Why Central Banks Have Been Stockpiling Gold | Ronald-Peter Stoeferle

Ronald-Peter Stoeferle, Managing Partner of Incrementum AG and author of the “In Gold We Trust” report, discusses why central banks around the world have been adding to their gold reserves, as well as the impact of monetary and fiscal policies on markets this year.

Vancouver Resource Investment Conference: https://cambridgehouse.com/vancouver-resource-investment-conference

*This video was recorded on January 22, 2024

FOLLOW RONALD-PETER STOEFERLE:
Incrementum AG: www.incrementum.li

“In Gold We Trust Report”: www.ingoldwetrust.report

Full version of the “In Gold We Trust Report 2023”: https://ingoldwetrust.report/download/26948/?tmstv=1683209229

Subscription (free of charge) for “In Gold We Trust Report”:
https://ingoldwetrust.report/igwt/?lang=en#igwt-formular

Compact version of “In Gold We Trust Report 2023”: https://ingoldwetrust.report/download/26950/?tmstv=1683209685

FOLLOW DAVID LIN:
Twitter (@davidlin_TV): https://twitter.com/davidlin_TV
TikTok (@davidlin_TV): https://www.tiktok.com/@davidlin_tv
Instagram (@davidlin_TV): https://www.instagram.com/davidlin_tv/

For business inquiries, reach me at david@thedavidlinreport.com

*This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.

0:00 – Intro
1:20 – 2024’s investment themes
3:30 – Monetary policy
4:41 – Fiscal policy
6:35 – Global trends
10:15 – Stocks vs. gold
14:43 – Central bank gold reserves
19:48 – Consumer spending
21:47 – Bitcoin

#investing #economy #stocks

We are get going back to a normal environment we’re going back to the fed put um Can elaborate normal what does that mean I would say a normal environment is is actually where where inflation is isn’t a topic anymore where the Federal Reserve always has the back

Of the equity investor of of Wall Street basically I think this is being celebrated at the moment we’re back at the Vancouver resource investment conference Ronnie Peter Stiffler joins us today he is the managing partner of incrementum Ag and the author of the famous inold We Trust

Report if you follow the gold space which I’m sure you do if you watch my show uh you probably would have read his book or one of the editions of your book it comes out every year yeah in Gold We Trust in Ronnie We Trust thanks for

Being here thank you David thank you let’s talk about the latest edition it’s a big book you talked about everything from the major themes affecting gold to geopolitical risks affecting gold to the to your outlook to the technical analysis it’s it’s a very comprehensive report but let’s start with um the major

Themes of uh the economy this year in 2024 I know the 2024 Edition is not out yet but just give us your out look for 2024 the major macroeconomic themes moving the gold price of this year I think that the pivot is in um um to be honest um I wouldn’t have expected

That the Federal Reserve will be able to raise interest rates up to more than 5% and uh that uh real rates would actually be surging because we’ve seen this massive disinflationary move over the last couple of month and the price of Gold’s holding up so tremendously well

If you would have told me um that that real rates would would would uh go in that direction I would have said gold would be trading at 1,600 something like that so the big question is what happened and um um my thesis is that that actually central banks and

Especially central banks uh in Emerging Markets have put in a floor under the price of gold if they wouldn’t have been here actually gold would be according to the old gold Playbook trading significantly lower investment demand isn’t there I’ve talked to many gold dealers um there last year their turnover was down 70

75% um gold ETFs um outflows of 255 tons last year so it is really the Central Bank demand that was crucial now going forward I think that you know the market little bit like a like a little dog moved ahead too far too quickly and after this very dobish

Speech by J Powell um quickly discounted like seven seven rate Cuts yeah um the first one in March I don’t think so I think it’s it’s all about the had credibility that they have painstakingly built rebuilt over the last couple of of of of quarters and I think they don’t

Want to risk this credibility yes you know what’s interesting I’ll come back to that point when the FED when drone power at his December press conference signaled rate Cuts as you know in the following month up until last week the stock markets have had a big rally new

All-time high is the S&P 500 why do the markets take that as good news think about it the FED would only cut if the economy is not doing well right wouldn’t that be bad news for the markets I agree and but but but I think you know cutting rates is is usually is

Being celebrated but if you have a look at uh the performance of equities uh during rate cut Cycles it’s actually um pretty underwhelming and and and and over the course of recessions and I think that the market um has moved from hard Landing to soft Landing to no

