25 Monetary And Economic Insights From Incrementum’s Advisory Board
from Gold Silver Worlds
Gold Silver Worlds has received the minutes of the latest Advisory Board meeting by Incrementum Liechtenstein and is pleased to summarize the key insights that were discussed by a panel of experts. Incrementum had launched the “Austrian Economics Golden Opportunities Fund,” a fund that takes investment positions based on the level of inflation based on their proprietary “Incrementum Inflation Signal.” Ronald Stoeferle, author of In Gold We Trust, is the managing partner along with Mark Valek.
The Advisory Board gathers once per quarter to discuss the economic and financial outlook. Respected people like Jim Rickards and Heinz Blasnik are part of the panel.
The detailed transcript of the Advisory Board is embedded below. We encourage serious market students to thoroughly read the document as it contains wealth of insights. We picked out 25 insights related to the state of the monetary system, economy and markets.
Before looking into the details, it should be noted that the Incrementum Inflation Signal is “neutral” at this point. This is pretty unusual, based on the calibration of the model, but it quite accurately represents the tug-of-war between inflation and deflation.
What does this suggest for precious metals investors? Mark Valek comments on that question: “Given this ongoing neutral signal we recently adopted a “Barbell strategy” for both scenarios: rising inflation and also rising deflation. On the deflation side, it was plain vanilla going long treasuries. On the inflation side, we were long gold miners and complimented this with some straddles on the SLV Silver ETF. The volatility on silver had been quite low before volatility spiked after the Fed Meeting – that was quite a successful position. We started to accumulate some of the miners – midMarch, before the Fed Meeting. Right now, we are tending towards rising inflation, but we are still positioned with this Barbell strategy. This has started to pay off since the end of March.”
The monetary system
I believe that all the economies in the world are on very shaky ground. The central bank experiment, which has been going on since 2008, is a very, very big mistake. In the end, this is going to lead to the implementation of another monetary architecture – only I fear it will be another type of fiat money system, probably an even more centralized one than is now in place. (by Heinz Blasnik)
No monetary authority can do anything to get us out of this mess. We need structural changes, not monetary stimulus. (by Jim Rickards)
Asian Infrastructure Investment Bank: what it really means is that China wants to be part of the old boys club, which is the IMF. (by Jim R.)
The big guys – United States, Europe and China – do not really think of gold in terms of the dollar and price. They think about gold in terms of quantity. What matters is the weight, how much gold you actually have, how much gold is available when they restructure the national monetary system. (by Jim R.)
None of these [the growth phenomena of recent years] are normal cyclical recoveries! All these are the temporary effect of a cheap currency, but no one has come up with a solution to the global problem. The only solution is structural reform, which we are not seeing; the other solution is to merge all the currencies into a single global currency and then print a lot of that. (by Jim R.)
In November 2011, the year-on-year rate of growth of money supply was 14.8%, and then by October 2013 it had fallen to 5.8%. This is the reason for the sharp fall in the growth momentum that we are witnessing. (by Frank Shostak)