may be somewhat dogmatic regarding tariffs and may not fully recognise the associated economic risks.

Share Price Valuation

What do you think would occur with share prices, indices, and so on if corporate earnings were to decline significantly by 40%, similar to what happened 24 years ago? I assume that valuations would need to be recalibrated to reflect this new reality, which includes lower earnings and growth potential, potentially resulting in a contraction of the price-to-earnings (P/E) ratio.

Futhermore

In addition, BCA (Bank Credit Analyst) Research asserts that tech-related capital expenditures have peaked. I strongly believe as of now, this perspective is not reflected in Nvidia’s current stock price. Analysts are predicting a 35% revenue growth over the next several years. As noted by The Financial Times, even if these projections are met, it remains challenging to justify the existing valuation: “If you sum the analysts’ estimates of free cash flows for the next five years and discount them back at a 10% rate, the total comes to only $650 billion. This implies that the remaining $3.8 trillion in enterprise value represents cash flow from 2030 onward.”

Conclusion

In response to the imperative for prudence and in recognition of the commendable performance demonstrated to date during the current fiscal year, we have implemented a strategic reconfiguration of the portfolio structure within our Private Client division. This adjustment encompasses the realisation of profits and a heightened allocation of liquid assets, aimed at mitigating the risks associated with what can be characterised as ‚insufficiency terrorism‘ in financial management.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”If a tree falls in the woods and there’s no one around to hear it,
does it still make a sound?”

Jesse Felder

In a series of four articles unfolding over the summer, my friend Anton, who lives in Oxford (UK) and works in the financial services sector, and I will examine the familiar term “wealth” and aim to gain a deeper understanding of its meaning.

Below is the third article in this series. In the previous two, we have attempted to define wealth using philosophical insights and to understand its essence by linking it to the nature of the human person.

Thank you all for reading them, submitting your questions, and sharing your points of view.

Today’s article will explore wealth from a cultural perspective through the lens of art and literature, specifically. As with the first two parts, Anton provided the text while I handled the editing.

If we are to take a purely metaphysical position, culture may be defined as what people do in time. However, if we try to be more precise, we will see that it is difficult to determine precisely what culture is. In part, this is because a culture contains tangible elements, such as buildings erected in a particular architectural style, paintings, books and songs, and intangible aspects like philosophical perspectives, political views, and moral considerations. Moreover, some of these aspects change as time passes, while others do not.

Therefore, rather than seeking a definition, it may be helpful to look for a mode of thinking about culture that helps to reveal part of what it is. The sculptor Alexander Stoddart articulated such a perspective well in a Ralston College interview. Stoddart sees culture as communion with the dead.

This is a beautiful way of thinking about culture because it enables us to understand an important truth- namely, that we are all one humanity; history has not ended for those who died long ago, while it keeps going for us today. Instead, history is going on for all – those alive and those resting. As such, culture can be understood to be a bridge between aeons through which generations of men and women lived, leaving – as we are leaving today too – their traces of how they lived and what they believed for posterity to contemplate and, hopefully, to understand. An essential part of this heritage that cultures leave behind is art.

Indeed, a powerful way to understand cultural landscapes is through artworks. Art serves an important function in the lives of individuals and of civilisations. On one hand, artwork enables people to express beliefs, values, aspirations, fears, socio-political relationships, and even economic and military events. In this sense, art’s function is some self-understanding, as the German philosopher Hegel argued in “Lectures on Aesthetics”. However, this is only part of the role that art has.

If they are truly works of art, they must lead us beyond ourselves. We can see this primarily in the sense of awe that they inspire in us: they invite us to meditate upon aspects of life other than ourselves. These different aspects can be a loved one, nature, our family and neighbours, or wealth and how it relates to others.

Of course, the world of art is very diverse. It includes poetry, paintings, music, literature, architecture, cinematography, and perhaps even clothing items. Wealth has been explored and represented in various ways across these art forms from ancient times to the present day. Let us go back to the edge of antiquity and take as an example Homer’s epic poems, “The Iliad” and “The Odyssey.” Both present wealth in multiple forms.

