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In Gold We Trust Own Ronald Stöferle Reveals Hard Facts About Gold – RCS Ep. 62

Rebel Capitalist Show

Ronald Peter Stöferle is the author of the most respected industry-standard publication on gold called “In Gold We Trust”, and is currently a partner of Incrementum AG, where he is a Research and Portfolio Manager.

In this interview, we answer the question: Is gold cheap? How do we know so? And what's the best way to analyze its past so we can better understand where it's going in the future.

Yet, we don't only talk about gold. We analyze silver, Bitcoin, the ban on cash, and more!

Ronald Stöferle's Background

George: All right, guys. It gives me a great deal of pleasure to bring someone to The Rebel Capitalist Show that I've really looked forward to talking to. 

His name is Ronnie Stöferle, I'm sure I'm butchering that, Ronnie. I apologize. But he is one of the editors of the mega gold report, In Gold We Trust. 

It comes out once a year, 350 pages, it is the go-to guide. Ronnie, welcome to The Rebel Capitalist Show.

Ronnie Stöferle: Hi George. Thanks for having me, you almost got it right, Stöferle. It's a tough one. 

George: Hopefully, we can edit that back in, I apologize. But for my viewers who might not know your full backstory, can you get us up to speed there?

Ronnie Stöferle: Sure, I'm Managing Partner and Fund Manager at Incrementum, which is a wealth manager based in Liechtenstein. 

Perhaps you heard my weird accent, I’m originally from Vienna, Austria. So most people would think, “Okay. This is where the Austrian school of economics is taught.” No, it is not. 

I discovered the Austrian school through the great financial crisis when I was an analyst sitting in a bank and I've heard about Ludwig von Mises and I thought, “Who's that, and who's Hayek and Carl Menger?”

So, at some point sitting in the bank, I realized it's a bit like the vegetarian sitting in a butchery because I started writing about gold in 2007 and I thought, “That's so fascinating. It's not about gold. It's about everything.” 

I discovered the Austrian school and at some point, I said, “Okay, I have to quit my job in the bank, set up my own company.”

I did that with fantastic colleagues from Switzerland and from Austria and we set up Incrementum.

I continued writing the In Gold We Trust report which is now one of the most widely followed publications on gold. As you've said, it's quite a brick, It's 350 pages. 

The compact version is 100 pages. But it is my contribution to, let's say, financial literacy to educate and inform people about sound money and what central bank policy does to you and your hard-earned money.

For us it's a very important publication, and I'm glad people from all over the world are loving it. It makes us very proud.

The publication is where we really distill all the thoughts that we have through conversations with clients, with institutional managers and with people at conferences.

The stuff that we read in books, in newsletters, we try to distill it, and once a year publish this big report. So it is a heavy reading, but I think and hope it's worth taking the time.

What We Should Expect From The Monetary And Fiscal Stimulus

George: Oh, it absolutely is. I want to be clear, there's a lot of macro in there as well. It's not just gold, silver, precious metals. I mean, it's everything you can imagine. 

It's money supply, inflation, deflation, the reserve currency. It really dives into a lot of topics above and beyond just precious metals.

Of course, they all tie in, but it's really a well-rounded report for sure. On that note…

What are some of your macro views right now? 

We're living in crazy times, to say the least. Last night on Real Vision I listened to their daily update, and they were talking about people using their unemployment checks to go into the stock market.

Literally buy stocks of companies who have already filed bankruptcy. I don't see that happening at the beginning of a brand new bull market.

What do you think Ronnie?

Ronnie Stöferle: Well, I've read that as well and I did some research on that.

Interestingly, in April, personal income rose a record 10.5%, which is 2 trillion, in the same month, when actually 20 million jobs got lost.

George: In the United States?

Ronnie Stöferle: In the United States, yeah.

The government doled out 3 trillion in handouts in the form of income transfers of all kinds at an annualized rate. So over half of the people are receiving more in benefits than they received before when they had a job.

Of course, this is some sort of generosity on steroids. For example, we can see that in Robinhood, the online brokerage, they had 3 million new account openings since the corona crisis started.

Basically, people are getting all the money transferred from the government. 

There's nothing on Netflix anymore that they haven't seen. There are no sports they can watch. So what do they do?

They invest or they gamble. I think this is really one of the main triggers.

