"Advanced Monetary Surrealism" Summarized In 60 Slides For Gold Bulls

Tyler Durden's picture

For anyone who wasn’t included on the 1.5 million person distribution list for Incrementum AG’s latest 160-page annual tome on the gold sector, “In Gold We Trust”, the authors/portfolio managers, Ronni Stoeferle and Mark Valek, helpfully condensed the report into a chartbook containing "only" mere 60 charts. This can be viewed below, and as a courtesy for those short on time, here is our pick of the 14 best charts. 

Incrementum believes that the bull market in gold has resumed. The gold price will benefit from the Fed’s inability to normalize monetary policy. With so much debt, how can it.

The gold price has dramatically lagged creation of base money, resulting from unconventional policies of central banks. Incrementum terms this “advanced monetary surrealism” which has eliminated risk aversion.

Pressure on the long end of the Treasury yield curve threatens Fed policy and is bullish for gold.

Central banks have outdone asset bubbles that have gone before with the “Everything Bubble”  this time (except gold).

Gold has been much stronger in other currencies than the dollar. While Fed tightening has restrained the dollar price, it will be unable to “normalize” policy.

The current gold bull market since 2001 has been following a similar timeline and pattern to the great 1970s bull market.

From a risk on/risk off perspective, the bull market in equities has been one of the key negatives for gold. Now the gold/S&P ratio is bottoming out.

The Commodity sector in aggregate is trading at a 50-year low compared with the S&P 500.

Unsurprising statistic - 89 economists were surveyed by Bloomberg and none expects a GDP contraction in 2017, 2018 or 2019 (plus ca change)

…despite 16 out of the last 19 rate hiking cycles being followed by recessions. That’s 84% in case you’re wondering.

Periods of negative real interest rates (using Fed Funds) are positive for gold.

The market cap of Apple is more than 7 times that of the HUI Index, which includes the 16 largest unhedged gold producers.

In 2016, the free cash flow of the HUI stocks was superior to 2011 as managements have structurally improved operating and capital outlays.

Finally, some solace for long-suffering gold bulls: the purhasing power of gold in terms of beer at the annual Oktoberfest is comfortably above the long-term average.

Of course, metric system and all, it’s lit(re)s not pints although £5.00 per pint in the City of London is still exhorbitant.

The full slideshow is below (link)

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afronaut's picture

. That handle is fuckin hilarious. I actually laughed and upvoted based that. Your comment is idiotic

I_rikey_lice's picture

My comment isn't idiotic.... I just beat tmosley to the punch. What you are saying is that mosley is an idiot and to that..I agree. 

Anyways, I am busy mining asteroids, have to run.

tmosley's picture

Cognitive dissonance removes your ability to understand arguments or the positions of others.

While you may not be able to understand that, you are clearly experiencing it.

Dirty Bumn's picture

Go live in your virtual castle in the sky, some of us prefer actual money and not digital promises.

tmosley's picture

8 years on the top, 24 years on the bottom. Yeah, this is JUST like the 70's. JFC.

afronaut's picture

Here, this puts it into perspective for you:

January 2000 – 830 Oz (343 000 \ 413 CAD)
January 2001 – 862 Oz (345 000 \ 400 CAD)
January 2002 – 811 Oz (365 000 \ 450 CAD)
January 2003 – 708 Oz (397 000 \ 560 CAD)
January 2004 – 853 Oz (461 000 \ 540 CAD)
January 2005 – 926 Oz (482 000 \ 520 CAD)
January 2006 – 926 Oz (584 000 \ 630 CAD)
January 2007 – 878 Oz (641 000 \ 730 CAD)
January 2008 – 836 Oz (742 000 \ 887 CAD)
January 2009 – 646 Oz (649 000 \ 1020 CAD)
January 2010 – 675 Oz (790 000 \ 1170 CAD)
January 2011 – 595 Oz (810 000 \ 1360 CAD)
January 2012 – 623 Oz (1 034 000 \ 1659 CAD)
January 2013 – 552 Oz (901 000 \ 1630 CAD)
January 2014 – 695 Oz (929 000 \ 1335 CAD)
January 2015 – 707 Oz (1 010 000 \ 1428 CAD)
January 2016 – 820 Oz (1 273 000 \ 1552 CAD)

 

Priced in Gold (Sound Money), Vancouver house price are basically the same in Jan 2016 that they were in Jan 2000

 

OverTheHedge's picture

Downvoted for facts?

Bizarre. You bitcoiners need to get out more. Reality is a thing: it's been around for a while, but to be fair, it can be tricky to see sometimes.

Peak Finance's picture

Love this line:

“advanced monetary surrealism”  

hmmmstrange's picture

I asked my waiter yesterday if he wanted a 1oz gold eagle for a tip or a $20 bill. He chose the $20.

silverer's picture

That's why he's a waiter.

bardot63's picture

With a doctorate degree in sociology.

thebeek's picture

Are we sure that wasn't a phd in economics?

afronaut's picture

When a typical waiter knows the price of a gold eagle, it's a good indication that it's time to sell

I Art Laughing's picture

Is it bigger than a $20 seems to be a far cry from knowing the price.

Goldennutz's picture

Unlike some market geniuses here who know the POG every minute of every trading day and pray to the Kitco ticker every morning.

PT's picture

Maybe he feared it was tungsten.

Or maybe he thought it was fool's gold, or he knew he had no way of figuring out the difference.

I Art Laughing's picture

Proving that neither of you is a genius.