In “The Iliad”, two kingdoms go to war. The entire military and material might of these two realms is on full display, all their material wealth is on the line – and for what? For something of far more value than the Greek or the Trojan kingdom: for human relationships, ultimately for love. In this manner, Homer’s mythological poem tells us much about our understanding of wealth. We value material possessions but are ready to sacrifice them for the real wealth another person can give us through their love.

Moreover, throughout “The Iliad”, other forms of wealth appear. These include particular virtues, like honour, which the warriors significantly value, and that most constant and correct aspiration of all mankind: immortality. These notions do not reach their full philosophical potential because Homer did not have the theological insights or the metaphysical concepts we possess today. However, “The Iliad” contains them, reminding us that, since time immemorial, wealth has meant more than material possessions.

Similarly, in “The Odyssey”, the house of Odysseus is rich in possessions, but his wife and son are mourning because he was thought to be dead after he fought in the Trojan war. Once more, we see that wealth should include something more than material items, prestige, and political power, for Odysseus’ family was reputable and influential. Moreover, Odysseus struggles to return home to his family for a long time because that is what he values most; that is where his heart is and, therefore, where his treasure is.

Suppose we accept Stoddart’s view that culture is communion with the dead. In that case, we can bring forward the observations we have extracted from Homer’s work about wealth and apply them to our present day without losing their colour. Looking at the world around us, do we see anything fundamentally different? I would argue that we do not, yet much – so much – has changed since Homer wrote the poems.

One of the genuinely great insights from reading Proust’s “In Search of Lost Time”, aside from the interesting perspectives on memory and time and aside from the in-depth views of French society of the late 19th century – early 20th century, is the stark realisation that material wealth, even when surrounded by immense aesthetic beauty, is insufficient for the human heart.

In Proust’s work, all the luxury in the world becomes the mere floor of a large ballroom in which generations join in their own social and political dances, all, however, playing after the same tune – that of the pursuit of unchanging happiness, that is, of love. Fundamentally, nothing new was said by Proust other than what Homer said, and yet, how much has the world changed since the ancient Greek poet lived?

Of course, there is no shortage of books that deal with the theme of wealth. Throughout the ages, this subject has fascinated the minds of authors worldwide. Some of the titles that are worth mentioning include “Great Expectations”, “The Great Gatsby”, “War and Peace”, and “Middlemarch”. Nevertheless, the same dynamics will be found everywhere: wealth is never seen as complete or, in fact, beneficial when it is confined to material possessions; there ought to be (and there often is) something more valuable, namely, personal relationships.

Our culture today has nuances and, therefore, is somewhat different from what people have left behind. However, at its core, because what men and women seek does not change, our art will tell the same human story. If it is authentic art that we shall leave to posterity, it will place wealth within the same dynamics we have from Homer to Proust.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Nvidia and Microsoft account for 15% of the S&P 500’s market capitalisation.”

Common Knowledge

When a government prioritises avoiding austerity measures over managing fiscal deficits, state expansion and the resultant increase in state deficits may become one-way streets. Nonetheless, Ladies and Gentlemen, it is essential to recognise that time is an expert at changing things, i.e. temporal dynamics can significantly alter any such trajectories.

To Make A Point

Perhaps it’s due to our work on the “In Gold We Trust” report, or perhaps it’s our general skepticism towards the ever-increasing government debt (to put it mildly), or simply our commitment to safeguarding our investors‘ purchasing power through various but coherent investment strategies, but I sometimes receive a range of intriguing messages about the “real facts” concerning the U.S. Federal Reserve System (and many other topics). Ladies and Gentlemen, we are neither flat-earthers nor pizza-gaters; we are a group of serious asset managers and economists dedicated to comprehending the global economic landscape and financial markets. For this reason, I feel compelled to share some clarifying information about the Federal Reserve System today, as there appear to be some misconceptions among some readers. What better time than now, during the ongoing Jackson Hole Economic Policy Symposium 2025 (taking place from August 21 to 23), which focuses on „Labour Markets in Transition: Demographics, Productivity, and Macroeconomic Policy“?

The Federal Reserve System

The Federal Reserve System serves as the central bank of the United States and is tasked with formulating and implementing monetary policy, consisting of the dual mandate of price stability and maximum employment. It is important to note that the Federal Reserve is not „owned“ by any individual or entity. Established in 1913 through the Federal Reserve Act, it was designed to function as the nation’s central banking authority. Its Board of Governors, located in Washington, D.C., operates as an agency of the federal government, reporting directly to and being accountable to Congress.

