Fireside Chat: Doug Ramshaw & Ronald-Peter Stöferle

0:07 Good morning, good afternoon, good evening, depending on where in the world you're signing in from. I've got the luxury and privilege to sit down today with Doug Ramshaw, president of Monero Alamos, and Ronnie Stofferley, the fund manager and managing partner of Incrementum. Gentlemen, thanks so much for joining me today. Thank you very much. Good to be here, Ronnie. So here's how today's gonna go. First, Ronnie's gonna go through a deck he put together, which I'm very much looking forward to. Then I'm gonna go ahead and pose both speakers a few questions. And if there's time remaining, we're going to jump to some of the audience questions that are on today's topic. To that end, there's a chat button in the bottom right of your screen. We really do encourage you to use it at any point during the presentation today. Now, I know some questions came in advance about Monero Alamo specifically and really appreciate everybody sending those over. Some are a bit outside the purview of today's conversation, but I've made sure Doug has them and he'll reach out to you via email with those answers following today's presentation.

1:00 Now that being said, if there are any questions that are right on topic today, I'll sneak them into the conversation as early as I can, so please do feel free to use that chat box on the right-hand side of your screen. I'll also say today's event is being recorded and the replay will be available both this afternoon and on YouTubeN6.com. So with my stuff out of the way nobody's here to see me I'm gonna throw it to Ronnie to start the presentation off today thank you very much thank you very much Romeo good evening from from Europe it's a great pleasure doc thanks for having me we We know each other for quite a while. Minoru Alamos is a premium partner of our report, so many thanks for supporting us. Doug is A great follow on Twitter, or on X as it's called nowadays. So if you're on X, it's really, really interesting and always thought provoking what he has to say. And yeah,

2:01 it's a great honor and pleasure for me to prepare a little bit of a foundation for our upcoming conversation. I've prepared some slides for you. I will try to

2:15 share them now. Should work. Can you see it?

2:23 There we go Works well, it does perfect so The light motif of our this year's report and if you don't know what we are actually doing, we're asset managers based in Liechtenstein and we also published this brick of a report called the In Gold We Trust Report. I'm writing this report for 18 years now, 450 pages, 20 people working on this report and people always ask me doesn't it get boring to write so much about gold and I say no actually it's getting more and more exciting every year because gold itself isn't moving at all it's just everything around that is moving at an even faster pace so so I truly enjoy I truly love what I'm doing together with my team. And I will now in the next couple of minutes explain one of the key messages of this year's report where we're seeing the gold price over the next couple of months, what it means for the mining space, and then we'll jump into our discussion and conversation.

3:40 Now last year, we wrote that actually if we should be breaking out from this long consolidation pattern. The technical target for gold is $2,700. Now, remember 1 year ago in November 2023, the price of gold was trading at $19.50. So this was a huge and impulsive move that we've seen over the last couple of months. And therefore, I think if we're taking a breather now, and I don't know if the election is the trigger, But I think taking a breather will happen over the next couple of weeks, next couple of months. And it is healthy. So perhaps that's not what you want to hear. But I would say the next couple of weeks will show some choppy trading in the price of gold but we will probably get some energy for the next move up. So What you can see on this chart is this long term consolidation that I was talking about. Actually the price of gold was flirting with new all time highs and with the 2000 US dollar barrier for almost 4 years.

4:59 And now we have this impulsive breakout. Now the interesting thing, ladies and gentlemen, is that all of this is happening in an environment where actually the price of gold should be falling, especially according to the old playbook. So here you can see real interest rates and the price of gold, which are normally very positively correlated. So falling real rates mean positive environment for gold while rising real rates, higher opportunity costs are some sort of headwinds for gold. But now we are seeing this big gap. So real interest rates were rising.

5:45 We've seen nominal rates rising and then also inflation numbers coming down. And still the price of gold made new all time highs. That would have been unthinkable in the old gold playbook. And the second thing that is truly remarkable is the fact that ETFs, which from my point of view are a sign for Western financial investors. Now, we are running investment funds, but I can tell you due to regulation, we are not allowed to buy physical gold for our funds. We are allowed to buy gold ETFs, for example, which is questionable from a regulatory point of view, but it is what it is. But normally you see with rising gold prices you're seeing inflows into the gold ETFs.

6:38 With falling gold prices you're seeing outflows. But actually over the last couple of quarters we saw the price of gold doing well. And then on the other hand, we saw outflows of almost 1000 tons of gold from gold ETFs. Now, only the last couple of months, we're seeing some modest inflows into the mine into the into the gold ETFs yet. But the Western financial investor is still highly underweighted in gold. The Western financial investor has completely missed the gold party so far. Now one part, and this is probably the first chapter of the new gold playbook, is this enormous amount of demand coming from central banks.

