Ronald-Peter Stöferle: Our Inflation Signal Just Reached Maximum Strength
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Ronald joins us to discuss his free annual report called “In Gold we Trust” which this year has expanded to more than 230 pages. He feels that the gold market is currently extremely dull with few investors interested. However, last year gold was up 14% in dollar terms and this year is down slightly but up compared to many other currencies. There is massive inflation beginning to show up, and they detail that in the report.
This year they have identified three significant changes. Globally central bank monetary policy seems to be growing hawkish as they tighten policy. This year the Fed will reduce their balance sheet by 430 billion. The liquidity that we all got used to is ending and people are at risk of underestimating the effects of this tightening.
Secondly, de-dollarization continues with countries like Russia having sold a lot of treasuries and continue to accumulate gold. The Petro-Yuan is now a major factor that helps countries to circumvent the US Dollar.
Lastly, there is a technological shift with new technology such as bitcoin and cryptocurrencies. He feels that they are just competition for gold and could become a potent tool for improving the usability of gold.
Many markets are trading at or near all-time highs which is a consequence of loose monetary policy. This tightening will have a major effect on markets particularly as consumer interest rates rise.
He discusses why recessions can be good for precious metals. They are monitoring various leading inflation indicators which they say have reached a maximum. They document this in their report which you can find here. https://ingoldwetrust.report