The Main Aspects of the Federal Reserve System

The Federal Reserve plays a crucial role in stabilising the U.S. economy by influencing money supply, interest rates, and inflation. The U.S. central banking structure has three key features.

Feature Number One

The first feature is its central governing board, the Federal Reserve Board of Governors, which establishes monetary policy, and the Federal Open Market Committee (FOMC), which manages open market operations and sets interest rates.

Feature Number Two

The second aspect is its decentralised network of 12 Federal Reserve Banks. I believe this is where some observers find confusion, as they mistakenly perceive the Federal Reserve as a private organisation. Each of the 12 reserve banks operates within its geographical area, or district, implements policies and provides financial services, and is incorporated as a separate entity with its own board of directors. Commercial banks that are members of the Federal Reserve System own shares solely in the reserve bank of their district and are subject to its regulations. It is important to note that holding shares in a reserve bank differs significantly from owning shares in a private company. Reserve banks do not operate for profit, and possessing a certain number of shares is, by law, a requirement for membership in the system. Furthermore, the reserve banks are obligated by law to transfer their net profits to the U.S. Treasury.

Feature Number Three

The third feature combines public and private elements because the Board of Governors, appointed by the American President and confirmed by the Senate, provides overarching guidance for the Federal Reserve System and supervises the 12 Reserve Banks. While the Board is accountable to Congress and testifies before it regularly, it is uniquely funded outside of congressional appropriations. Additionally, the Board submits a comprehensive report, i.e. the Monetary Policy Report, twice a year, detailing recent economic developments and outlining its plans for monetary policy.

Conclusion

I hope this simple explanation provides some clarity and facilitates a deeper understanding of the American central banking system. Oh yes, and I almost forgot today’s quote. How does it make you feel when you see that two companies account for 15% of the 500 companies‘ market cap that make up the S&P 500?

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Don’t gamble; take all your savings and buy some good stock, hold it until it goes up, then sell it. If it doesn’t go up, don’t buy it.”

Will Rogers

Europe’s difficult situation is home-made, and I think humanity is currently engaged in a significant experiment. Because in the Western world, particularly within “reasonably” liberal democracies, we lack a scientific control group. This absence stems from our collective deference to the directives of the American government, given its economic and military power, which is a somewhat understandable situation. Nevertheless, it leaves us without a means to discern our circumstances if we do not submit to these influences. However, at some point, I believe, Europe must cultivate a culture of debate that allows individuals to express opinions that may not align with the prevailing and often left-wing mainstream. The ongoing moralising and emotionalising of discussions is detrimental to the political discourse and seriously represents one of many fundamental challenges.

The U.S. Labour Market

Overall, tension in the U.S. labour market is rising, although it has not yet indicated a recession. Concurrently, the U.S. economy is experiencing a slowdown, as evidenced by the labour market data for July and the ISM services index. Initial jobless claims in the US increased from 218’000 to 226’000, while continued claims surged to 1.97 million, a new record high.

The Fed – Was I Wrong?

Some two weeks ago, I wrote: “So, if you seek my two cents on the matter, I believe it is reasonable to expect that the Federal Reserve will make no policy changes for the remainder of the year. As a result, I would not be surprised if interest rates remain unchanged during this period.” Given the context of the U.S. labour market and the Fed’s dual mandate addressing inflation and employment, I must admit that the likelihood of interest rate cuts is rising. The current US key interest rate range lies between  4.25% to 4.5%. Until yesterday morning, there was a strong possibility that the Fed would decrease its key interest rate by 25 basis points in September and even at the following meetings in October and December. Futures traders anticipated more key interest rate cuts by the end of 2026, namely in September, October and December 2025, and two more in April and July 2026. The latest numbers clearly show that the tariff war’s impact on the consumer side of inflation remains limited in July, with US inflation remaining at 2.7%. However, core CPI inflation rises to 3.1%. It is essential to acknowledge, Ladies and Gentlemen, that we are not exempt from the possibility of forecasting inaccuracies, i.e. (and it is not that I like to admit it) we are also prone to prediction errors.