7:31 What we did here is we showed global central bank gold purchases as a percentage of mine production. And we can see that actually in the 1990s up to the Great Financial Crisis actually central banks were net sellers. Almost up to 30% of annual mine production was being sold by central banks. This switched during the great financial crisis. And now, starting with the Russian invasion of Ukraine, we're seeing that central banks are soaking up almost 30% of annual mine production. So from our point of view, central banks have really become an important driver.

8:17 Now, recently we saw the BRICS Summit in Kazan. Many people said it was some sort of a nothing burger, but then on the other hand, if you really read the declaration, then you can see that for the very first time they emphasized reforming the current international financial architecture. And they did it not only once, but actually 4 times. So a common currency or perhaps a gold-backed BRICS currency isn't happening now and President Putin said the time has not come yet. But then on the other hand, we're seeing that the so-called BRICS pay is already reshaping payments.

9:07 So for example, at the BRICS conference, attendees got vouchers to buy coffee with a QR code. And next year, this BRICS pay system, which will be bypassing the SWIFT system, will go live. So from our point of view, expectations were perhaps a little bit too high. But what we can see is that BRICS are playing the long game. So it's not just a trade alliance. It is more of a shift of the economic order where capital is not being recycled into US treasuries anymore, but rather gold taking the center stage.

9:52 And I think 1 very important thing regarding this new gold playbook is the fact that the gold demand is shifting east. We're always too much focused on you know developments in Europe and in the US and in Canada but actually 65% of total jewelry physical gold demand is coming now from China, India and the Mideast. For the physical investment demand, the gold bars and the gold coins, China, India and the Mideast are responsible for 50% of total demand. So the Western media keeps telling us gold is rising or falling due to geopolitical tensions, due to interest rates, inflation.

10:40 But from my point of view, we should not forget that physical demand from emerging markets, this so-called love trade, is really, really important. Now, Louis V. Sengaf, he said gold is a low beta emerging market proxy. And if you have a look at population growth in emerging markets compared to the Western world and GDP per capita growth compared to the Western world. I think it's fair to assume that with rising prosperity in emerging markets, we will also see positive tailwinds for gold demand in emerging markets. So this is the real, that's the love trade that we've been emphasizing for quite a while, physical gold demand coming from emerging markets.

11:34 So that's me at the gold soup in Dubai. Dubai is now responsible for 25 percent of global gold trade. Now what does this new gold playbook mean? Adam Grant said, we laugh at people who still use Windows 95, yet we still cling to opinions that we formed in 1995. So From our point of view, it is remarkable that Western gold investors are still a little bit hesitant when it comes to realizing that the debt situation in the US is definitely not sustainable. You know, Donald Trump, who won yesterday, and we're very happy that he has got a new job because he had to actually work 2 jobs recently. He worked at McDonald's and working as a truck driver for the garbage service.

12:38 So he will have a new job and as we all know he said I'm the king of debt. Now actually I think the debt situation in the United States is clearly not sustainable. The US has the highest primary deficit globally, actually. In August alone, the US posted a 380 billion budget deficit, up more than 50% from July's $240 billion. Now I know that yesterday's reaction to Trump being elected and this very impressive sweep, Gold actually traded down big time. However, if we take a step back and have a look at the performance of gold during his first term, gold was actually up 67% during the first term of Donald Trump.

13:37 Last time Donald Trump was president, US public debt rose by 7 trillion or 35%. If he spends on a similar scale, like in his last term, we would see debt rising to 49 trillion from currently 37 trillion in 4 years. Now I think it's important to say that going forward, bonds, which are obviously very important to the so-called 60-40 portfolio, will probably have a hard time. So In our last report, we said there should be a new 60-40 portfolio. Obviously, we still like stocks and I don't think that gold is the enemy of equities.

14:28 But I think that gold primarily competes with bonds and therefore we're seeing only 15% in our interpretation of the 60-40 portfolio and perhaps more in emerging markets and more on the corporate bond side. Then we recommend 15% of so-called safe haven gold. This is physical gold stored in a safe jurisdiction. We advise 10 percent performance gold, which is for example gold and silver mining equities, 10 percent commodities and 5 percent Bitcoin. Now, how much gold is actually the perfect allocation? We put out a special publication recently

15:11 where we analyzed the most important academic studies and we did our own studies and we found out that 14 to 18%

15:23 roughly is the optimal gold allocation. If you own more gold in your portfolio it doesn't really have an impact on your portfolio structure. If you own less, like many investment banks advise 1 or 2 percent gold, it doesn't have any impact on your portfolio characteristics. However, As we're seeing on this chart, this shows gold ETF share of equity ETFs. This has been 17.6% of total ETFs in 2011. Now, of course, there's much more gold, much more ETFs out there. But still, we're now at 2.9% our gold ETFs compared to the whole ETF universe.

