hi this is mike maloney and we've got the annual in gold we trust report and we've got with us ronnie stoffele from incremental ag how are you doing ronnie hey mike good to see you how are you great great it's it's wonderful having you back here once again for any viewers that are new we periodically do this with ronnie because uh he and his guys at incrementum do some of the best uh broad spectrum analysis where they're really taking a look at the big picture and they come out with a gold report


every year so let's get right into this ronnie uh what is it that you want to talk about in your chart book here first well you know the the light motif of the report and you know this is that's the that's the front page so it is monetary climate change now it is a bit provocative i would say because nowadays it seems that everything is is all about uh you know a more sustainable economy it's about esg sri and so on i i i saw an advertisement for for a beer recently where they said um it is


produced carbon neutral so so this is really a topic that is that is now all over but for us especially um as we're uh approaching the 50th anniversary of the birth of our um monetary system of our new monetary system and let's say the the separation of the world monetary system from from gold for us it's it's really important to say that our monetary system is not sustainable and that this uh highly inflationary uh politics is not sustainable that the debt situation is not sustainable and


that those policies have got enormous consequences for the structure of our economy for financial markets for our society so um we basically described this this monetary climate change that has happened pre uh over the last couple of months where basically from our point of view we're shifting from an environment where deflationary forces were stronger now to an environment where the pendulum is swinging into the direction of increasing inflation so in the report we mainly describe those triggers um for


inflationary forces getting stronger and yeah you know like every year we try to to write a little bit less we ended up with 350 pages because there's just so much going on that we want to um discuss and to analyze and to share with our with our readers yeah i want to tell everybody that uh the in gold retrust in gold we trust report is available in basically two versions there's the full version and then sort of the executive summary version so uh if you can't read a 350 page report please download the


executive summary version at least because this is important stuff so uh yeah uh so let's uh hit the first thing in the in the chart book here well we could we could start talking about gold if if if you want mike um because obviously that's that's what what what the viewers are probably most most interested in we could talk about the performance of gold as we can see here um i mean 2020 was a was a terrific year for gold it was up um 24.6 in us dollar terms uh in euro terms it was up almost 15


and i think it's it's interesting that so many people were um let's say a bit dissatisfied with with the performance of gold in 2020 i would say and and i think this is also your view mike that uh gold's role is is not to make you rich uh the role of gold is to protect your purchasing power is to protect your savings and i think that gold did a tremendous job in 2020 as i've said being up 25 in us dollar terms uh it acted as a portfolio stabilizer um in this highly volatile year


it acted as a as a hedge within the recession it acted or it reacted very quickly to rising inflation expectations but then i think after hitting the all-time high in in in summer of last year um of course we saw some headwinds and and and yields were rising i think bitcoin also to some degree stole a bit of the attention from market participants later on we saw a a stronger us dollar but i think in general gold did a tremendous job last year this year so far it is it is down 4.8 percent which is which is uh quite okay


i would say giving the circumstances but what is interesting at the moment we are basically trading at the exact same level like one year ago now if i compare the sentiment now to one year ago i would say that it's a tremendous opportunity because one year ago the sentiment already was extremely positive now i think nobody really cares about gold i think gold is um kind of doesn't grab any attention i don't see very strong positioning um um based on a commitment of traders reports sentiment indicators are


basically neutral area so i think this is a very good setup and therefore we continue to to to forecast new all-time highs uh uh in this year yeah i absolutely agree uh you know right now uh the sentiment it it's so weird the economy is just so weird everything is like being torn two directions at once uh and uh you know i do believe that uh we're probably going to see some sort of whip saw with a deflationary market crash that will be short-lived but the overall theme is going to be inflation


and big inflation uh and you know when you talk about the 50 year old monetary system i look at all the charts and i get the you know the world has new monetary systems periodically this is has been normal the monetary system shifts and uh when i look at all of the charts i see a monetary system that is in its death throes right now and people aren't getting ready and those who are prepared i think will do very well and there are these periods of time where gold doesn't just protect your