Prediction Error: A Quick Definition

Prediction error is the difference between expected outcomes and real events. This process acts as a mechanism by which the brain maintains a cognitive record, constantly comparing its predictions with incoming sensory information. Consequently, it enables the ongoing improvement of internal models, supporting adaptive responses to the environment.

Not So Fast, Look At The PPI

However, yesterday’s unexpectedly substantial price increases among U.S. producers may indicate the tariff war’s initial effects on inflation. In July, producer prices in the United States surged by 3.3% year-on-year, following a 2.3% increase in June; economists had only anticipated a 2.5% rise for July. This development immediately tempered expectations for a swift interest rate cut in the world’s largest economy, which had previously been supported by the above-mentioned subdued consumer price inflation data released earlier in the week. Now, the latest and higher producer prices may lead to higher consumer price inflation, and higher consumer price inflation limits the possibility of interest rate reductions that the stock market had been speculating about recently. In short, it will stay interesting and higher market volatility may be expected.

Reduced Growth Prospects Using Germany as an Example

The outlook seems quite bleak when assessing European growth prospects through the lens of Germany. The ZEW Index highlights a troubling economic situation for Germany in August, with a significant drop from -59.5 to -68.6 points. This decline has effectively interrupted the tentative recovery that had been underway. Additionally, economic expectations have sharply fallen, plummeting from 57.7 to 34.7 points. After several months of improvement, it is clear that the 15% import tariff imposed by the U.S. on EU countries is beginning to affect the economy. Excluding the recovery following the coronavirus crisis in 2021, the German economic landscape has been negative since 2019, reaching a record low that surpasses 2002 to 2006, when Germany was often referred to as the ‘sick man of Europe.’ Overall, the prospects emerging from the world’s third-largest economy are not particularly encouraging.

Conclusion

We are now entering a critical phase regarding the initial effects of the tariffs imposed by the Trump administration on global trade. This situation extends beyond merely the absolute level of tariffs; it also encompasses the non-binding nature of agreements and arrangements, along with a noticeable departure from established global trade norms. Without passing any judgments, we will be able to assess the implications for the United States and other nations within the next few quarters, or at most, in a few years. It is important to note that during uncertain times like these, businesses and individuals tend to trim investments, which will likely negatively affect global growth and employment rates.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

””Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”

John D. Rockefeller

Becoming socially acceptable historically involved adapting one’s behaviour to fit various settings, particularly when sharing those spaces with others. For instance, if you enjoyed putting your feet up on the sofa at home, you understood that such behaviour would be inappropriate on a train. Listening to music in a waiting room was typically done with headphones to respect those around you. However, with the rise of remote work, the use of noise-cancelling headphones, and a reduction in social interactions, leading to less time spent with others, including strangers, many seem to have developed heightened sensitivity to noise. A crying toddler can become distressing, and the sound of someone smacking their food can feel intrusive. This heightened sensitivity now has a formal designation: Misophonia. Some individuals are so acutely attuned to the presence of others that it becomes nearly unbearable for them.

In contrast, others may seem oblivious to the needs and existence of those around them. This dynamic presents a stark contrast in sensitivities, a phenomenon that can be frequently observed, read about, and experienced across all platforms, particularly social media. Now, why would I mention this? I believe these perceived sensitivities influence our thinking and behaviour in many aspects, including investing.

Fed’s Not Moving

Federal Reserve Chair Jerome Powell emphasised that inflation remains far from the target. He noted that a rate cut in September could be considered only if there are signs of an economic slowdown, which would include a weakening labour market emerging before that time. Interestingly, and perhaps not widely recognised by the general public, two members of the Fed’s board (Fed governors Christopher Waller and Michelle Bowman) voted against keeping rates at their current levels. This marks the first instance of such divergence with two dissenting votes in 32 years.

U.S. Car Makers as a Proxy

Following General Motors, Ford stands as another iconic U.S. automaker that was significantly affected by discussions around the introduction of tariffs, which have significantly impacted the manufacturing costs of their vehicles. Thus far, they have only experienced a portion of this effect. In the coming quarters, we will better understand the actual impact on costs, likely leading to price increases and subsequent inflation. I think price hikes will be inevitable, as the net margins on cars are not high enough to absorb such additional cost. The principles applicable to the automotive sector will likely extend to a broad spectrum of industrial goods. Although the imposition of applied tariffs may generate revenue for the U.S. government, it is essential to consider that these tariffs are also likely to result in price increases, exacerbating the financial burden on consumers.