Hertz, for example, the rental car company that used to be really big, went bankrupt and now its stock is trading at even a higher level than before they declared bankruptcy. Then there are other companies.

George: Oh yes, I heard about that. Yeah, tell that story. That was incredible. Yes, I just heard about that yesterday.

Ronnie Stöferle: It happened with Nikola or something like that. They're in the process of producing electric driven trucks. Of course, they've got no turnover whatsoever.

I did some research on it and I thought it is crap, but their market cap is like 27 billion, which is more than Ford at the moment. 

So you can tell there's quite a lot of speculative frenzy in stock markets, and that's obviously not a very healthy sign.

I always said it's not a V-shaped recovery, it's an L-shaped recovery, and L stands for liquidity because those amounts that are pumped into the economy by central banks are just staggering.

George: Just to be clear, the company you're talking about, the guy when they went public stated that it was just a play to get retail investors involved. 

Their market cap is almost 30 billion, and for 2021, they project zero revenue, not zero profit, zero revenue. So the 12-year-old boy who's getting a $2 allowance per week will get more revenue in 2021. 

But their market cap is $30 billion. It's so obvious to me that, I'm not going to call them kids, but all these people think they got in late with Tesla and are like, “Oh my gosh, now it's 700, it's 800, it's 900.

Oh, I wish I would have bought it at 50. I wish I would have bought it at 10. I wish I would have done this.” Woulda, should have, coulda, this FOMO.

So they're seeing this company. “Well, it's got the same name so it's got to be just as good so I'm going to buy in here at the bottom level and I'm going to write it all the way up to $1,000 a share and get rich, just like I should have with Tesla.” 

But unfortunately, it never seems to be that easy.

Ronnie Stöferle: What's going on at the moment it's super interesting George. I was back at home with the family when everything started, so I was working from home most of the time.

It was demanding because my wife is working in the oil and gas industry, which had a quite tough time the last couple of weeks, and I was writing my diary basically every day.

I tried to note down all the measures that were taken by central banks, and at the moment, roughly 20% of the world's GDP was injected by monetary stimulus and fiscal stimulus.

I think, if we make the comparison, 2008 versus the current crisis, the big difference is that the numbers coming out of central banks are acting much more aggressively.

Let's not forget that the Federal Reserve did an emergency meeting on a Sunday. The basically said that they lower down to zero.

This was the “emperor has no clothes moment”, because I think futures for the S&P were limited down. 

So it showed me that the market has kind of lost trust in the Federal Reserve at that moment, and those measures that were taken were bigger and more coordinated.

But this time around it was also a fiscal policy that was really aggressive. I think this combination of monetary and fiscal stimulus will lead us to a much quicker reflation.

If we compare it to 2008, 2009, back then US 10-year treasuries were trading at 3.5%, now they are way below.

Who would have expected that $14 trillion USD was going to be sitting in bonds with negative yields? I mean 14 trillion US dollars.

So investors are taking a guaranteed loss holding them to maturity.

It is obvious that central bankers are running out of ammunition, and this is why I thought it was really interesting when J. Powell said on 60 Minutes “There's really no limit to what we can do with these lending programs.” So he was extremely dovish.

From my point of view, I don't think the economy is in a V-shape recovery, I think it will take much longer than most people expect.

I think for now the health crisis is over, but the next one will be the credit, debt crisis, and perhaps the financial crisis because those problems sitting on bank balance sheets at some point will pop up.

We shouldn't underestimate the creativity and the aggressiveness of central bankers and fiscal policies.

I recently said we should expect stuff like MNT, somebody called it Mugabe Maduro Theory, helicopter money, universal basic income, all that stuff that used to be like a wet dream of some monetarist economist sitting in the ivory towers.

But now it is basically a given that it's going to happen, and people just accustom to that and say, “Yeah, the government will take care of everything.” 

This is something that I really want to stress out. This crisis will not be solved with more capitalism and with more free markets. It will be solved with more interventionism and more socialism.

This is something that worries me quite a lot.

George: I think it would be solved with capitalism but they're going to try to solve it with the antithesis of that.

You made some fantastic points Ronnie. Back in March, I was watching the markets closely for obvious reasons. 