wealth but it also becomes the best performing asset you know 1979 1980 that was one of those the 1970s you made enormous gains in absolute purchasing power in the united states if you had sold your house and bought gold by the time by 1980 if you were able to sell your gold at the peak you could buy 17 of the same or maybe no that was silver i'm sorry 17 of the same homes i can't remember what gold was but it was like 12 or something like that but it was an incredible gain of absolute wealth the amount of


purchasing power so anyway uh let's move on to the next uh chart in your book here uh tell us what you think well that shows the the annual average um gold price and it has reached uh a new all-time high last year and and since the beginning of the year we're we're we are higher again so we are seeing a new record average price of gold which is of course very very important for the gold miners they had the most profitable year last year i think this year will be better and as you can see on this chart since the


ipo of gold on 15th of august 1971 um on average uh gold was up 10.2 percent which is um um compound annual growth rate of 7.9 which is from my point of view pretty decent and i think going forward we should not forget that the third quarter um is showing the strongest seasonality so um therefore i think it's it's it's a very nice entry point in combination with this uh uh sentiment that is uh pretty neutral or or or negative so gold is in a solid bull market um um i think we we saw a


correction since the all-time highs now nobody really cares so so so that puts me that gives me quite a lot of confidence i would say going forward i agree and one of the things i want to point out in this chart of the average annual price this is annual so you're not talking about the peaks so you're talking about a little bit over a 600 uh annual uh price average in 1980 but gold uh went above 850 it was actually over 900 in some futures markets uh but i want the viewers to take a look at the


blue line on here that's the year over year change and what you see is when this bull market started you've got to look at where the zero percent line is on the right hand scale and imagine a line going straight across there and so when it's above that zero line the gold price is rising that year year-over-year change and so you've got those years from 2001 to 2011 and then from uh 2019 to end 2020 uh you know there's a few years here that we were above take a look at what the bull market looks like


back in the 70s of the year-over-year change we haven't even started this yet we haven't even gotten there we're about you know once we exceed our previous high again or once the next crisis happens you're going to see these immense uh gains where you know you had in 1980 you had almost a 100 percent gain in gold in that one year we haven't got we haven't touched these areas yet so this bull market really to me has barely begun and it's it's your year-over-year uh change in price data


that shows me this what what do you think yeah well uh we've got a fantastic interview with uh fourfour friend of a friend of another um which is a you know um a blogger which writes about free gold and he rightly says um gold will be repriced once and that will be more than enough so so i think all this chatter about you know gold being up 50 bucks or down 100 bucks whatever i think at some point this will be useless because i think what you will really need in this transition phase from one


monetary system to another monetary system i think then um it will really become important to hold gold and and i think you know just recently um we saw some um some some great gold purchases uh by central banks brazil bought i think 40 or 50 tons of gold we saw russia buying significant amounts of gold in july we saw hungary um buying huge amounts of gold it is no coincidence because as you know um hungary is leading the um the the charts of uh the world's biggest hyperinflations so so i think


you know um the most important players they are already um kind of preparing for for this transition from one monetary system to another and i think this is really the end game and i think you know with the whole covet crisis um i think we we got much closer to this to this endgame of our monetary system so um long story short i would only get nervous about holding gold if i would expect real interest rates to rise significantly and if we should see real rates at plus three or four percent then i think it


would be wise to reduce your gold holdings but as we know due to the to the to the dead situation this is simply not possible so this makes me pretty pretty much relaxed about gold going forward and um yeah i would say that that this setup for for gold for the next couple of years is as good as as it gets yes i believe that with this monetary reset you know that uh thing that you said about gold being repriced once so that's if there's a complete change in the monetary system uh and when that happens i think anybody


invested in gold is going to see a many fold uh increase in their real wealth their purchasing power and it'll only happen once so this is a once-in-a-lifetime opportunity i want to thank you uh this is going to end this segment but join us in the next segment everybody because we got lots more from ronnie storpole of incrementum ag thank you ronnie thank you see you soon