Landing um I showed a chart recently where actually the the Google search queries for um for the term recession have totally collapsed so nobody’s seeing a recession anymore so I think the market is is really seeing you know we’re get going back to a normal environment we’re going back to the fed

Put um Can elaborate normal what does that mean I would say a normal environment is is actually where where inflation isn’t isn’t a topic anymore where the Federal Reserve always has the back of the equity in W or of Wall Street basically I think this is being

Celebrated at the moment okay now um you mentioned to me several times in the past that fiscal policy is just as important if not more so than monetary policy especially in today’s environment explain well you know the question is why why didn’t the the US like um you

Know large parts of Europe move into recession we know that China is obviously not doing so well at the moment um but the US market clearly stood out and and and I think one of the the the main reasons and we describe it with the term uh monetary climate change is that

Fiscal policy has taken over we’ve seen a a budget deficit in the United States last year I think it was like 8% of GDP we’ve never seen such a high deficit outside of recessions or major Wars over the last 100 years so I think this is

Kind of a paradigm change um and and it works yeah it works like you know drowning five Red Bulls and and seven espresso yeah it has an effect yeah but this effect is kind of fading yeah well then you have a heart attack and you die so that’s also the you

Know oh is that where we’re going is that what’s happening to the economy I don’t know that sounds like a lot of pain for short-term success FY um but I I understand I understand what you’re trying to say but of course I mean um we’ve got an election year here uh

Coming up in the united not only in the United States yeah uh also in my home country Austria but people probably don’t care too much about that but also in India um uh we’re seeing it uh in the in the European Union we’re having elections we’ve seen elections in Taiwan

So it’s a it’s a big de is there a global political movement that that you might you know expect to see change in the or change the political landscape is there populism Rising is there more protectionism or is there less is there more of a desire for global trade what

Do you what what do you think the people of the world really want right now that’s a very very broad question of course of course yeah I think it’s you know this this this um this polarization is is clearly continuing yeah and and I think that you know uh with the election

Trump versus Biden I mean that’s um that’s the best sign for it I I really don’t look forward to this uh uh election year it’s going to be very very dirty um um I think it’s um it’s also you know let’s let’s let’s say that

That the the majority of the world is is clearly going into a more protectionist less free market um um attitude there’s a few exceptions um let’s see how how Argentina for example is is is is is going to uh going to develop I’m I’m pretty pretty confident

Actually I think it’s um very late but um I think it’s it it it could really become one of the one of the big turnarounds which one of the big success stories um but in general um I just see that um I hope that um uh October um October

7th wasn’t a little little bit similar like um um June 28th uh 1914 so really like the Tipping Point yeah where one uh you know conflict um um you know was was the beginning of a major war uh I don’t I don’t want to sound too pessimistic

But if we if we follow what’s going on yeah I mean there’s so many small conflicts now coming up um that makes me very much very much concerned are you saying there’s heightened geopolitical instability I bring this up because geopolitical stability or instability important for goals right yes um clearly

Uh I mean it’s it’s um it’s it’s going into the wrong direction um if you want to call it forth turning or or just a major cycle that is uh now now uh now now happening from a political point of view but it also probably has to do with

Um you know the the situation of our monetary system we’re seeing that um for example in the United States um we are now reaching debt levels that are clearly unsustainable um you know since the year 2019 US debt is up 10 trillion um um before covid um the US paid I

Think 1 billion in interest per day now it’s two billion per day so those are really significant numbers now um now coming from Europe I have to tell you that the situation let that the general mood is very very pessimistic very negative um but I also attended a a gold

Conference in Dubai in November uh and I have to tell you I was really excited yeah because there’s um um the this this positive attitude not only when it comes to to gold and commodities but in general this um this this this um positive view of the future was really

Really refreshing and I can just say um when it comes to Gold um we’re clearly seeing I don’t want to say that um the West has lost control of the gold market but it’s Crystal Clear that the center of the the global gold trade is is moving and that’s a process but it’s

Moving from the West to the East do you know what’s an interesting chart I just pulled this up I’ll show to the audience the S&P 500 is the Orange Line gold is the bar close correlation not perfect over the last 12 months yeah are you surprised at this do they usually not

Move in different directions no I would say those correlations uh uh obviously they’re they’re not stable they they change I think with the long term this is slightly positive correlation um but but I would say I mean that the the major major theme since October was end of October was

Basically okay um um um basically risk on and we’ve seen that um yields came down significantly we’ve seen it in equity markets we’ve seen that in Gold we’ve seen it in crypto obviously so it was basically one big trade uh that we saw and end of October if if there’s

