Outlook For Gold, Stocks, Economy By Incrementum’s Advisory Board

Outlook for Gold, Stocks, Economy by Incrementum’s Advisory Board

In March, we released the minutes of the first Advisory Board meeting by Incrementum Liechtenstein, see the summary Will Inflation Make A Comeback In 2014 When The Consensus Worries About Deflation. 

As discussed, 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.” Incrementum Liechtenstein has Ronald Stoeferle, author of In Gold We Trust, as managing partner, and Mark Valek as partner.

The key topics that were discussed at the time:

• The Incrementum Inflation Signal started showing rising inflationary momentum after a period of 19 month of disinflation.
• The usefulness of the CPI as a decision making tool is highly questionable.
• Incrementum’s Advisory Board sees a lot of strength in the gold market.
• Is the stock market topping or in a bubble?

Not much later the inflationary trend stalled and a new disinflationary trend started, leading precious metals and miners to lower prices.

Meantime, the second Advisory Board meeting has taken place, in which all relevant and important topics for gold investors have been discussed.The economic situation and China in particular, a monetary policy update, the geopolitical situation, a stock market review, and precious metals and miners market update.

 

Incrementum Inflation Signal – via Incrementum, click to enlarge.

The key insights that were put forward by Jim Rickards:

• Draghi played it brilliantly. He is a man, who says little and does less. He understands that currency wars don’t win
• Think of cash as
  • a) a deflation hedge
  • b) something that reduces the volatility in the rest of the portfolio
  • c) something that has enormous embedded optionality.
• The fact that Yellen is the new kid on the block, the fact that Bernanke tied her hands and the fact that you have a very hawkish FOMC, makes it almost impossible for her to pause the taper.
• The Fed will have to come back with QE4 in 2015, because the data is going to be horrendous.
• The US economy is fundamentally weak but the big story in the world today is China is back in the currency wars.
• The Euro has found a floor and will go up again.
• Everyone is screwed! This is the problem with currency wars, this is the problem with depression and this is the problem with deflation. Everybody loses.
• The Japanese are like on a lifeboat surrounded by sharks, and as long as they stand in the boat together and there is enough food, then they don’t have to worry about the sharks.