And I remember specifically when the Fed came out on that Sunday, they were supposed to meet the next Wednesday, but they had this emergency meeting where they dropped rates.

You're right. The market just fell out of bed the next day.

But what happened, from a timing standpoint, is that the catalyst seemed to be when the government came in and started announcing all of these fiscal measures, all these stimulus packages.

That's when the market started to go back up when the Fed was just throwing everything at it and the kitchen sink. When they're committing to a trillion dollars a day in repo.

Insights On The Cause Of Inflation 

George: Again, not that they did that, they're committing to a trillion dollars a day in repo. They were doing QE unlimited. 

The market was just shrugging it off saying, “We don't care.” So it seemed to me that maybe there's no longer a Fed put, there's a fiscal put.

But how long can that go?

Understanding how bank reserves are created and how central banks, m1 and m2 work, based money, broad money.

We know that if there's a fiscal put, that it's most likely going to be a lot more inflationary when you look at consumer goods and services than the Fed just expanding their balance sheet by printing up bank reserves. 

That stated, I'd love to get your take on deflation and inflation. You talked about that in a recent video and you had some fantastic insights into consumer inflation in the United States, especially around groceries and food prices. So can you go into that?

Ronnie Stöferle: Well, the question of inflation and deflation, its actually crucial for our investment process because, in one of our funds, we invest in inflation-sensitive assets.

Now, what's most inflation-sensitive? It is of course gold, silver, commodities in general, it is mining stocks, and it is commodity currencies like the ruble, Australian dollar, and Canadian dollar. Of course, inflation-linked bonds are interesting.

For us, it was really crucial to understand this interplay between inflation and deflation, and we coined the term monetary tectonic. It's basically tectonic plates pushing against each other and creating pressure.

We always say, “If there would be a Laissez-faire approach, which would be the capitalist, the Austrian solution? It would be highly deflationary.”

We would see a recession and massive unemployment, but afterward, we would also see a stronger capital structure.

The central bank policy wants to make up for this natural deflation by introducing quantitative easing and forcing bank lending.

On the surface, this turned out pretty well because everybody said, “You know Ronnie? All the Austrian economists talked about inflation, about hyperinflation, but where is it? Nothing happened.”

Then I first say, “Your inflation definition is a different one to mine. From my point of view, inflation means an increase in the money supply.”

George: In base money or broad money?

Ronnie Stöferle: This is something that we almost wrote a book about, Austrian School for Investors, Austrian investing between inflation and deflation.

I think the broad money supply did grow fast enough, and this was probably the main reason why we didn't see any price inflation. 

Of course, there are people like Jeff Snyder but also our mutual friend Emil Kalinowski who really dig into this topic, and I think it's highly fascinating.

Now, in 2008, 2009, many people only looked at balance sheets and said, “Okay, it's exploding, so this must be hyperinflationary.” 

And we said, “Most of the monetary aggregates are actually created by commercial banks.” Now, what we saw over the last 10 years was massive asset price inflation.

This is something the Federal Reserve wants to create because the wealth effect works and we saw massive asset price inflation in equities, we saw it in real estate all over the globe, we saw it in the art market and of course in the bond market.

Now, according to Murray Rothbard in this fascinating book, The Mystery of Banking, the third stage is only price inflation.

This is the moment when central bankers should become more hawkish, more conservative, when people lose trust in paper money, in the purchasing power that it has, whether is Euros or whatever.

They just start spending it, buying real assets and Mises described it. In Germany it's called “katastrophenhausse” which is a fantastic term.

In English, it would be the Crack-up Boom.

Ronnie Stöferle: I think perhaps we're at the beginning of “Crack-up Boom”, because as I've said before, this time around it is much more direct interventionism into these inflationary policies.

This time around MMT or helicopter money, have a much more direct input and consequence on spending behaviors, on economic numbers, and inflation than traditional quantitative easing.

I don't want to say that inflation is around the corner, but I see it on the horizon and I think that at some point, central bankers will underestimate the time lag. 

There will be a point where consumers will regain confidence, and central banks and the fiscal policy, will have to become more conservative again. But I think they will miss this point. They will be too dovish for too long. They always do.

Then the second thing is we're seeing this big trend to de-globalization. I'm a free-market guy. From my point of view, the free market is something fantastic. It helps everybody. It makes goods better and cheaper. 