Like um positioning from – 10 to + 10 I would say end of October we’ve seen like minus8 really really negative uh and at the end of December we moved to plus eight so so everybody was super confident um most people were allocated made their money and now it’s kind of cooling off

And we seeing it in the gold space we seeing that in the mining space big time um but for some reason um equities still continue to rock and roll at some point that’s going to change uh somebody just tweeted out that the max 7 stocks now

Have a larger market cap than um I think Japan Canada and the UK okay wow okay signicant okay yeah that just yeah well Canada and yeah we’re in Canada right now that makes sense we need no hate to my fellow Canadians we need to beef up our economy um but yes

You’re absolutely right there do you think that there’s you know I was doing a panel just earlier this morning do you think that there was a lot of speculative money that went into um perhaps a tech sector would that have would that money have gone to perhaps

Gold or gold mining companies do you think that they’re competing for the same capital I think so I think so no no no I think it’s like if you talk to a tech investor and if you talk to a mining investor that’s that’s like a different planet yes absolutely yeah

Yeah I can tell there’s no Tech investors here on this conference everyone’s in the too that’s how you know we’re not at a Tech conference uh Ronnie tell us about the presentation you made at VC yeah a very interesting theme well well the light Motif was Showdown which was the um um

Um the title of uh our lasting gold with trust report um by the way the new report will be published on 17th of May this year we’re already working on that um so we basically said there three different showdowns and at the beginning you know I I like analogies um I like

You know um also to it should also be to some degree entertaining so I started um with um the world of professional wrestling okay um I don’t know if if you follow uh professional wrestling I don’t really okay but I thought it was interesting because in in wrestling

There’s the heel and the face so there’s the good guy and there’s the bad guy um but then there’s also so-called heel turn and the the most important uh example for that is The Rock we know him now as a as an actor obviously as an

Action movie star but he used to be a wrestler and he used to be the bad guy but he was so super popular then the audience said well actually he has to be the good guy and I made this analogy that when it comes to gold as a central

Bank reserve we’re seeing some sort of a heel turn so in the 1960s 1970s gold as a percentage of Central Bank Reserves was between 70 and 80 % then we saw the great moderation gold became basically a pet rock nobody cared about it anymore the price of gold was coming down and

Now we’re seeing that this ratio is stabilizing at roughly 20% and as I’ve said at the beginning central banks especially from Emerging Markets are buying gold like crazy so we might see really that gold is coming back which central banks um it is turkey it is

China um India has bought um we also in Singapore we’re seeing in Europe uh Hungary Poland Czech Republic so so it is really I would say it’s pretty much Diversified why more of the Eastern countries Sor I’ll let you finish but why why the Eastern countries more than

The West oh I think it’s it’s Pro merily because their El their gold reserves are are are smaller then they’re more um dependent on the US dollar so the majority of their reserves is in US dollar terms and I think the really the the Tipping Point and the reason why

2022 was the year when we seen new all-time highs in Central Bank activity was actually um the sanctions against Russia and many countries that are somewhat critical to the US realized well actually with the stroke of a pen 350 almost 400 billion can be wiped out so we have to

Diversify um and and of course uh uh what what what currency or what what what asset can you use to diversify it has to be liquid it has to be traded 24/7 it has to be um a sophisticated market and there shouldn’t be too much

Of a um of a counterparty risk now gold is a pretty good choice uh actually so I think this was really this was a major turning point so so I would say this this Central Bank activity will continue last year we’ve seen um so 2023 we don’t

Have the final numbers yet but it was about th000 tons again so that’s going to be a driver so my thesis is that gold is slowly but surely really coming back as a central bank asset and I can tell you you know we we are focused on the

Western World you know North America Europe but if you go to Shanghai if you go to Dubai if you go to Mumbai it’s a completely different attitude two questions about central banks first of all do you think that um or are they price sensitive meaning they buy when

They believe value is good no they’re not Transit no no you know central banks are very bureaucratic organizations yeah so it takes a while to make decisions and usually once they’ve made the decision to buy gold to increase their reserves they stick to that plan so they’re not

Really price sensitive so they don’t you don’t think that they believe $2,000 is cheap um we don’t know for sure but we just spe speculating based on their buying patterns and their and their preferences I think they just want to um they just want to diversify they want

To reduce risks so they’re not they’re not trying to be a hedge fund I mean a Swiss Central Bank is trying to act like a HED and they didn’t they did pretty well second part of the question are they preparing for something that requires an additional reserve of

