Ronald-Peter Stöferle

Well, good morning, ladies and gentlemen. Half past seven. The fact that you’re already here is very much appreciated. I’ll try to wake you up like a double espresso and three Red Bull this morning. It’s gonna be exciting. It’s gonna be entertaining, and I think it’s gonna be thought-provoking. My name is Ronnie Stöferle. I’m fund manager at Incrementum based in Liechtenstein, and for 20 years now, I’m publishing the so-called In Gold We Trust report.

So this year we published edition number 20, and we hit an all-time high in the price of gold, but also in the length of the report. So that’s 450 pages, but I will make sure, like every year, to write a little bit less for the next edition, which will be out May next year. But make sure to have a look at the compact version, which is sitting on your tables.

Now, quick show of hands, who has heard me speak before? Okay. For some reason, you’re here again. Well, then you kind of know what happens next. Every year we hunt for a new leitmotif for the In Gold We Trust report, and each year it takes me somewhere new. For our nineteenth edition, I took you into the world of cycling. We talked about the famous Alpe du Calm climb at the Tour de France, and I made the analogy that what I call performance gold, which is silver and mining stocks as well as commodities, would break out versus gold. So that was last year, and actually that worked out pretty well. So we have seen this outperformance by the silver space, by the mining space, but also from the commodity space versus the S&P.

Now, this time, unfortunately, no analogy from the world of cycling. I had my own moment with mountain biking this summer. I broke my collarbone and a couple of ribs, so I have to give the sports analogies a rest. Sorry about that. This year, we’re going to Hollywood instead. [instrumental music] Who remembers? Who remembers that movie? Yeah. I can tell you, the younger colleagues in my team, they said, “Well, Back to the Future, never heard about this movie. Never seen it.” So I realized, well, I’m not that young anymore. So I gave them some homework, and they watched it and said, “It’s a good movie, but it’s a little bit lame.”

However, we all remember Marty McFly, the DeLorean, 88 miles an hour. “Marty, you gotta come back to me.” Where? Back to the future. And Marty’s insight was very simple. You cannot fix the present until you understand the past. Now, monetary history, ladies and gentlemen, works the very same way. The future of money is hiding in its past. But unlike Marty, we’re going forward first.

Now, picture a conference room in Basel. It’s the year 2030. The delegations have been in the room for the whole week, and the week before the bond market came apart. Sounds familiar. Yields were spiking. Two failed treasury auctions. Equities in free fall. Late on Sunday night, they sign a paper. The agreement that these gentlemen sign, it fits in one sentence. Central banks settle their imbalances with each other in gold at market price marked every quarter.

So that’s not a classical gold standard because nobody’s currency is convertible. Nobody’s money supply is fixed. It’s narrower than that and probably more powerful. Between central banks, gold settles the difference, and every rise in the price of gold quietly recapitalizes the balance sheets. Not to replace fiat money, but to make fiat money credible again. And when they sign this paper late Sunday night, where is gold trading at? Hold that question. We’ll come back to it.

But before we travel anywhere, ladies and gentlemen, one question that the whole investment case for gold actually hangs on. Is this a normal gold cycle or is it a re-monetization cycle? And I think the answer depends on the lens. Through a mainstream eye, gold looks pretty expensive. Perhaps the cycle is already over. But through the lens of the monetary history, through the lens of the Austrian school of economics, gold is not expensive at all. It’s actually quite inexpensive if you have this monetary view on gold.

Now, again, most people value gold as a commodity. From my point of view, it’s a monetary asset. And a monetary asset has to be measured against the money supply. Now, what you see here is the so-called shadow gold price. It asks one simple question. If every dollar of the monetary base had to be backed by America’s gold as the law once required, what would the price be?

Now, have a look at this chart. The green line, $21,000. In dark blue, that would be 40% gold coverage, which was the legal minimum under the Federal Reserve Act until 1945, $8,400. And in light blue, that’s 25%, the rule from 1945 until Nixon actually closed the gold window. This shadow gold price would be $5,200. Now these prices are not price targets. Think of them as basically X-rays of the same patient, the US dollar.

Now have a look at the green circles. Twice in a century, actually, the actual gold price climbed all the way up to the full backing line in 1939 and in 1980, roughly 40 years apart. Both times we saw a monetary crisis. Both times gold actually repriced until the balance sheet was made whole again. Now do the arithmetic. Forty years after 1980 is 2020. So by that clock, the third circle isn’t a forecast, it’s actually overdue.