16:13 So from our point of view, the Western world is still massively underowning physical gold and also gold ETFs. Now, I'm talking briefly about mining stocks. Mining stocks, you know, They have to be timed actively from our point of view. It is probably the most top down investment class. It is remarkable what kind of returns you can have in the gold mining space. 1300%, 590%, 550%. But you're also seeing massive drawdowns. So our take is we're timing it in one of our funds with a signal.

17:02 Now obviously, we will not be calling the tops or the bottoms but we're focusing on capturing the meat of the trend. Now you would probably ask yourself now what is the signal saying now And actually since December of last year,

17:21 our active hour room signal is saying full allocation. So in our funds, we're now fully allocated in the mining space. We're aggressively buying also the smaller stocks. We are invested in Mineralimos of course. But now is really time to play offense and there will be a time to play defense. But it's not now. Now how high can gold go in the new playbook? A brilliant quote by Michael Kosaris, in a bull market, the sideline is the worst place to be.

17:56 So from my point of view, we're not very early stage in this bull market. Don't get me wrong. We're somewhere in the middle. I would say it's like halftime. But if you have a look, for example, at the analyst forecasts on Bloomberg, actually the consensus is by I think 42 analysts on Bloomberg that gold will fall to 2,300 bucks next year and then to 2,200 and then 2,000. Is this the type of behavior that We usually see at the end of a secular bull market. I don't think so. At the end of a bull market, everybody will come out with crazy gold price targets. So we're not there yet.

18:45 Now a little comparison between the last bull market and the current one. Let's not forget, ladies and gentlemen, it took us almost 2 years in 2008-2009 until we decisively broke above the US$1,000 resistance. And then actually the price of gold almost doubled in less than 2 years up to 2011. Now compare it to the current setup.

19:17 We've seen this resistance at 2000 and I told you before, we've been flirting with this resistance for actually 4 years. Now we've seen this decisive breakout. Can the price of gold double over the next couple of years? From my point of view, yes. Now, we're having a Fed meeting today, but from my point of view, it's crystal clear that we won't see higher interest rates over the next couple of quarters.

19:47 Now we did a study where we analyzed how does gold perform 24 months after the first rate cut that we've seen in September and it's pretty positive up 31%, up 39%, up 26%. So from the rate side we should have positive tailwinds. How do gold mining stocks perform after the first rate cut? Also very positively. So I would say from the rate side, we will see lots of tailwind going forward. Now the big question is, is gold already too expensive? Again, I would say gold is not dirt cheap, but if we compare it to secular highs in 1980 or in 2011, and if we compare that, those nominal prices, If we compare them to the monetary base, for example, which since 2011 is up 115% or is up 115% or M3 money supply, 118%, the S&P up 400%.

21:05 Then you can actually see that based on those numbers, I would say that the price of gold is still pretty reasonably priced. Now the big question is, of course, the US dollar. Usually at those secular highs, the US dollar was trading significantly lower, 86 in 1980 and 75 in 2011.

21:29 Now we're trading at 105, I think, currently. So will we see significant dollar weakness, especially

21:39 in the next 4 years of a Donald Trump presidency? I think that could be a major trigger for gold going forward, but not for now, as we're seeing this massive move on the dollar side. Now is gold expensive? Again on an inflation adjusted basis the inflation adjusted high would be 3,400 US dollars based on this spike in 1980. So from that side we're clearly not expensive and usually in a secular bull market the inflation adjusted cycle highs are being taken out. Now just a little bit more regarding presidents and the performance of gold during those terms.

22:30 Again, I think there is no very clear pattern. You cannot say that Republicans or Democrats are better or worse for the price of gold. But you can see that actually over the last couple of years, gold did tremendously well on either side of the political spectrum. And Donald Trump, again, from his first term, gold was up, I think, 54%. During Joe Biden, gold was up 46%. So I would say we shouldn't overemphasize the election. Of course, we've seen quite a brutal move yesterday. But again, today gold is up roughly a percent.

23:17 So I would say over the longer term it should provide a pretty positive environment for gold. Brings me already to my conclusion again thank you very much to Mineralimos and many other of our premium partners. They make it possible that we publish all our work, our chart books, our special publications, our In Gold We Trust in different languages, not only English and German but also in Mandarin and Spanish, Totally for free. So you don't have to register and it wouldn't be possible without the support of our premium partners. So thank you very much. So the conclusion.