It is also important for peace because countries that trade with each other usually don't fight wars.

So this trend to de-globalization is something that worries me and definitely has an inflationary impact.

Ronnie Stöferle: We're seeing reduced productivity, which is also inflationary because all the factories have very strict requirements that just reduces productivity.

We are now seeing debt levels for industrialized nations that we used to only see for banana republics. Now, the higher your debt level is, as a government, a household, or as a corporation, the bigger your fear of deflation, and the more you wish for inflation.

Of course, since the whole system is highly over-indebted, this natural deflation is just the biggest enemy of the system, and therefore there will be massive inflationary policies. 

We're already seeing that. Inflation expectations, this time around, rebounded much quicker than in 2008, 2009. 

We have never seen this deflationary mindset in this crisis because the reactions have been so much more aggressive.

So in a nutshell, I think that inflation might become a real concern and actually something that mainstream economies think is impossible. I think that stagflation is something that we should be actually scared of.

Supermarkets: The Biggest Driver For Anchoring Inflation Expectations

George: I completely agree.

You were saying, in your report about the food prices at the grocery store, that, psychologically that tends to be a catalyst for people worrying about inflation.

The more people worry about inflation, the more they want to maybe get rid of their fiat for something else which kind of has this positive feedback loop, if you will, and creates even more and more inflation. 

I call it doom vortex if we were on one of my whiteboard videos. But can you explain that?

Ronnie Stöferle: Yeah. In our report, we've got like 450 footnotes. We really try to link to external sources. We want to tell people, “Okay, this is an interesting study. Have a look at this webpage. 

Have a look at the tweets of those guys.” And we found some really fascinating work on inflation expectations. 

The outcome was that the most important driver for anchoring inflation expectations is actually in supermarkets when you go grocery shopping.

In April we saw the biggest rise in supermarket prices in the past 40 years. And it seems that if people become concerned, “Okay, I'm not paying 100 bucks for my grocery shopping, I'm paying 110, 120,”, this will definitely influence their inflation expectations.

One thing that is highly interesting, and this reminds me very much of the Great Depression is that we are seeing the savings rate exploding higher. 

It jumped from 12.7% to 33%. This is something that we should have a very close look at.

From my point of view, because this is going to tell us if people are seeing some sort of a long-term depressionary environment, or is it for them more of just a quick recession and then everything is back to normal?

George: They're buying call options in the S&P. They're buying Nikola. They're buying Hertz. I'm sorry to cut you off there buddy. It still boggles my mind. 

I think this transitions us into another part of your report where you're talking about the de-dollarization.

This is really fascinating for me because we see the US as obviously the world reserve currency. 

We know that it allows Americans to consume way more than they otherwise would have, therefore, boosting GDP and making the economy look a lot healthier than it may actually be from a fundamental standpoint. 

Gold: The Decisive Factor In The Fight For De-Dollarization  

If the world decides, “Hey, we really don't want to do business in dollars anymore,” you've got, 20, 30 trillion US dollars outside of the United States that could come back in.

And there's no way that you can increase goods and services at the same rate, that means the dollar goes down and then gold goes whap, and we'll get into gold next.

Can you expand on the de-dollarization portion of your most recent report?

Ronnie Stöferle: Well, we have been covering this topic of de-dollarization for the past five or six years and we always say this is a really long-term trend.

So, don't expect the US dollar being taken out as the world reserve currency and the Chinese Yuan or the Euro taking over its role. 

 If you study history, you can see that the British pound and the US dollar for more than a decade were, at the same time, the world's leading currencies.

Then only after the Second World War, Bretton Woods, the dollar came out as the world reserve currency.

I think one of the main reasons was that the US held 29,000 tons of gold. This was definitely one of the decisive factors for the US, getting this exorbitant privilege as the French called it.

Now, I think this de-dollarization is kind of picking up momentum, there is a lot of different tiny pieces that added together clearly show that there is something big going on.

Lots of agreements between China and Saudi Arabia, China, and Russia, many commodity-producing nations circumventing the US dollar and using their local currencies. 

But if you understand history, it is also something that is not only being fought on financial markets. 

It is also something highly political and we shouldn't forget that the US still has by far the strongest military, which is also quite a big factor I would say.

