Oil Prices, Deflationary Pressures, Bonds and Gold

The transcript of the Incrementum Fund’s fourth advisory board discussion is available for download below. The fund is managed by Ronald-Peter Stoeferle (formerly of Erste Bank, author of the annual “In Gold We Trust” report) and Mark J. Valek, employing a strategy focused on the effects of monetary policy on asset prices, with the help of proprietary indicators based on the monetary theory of the Austrian School of Economics. Here is Ronald’s brief summary of the discussion:

 

“The main topic of the discussion was the increasing deflationary pressure and its consequences on markets and central bank policy. We discussed the consequences of collapsing oil prices, a potential case for new all-time highs in treasury bonds, the impeding currency wars and the consequences for gold. As readers of our previous Advisory Board transcripts may remember, we already discussed the possibility of another round of quantitative easing in the US in our last advisory board meeting. It seems, as if the odds of such an event have increased since then, but generally still are considered as a highly improbable event by most market participants.

Perhaps the whole discussion can be accompanied by this quote by the great Ludwig von Mises: “No very deep knowledge of economics is usually needed for grasping the immediate effects of a measure; but the task of economics is to foretell the remoter effects, and so to allow us to avoid such acts as attempt to remedy a present ill by sowing the seeds of a much greater ill for the future.”

 

ludwig-von-mises

Ludwig von Mises, who first came to the world’s attention in 1912, as an eminent European monetary theorist with the publication of “The Theory of Money and Credit”

Photo via mises.ca

 

 

oil and bondsOil and bond prices (as reflected by long term bond ETF TLT), via StockCharts, click to enlarge.

 

Incrementum Fund Advisory Board Discussion, download link.

 

 

 

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