Gold well whatever that something may be everybody’s talking about D dollarization yes um that’s like the big topic and we’re riding in the Eng gold trust report for I think eight or nine years but we always said it’s a process now David I think that um um the world

You know the the privilege having the world Reserve currency um that also means an enormous amount of power obviously but um I think it’s a net work good like language um like like Microsoft Windows for example yeah um it’s a network good so so actually if we would move from the

US dollar system to a new monetary system first of all it’s going to take a while it’s going to be expensive and the new system has to be significantly better so let’s say okay we decide English isn’t the Global Currency anymore let’s say it’s going to be German okay perfect chairman um what’s

What’s what’s the chance that we’ll sit here like next year and do the interview in German I think it’s pretty low are you saying I I can’t learn a language in 12 months okay all right challenge accepted Ronnie German is a top language I understand English is a derivative of

German actually but that’s a different topic no but what I wanted to say is it’s going to take a while yeah understand uh and therefore I think that we’ll probably see more of a de euroization than a dollarization i i showed one chart recently with um with

The um um the percentage of um uh Swift transactions yeah and it’s not Taylor sft yeah it’s you know the banking uh the banking Network and actually um the percentage of the dollar is rising but while the percentage of the um the euro is falling remember is rising but it’s I

Think 3.5% at the moment yeah yeah you brought up Taylor so if you know she added $1 billion do of GDP to the eastern states on her latest tour it’s uh it’s incredible maybe she’s the reason we don’t have a recession yet they have got three daughters and they

All want to go to the Tor sft concert in Vienna it’s not cheap yeah yeah yeah sold out three concerts all sold out it’s crazy that that but that’s another good point we we’ll close off on the consumer and I also want to ask you about Bitcoin consumer spending

Continues to rise consumer sentiment is up retail sales are strong you know it doesn’t seem like we’re getting a recession yeah do you agree or disagree um I have to tell you we’ve been in the recession Camp early on and we’ve been wrong um we underestimated the the amount of fiscal stimulus

Um as discussed we’ve got an election year so the Democrats will try everything to to avoid the r world and the the Republicans will try everything to make the economy appear uh as weak as possible okay um you know the indicators that I like follow for example the

Leading economic indicator is now down I think 20 months in a row um obviously the yield curve was inverted I think it was first inverted uh um was it March 2022 and now it’s steepening and normally the steepening is the sign that we’re moving into recession

Um so I’m I’m still in the recession Camp because you know might be anecdotal evidence but talking to so many business owners um um from all over the globe everybody says well actually those interest rates they really hurt and there’s a there’s a time lag um so even

If the FED starts lowering rates I think we will still see the effects um of of of high interest rates um with this time lag so I’m I’m still in the recession camp and I think the the price of gold is is kind of discounting a recession we

We in this year’s report or last year’s report we actually analyzed how gold is performing uh in a different stages of recession so if I’m right that we’re going to move into a recession I think gold should do pretty well why because what happens in the recession we’re

Seeing fiscal stimulus and we’re seeing monetary stimulus Bitcoin I know you follow Bitcoin as well let’s end here do you think Bitcoin will outperform gold this year in 2024 um I mean we have to talk risk adjusted and volatility adjusted I think um with um the

ETF it was first of all it was a a by the Ruma sell news um everybody was super excited regarding the ETF but have a look at the the the the the the the homepage of Black Rock like on their first page they’re having the Bitcoin ETF it’s Black Rock it’s investco it’s

Fidelity it’s F Templeton all the big guys now have the ETF and and of course I mean their marketing departments um they’re enormous and and and and I think this this is probably um the next stage of of of of you know Bitcoin growing up we’re going to see the halfing in April

Um so I’m I’m pretty confident and we got lots of criticism for from from the gold camp but also from the Bitcoin camp that we have two funds that actually combine gold with Bitcoin my my thing is gold for stability Bitcoin for convexity and and therefore I think why not own

Both monetary assets um that are not controlled by a central bank that are controlled by um by the market basically and and by code I just like both and I’m pretty pretty confident and you know there wouldn’t be a case for gold and for Bitcoin if we would have like a

Sound monetary system but from my point of view we don’t have so so that makes me pretty excited about Golds and bco excellent Ronnie thank you very much for coming and everyone should check out the latest edition that’s coming this year May May 19th you said 17th May 17th is

Going to be released the latest edition of the gold in Gold trust report thank you very much good to see you in person thank you for watching don’t forget to follow Ronnie in the links down below and uh like this video And subscribe