In Gold We Trust Report 2021

(May 27th 2021 - Incrementum)

Key takeaways from this document include:

• This year marks the 50th anniversary of the Nixon Shock when the last peg between money and gold was severed. This event ushered in the era of debt-based money and allowed central banks to create money without restrictions.

• A monetary climate change is taking place right before our eyes. We identify three key aspects to this change: budgetary nonchalance, the merging of monetary and fiscal policy and the creation of new tasks for monetary policy.

• In our view, the inflation pendulum finally swung back in the previous year, and inflationary forces are now stronger than deflationary ones.

• We are likely moving into a period of inflation caused by strongly rising money supply growth. Consequently, more and more central banks will be forced to implement a policy of explicit or implicit yield curve control. Real interest rates will thus remain negative.

• We continue to our forecast based on our proprietary gold price model presented in last year. The conservative baseline scenario has resulted in a price target of USD 4,800 for gold at the end of the decade.

• After hibernating for years, commodity prices have now awakened. In such a market environment, tangible assets, especially commodities, selected equities in the right sector, and obviously precious metals should form the solid basis of the portfolio.

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