Introducing The Incrementum Recession Phase Model.
What assets perform well during a recession?
We look at 5 different phases of a recession and the performance of various assets during each phase. 1/
We analyzed eight recessions since 1970. Turns out that gold and mining stocks tend to perform quite well during a recession. 2/
We also look at different leading economic indicators to establish if a recession is imminent. Currently, all of
them are signalling an imminent recession. 3/
For a more detailed look at the Incrementum Recession Model, check out our chapter, The Showdown in Monetary Policy, on page 118 of this year's #IGWT report.
Available to download here: ingoldwetrust.report/?lang=en
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We feature quite a few charts, but our favourite remains the gold/Okteberfest beer ratio.
Gold has not only maintained its beer purchasing power over the last 12 months, the ratio even increased from 121 to 123 Maß Oktoberfestbier, despite the price increases in euros. 1/
We also feature the iPhone/gold ratio. Every year, the latest Iphone is more expensive than the previous year.
But not if you hold gold. The first iPhone sold for 0.92 ounces of gold in 2007. Fifteen years later, only 0.75 ounces of gold are due for the iPhone 14 Pro. 2/
Not only do holders of gold pay less than 15 years ago, but they also get a vastly superior product to that of the past, proving that gold is an excellent store of value. 3/
The top 10 facts in the 2023 #IGWT report.
A thread:
1. If the U.S debt ceiling is raised again, it will be the 79th increase since 1960, the 21st since 2000, and the 30th under a Democratic president. Republican Presidents have raised the debt ceiling 49 times. 1/
2. Gold, you are the apple of my eye… in terms of purchasing power! In 2007, the first iPhone cost $599 or the equivalent of 0.92 ounces of gold. Fifteen years later, only 0.75 ounces of gold are due for the iPhone 14 Pro, which cost $1,499 at its launch in September 2022. 2/
3. Despite US equities becoming more undervalued in the last year (Shiller P/E ratio 38.3 in 2021 vs 2022’s figure of 28.3), gold is still historically undervalued compared to US equities. The Gold/S&P 500 ratio of 0.49 is significantly lower than the long term average of 1.66 3/
Gold as International Reserves: A Barbarous Relic No More?
This is the title of a working paper released by the IMF on the 27th of Jan 2023.
We summarized their findings for you below: 1/
In the past, the IMF considered gold to be a "barbarous relic" and advocated for its replacement with a more modern and flexible reserve asset, such as its own Special Drawing Rights (SDRs). However, in recent years, the IMF has changed its stance on gold.
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They now recognise the importance of gold in a diversified international reserve portfolio and the organisation now allows its member countries to hold gold as part of their official foreign exchange reserves.
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We list the top 5 worst cases of hyperinflation in history!
Let the countdown begin!👇 1/
#5 The Greek Hyperinflation of 1941-1944: Greece experienced a severe episode of hyperinflation during the German occupation in World War II. The inflation rate reached an estimated 50% per month, causing widespread poverty and social unrest.
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#4 The Zimbabwean Hyperinflation of 2007-2008: Zimbabwe experienced severe hyperinflation in the late 2000s. The inflation rate reached an estimated 79.6b percent per year, causing the country's currency to become worthless and leading to widespread poverty and social unrest. 3/
If accepted, the new proposed BRICS members would create an entity with a GDP 30% larger than the United States, over 50% of the global population and in control of 60% of global gas reserves.
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"China is proactively writing a new set of rules, creating a new type of globalization with new institutions like the
Belt and Road Initiative, BRICS+, and the SCO."
One World, Two Systems.
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Mises describes the world on a gold standard, enjoy:
"The gold standard was the world standard of the age of capitalism, increasing welfare, liberty, and democracy, both political and economic.
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In the eyes of the free traders its main eminence was precisely the fact that it was an international standard as required by international trade and the transactions of the international money and capital market.
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It was the medium of exchange by means of which Western industrialism and Western capital had borne Western civilisation into the remotest parts of the earth's surface, everywhere destroying the fetters of age-old prejudices and superstitions, sowing the seeds...
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