George, I don't know if you know, but the first trip from Donald Trump abroad, where did he go to, do you remember?

George: I don't know.

Ronnie Stöferle: He went to Saudi Arabia. I think this is quite telling because the Saudis of course are their most important alliance when it comes to the dollar being the reserve currency where everything is traded in. 

But we have seen this loss of trust in the media, in economics, and in science over the last couple of years. 

For example, last year we showed that more and more people are believing in the “flat earth” theory and stuff like that. People are losing trust in many different things. 

But also in political and strategic alliances that we have had for decades, they are basically broken up. 

This tells me that this de-dollarization is picking up momentum and I think that at some point, as my Swiss partners, they're very diplomatic say, there will be a realignment of the international currency system.

George: That's a very nice way of saying it, yeah.

Ronnie Stöferle: It's very Swiss. Unfortunately, most people don't care about history.

If you study history, you can tell that every couple of decades we saw currency reforms, we saw new world-leading currencies coming up, and this brings me to gold. 

I think it's no coincidence that the US holds 8,100 tons of gold, the eurozone holds more than 10,000 tons of gold, the Chinese are buying every ounce they can get, Russia is having more than 2,000 tons, the IMF has more than 3,000 tons. Turkey is buying gold. 

Like Jim Ricketts recently said, ” The big boys are coming to the table and their chips are golden.” So if there should be such a realignment of the international currency system, I think that gold will really play a major role.

George: Oh absolutely, 100%.

Are you in the camp that believes we could see a gold standard in the future? 

I know it's not right around the corner, but 10 years, 15 years down the road?

Ronnie Stöferle: Well, as an economist I would say, yeah, of course, it would be terrific and if you study history, you can say that those times of the classical gold standard were a pretty vibrant time. 

For example, in The World of Yesterday, a fantastic book by Stefan Zweig, he describes this time of the classical gold standard, and later talks about the hyperinflation in Austria and Germany and what it did to societies. 

How frustrated people were and how open they became to radical ideas. 

This reminds me very much of the current mindset because we can see that weirder ideas from the right and weirder ideas from the left are coming into the center, and populists are winning elections basically all over the globe.

Coming back to the gold standard, knowing politicians, I would say this is not something that they would enjoy having, because a gold standard restricts your spending and you should, over time, have a balanced budget, you cannot just pay for everything.

 It would be a very limiting factor for politicians, but at some point, when there's a loss of trust in paper money, then I think we'll need a new basis, and this basis has always been gold.

The importance Of Building Trust

Ronnie Stöferle: Now, is not a coincidence that our report is called In Gold We Trust. Last year we wrote about this trust erosion and we said that trust is highly asymmetrical. 

It takes decades, centuries to build up trust, but it takes one second to completely lose it.

Bill Cosby for example, used to be the good uncle, the good guy, and then all those allegations came up.

Lehman Brothers, one of the oldest investment banks, for over 100 years they never had one-quarter of losses, then over a couple of weeks, the market lost trust in their balance sheet and in their liquidity and they were bust.

Ronnie Stöferle:

So, I think this stage when people lose faith and trust in paper money can happen very quickly, and then of course you need something to restore trust, and this will probably be done with gold.


Do you think that the US will go to a government-backed digital currency before potentially we go to a gold standard?

Ronnie Stöferle: If you understand bitcoin and cryptocurrencies, it's quite frustrating to hear about those central bank digital currencies because they've got nothing to do with the ideas.

George: Our friend Erik Townsend with MacroVoices, calls the US digital currency or potential US digital currency, Orwell.

Ronnie Stöferle: I think in a crisis, politicians tend to become really creative and also kind of proactive.

So I wouldn't rule that out and I wouldn't rule out that we will see much more financial repression.

Yield curve control is the new buzzword. Like my friend Russell Napier always says, expect much more capital controls. We're already seeing that in Germany for example.

I don't know the exact number but the amount of millionaires just leaving the country is staggering. 

This is not only about their financial capital, it's also about their entrepreneurial creativity, their network, their work ethics.

George: And who is John Galt?

Ronnie Stöferle: Exactly. I tweeted out that I sometimes really feel like in Atlas Shrugged, and we know how that ends. So this is something that really bugs me. 

Then we're coming back to more interventionism, less capitalism, and what kids are getting taught at school. Everybody cheers for a strong state and less markets.