23:56 Gold has completely decoupled from the old playbook from its inverse correlation with US real yields and ETF flows. Central banks and emerging markets are now in the driver's seat, while Western financial investors are still on the sidelines. At some point, they will start playing. They will allocate more capital in gold, but we're not there yet.

24:20 The traditional 60-40 portfolio is obsolete. Active management is crucial when investing in mining stocks. We're seeing a stealth bull market in gold. However, I would say that a short term correction, really taking a breather over the next couple of weeks is likely and is actually for a long term trend pretty healthy. And our gold price target for 2030 is $4,800.

24:46 Now that might sound like quite a lot, but that's actually the annual growth rate of 9.4% until 2013. So from my point of view, I think that's very, very realistic. And I know that many mining companies, even at 4,800 US dollars, will still not be able to make any money. I think that Mineralimos will, big time. And therefore, we are very proud to be here, to be invested in Mineralimos. And now I look forward to my conversation with Doug. Thank you very much. Well, there's unfortunately no way that we can have an audience applause for that, but I think all the audience very well served.

25:36 And I'm thankful for you to come on because I'm by no means an expert on the gold markets and haven't done the work that you and your team have done over 18 years. I'm a big believer that, you know, gold, gold should be mined. We need more mining companies. For us, yeah, 4,800. I don't think we're going to be one of those companies that struggles to make money at 4,800. I think you're right. There might be a few that still find a way to create a miserable environment for their shareholders. No, I think it's important, I always say, to build minds that make money in weaker gold price environments and then take advantage of these high gold price environments when they come and for however long they last. So I wouldn't say this gold market has been stealthy.

26:30 It feels like it's been

26:32 a bit of a rip your face off kind of gold market, although I think healthy compared with 2012-13 where exponential moves that we saw in the gold price then, we were saying before we started, it took 5 months to go up $100 and then it took 2 months to go up the next $100. Then it was a couple of weeks, then it was a couple of days, and it was a few hours. And, you know, that kind of exponential move is never, never healthy.

27:00 I also think that it's healthy on a more sedate bullish move like this to have a pause. We're 2 for 2 now on a Trump victory and what it's done for gold the next day. But as you pointed out, it led to a very healthy gold market thereafter. I think despite the immediate strength in the US dollar and the moves in bond yields that followed the result, I would hesitate to think that regardless of the debt, the unsustainable debt situation, I mean, I think Trump will want a weaker US dollar for competitiveness and the like. And Obviously, despite the lack of headwinds, I think that gold faced a few years ago, US dollar strength, as it showed yesterday,

27:54 is probably the short term headwind. And if that actually creates a short term healthy pause in this strong gold market, I don't think that's a bad thing. And yeah, you coined, you know, talked about the energy. I think if you want energy to have a break higher, and we don't need one. I mean, these are really healthy gold prices for gold miners. But this kind of short term pause we might see over the coming, maybe it's days, but maybe it's weeks. I mean, I've never been a big philosopher on trying to predict where the gold market is. So I'm glad you made a prediction because I never will. You know, I think it's healthy in the long run. So thank you, Ronnie, for, you know, for our speak for the audience. I think it was a fantastic presentation. And I know Romeo's got some more specific questions that he was thinking about before you came along with your slide deck, which I think makes for a far better kind of lead-in for our conversation today, but I appreciate you joining us. Thank you.

28:56 Yeah, thanks so much, Ronnie. And you're right, a lot of the questions that I had, Ronnie actually covered super well, but there's a couple of specific ones that I still wanted to get into. And I see all the questions from the audience, really appreciate them. We'll get to as many as we can today. We might cover a couple of them in the conversation that's about to follow, so stay tuned. But bug me in the chat if you think you haven't been heard. Brent and Doug, I'm gonna get you in right away on this. Obviously, the presidential election is on a lot of people's minds, with the trifecta and the White House and both houses of Congress. Curious for what you think is the potential impact on North American free trades and generally operations in Mexico?

29:35 Well, it wasn't bad, actually, during Trump's first term. Permits were flowing, which has been the biggest impediment in Mexico in the last few years. So if you actually look at the overlap between Trump and AMLO, it wasn't bad.

29:55 I think it will be better this time around purely because you don't have 2 bombastic characters in Amlo and Trump that did kind of lock horns like a couple of bison on the prairie ranges. There's only one of those people now with Amlo gone. And Claudia Scheinbaum has I think approached things so far with a much more pragmatic approach. She knows she needs to court foreign investment. The strength of their election result actually led to a very important warning shot across the bow with that increased power, the concentration of power, wielded responsibly. So I think the fall in the peso the day after the election down there was good.