Conclusion

Ladies and Gentlemen, as it was mentioned on Bloomberg, “while the economic growth has moderated, as the Fed statement said, the stock market is pricing in growth acceleration. Lately, the surge of cyclical/defensive stocks may reflect the stimulative part of the Big Beautiful Bill. That’s the risk for a Fed looking to resume the policy easing.” So, if you seek my two cents on the matter, I believe it is reasonable to expect that the Federal Reserve will make no policy changes for the remainder of the year, and therefore, interest rates will remain unchanged during this period. In a time characterised by sensitivities, staying focused on long-term investing is increasingly crucial rather than seeking short-term gains through speculation and being swayed by the constant noise around us.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

””Wall Street will sell shit as long as shit can be sold”

Charlie Munger

Navigating U.S. interest rates can often feel like a rollercoaster ride in the unpredictable realm of finance. While investors seek that perfect win, it is important to recognise that not every decision will succeed. Embrace the journey, learn from both the highs and lows, and maintain your focus on the long-term goals!

U.S. Inflation

According to the latest consumer price index, U.S. inflation increased by 0.3% in June compared to the previous month, surpassing economists‘ consensus expectation of a 0.27% rise. The annual inflation rate stood at 2.7%, again exceeding the anticipated 2.6%. The yearly rate of core inflation was reported at 2.9%. This, Ladies and Gentlemen, indicates that US inflation continues to exceed the Federal Reserve’s target of 2.0%.

Tariffs and Their Potential Impact on Inflation I

In April, US President Donald Trump announced substantial special tariffs on imports from numerous countries. Though some of these tariffs were later suspended, new agreements with various trade partners were reached and are in the process of being reached, and a base tariff rate of 10% remains in effect. US Federal Reserve Chairman Jerome Powell has already cautioned on multiple occasions that any tariff increases this year will likely elevate prices and strain the economy.

Tariffs and Their Potential Impact on Inflation II

No wonder the question of whether tariffs contribute to rising inflation rates has garnered considerable attention in recent economic discourse. Notably, June’s above-mentioned consumer price index demonstrated a marginal increase that exceeded initial expectations. This raises the question of whether implementing tariffs is beginning to exert upward pressure on prices. While a definitive correlation is difficult to establish at this juncture, it is essential to consider the probability of tariffs influencing inflationary trends. Future analyses will be necessary to illustrate the relationship between these economic factors more conclusively. In an initial statement on this year’s half-year figures, Paul Jacobson, General Motors Co.’s CFO, said in an interview on Bloomberg TV that President Donald Trump’s tariffs cost the automaker $1.1 billion in profits. However, GM has not yet increased its retail prices.

Tariffs and Their Potential Impact on Inflation III

So far, none of this definitively indicates that tariffs will lead to another price spike. However, it does imply that the progress made on inflation has stalled without ever reaching the Federal Reserve’s target. Furthermore, concerning the cost of living for the working class, a central issue in last year’s presidential election, the trend is again heading in the wrong direction.

Meanwhile, at the ECB

The eurozone’s key interest rate remains at 2%, as the European Central Bank (ECB) has opted for a pause in interest rates after seven consecutive cuts. This decision marks a pivotal moment for the ECB, as it navigates a challenging economic landscape. Under the leadership of President Christine Lagarde, the Governing Council of the ECB has lowered the key interest rate seven times in succession. During a meeting in Frankfurt am Main on Thursday, they resolved to maintain the benchmark deposit rate at 2%, the rate at which banks earn interest on funds held at the central bank. Most market analysts anticipated this decision. Lagarde had previously indicated that we might witness the „end of a monetary policy cycle“ after the last meeting in June. She has successfully achieved the inflation target of 2% for the eurozone, which very recently ticked up from 1.9% in May to 2% in June.

