hi this is mike maloney and i've got ronnie stoverley once again from incrementum ag with the in goldwe trust report ronnie how are you doing very well mike good to see you again great so uh what's next on the agenda here you've got this great uh chart book with all these great images in it uh tell us what you want to cover next yeah let's have a look at page nine which uh shows the fiscal stimulus and you know mike um i think 1 trillion us dollars used to be a really big number but we're getting


used to it so so for our readers we we tried to make those big numbers a bit more uh comprehensible so we combined um the two last um fiscal fiscal packages the cares act and the american rescue plan act um each 1.9 trillion and then we said okay let's line up one dollar bills um for those two stimulus packages and uh how high would it be or or how how far could we travel and and actually we could go from earth to mars and back again so that's that's that's a pretty pretty pretty


long distance as we know uh even though mr musk wants to travel it uh at some point but i think you know it's it's really important to to to make those big numbers more comprehensible because um you know we know that austerity is out we know that taboos have been broken and nobody really cares about balanced budgets anymore so big government and and uber keynesian policies are back but um i think it's it's it's it's really important to to to um put uh to to to to to make comparisons about


those great numbers just to give you some additional numbers since the beginning of the covit 19 pandemic we added roughly 24 trillion to the global debt mountain so now we are reaching 281 trillion which is a global debt to gdp ratio at 360 percent in most countries we are now approaching the same levels like uh at the end of world war ii so so actually we're seeing the highest debt levels in peace times and for us it is simply impossible to grow out of this debt problem in real terms so um that also means from my point of


view the higher the debt levels the less likely it is that we will really see a sustainable turnaround in interest rates so so in the report we say before we see highly positive real rates again it is more likely that a dutch skier will win the downhill race in kitzbuhel so what that means for gold is that the environment going forward with negative real rates should be very very positive and that the biggest threat to the price of gold rising real rates and high positive real rates is basically uh not existing anymore


yes uh yeah you know we are just in trouble people do not realize how far away mars is this is an incredible distance that this currency stretches and you know they used to say a billion here a billion there and after a while it adds up to real money well it's currency not money but now it's trillions and trillions is it's just an incomprehensible number and we're getting used to it and we shouldn't be getting used to it you know in the united states uh we used to have a half penny because a whole penny


bought way too much stuff now there is nothing that you can buy for a penny [Laughter] so these these numbers are getting way out of hand and it is all uh because of government recklessness in in their spending and uh you know i like this thing with elon musk i've i've been a you know i've met him a few times and i've owned tesla's uh my first tesla was a 2010 roadster and so i've been driving tesla's for many years uh and uh so uh yeah great theme great imagery uh it's just that uh it mars is an almost


incomprehensible distance away from us to be able to uh show that the currency that they're creating if you printed all of it could stretch there and back again that's amazing so what's up next for for in your chart book here of course the question is um who's gonna finance all the debts and as we can see on on chart number 10 um yeah central banks are creating trillions of of new currency units every year and that clearly confirms our view that the current system is is not sustainable


and if you see if you have a look at this chart you can see that those numbers compared to 2008 and 2009 they're significantly higher so um you know the great financial crisis looks like a kinder kindergarten party now and it seems just for the for the for the united states i think they have to refinance roughly 9 trillion this year and who's gonna buy it i think at current rates it's it's it's not going to be um sane market participants while i have to say that um treasury yields in the u.s really look


highly appealing compared to the eurozone where now even greek debt is almost trading at negative yields so um in the eurozone probably the situation is even worse now um the ecb has i think for austria i think they have bought um roughly eighty percent of all uh net issuance last year and that goes for most of the other countries as well so long story short i think central banks will have to continue financing the debt and there's basically no way out of that i absolutely agree and one of the things


that i see when i look at this chart you know we were talking about a monetary system in its death throes and if you look at the year-over-year change in central bank flows before the 2008 crisis this to me is like a top that's spinning and it's very stable and then it starts a little bit of a wobble and then it goes why like that that wobbles more and more and more and does another one of those big things and then after a while the wobble gets really big and it flops over on its side and the whole thing's over with


it crashes and we're in that wobbling state right now uh where you know it it's it's had that first little whip where it you sort of realize that uh the whole game is over with and that was the 2008 crisis and since then the wobbles are getting bigger and bigger and bigger and this is i don't know you know could this be the end right now will they be able to patch it up for another couple of years uh you know i don't know but i know that something enormous is coming and it's not too far


away and i do know that for me the you know cryptocurrencies might do well in a so far we've seen cryptocurrencies do well in what was not a financial collapse uh we'll see what happens when there's a real uh financial crisis here because so far we haven't had the crisis uh so anyway let's uh move on to uh your your next chart here let's have a look at a chart number 11 which which also confirms that um our view that this is not not transitory it shows um the the year-on-year growth of


m2 so so i think it's it's it's important to say that first of all last year m2 grow grew by almost uh 25 which is significantly higher than in the inflationary 1970s but one major difference compared to the uh to the great financial crisis where actually m2 and m3 they collapsed because the problem was in the banking system the whole banking system basically was frozen now we're seeing within the crisis that um that monetary growth is rising significantly and this basically confirms our view of this so-called


monetary climate change because something has happened last year and i'm very grateful to to russell napier who um did tremendous work uh on that topic governments handed out credit guarantees so basically that said dear banker um you can you can give out that that loan that credit um to to um to companies to private individuals whatever we've got your bag so we are guaranteeing that um that um nothing will happen and i think this this is one of the most important changes that we saw last year


and i think this is really responsible for the fact that within this um big crisis actually monetary growth was rising significantly um and as you as you can see on this chart as i've mentioned it's significantly higher than in the 1970s which where i would say um quite a quite an inflationary decade yeah and a decade that was great for gold and bad for everything else uh yeah you know um uh the this again shows a monetary system in its death throes if you ask me this is it's all it's all


absolutely insane uh so um i i think that uh this monetary reset is coming and like we said in the last episode there the gold will be repriced uh it'll be repriced eventually by central banks when they go for the stability of gold the one thing that's great about gold is you can't create it out of thin air so it gives you a stable currency supply and there is a reason that so many central banks hold gold as a tier one asset uh you know they would they say that gold is this uh barbarous relic according to john


maynard keynes well if it's a barbarous relic why didn't the central bank sell it off years ago i want to thank you again ronnie for for uh doing this this is a wonderful insights that you've got and uh we're going to continue this in the next episode so thank you so much ron thank you very much mike it's been a pleasure