30:46 And I think subsequently she's made some very good pro-business cabinet appointments and in her inauguration speech

30:57 she she said a lot of the things which I think in Canada and the US you'd want to see, relative to, you know, AMLO. She was embraced the relationship with her Northern counterparties. So I think from a Mexico standpoint, you know, there's a positive position being taken. The question will be, you know, where does Mr. Trump see things? Because I'm sure with the kind of the protectionist and America first approach, the nearshoring that's going on in Mexico will, you know, maybe be an affront to what he wants to do in the US.

31:46 But I don't think you're going to see battles on what are largely Canadian companies operating down in Mexico. There are obviously a few US mining companies. I mean, Newmont is a good example with Penicillito, but overall, it's Canadian companies down there. And I'm very happy to hear much more constructive words coming from the mouth of the Mexican leadership than what we've experienced in the last few years. I mean, let's remember her predecessor would blame America for having the demand for fentanyl, not looking inwardly at Mexico and seeing Mexico as a driver for fenced-off production that would cross into the US, it was a demand side issue from the US and nothing to do with the problems.

32:41 You know, that kind of talk, it will hopefully now dissipate with a change in leadership there. And I think it is leading to, I think in the last few months, we've seen a shifting

32:56 dynamic with regard to investor sentiment towards Mexico. And I think that's going to lead to, you know, some positive developments there in 2025 to kind of cement that we have gone through a period of change. Even if the party may stay in power, the leadership has changed and it is making all the right moves and saying all the right things at least from now.

33:22 I appreciate that very much Doug. Ronnie, I'll cross the Atlantic for my next question that I'll shoot to you. That's really what impact do you think the elections in the States will have on with European banks and central banks, and how will that play out over the next period?

33:40 Oh, you're on mute, Ronny, sorry. Sorry. I would say that actually probably Europe is the biggest loser of this election. I know that.

33:56 I think that's pretty much the same everywhere. But I thought it was especially remarkable over here in Europe how anti-Trump the establishment was. So they were really fearful that Donald Trump is going to make it. Because, you know, I think that People tend to forget he's not a politician, he's not a diplomat, he's a business guy, he's a real estate guy and he wants to make deals and he's got very, let's say, interesting different ways of negotiating deals. But I think that actually for Europe, which is in a very tough situation at the moment, Yesterday we saw in Germany that the coalition basically breaking down and they're having a snap elections.

34:56 So we are really for 2 years now we're kind of borderline on a recession. Then on the other hand inflation is not it has come down. But we're actually in a stagflationary environment. And I think that that what's what's even more interesting and most people don't do that with massive immigration in Europe. If you calculate the GDP development per capita, it's actually pretty frightening how the European economies are actually shrinking. There are some better countries, for example, Greece. Greece is doing tremendously well. Also, Spain is doing well. So it's a bit ironic that former, you know, you remember the PICS countries, they are now really growing at a much faster pace compared to Germany and and and and obviously France and also Italy But I would say that going forward, we will see that the ECB will be highly challenged.

36:11 So they may need to adjust its interest rates in response to the dollar strength and also to eurozone inflation. I would say that going forward with Donald Trump, as he at least announced, massive deregulation, you know, a very pro-business environment, a very... Of course we can talk about tariffs which will be inflationary in the end, But of course he wants to continue lowering taxes. So it's a very pro-business program while in Europe we're very much focused on more regulation, higher taxes, tax the rich. And therefore, I would say that this election for Europe, it's going to make the situation even worse. That doesn't mean that the pendulum cannot swing to the other side. But at the moment, I don't really see that.

37:21 Well, appreciate that. One question I'm going to get in from the chat. Obviously, we've seen central banks through East and Central Asia buying gold significantly over the last period. But Tristan from the chat asks do you have any qualitative guesses on when central bank buying might reverse. Ronnie I'll throw this one to you first but Doug feel free to chime in. That's a great question Tristan. I would say that usually those central bank buying programs, they are, you know, they're not traders. Once they establish a process, It stays in place for quite a while. On the other hand, we have, for example, seen that China bought gold 18 months in a row. Now they have kind of paused.

38:12 But I would say, you know, We've been pretty busy tearing down walls over the last 30 years. And now we're getting more and more busy building new walls. And what we're seeing and I'm not sure if Donald Trump is going to change that. I would definitely not rule that out. But with, you know, the BRICS or also the Shanghai Corporation organization and all those emerging market countries that were not taken seriously by the Western world. Countries like Mexico, Turkey, obviously China and India, Vietnam, Indonesia, I think they are just, they want to be taken seriously on the negotiating table. I think they don't enjoy playing by the rules that they haven't written.