Tariffs and Their Potential Impact on Inflation IV

What is true for the U.S. is certainly also true for the countries at the other end of the “deals”. All the central banks must contend with a challenging environment marked by economic uncertainty, largely driven by developments in the United States. For example, we all witnessed President Donald Trump’s recent announcement of a 30% tariff on EU goods, set to take effect on August 1. In response, the European Union is now preparing countermeasures. EU Commission President Ursula von der Leyen has proposed a package with up to 30% counter-tariffs on US products worth approximately EUR 90 billion, targeting iconic American items such as jeans, whiskey, cars, and aeroplanes. Hopefully, there will be a deal soon for both sides.

Conclusion

As the title of today’s “Stefan’s Weekly” indicates, central banks occasionally find themselves in a tough position! While lower interest rates would certainly benefit consumers with mortgages and personal credit, as well as assist governments in managing their substantial debt, we must not underestimate the potential risk of igniting rampant inflation.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”…what is there in the whole world worth more than a peaceful family life and work?.”

Doctor Zhivago, by Boris Pasternak

In a series of four articles unfolding over the summer, my friend Anton, who lives in Oxford (UK) and works in the financial services sector, and I will examine the familiar term “wealth” and aim to gain a deeper understanding of its meaning. Below is the second article in this series. It analyses wealth from a metaphysical perspective, but as in the first article, which was published on June 13, 2025, with a philosophical bent. Just as with the first part, Anton provided the text while I handled the editing.

Wealth and Metaphysics

Ladies and Gentlemen, thank you for reading this series‘ previous article on wealth. In it, we explored a philosophical perspective to deepen our understanding of this concept.
We have received thoughtful feedback that has been truly humbling. One reader pointed out an essential dimension of wealth that transcends the monetary realm: personal wealth. In today’s article, we will delve into this aspect, drawing upon metaphysical insights to further illuminate our notion of wealth.

What Metaphysics Is (and What It Is Not)

The Stanford Encyclopedia of Philosophy notes, „Metaphysics’ is notoriously hard to define.” I concur. Capturing the essence of the question, “What is metaphysics?” in just a few lines is a daunting task that could occupy a lifetime or even several lifetimes.
Nevertheless, we should strive for a brief definition to ground our discussion in something tangible. The term traces back to Aristotle’s work of the same name, which addresses the principles of things, seeking to understand “being as such,” the “first causes of things,” and “that which does not change.”

In the context of our exploration of wealth, a metaphysical inquiry prompts us to ask: “What is the first cause or ultimate principle of wealth?” Before we seek to answer this question, a few preliminary observations about metaphysics are necessary.

It has often been claimed that metaphysics primarily (or solely) concerns itself with the unseen and immaterial aspects of our existence, leading some to conflate it with theology. While there are significant connections between theology and metaphysics, this view is misleading and does not accurately represent the discipline. Theology engages with the supernatural order of reality or revealed truths. In contrast, as the foundation of philosophical inquiry, metaphysics investigates the natural order of reality, striving to uncover its most profound core to achieve a more comprehensive and precise understanding of existence.

The key distinction is that metaphysics concerns something that the human mind does (e.g., philosophy), whereas theology deals with something that the human mind receives, namely, revelation. What we are doing here is the former: we are applying our cognitive faculties to explore the concept of wealth.

The natural order of reality encompasses material elements, such as stones, trees, and gold, and immaterial aspects, including knowledge, love, and ideas. Accordingly, an accurate engagement with metaphysics necessitates considering this natural order’s visible and invisible dimensions. Wealth exemplifies this duality; it manifests in tangible forms (land, gold, property, art) and intangible constructs (value, perception, relationships, knowledge).

Given the expansive nature of metaphysical inquiry, it is essential to establish a conceptual framework for our exploration. To this end, I would like to draw upon the insights of 20th-century Romanian philosopher Nae Ionescu. Ionescu articulates metaphysics as a constellation of distinct, albeit interrelated, perspectives on existence that historians of ideas, such as Frederick Copleston, meticulously document in comprehensive multi-volume works.

For Ionescu, each metaphysical position represents an absolute, forever unique, due to the individuality of the inquirer. This assertion is grounded in the premise that each person who contemplates these profound questions is distinctive; there will never be another individual precisely like you, esteemed reader.