Now, ladies and gentlemen, 21,000 sounds absurd, I know. But remember in 1971 at $35, probably $850 sounded absurd too. Nine years later, it was the gold price. And three years ago, if I would have told you $4,000 for the gold price, sounded pretty absurd too. Today, it’s the price. So absurd is just a question of your time horizon.

Now let’s start our DeLorean. These are the so-called six vectors of remonetization in three groups: the past, the present, and the future. Three stops. Let’s get into it. The first vector, central banks are becoming gold buyers. You probably know that since 2010, central banks have bought 9,700 tons of gold, more than 4,000 of those since 2022 alone. But almost none of it was bought by the West. So who did buy and why now?

Before we answer who, let’s look at the why. For fifteen years, gold did exactly what real yields told it to do. Higher real yields, lower gold price. Lower real yields, higher gold price. But in February 2022, the relationship broke, not gradually, but suddenly, and it has never come back since then. Gold behaved like a different asset since then.

So what happened in February 2022? You know it, sanctions. The West froze $300 billion of Russian central bank reserves, and every central bank outside the alliance drew the same conclusion. Reserves inside somebody else’s system are not reserves at all. So they built a plan B, a golden plan B. Before the invasion, central banks bought 118 tons a quarter. After, 245 tons. So February 2022 reset the baseline.

Last year, central banks bought 863 tons, which was a new all-time high in absolute prices because of the rise in the gold price. And when the World Gold Council, in their annual survey, asked what comes next, for the first time in the survey’s history, not one central bank expected its own reserves to fall. Not one. And this year, second quarter, the strongest second quarter on record, 289 tons of gold, up 60%, bought straight into the correction, bought straight into a falling price.

Now, who has bought? Have a look at the list. What do you notice? There’s not one G7 country on it. The usual suspect, China, took 398 tons. But look at number one, Poland, at 404 tons. A NATO and EU member as the largest buyer, and Poland keeps buying. 632 tons by June, target at least 700. Now, Poland has read its history books, and their message is simple: We are becoming an important nation in Europe, so we have to own serious amounts of gold.

Now let us widen the lens from central banks to central banks and private demand. So this is official and private gold together since 2010. China bought 15,000 tons of gold. India, 13,000. Russia, 2,500 tons. The US, 3,000 tons. So China alone bought five times as much as America. Now add up the three men on this picture in the photo. They bought 31,000 tons of gold. That is roughly nine years of global mine production in the last fifteen years. Why? Because if you wanna play poker with the big guys, you have to bring golden chips to the table.

Now let’s have a look at this one, the whole field in one picture. Each dot is one of the ten biggest economies plus the Eurozone. To explain the chart, further on the right means bigger reserves. Higher up means higher of those reserves in gold. Top left, the legacy holders, France, Germany, Italy, the US, around 80% in gold. Bottom right, China, the world’s largest reserves, single digits in gold.

Now the rest of that bottom half, the UK, the inventor of the gold standard, under 20%, Japan under eight. And on the floor, Canada, a G7 nation, top five gold producer, zero ounces in the vault. They dig it up and keep none of it. It’s a little bit like the winemaker who harvests the finest grapes and drinks cheap booze himself. So my thesis is at some point, those what I call gold light countries, Australia, Japan and Canada, will start buying gold.

Now let’s have a look at the second function, the reserve function. February 2022 taught the world gold reserves you do not physically control are not reserves in a crisis. Are there any English here? Yeah. It’s coming home. It’s coming home. Football’s coming home. You remember that song? You’ve been singing it for a while. Hasn’t come home yet, although it was pretty close this year.

So gold did. Gold did actually come home, over 2,000 tons. It started with Venezuela in 2011, then Europe came for its gold. Germany, 674 tons from New York and Paris. France, 348 tons. India, 215 tons. And a couple of days ago, the Dutch moved again 86 tons out of New York and Ottawa into London. Their official reason, to be better prepared for a crisis. Now, when custody becomes strategic, gold is no longer an asset class. It is money, ladies and gentlemen.

