In Gold We Trust 2013: A New Chapter Begins
4. März 2026
As part of our “20 Years, 20 Threads” anniversary series, we revisit the 2014 edition of the In Gold We Trust report. This was the eighth edition overall and the second published under the Incrementum label.
Having been released three years after the dramatic peak of the 2000s precious metals bull market, the report arrived at a moment of widespread pessimism in the gold sector. Essentially, gold had reached its cycle high of USD 1,921 on September 6, 2011, while silver had peaked earlier that year in April. By 2014, the correction had evolved into a prolonged bear market that would ultimately last until late 2015.
The central question confronting investors at the time was simple, yet profound:
Was the bull market merely consolidating—or had it already ended?
Looking back today, the In Gold We Trust 2014 report offers valuable insights into the macroeconomic forces shaping gold markets and highlights both the strengths and limitations of financial forecasting.
📘 You can revisit the full report on the IGWT Archive of our Content Vault.
The central theme of the 2014 report was “Back to the Future.”
The report drew historical parallels between the global economic environment of the early 2010s and the conditions of the late 1970s and early 1980s. Several structural similarities stood out:
Rapidly rising global debt levels
Surging equity markets
Negative real interest rates
Expanding government intervention in the economy
These dynamics suggested that the global monetary system was entering a phase of instability reminiscent of earlier inflationary periods. History rarely repeats itself perfectly, but in monetary regimes, it often rhymes.
One of the report’s most important analytical frameworks was the concept of “monetary tectonics.”
According to this framework, the global economy is shaped by the constant interaction between opposing forces:
Deflationary pressures
Debt deleveraging
Demographic headwinds
Productivity constraints
Structural stagnation
Inflationary pressures
Quantitative easing
Central bank liquidity creation
Fiscal stimulus and political intervention
At the time, our view was that inflationary forces would eventually dominate this struggle. In reality, the years that followed demonstrated that these forces can alternate in complex ways, producing cycles of inflation, disinflation, and financial repression.
The 2014 edition also introduced a proprietary analytical tool: the Incrementum Inflation Signal.
We have long argued that inflation is fundamentally a monetary phenomenon. However, monetary expansion does not always translate directly into price inflation in the real economy. To measure how much monetary inflation actually reaches markets and consumers, we developed a model based on several market-based indicators.
The result is a composite signal akin to a “monetary seismograph.” Just as a seismograph detects movements beneath the earth’s surface, the Incrementum Inflation Signal helps detect underlying inflationary pressures building within the monetary system.
One of the report’s key observations was the growing role of central banks in sustaining credit growth. As the report noted:
“Since commercial banks are currently not contributing sufficiently to credit expansion, this has to be compensated by unconventional central bank monetary policy measures.”
In other words, central banks had effectively become the primary engine of global liquidity. This trend, which began during the response to the Global Financial Crisis, has continued to shape financial markets throughout the 2010s and into the present decade.
In 2014, markets were intensely focused on one issue: Could the Federal Reserve exit quantitative easing?
Our view at the time was that a genuine exit from ultra-expansionary monetary policy would prove extremely difficult. In a debt-based monetary system, continuous credit expansion is often required to maintain economic stability.
In hindsight, our assessment proved partially incorrect. The Federal Reserve eventually implemented quantitative tightening (QT) between October 2017 and July 2019, reducing its balance sheet from approximately USD 4.5 trillion to USD 3.8 trillion.
However, the experiment was short-lived. Within months, the central bank was forced to inject liquidity again, demonstrating just how fragile the system had become.
Another scenario discussed in the report was the possibility of negative interest rates.
While the Federal Reserve ultimately began raising rates in December 2015, other central banks moved in the opposite direction. Institutions such as the European Central Bank and the Swiss National Bank experimented with negative policy rates.
What once seemed radical quickly became a mainstream policy tool, despite the profound distortions it created across financial markets.
Historically, the Gold Forward Offered Rate (GOFO) had been a useful indicator for gold price movements.
Basically, negative GOFO rates typically signaled tightness in physical gold markets and were often followed by rising gold prices. However, after 2013 this relationship broke down. The negative GOFO readings no longer led to a sustained rally in gold.
Obviously, this breakdown suggested that the financial system had undergone structural changes in the aftermath of the Global Financial Crisis and the European sovereign debt crisis that had just occurred.
Despite the difficult market environment, the report maintained a bullish view on gold mining equities.
At the time, the sector had experienced a dramatic collapse in profitability. Mining companies had expanded aggressively during the boom years, assuming that high gold prices would persist.
Plainly, when prices fell, margins collapsed.
In retrospect, the downturn marked the bottom of the earnings cycle, which occurred in 2013. Notwithstanding, before launching a powerful rally, the gold mining stocks would only reach their market lows in January 2016.
Be that as it may, the report emphasized an important lesson:
Mining stocks are not buy-and-hold assets. They require active management.
One of the most prescient insights of the 2014 report concerned the growing role of emerging markets in shaping global gold demand.
Central banks and investors in countries such as:
China
India
Russia
were steadily increasing their gold reserves.
Meanwhile, rising incomes and expanding middle classes in Asia were driving stronger demand for both investment grade gold and jewelry.
Moreover, for being a captivating development, we delved into the true objectives behind China’s obscure gold accumulation strategy.
Although the People’s Bank of China had not officially reported new purchases since 2009, we argued that its actual holdings were likely far higher than reported. At the time, we estimated China’s reserves could range between 4,000 and 6,000 tonnes, potentially making it one of the world’s largest holders of gold.
Naturally, this accumulation was widely seen as part of a broader effort to internationalize the renminbi.
During this period, the International Monetary Fund was also exploring potential reforms to the global monetary system.
One proposal involved expanding the role of Special Drawing Rights (SDRs) as a new global reserve currency. The goal was to strengthen financial stability and reduce the world’s dependence on the US dollar.
While this proposal attracted considerable attention at the time, it ultimately never materialized as a viable alternative to the existing dollar-based system.
Looking back today, the In Gold We Trust 2014 report offers several important lessons.
Firstly, monetary systems rely heavily on continuous credit expansion. Attempts to reverse this process are often short-lived.
Secondly, forecasting direction is difficult, but forecasting timing is even harder.
Finally, the report correctly identified a structural shift that continues to shape the gold market today: the growing importance of emerging economies and central banks as buyers of gold.
Above all, the experience reinforced a core principle of macroeconomic analysis:
Humility is essential when analyzing complex financial systems.
📘 If you would like to revisit the original report, head over to our Content Vault.
#InGoldWeTrust #20Years20Threads #GoldReport #GoldInvesting #GoldDemand #GoldMiners #MiningStocks #SoundMoney #HardAssets #SafeHaven #InflationHedge #GoldForecast #CentralBanks #GoldReserves #MonetaryPolicy #EmergingMarkets #Dedollarization #WestVsEast #GlobalCurrency #MarketTrends #InvestmentInsights #PortfolioStrategy #WealthManagement #MacroResearch #MarketAnalysis #AustrianEconomics #AnniversarySeries #IGWT14
Erhalten Sie den jährlich erscheinenden In Gold We Trust-Report sowie das Chartbook mit den dazugehörigen Charts.