Rex Andrus's picture

Only because you wrapped it around your burrito and shoved it up and down his ass until he couldn't come anymore. But seriously, Krugman is waiting tables these days? Where? He must have been stawking pizza, like the rest of the aliens.

willy up the creek's picture

Why do we always talk of eagles?  I think the gold buffalo is a far superior coin.  The design is mucho better, and the gold is as pure as it comes.

GRDguy's picture

If you feel that everyone will keep their paper (and electronic) promises to you,

(now and in the future)

you don't need to think about holding any physical gold and silver.

silverer's picture

Gold will win. It always has.

Antifaschistische's picture

sure, I'm a collector/stacker/whatever.  but not because I think gold's a winner.  It's because I KNOW fiat currencies are losers.  I like cement, tin, copper, oil and rhodium too...but gold's just easier to collect.

BobEore's picture

It is certainly REASSURING to know that... unlike cheatin, lying DIRTBAG bankers and .gov badguys...

we've been able to count on the continued RELIABILITY of gold pundits, goldnsilver websites, and the insights of ANALCYSTS with a mandate to bring relief to the fabled 'lil guy.'

By taking the never-reliable advise of such critters without the requisite tonne of salt... bagholders of all stripes have been able to continuously remove from themselves the burden of personal savings, security, and the feeling of being part of an incrowd of knowing 'investors' who GOTS OUTTA the system...

and into the frying pan. Whatta joke. PROMISE KEEPERS... OF THE PROMISED LAND

of oz. Nickel off expired baby food. Today only!
https://storify.com/SuaveBel/massive-breakouts-are-always-just-around-th...

Goldennutz's picture

C'mon...it IS backed by the full faith and credit of the U.S. Goobermint.

 

Nyuk...nyuk...nyuk..

Seasmoke's picture

$1900USD in 2011. $1300USD in 2017. Fraud. Manipulation. Nothing else needs to be said.

Goldennutz's picture

It's market forces.

 

BWWWAAAAAHAHAHAHAHA!!!

SeuMadruga's picture

Yes, it does: OPPORTUNITY !

afronaut's picture

250 in the late 90s. It had a huge run. Historically.

c2nnib2l's picture

in 2018 gold will reach 1800 per oz mark my words

Code Duello's picture

LOL.  Gold will trade below $1050 before it trades at $1800.

illuminatus's picture

Predictions are like a holes, everybody knows one.

assistedliving's picture

7 times?  i can do 1000 times more things w/ my Apple

Rex Andrus's picture

1. Frisbee (public school)

2. Bludgeon (public school, shakedown)

3. Shield (public school, shakedown)

4. Get busted and humiliated for life for illegal tweeting (public school)

5. Pay taxes (shopping)

6. Porn (shopping)

7. Mail order bride (blackmail, theft, taxes, identity theft, accessory to human trafficking and shopping)

What are the other 993?

slipreedip's picture

With so many bubbles:

-Sharemarket

-property

-artwork

-cryptos

The question to my mind is why ISNT the price of gold going up as well.

It suspicious that something of tangible and inherent value isnt increasing in price like everything else, power, food, insurance, medicine.

 

afronaut's picture

It is up. Go look at a 20 year chart. I was buying under 300. Where were you?

slipreedip's picture

Yes, it has, but then so has basically eveything you look at for 20 years.,

It hasnt done much for the last decade in contrast to some of the things i mentioned.

Which is the suspicious thing to my mind.

slipreedip's picture

I  bought property when gold was at 300 ( just having looked it up). 

I can tell you now, that property has gone up close to 10 times  what I paid for it in the last 20 years.

Thats a long time for gold to have done half as well.

 

 

ljag's picture

Yet Russia and China are feverishly stacking. They must think they are the ones to rule....you know....the Golden Rule (he who has the gold ...rules). Simple shit, huh?

afronaut's picture

It's doing its 50% retracement. I predict 5-600 over the next 10 years. Wild guess. I made lots off gold by realizing 252 was dirt cheap. I buy silver now. When I can find it

platyops's picture

All one really needs to understand is the worldwide average production cost of an ounce of gold.

 

Gold as a product for sale cannot go below this average cost and stay there for very long. If a profit cannot be made then no gold is mined.

 

Try and find this number out and you will find it difficult if not impossible. It is a well hidden number.

 

Oil is the same! Once oil goes below around $50 a barrel, then suddenly "fracking" is not profitable and oil companies can only store so much, so they give it away as a loss or go out of the business entirely.

 

SUPPLY and DEMAND is entwined with cost of production. Then again you may have Goldman Sachs printing paper gold. So the price point is obscured by several things that takes an expert to unwind into simple common English for one to understand.

blargg's picture

Essentially, one factor tends to dominate. Paper gold? Price is artificially depressed. Supply? Price is pushed up to at least what it costs to produce. Scarcity? The sky's the limit.

gdpetti's picture

Well, like oil or gas etc, it's different for different fields/mines... say Russia's average price is a bit higher on average than the House of Saudi's... or Russia's Artic fields is higher still, but any startup is... then compare American fracking ops.... as long as they don't have to pick up the cleanup tab, they can manipulate the free money game a little longer, but that's up to those oligarchs pulling the Fed's strings. Gold and silver, on average are about at that price point... thus the reason so few new ones show up... but this game is dependent upon the timing for the global collapse... as Mother Nature swings in... new deposits will get exposed, while other mines collapse... same with all the other digs, mines, fields... all markets are bbeing manipulated like there's  no tomorrow, because 'this time is different'... this cycle isn't a small one, but a rather large one that encompasses all of human history on this planet.. so why care about price points when the game of manipulation is still on? Like the Olympic (Titanic to the general audience of suckers), the ship is sinking.. but the band plays on...