In our initial discourse, we invoked Heraclitus’s thoughts to underscore the dynamic nature of the world and humanity. Yet, despite this flux, one constant remains: the enduring questions posed by the human condition. The constancy of human nature ensures that texts from antiquity, such as Homer’s “Iliad” and “Odyssey” and Sophocles’ Theban plays, retain their relevance as sources of inspiration across the ages.

Thus, it is reasonable to anticipate a connection among the various responses to metaphysical inquiries, even amidst their apparent disparities. This connection is underscored by a shared objective: the quest to understand existence. Although the contemporary milieu may differ significantly from that of ancient Greece, fundamental human experiences, suffering, love, aspiration, disappointment, life cycle and ageing remain constant. The essence of existence persists, manifesting in diverse contexts, technologies, and governance structures.
In its most profound sense, wealth is intimately tied to the nature of the human person, who continues to grapple with the same metaphysical questions across time. Accordingly, we will aim to deepen our understanding of wealth through its intrinsic relationship with the human experience.

The Dimensions of the Human Person

In his work „I and Thou,“ the Jewish philosopher Martin Buber posits that each individual is profoundly interconnected with others. If I recall correctly, Buber asserts that there is never simply an “I,” but always an “I-and-thou.” This perspective, with which I align, starkly contrasts with that of Jean-Paul Sartre, who famously claimed in his play „No Exit“ that “hell is other people.” Sartre did not intend to demonise humanity but rather articulated, in very forceful terms, the notion that the individual exists solely as such. I find myself in disagreement with this view.

Yes, ontologically, a person is defined as “an individual substance (of a rational nature),” as Boethius stated. However, this definition implies that each individual possesses intrinsic and inalienable worth simply by being unique. Furthermore, this “individual substance” is not “thrown into existence,” as Martin Heidegger suggested, a notion Sartre endorsed.

Instead, every person is situated within a moral universe, and because this universe is ethical, it is inherently social. This is why Aristotle, in „Politics,“ referred to the human being as a “political animal” by nature. Notably, the term “political,” as a friend of mine who specialises in Latin pointed out, translates to “social.” Thus, the “individual substance” is never solitary but is always part of a community: “I-and-thou.”
Wealth illustrates this multi-dimensional aspect of the human experience.

Wealth and the Human Person(s)

In discussing the concept of asset possession, one must acknowledge that the expression “I possess this asset” is, in essence, a collective assertion, wherein “we possess this asset” more accurately reflects the relational nature of ownership. This “we” encompasses not only the individual but also extends to the familial, social, and communal context in which one exists. The assets in question can manifest as material entities, such as gold, or as immaterial resources, such as knowledge.

This discourse transcends legal definitions of ownership; it delves into the implications of asset utilisation, particularly as it relates to our overarching definition of wealth, as introduced in prior discussions. Wealth is inherently a collective construct; it is inaccessible without the support and involvement of others. As such, the distribution of one’s financial or intellectual resources must account for the contributions of familial and communal ties. The question arises: what value does knowledge or material wealth hold if not shared with one’s spouse, children, family, and broader community?

Practical applications of this sharing philosophy are evident in using material wealth, such as establishing educational funds for children, assisting the impoverished, and contributing to charitable organisations or local religious institutions. These avenues illustrate the acknowledgement of our interconnectedness and the responsibility to use our wealth in ways that honour and empower our relationships with others.

Furthermore, it is imperative to recognise that the human experience encompasses more than mere material accumulation. Throughout history, figures such as King Solomon have exemplified the prioritisation of wisdom over tangible riches, with the biblical narrative illustrating a request for discernment rather than conventional assets. This philosophical inquiry resonates with the ancient Greeks, notably Socrates, who advocated for a deeper understanding of wealth as an internal virtue rather than external accumulation.

Returning to the principal inquiry of this exploration, “What is the primal cause, or the ultimate principle, of wealth?” We elucidate that the foundational principle of wealth is rooted in our relational dynamics. This intrinsic bond enriches our existence in multifaceted ways. Metaphysically, one could argue that wealth is inextricably intertwined with the essence of humanity itself, emerging from the complex interplay between individuals. Future discussions in this series will further examine wealth through a cultural lens, drawing upon prominent literary works to enhance our understanding of this multifaceted concept.

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

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li