Over here we've got 50% of GDP created by the government. So I wonder why people are still speaking about a capitalist system. I just don't see it.

George: Just out of curiosity, where do you see all of those millionaires or producers actually going? Are they going to Monaco? Croatia?, Montenegro? I'm just curious.

In a few of my last videos I've talked about where to bug out, regions like the Caribbean and stuff. Do you have any idea?

Ronnie Stöferle: Well, Switzerland of course is the go-to place. Liechtenstein is also very successful.

The younger generation, very talented people with great education, tend to go to Singapore, Hong Kong, Asia in general. 

There are lots of great projects. For example, a friend of mine, Titus Gebel, is coming up with free private cities in Honduras.

There's lots of ideas, and of course, the pressure, the capital controls and this financial repression, create new ideas and new businesses, that is what I'm most excited about. 

But of course, the majority of people will suffer from those policies.

Gold Is About Stability, Not About Getting Rich 

George: Let's take it back to gold.

When I talk in my live streams or on some of my videos, the advice I give people, is just what I do myself and what I try to get my family and friends to do as well.

That's just simply to divide your portfolio into three categories, insurance, investing, which I define as it's got to pay you to own it, and then speculation, the only reason you're buying because you think it's cheap right now, it doesn't really pay you to own it, so such as bitcoin.

I see gold as insurance, physical gold 10%. But then I also try to buy things when they're cheap and sell them when they're expensive. I try not to focus on the price. 

So in your opinion right now, I know you guys are really bullish on gold. I'm right there with you, but….

  • Why or why not is gold cheap right now?

And then taking it to the next level…

  • Why are you guys really bullish?

Ronnie Stöferle:

You're completely right, gold it's an insurance or as Grant Williams said, an insurance, because the more unsure you are about the future, the more gold you should have. I think that's great wording. 

From my point of view, the role of gold is not to make you rich. It is to preserve your purchasing power. This is the job that gold is doing.

Do you have any favorite sports, George?

George: Oh boy, yeah, Formula One.

Ronnie Stöferle: Formula One. What about football, soccer?

George: Oh okay, I'm sorry. Let's do basketball, sure.

Ronnie Stöferle: I recently compared gold to a defender in a sports team. It's there to defend, to not let the opponent score any goals. His job is not to score all the goals or to be offensive. 

It is something that keeps you safe, that keeps your purchasing power safe. We've got lots of comparisons, long-term comparisons in our report.

One of the most often quoted one is our beer to gold ratio.

George: Beer to gold? I haven't heard this one.

Ronnie Stöferle: Have you ever gone to the Oktoberfest in Munich?

George: What's that?

Ronnie Stöferle: The Oktoberfest in Munich.

George: I've never been but I'd love to go.

Ronnie Stöferle: You can get those big beers like one liter. We crunched numbers and it's interesting because we've got this very long time series.

Since the year 1950, the average price increase every year was 5%. 

So one liter of beer costs 5% more every year. Many people say this is closest to actual inflation that everybody has experienced.

Then we calculated your purchasing power of one ounce of gold, how many beers you can buy at the Oktoberfest in Munich.

It's not 100% stable, but over the long term, you've got a pretty decent purchasing power. We did the same with admission tickets to Disneyland, with loaves of bread, with cars and with oil of course. 

This tells you that over the long term, gold is a good hedge against inflationary policies, and this is all gold has to do.

Ronnie Stöferle: Now, coming back to your question if it's expensive or not, inflation-adjusted the price of gold would have to go to 2300 to be above the 1980 all-time high.

So inflation-adjusted it is very cheap.

If you compare it relative to the equity market or the bond market gold is cheap. If you compare it to oil, for example, gold is pretty expensive at the moment.

Now, from our point of view, we measure it in monetary terms, because it doesn't make any sense like Warren Buffett does to compare equities to gold.

That is like comparing a Formula One driver Ayrton Senna, Niki Lauda to a basketball player. It doesn't make any sense.

But if you compare gold to the US dollar, to the Euro, to the Canadian dollar, it makes sense.

Ronnie Stöferle: In monetary terms, because so much money was created over the last couple of years, I think gold is still pretty cheap.

From a technical point of view, gold is trading in an uptrend, so it's showing strength against the equity market and the bond market. Gold is up in every currency.

