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In Gold We Trust report 2021
Monetary Climate Change
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.
Climate change and the associated striving for a “more sustainable economy” are omnipresent issues today. From energy production and mobility to the food industry and retail, to government bonds and investment funds, everything imaginable is given predicates such as “green”, “sustainable” or “climate-neutral”. ESG and SRI have become winged acronyms that no one seems able to elude.
Extensive
Detailed study on gold and gold-relevant capital market developments.
Critical
Critical consideration of all relevant events.
Global
Recognized in more than 60 nations.
From the content
- 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.
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