39:12 And I think that they just want to have their well-deserved place at the big table with the industrialized nations. And I think gold is only one part of the story. And it's probably not the crucial part, But it's not unimportant. And I think that the fact that they're massively hoarding gold, that they're continue to buy gold more than 1000 tons again this year probably. This is just a statement that they want to diversify out of the dollar, that they want to reduce dollar risks. And still for the time being, the majority of emerging markets has still huge amounts of their currency reserves of their central bank reserves based in US dollars.

40:06 Now, after the decision in 2022, where the EU and the US basically told the Russians, okay, your 400 billion of reserves are worthless. I think that was really in monetary history. That was really a very, very important point in time because this is when they realized, okay, actually, if they can do that to Russia, they can also do it to every other country. And this was it's no coincidence that this was the time when central banks from emerging markets started buying gold big time because, you know, it is accepted all over the globe. It doesn't have any counterparty risk. It has a brilliant infrastructure. You can trade it with very low bid-ask spreads.

40:57 And again, central banks in emerging markets still hold very insignificant portions of the total reserves in gold. So I would expect a long answer for a very simple question. I would expect this will continue. Can it be slightly lower sometimes? Absolutely. Absolutely. But I think this will continue to be a major drive of gold going forward. Yeah I would. I mean the only thing I'd add to that and to Tristan's question would be if you're worrying about a topping, that top probably is when Canada and the UK start buying gold. They'll be buying the top just like they sold the bottom. So maybe That's the leading indicator to watch in terms of broader, you know, central bank buying or selling.

41:51 It's when Canada and the UK jump into the market. I appreciate that. Bring back Gordon Brown. But Rock from the chat has a question that I actually find just really interesting. So I'll throw it to both of you. He says that China's shown a propensity to take over critical metals mining, lithium, nickel, etc. Is China capable of producing mining so much gold that it also overwhelms and diminishes the market? I'll throw it to whoever's got an instinctive answer. No, I don't think so on the gold front. They've clearly had a major impact on critical metals. And I think one of the things we saw on that came out of the pandemic was supply chains. And it wasn't just, you know, the crap we buy off Amazon that we don't need that's manufactured in China or whatever it be, hydraulic pumps or whatever it might be, we had offshored so much of that.

42:51 It was interesting during the Biden administration, they introduced a lot more and have been deploying capital into critical mineral development. And that critical minerals list keeps expanding. I think gold is not something which I would concern myself in terms of their ability to control kind of the mine supply that they can do on a lot of very important critical mineral elements. So no I don't think you're going to have the same issue. You might see big central bank buying for sure and on the physical side. But, you know, the mining of gold is still very much something that we have control of outside of China And that you can't say the same for a lot of very critical mineral paths.

43:52 Something which I think it will be very interesting to see. I would assume that President Trump, President-elect Trump, would actually embrace what the Biden administration were trying to do on critical minerals. It will be very interesting to see how that's probably 1 legacy thing. I know every administration comes in and the first thing they do is look to rip up anything the previous guys have done. I wouldn't say that that's going to be the case on critical minerals. Yet just just one more thought. Well actually you know China is the largest gold producing country now for 7 or 8 years.

44:37 And since then, I would say gold production in China is fairly stable. It's rising a little bit. But then we shouldn't forget that no ounce of gold actually leaves the borders of China. So it's all being consumed within China. And you know what's that's that's that's on a different different note. But if you have a look for example at the volumes being traded at the Shanghai Gold Exchange, it's really staggering. And it is a physically backed futures exchange. So for every futures contract, there's actually the gold is really there. And I would say that the infrastructure of gold trading in Shanghai has developed tremendously over the last couple of years. And this is quite telling. And I think I haven't been to China in a while. I would love to go the next year again. But it's really impressive what they're doing, not only in the gold space, but actually technologically in every space. And, you know, China now basically dominating the proud German car manufacturers.

45:52 This is quite telling. And I know many Germans from the automotive industry, and they're really, really concerned. I appreciate that. One question I wanted to ask, this is just interesting because over the majority of the last 75 years, a Republican trifecta would usually mean that the market would believe that they'd be fighting debt to some degree. But the market doesn't seem to think that about the Trump administration. So I'm curious, how do you both view increasing us debt burden and inflationary pressures as factors? And honestly, what steps should investors take to protect against further inflation? I'll throw it to again, whoever's got an instinctive answer. Wanna start Doug? Yeah, like I haven't seen a decent thesis on how you can actually control runaway debt that is mind boggling in terms of its growth.