In fact, it is trading close to all-time highs in every currency but the US dollar. So from our point of view, it will hit new all-time highs in the US dollar as well.

We've got a proprietary model that we explain in the report where we see, at the end of this decade, gold going to $4800 or even higher. 

Now that sounds like a large number, but is actually a compound annual growth rate of 10.9%, which then would say, okay, it's actually not that bad, and we expect some sort of a stagflationary decade.

So, in stagflation, you're having a really hard time on the bond market and with many sectors in the equity markets, so you should be very selective when it comes down to real estate.

Gold does extremely well if such a stagflationary environment plays out.

Gold for me is not a religion, it is not something to go crazy about, but it is a proper insurance that everybody should own. That's basically it.

George: Is that price target nominal?

Ronnie Stöferle: It is nominal, yeah. This will also mean the prices of a beer or a coffee will also be significantly higher, but your purchasing power measured in gold will be pretty stable.

George: One thing I've been trying to figure out, because I know there's a lot of confusion even from so-called experts, are gold coins subject to capital gains tax.

I know it might be different in the UK and different in the United States. Do you have any idea what's accurate there?

Ronnie Stöferle: Well, thank god I'm not a tax advisor.

I cannot give an answer to every country, but over here in Austria, for example, and in many countries in the European Union, if you hold it longer than one year, you don't have to pay any capital gains tax.

So if I buy this coin today and I sell it in one year and it's up 20%, I don't have to pay anything on that. Yeah, if I sell it in two months, then I have to pay capital gains tax on the profit.

George: For the American viewers I want to be clear, I think it might be drastically different in the United States. So make sure that you're doing a lot of homework.

I know on my comment stream, I always get people saying, “Well George, if you go down to the local pawn shop or the gold shop, it's not reportable.”

But just because the pawnshop is telling you it's not reportable, that just means that they don't have to report it. 

It doesn't necessarily mean that you don't have to report it on your own personal tax returns. So there could be some discrepancy there, but that's great insight.

Silver: An Exciting Bet

George: Okay. I don't want to spend too much time on that because I know the viewers won't be overly concerned with that.

  • Can you explain the gold-silver ratio?

And when you look at that through history…

  • Is it something that we should put a lot of weight into? If so…

  • What is it telling us right now?

Ronnie Stöferle: We had a special chapter on silver in this year's gold report, and our friend Emil Kalinowski helped us with that.

Two years ago I was ridiculed at every keynote that I gave when I was bullish gold. People said, “Come on, gold mining stocks, that's ridiculous.” Now it feels that changed.

We're now in this so-called public participation phase according to the Dow theory. But it is similar with silver and with commodities at the moment. 

When you say, okay, I'm bullish silver, I'm bullish commodities like copper, people will ridicule you.

From my point of view, in March, we saw the gold-silver ratio at an all-time high in the history of 125. That means for one ounce of gold you could get 125 ounces of silver.

Now, we saw a big reversal of that ratio, and from my point of view, silver is something like a sentiment indicator on gold.

Normally in the later stages of a bull market in gold, silver should outperform gold, so the gold-silver ratio should rise, and I think this is what's really happening now.

We shouldn't underestimate that, six out of eight supply sources, are in the process of stagnating and we shouldn't underestimate that industrial demand might really pick up.

People might ask, why? I would say this is a fiscal stimulus.

This is all those infrastructure programs that will be implemented at some point, will also affect silver demand.

But the big driver will be investor’s demand, and at some point, people say, “Okay, I've got gold, and I'm really bullish gold, but I want a bit more oomph, a bit more beta,” and then they will reconsider silver.

So I think at the moment, silver and silver miners are a great buying opportunity.

We saw some large moves. Have a look at the stock prices of the large gold miners like Barrick for example.

We saw it in Agnico and in the Royalty companies. Really huge volumes kicking in.

This tells me the generalists are coming into the market and that the mining sector is in the spotlight again.

Why? Because first of all, they're making a shitload of money, huge free cash flow generation at the moment.

They are actually raising their dividends while The Wall Street Journal just said that over the last couple of weeks more companies completely shredded or reduced their dividends than in the total of the last 10 years.

George: Yeah. And you were talking about their expenses going down to Ronnie.