And the same loss of trust actually shows up in the private market. This is COMEX gold deliveries back to 2007. For most of history, the futures were simply rolled and the paper stayed paper. Now look at the step change after 2020. The market stopped rolling its contracts and started taking the physical metal. Don’t trust but verify, as the Bitcoiners used to say.

Now that was the past. Now we move the DeLorean into what’s happening right now, private demand and digitalization. I know that everybody is talking about central bank demand, but nobody is talking about the feedback loop underneath. And remember that word, please, loop.

John Maynard Keynes, and I have to admit, I’m not a Keynesian at all, but he got some things right. He said, “It is better for reputation to fail conventionally than to succeed unconventionally.” Now this concept is so important to understand in our industry, in the investment industry, career risk. Hold gold and underperform for two quarters and you will lose the mandate. Hack the benchmark, underperform, but you will keep the job.

Now have a look at this chart. It shows gold as a share of private financial assets back to 1971. How much do private allocators actually hold? 2.7%. From my point of view, that’s not a bubble at all. In 1980, that share stood at 8% and by no means I’m saying that we’ll go back to 8%, but we might go back to 4% or 5% over the next couple of years.

Now what about family offices? Based on UBS data, 72% of all family offices hold zero gold. The average allocation by family offices is 2%. Now I ask you, ladies and gentlemen, is this how a secular bull market in gold ends? No. We’re somewhere mid-cycle in this bull market. The mania phase is still ahead of us and the first movers are being paid quite handsomely.

In our 2024 report, we published the new 60/40 portfolio. That’s 45% stocks, 15% bonds, 15% safe haven gold, 10% what we call performance gold, 10% commodities and 5% Bitcoin. The outperformance versus the traditional 60/40 is quite significant, 25 percentage points. So it actually works in real time. Decent outperformance with basically the same volatility.

And now listen to some big names on Wall Street that are getting more vocal about gold. Mike Wilson, CIO of Morgan Stanley, 60/20/20. Twenty percent of that gold. He calls gold an anti-fragile asset. Ray Dalio, 15% in an environment he compares to the early seventies. And even Jamie Dimon said it’s semi-rational to hold gold, whatever that means.

Now, we all know that gold is a superb asset as a store of value, but it can be somewhat difficult to move. Tokenization attacks exactly that weakness. If Tether were a country, its 146 tons of gold would sit between Libya and the Philippines, nearly double Australia. And they are not done. This year’s gold purchases by Tether ranked them third among central banks.

So we asked them, Juan Sartori, in our last In Gold We Trust report, and I quote, he said, “This is not speculation, not a trade. This is strategic reserve construction.” Now, if we add the Genius Act, which will make stable coins much, much more important, do you think that Tether’s gold demand will go lower or higher? I think it’s gonna go significantly higher.

And now we’re moving to our third stop, the future. This is where it really gets interesting. Vector five, gold-backed bonds, a very old idea for a big problem. The problem, trust in government debt is eroding. Now, this has been a rough week so far in the gold market, in the mining space. Obviously, one of the most important drivers for that was the turmoil in bond markets.

James Carville, the chief strategist to Bill Clinton, famously said, “I used to think that if there was reincarnation, I wanted to come back as the bond market. You can intimidate everybody.” Now, he was right then, and he’s right now. This is what a loss of trust in the bond market looks like. Those are the ten-year government bond yields since 2000. Don’t look at the levels. Look at the direction. UK, United States, France, Germany, four countries, four fiscal cultures, one shape.

Now, we saw two decades of decline, a brief flirt with zero. You remember when the bond future was trading above 160, so actually you had a guaranteed loss holding your ten-year bonds. But then since 2022, a sharp turn north. And it’s not only these countries, but it’s also Japan, Italy, Canada, and Australia moving into the same direction. So the bond market is not shouting. It is doing something worse. It is repricing the promise behind government debt.

Now look at this chart. It shows US gold as a share of US public debt back to 1915. Twice this ratio mattered. Over 40% around the world was 20% in 1980. Today, US government debt is backed by 3% gold. Now read the chart the other way around. For gold to cover the debt like it did in 1980, the price would have to be 31,000. Now, I’m not forecasting those numbers. I’m just showing you the arithmetic of the debt coverage that we have at the moment.