46:52 Like, debt jubilees get trotted out, but without really like some, some, Oh, well, that's easy. We'll just have one of those. It's like I just I I Thought we we all thought 6 7 years ago ago that the US debt situation was unsustainable And yeah, they've been able to sustain the growth in it And I don't know they the answer to that. I think that there is a real fear that policies that are going to be put in place are going to reignite inflation. And I think Ronnie's data supports a shift in the traditional thesis of how to manage one's portfolio allocation.

47:46 And I think this is something that would be a positive driver for gold. But I mean, there are way smarter people than us that have no idea, like, like how to solve it. Okay. And I, and I think both parties were just going to, both whoever won yesterday was going to be good for gold because I think both of them were going to be spending money albeit in different areas, but the spend was going to continue. There's just an insatiable appetite to spend money in the US. The traditional fiscal restraint of the Republican Party disappeared when Donald Trump came to power. And really, whether it, you know, they've lost their roots, just like that party to some extent has changed under the leadership of Trump. And so they were potentially a political guardrail to periods of just unabashed, you know, money printing.

48:58 And there isn't. So, so I don't know what the solution is to be honest, but I do think that it's a very positive tailwind for gold. And for why potentially the traditional 1-2% allocation that's been talked about by the banks for so long is not sufficient? Well, I mean, that's a very big question and, you know, we had a look at both parties web pages and their programs and researched actually what you know the suggestion from the Democrats and the Republicans is to to actually deal with the debt situation. What did we find on those webpages of the Republicans and Democrats?

49:52 Nothing. It isn't mentioned at all. It's the big elephant in the room. Now, How can you deal with the debt? I mean, a debt jubilee would be highly deflationary, which is impossible in our monetary system. It doesn't work. Inflating away, we can see that, you know, population doesn't really enjoy this inflation because it's obviously divisive. There's people profiting from inflation and the majority of it is suffering. So I would say it's a combination of structurally higher inflation, negative real rates and financial repression. So money will be funneled into directions where it would normally never go to.

50:44 And I mentioned, for example, that in our funds, for example, we're not allowed to buy physical gold for our funds because it's too risky. But we can take on enormous amounts of leverage on treasury holdings, for example. So I think that more and more money will be funneled, will be due to just regulation and new laws will be funneled into directions where it would normally never go to. And I think that for in the Western world, the majority of investors, they don't know how to deal with in an environment or how to navigate in an environment of structurally higher inflation rates. If you talk to investors from Brazil, from Turkey, for them, it's just normal to hold gold.

51:42 Why? Because they're used to rubbish currencies and high inflation rates. While over here in the Western world we had the great moderation inflation rates were coming down. Then we've seen this big surge in inflation. Now everybody expects OK we'll go back to the old regime where inflation is the least concern for portfolio construction. Now actually the last big bear market in bonds ended in 1980 when I was born and that was you know when Jimmy Carter handed over to Ronald Reagan, that was, you know, Abba was in the charts with Super Trooper, I think, you know, people were wearing mullets.

52:28 You had like Star Wars, Empire strikes back. That's a long time ago. And I think that most of the professionals in our industry, they've got no idea to navigate in this environment of structurally higher inflation rates. So That's what we're kind of expecting. And this is why we came up with this concept of this new 60-40 portfolio where real assets play a much bigger role. I appreciate that a ton. Now, I've only got time for one more big impossible to answer question, but I'm going to move to Bitcoin next. Now, I know, Ronny, in your latest report, you discussed Bitcoin as a competitor to gold. I'm curious, how do you see Bitcoin impacting gold's position as a store of value? And Do you believe both assets can coexist in a portfolio?

53:19 Yeah, of course. I mean, I know it's gold is a very emotional topic. People love it or hate it. You know, convertible bonds. Yeah, There's nobody hates or loves convertible bonds. Yeah. Real estate isn't isn't that emotional. But gold is extremely emotional. And Bitcoin is is the same. And people from the gold community hate Bitcoin and People from the Bitcoin community hate gold. Now people in the gold community tend to be slightly older and people in the Bitcoin community tend to be slightly younger. My kids say that I'm middle aged. I'm not super young. I'm not super old. So I'm in the middle and I actually I discovered Bitcoin in 2011.

54:07 And in 2019 we set up one of the very first funds that actually combined gold and Bitcoin. 75% physical gold stored in Liechtenstein. 25% Bitcoin with an options overlay. And we got lots of hate, lots of hate. You're gold guys, you know, you're actually cheating on us with this Bitcoin thing. From my point of view, actually, it's a monetary technology. And I think Satoshi Nakamoto, whoever it was, he clearly understood gold. He clearly understood how our monetary system works. So I'm confident regarding the future of Bitcoin. On the other hand, it's just a teenager while gold is around for 5,000 years.