Ronnie Stöferle: Exactly, then you've got the local currency factor where the Canadian dollar, the Australian dollar is still pretty weak against the US dollar, where energy prices are low. 

They did their homework over the bear market, and I'm sure some of the companies will screw it up again in the bull market. But at the moment I think there's really a nice value that can be found in the mining space.

When It Comes To Commodities, Sentiment Is Always Negative

George: Okay Ronnie. In your recent YouTube video, I saw you were talking about a few prices relative to the stock market, gold price relative to stocks. 

I think you might have done silver, but also commodity prices relative to the stock market and where they've been historically and where they are right now. Can you expand on that?

Ronnie Stöferle: Yeah, George, we really like long-term charts because our investors don't want to make the big money in a couple of months. They are thinking in years and decades, even in generations.

Most of our clients really feel more like friends and partners. So for us, it is really important to always understand the big picture.

This is why we use lots of long term charts, but we also use lots of relative charts, the ratios.

Because nowadays with extreme monetary and physical expansion, I think nominal prices are extremely disturbed. So I think I can get more information from relative prices.

Now, if you calculate commodities versus the stock market, commodities are at the cheapest level since the 1960s.

Now, that doesn't necessarily mean that they will bottom very soon and that they will start outperforming stocks, but there is tremendous relative value there.

One of the iron laws of markets is a return to the mean, and I think we should see commodities starting to outperform on the stock market at some point. 

As I've said before, I think that infrastructure spending might be one of the triggers for that

Let's face it, every politician will say, “Now we have to get the economy up and we'll build roads and we'll build, I don't know, new airports, bridges,” So this will definitely be one driver.

But on the other hand, because of ESG policies, we're seeing it is impossible for institutional investors to invest in anything that is somehow related to commodities extraction nowadays.

It is really from a legal point of view and it's really hard because most asset managers say, “No, we're only investing in sustainable assets, we're buying Tesla stock, everything that has to do with fossil energy is bad, gold mines really bad”

George: I wonder what they'd think of my coal ETFs?

Ronnie Stöferle: Those people have never been to a mine. I always tell my wife when we're on vacation, “Honey, we could go there.

There's a nice mine,” and she would just say, “Yeah, okay, let's do that.”

George: I can't believe your wife doesn't want to go to the local gold mine on your vacation Ronnie.

Ronnie Stöferle: But the pubs are always most interesting because this is where you get the best information. 

It's interesting to get a feel for the industry and to see how alert those companies are when it comes to environmental issues.

Because of course, I mean, if they screw it up, they will have tremendous pressure coming from capital markets, but nowadays, for many investors, it's almost impossible to invest in anything related to resources. 

It's a very important point. As I've said before, when it comes to commodities, sentiment is really negative.

Nobody is on bullish commodities anymore. If I would have to pitch buying Facebook or Amazon, that's the easiest sell.

But from my point of view, those investments that really hurt, that make you uncomfortable and make you reconsider your whole thought process back and forth, those are the best investments.

While those investments where I say, “Okay, yeah that's an easy one, everybody says it's good,” are probably the worst ones because everything is already priced in.

I think commodities going forward might be really a good bet. It is highly contrarian but that's what I actually like.

George: Yeah, I couldn't agree more. All right, for the sake of time, we'll leave it there Ronnie. It's been a fantastic interview. People are just going to love this. I really enjoyed it.

Thank you very much first and foremost. But for my viewers who want to find out more about what you do, where can they go?

Ronnie Stöferle: Well, our company webpage is

We're offering fund management, wealth management for high net worth individuals, and we're doing quite a lot of research.

Our research is published for free, you can download all our research publications.

Our In Gold We Trust reports are available totally for free on, available in German, English, and also in Mandarin.

I wrote two books, one is called The Zero Interest Rate Trap and the other one Austrian School For Investors.

I enjoy writing, we're doing quite a lot of keynotes which can also be found on YouTube 

I'm pretty active on Twitter as well. You can also find me on my handle @ronstoferle. And George, we will practice my last name, but I have to say, it's not even easy for native speakers so you did pretty well.

George: All right. Well, I appreciate that. Ronnie, thank you again and I just can't wait to do this in the future.

Ronnie Stöferle: Thank you very much, George. It's been a pleasure. Thank you.