03/31/2021 – Just over a year ago, we were in the middle of a severe correction of the markets due to the Corona crisis. At that time, no one knew what impact this would have on all of us. Back then, the question was if or when deflation would follow and how the world could get out of this pandemic. Many people bought gold as a hedge and as a crisis currency. Today, 12 months later, there are various vaccines available and it seems to be only a matter of time before we all return to a certain normality. This prospect, combined with the central banks’ glut of money and the exorbitant levels of new government debt, drove most stock markets close to or even above their peaks. Why? The fear of deflation has turned into a fear of inflation in just a few months. “Cheap money” is escaping from bond markets and finding its way to equity markets, but only to a few sectors. And this is precisely where the main problem currently lies. Interest rates at the long end have been rising significantly for some time, especially in the US. If this continues at an unabated pace, there are risks. The enormous expansion of the money supply of the “old currencies”, also known as FIAT currencies, reveals the extent of the devaluation of money. We will keep a close eye on developments. But one thing is for sure – it remains exciting and we will monitor the siutation closely.
Here you can read our full Strategy Update from the first quarter 2021.
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