Ronald-Peter Stöeferle: Systemic Shocks will Lead to a Loss of Trust in Central Banking
Ronald discusses their upcoming annual report “In Gold we Trust” and how last year’s report had a focus on the coming breakdown of trust in society. This year that erosion of trust may spill over into central banking.
There are a lot of economic experiments occurring right now. We saw equity markets and real estate markets at all-time highs just a month ago. We’ve seen massive price inflation in assets, and now we have a gigantic deflationary reaction. Multiple shocks are in progress including, a global demand crisis, deflationary reactions in assets, a global supply crisis, an oil collapse, a rising U.S. dollar, and a credit shock.
Politicians and central bankers are in a state of action but also helplessness. Measures taken recently with proposed helicopter money shows that we are moving into a new era. This crisis will mean less globalization, higher inflation rates, and increasing fiscal stimulus. We should expect additional central bank actions like MMT and helicopter money before this market bottoms, which could lead to stagflation.
Commodities have only been lower twice in history. Worldwide currency shocks are ongoing, and U.S. dollar strength is resulting in weak commodities, but that trend will eventually reverse. Trump would prefer a lower dollar, but that may be difficult to achieve.
Silver is a bargain relative to gold, along with many of the positive cash-flow producers like Newmont, who can only do even better with low oil prices. Ronald feels there are some excellent opportunities right now. The worst may be priced into the market, and as a result, things could quickly become positive again after Easter.
Time Stamp References:
0:40 – Trust breakdown in society.
3:00 – Unorthodox solutions being discussed.
7:30 – Recessions and opportunity.
8:55 – Outlook for gold, silver and energy.
13:10 – Mining stocks and silver.
15:30 – Producer Fundamentals
16:50 – Opportunities in down markets.
19:30 – Highlights from the coming gold report.
21:40 – Optimism toward gold and bitcoin.
Talking Points From This Week’s Episode
• A possible breakdown in public trust for central banking.
• Multiple shocks are affecting global markets.
• Bankers and politicians are helpless and trying numerous actions.
• Additional central bank actions are coming.
• Markets could turn positive after Easter.
Ronald-Peter Stöeferle is a Chartered Market Technician and a Certified Financial Technician. During his studies in business administration and finance at the Vienna University of Economics and the University of Illinois at Urbana-Champaign, he worked for Raiffeisen Zentralbank in the field of Fixed Income/Credit Investments. After graduating from university, Stoeferle joined Vienna based Erste Group Bank, covering International Equities, especially Asia. In 2006 he began writing reports on gold and gained media attention when he expected the price of gold to rise to USD 2,300/ounce when the current price was only at USD 500. His six benchmark reports, called “In Gold We Trust,” drew international coverage on CNBC, Bloomberg, the Wall Street Journal, Economist, and the Financial Times.
In 2013 he became managing director and partner of Incrementum AG, based in the Principality of Liechtenstein. The company focuses on asset management and wealth management and is one hundred percent owned by its partners. He continues to write the annual “In Gold We Trust” as a senior advisor to Erste Group.