54:55 But let's not forget, I mean, the largest asset managers on this planet, They're now having Bitcoin ETFs. Donald Trump said, I mean he said quite a lot, but he said there will be a strategic Bitcoin reserve. So I would say I'm pretty confident going forward. But is it going to cannibalize the gold market? I don't think so. Gold is like an 18 trillion asset class now. Bitcoin is 1.3, 1.5 trillion. And I think When it comes to sound money, if you compare it to the global bond market, for example, which is I think 80 trillion, something like that, this is really where gold and Bitcoin will take some share.

55:45 But I think, you know, there can be friendly coexistence between gold and Bitcoin. And I hate this, you know, this competition. Is gold better than Bitcoin? Is it the enemy? I don't think so. You know, it's like having a Land Rover or, you know, a SUV. And then you can also have like a motorcycle, a Ducati, which is fun to ride. Of course, it's a little bit more dangerous than sitting in a big SUV, But why not have both actually? I think they can coexist. And you're absolutely right with the demographics. Gold's history is often represented in the age of the very investors that covered it so much. And you've got a younger demographic on. So, and they know, like, gold is not marketed well. You know, the World Gold Council, you know, do some ad campaigns and this great movie by, you know, the Idris Elba was involved, which was probably some of their best work that they've done in a very, very long time.

56:59 But that younger demographic on the Bitcoin side, they seized they seized on it. I mean, the drop, there wasn't a drop Bitcoin campaign from the gold community. But on Twitter and the like drop gold hashtags. Absolutely. And You look at a, you know, Bitcoin influences on Twitter have hundreds of thousands, sometimes millions of followers. Some of the top gold followers on Twitter have pure mining. There are some that do gold and Bitcoin and so they're in, you know, over a hundred thousand, but typically some of the biggest talking heads on gold, maybe 50,000 and there's very few of those. And there's, you know, pick a Bitcoin influencer, you know, there's, there's, there's hundreds of them with hundreds of thousands of followers. So I don't think that the 2 need to fight, honestly.

58:00 Yeah, I mean, I'll bring it up now only because Ronnie talked about having a fund that was gold and Bitcoin and what are you doing and the hate and everything else. I joked when I was speaking to Ronnie from London airport one time where I had 2 hours to kill and I killed an hour of it talking to Ronnie about a crazy idea I had. I'm about to say right now to someone for the first time other than Ronnie that I couched by saying if I was to ever contemplate this, I would be a pariah in the gold sector. This is the problem with having to pick a side when I don't think you have to pick a side. I said, imagine, especially in a mining industry which is starved of investors.

58:49 The younger demographics are not buying gold companies and stuff, because again, it's for people with no hair or gray hair or the like. But I said, imagine a gold company that uses fiat to build a mine and mine gold, and then takes a bit of the profit from that gold and buys a small amount of Bitcoin on its balance sheet. Now you've got the best of both worlds. You're utilizing fiat to get gold, and some of that gold you're gonna turn into digital gold or whatever. The marketing value of that would be anything that any company could actually spend an IR budget on because you actually finally have a situation where you have a gold company that's showing a degree, a very modest, It would literally you would have to buy a couple of Bitcoin you get the same prices if you bought a thousand Bitcoin you know, it's like a gold company doing that and I I Remember gold caught prior to their takeout from you mark I mean They actually had a slide in a decade that actually talks about crypto back in the day. And I know that everyone in the mining industry looked at it with a certain amount of skepticism, derision, laughter.

1:00:15 But I do think that they don't have to be enemies. You don't have to pick one or the other. I think the fund approach that Incrementum have taken is actually a fantastic thing for investors where they only have to pick 1 fun choice. And the fund has made that determination and is managing what it needs to do. But yeah, it's the weird one. It's so polarizing. And I don't think it needs to be. Doug, Ronnie, I wish we had another half hour because there's still some things we wanted to cover, but unfortunately we are towards the end of the hour. So thank you very much for a really great conversation for everybody who joined, particularly those who asked questions. For the ones that were Monero specific, I'm shooting them to Doug right after, so he'll get back to you soon. We will have a separate event to tackle some questions there. But everybody, thank you so much. And Doug and Ronnie, thank you most of all for joining me today.

1:01:05 Yeah, the moment you say you switch off, we just disappear. So Ronnie, I just wanted to thank you because we don't go to some green room after this where we have a chat and go, How do you think it went? It's like the screen will just collapse on us. Thank you so much. I hope that the audience benefited as greatly as I have always done listening to your presentations on gold and for 6 for hosting. It's been a thrill.