What might be a solution? Judy Shelton, she was twice nominated to the Fed board. She has an answer, and we did a great interview with Dr. Judy Shelton in this year’s In Gold We Trust report. She suggested a fifty-year gold convertible zero coupon treasury trust bond. Issue date, July fourth, 2026. Maturity, July fourth, 2076. Now, July fourth has come and gone. Nothing happened. But don’t mistake this for a crazy idea. We had gold-backed bonds in the US, in France, in Italy. So this idea might sound a little bit outlandish, but if you look at history, if you study history, those gold-backed bonds have been a big thing in the past.

Now, let’s look at the last of our vectors, revaluation. For some reason, the United States still carries its gold at $42.22 an ounce, fixed by law in 1973. Was never changed. So the largest economy on Earth values its gold at 1970s prices. Now, if you bought a house in the 1970s, would you still value it at the same price that you bought it in 1970? The gap that we’re seeing here is the largest unrealized gain on any sovereign balance sheet in the world.

The Euro system already marks its gold to market every quarter. Now, if Washington did the same, that would be roughly a trillion dollars of surplus just from a bookkeeping entry. And listen to the man who would sign it, Scott Bessent. He said, “We are going to monetize the asset side of the US balance sheet.” The same man who said that back when he ran his own fund, people would have called him a gold bug. Now, the beauty of that recapitalization by revaluation is balance sheet repair with no new debt required.

Now, none of this is history. Three cards on the table, Italy in 2002, done. South Africa, 2024, agreed. And the United States, 2025, still open. Don’t take my word for that, but that is a study published by the Federal Reserve in August 2025. They have actually described every revaluation of gold in history. They did the arithmetic. The note spells it out. Revaluing gold would be worth around 3% of US GDP. And that study was published when gold was trading at $3,300 an ounce. So they’re not speculating about it. They’re actually describing it. So this is what I call a silent recapitalization of the balance sheet. No laws passed, no ounce sold, and the balance sheet actually gets stronger.

So how would it actually happen? My friend Luke Roman, I’m sure you know Luke, he has laid out the potential sequence. So the Treasury upsizes the buybacks. The Fed starts cutting rates. Gold moves sharply higher because that is what gold actually does when the front end is pinned down and the long end is in trouble. Then the Treasury revalues the gold at the new higher price. Several trillion dollars into the TGA, the Treasury General Account, enough to buy back the long end very cheaply as it’s sold off. Interest rates, interest costs collapse. And the secretary who pulls it off will go down in history as the man who fixed America’s balance sheet.

Now, let’s be honest, I think there’s no shortage of ego in the White House at the moment. I think that Scott Bessent actually wants his place in the history books. So actually, the higher the price of gold goes, the better the arithmetic gets. So Washington has no reason at all to stand in the way. Washington is holding the door open.

Now, at the beginning, I said you have to remember one word, loop. I promised you that this picture, those six vectors of the remonetization, would come back but slightly changed. Do you see it? The timeline has now bent into a circle. Six vectors, no beginning, no end. So once more, the sequence. Buying lifts the price. A higher price repairs central bank balance sheets because the gold they hold is suddenly worth more. A repaired balance sheet makes a gold-backed bond possible because now there is something behind it. A gold-backed bond makes gold respectable again, officially on the record. And respectability brings in new buyers because they don’t have to fear career risk anymore, which lifts the price.

So this is where we came in. Every vector feeds the next one. This is why you cannot analyze all those vectors in isolation. And this is why this does not stop when the price actually corrects. Past a critical mass, it runs on its own.

Now, again, the question from the beginning, ladies and gentlemen, is this a normal gold cycle? Does a normal gold cycle have central banks resetting their baselines, buying roughly 1,000 tons of gold every year? Does a normal gold cycle have sovereigns flying their metal home, a repatriation? Does a normal gold cycle have a revaluation on the Treasury’s agendas? No, this is a remonetization cycle, ladies and gentlemen. And the big question for me is, at what point do we stop calling central bank gold buying just diversification? And when will we start calling it fiat repricing? So for us as investors, the question is no longer whether gold belongs in a portfolio, only in what size and in what form.

Now, do you remember the slide with our dear central bankers in Basel? Where is gold trading when they sign the agreement? I’ve got no idea, but probably higher, significantly higher. Because where we are going, we don’t need roads. We don’t even need a DeLorean. We need gold. Thank you very much. [audience applauding]