Cryptocurrencies, Critical Utility and Function 

EG: Many cryptocurrency investors like to focus on projects that offer utility. What cryptocurrency projects excite you that you feel may have a great future due to their critical utility and function in the economy?  

SK: Basically, anything can be tokenised from a technical point of view. Tokenising investments, participation in companies, etc., have great potential. The cost of tokenising a company instead of creating a traditional shares-holding structure can reduce cost and allow the buying and selling of parts of it at minimal or no transaction cost, any time, anywhere, as long as one has internet access and electricity. Therefore the potential seems almost unlimited.

EG: How do your principles of 1) thinking independently, 2) unbiased communication, and 3) innovative investments, result in increased profitability for your clients? 
 

SK: Incrementum has five owners. We owners meet every two weeks for our asset allocation meetings, discussing current market trends, strategic and tactical investment ideas. Our goal is to have the highest possible tactical freedom within the strategic boundaries of every mandate, which implies a high degree of independent thinking. We do our best to communicate as unbiased as possible. The boundaries of bias-free communication are set for us, as for all people, by our own ideas, experiences and beliefs, and of course, they are and will be different in their expression from partner to partner. Above all, we want to distinguish ourselves from institutions where management or a communication department sets strict communication consensus guidelines.

Incrementum's partners can express their opinions within the framework of Incrementum's values. The increased profitability for our investors comes from this free spirit. As a matter of principle, we do not use any in-house products in our private client portfolios and do not accept any personal remuneration from providers of third-party products. This leads to the greatest possible independence and positively affects the cost structure of our mandates.
 

EG: We have seen soaring energy prices in recent times, yet some of the most undervalued precious metals in the world, and particularly, silver- the most scarce precious metal with immense industrial demand, manufacturing, medicinal and clean technology applications- remain undervalued. Against the backdrop of hyper debt monetisation, why does the shiny white metal remain a crucial asset for consideration in any investor's portfolio today? 
 

SK: As you mentioned, it is scarce, has immense industrial demand, and can be used as currency. Therefore, we like it, and we are very patient.
 

EG: J.P. Morgan said that 'gold and silver is money. Everything else in credit'. Can you expand upon this statement? How do you implement Austrian School Economics in your asset management activities? 
 

SK: We like tangible assets like precious metals and participation in companies, (i.e. equities and natural resources) and we like to harvest cashflows and reinvest them. We usually keep our fingers away from credit, such as bonds and the like.
 

EG: Tell us about the Incrementum Crypto Gold Fund and the Incrementum Digital and Physical Gold Fund? 
 

SK: We have taken the proven concept of rebalancing asset classes that do not genuinely correlate, into a universe we believe in having expertise in, such as precious metals and cryptocurrencies, and we have combined it with what we call ‘volatility harvesting’. As I have mentioned before, we like to harvest cashflows. Since neither precious metals nor cryptocurrencies offer cashflows, we partially implement the rebalancing strategy synthetically, (i.e. we write a certain amount of puts to build up exposure and collect the premiums). Then, when reducing exposure- we write calls to collect premiums again. Such a strategy needs close monitoring and is highly time-consuming, but it offers excellent upside with less volatility than the underlying crypto assets.
 

EG: Looking at the tenets of Marxism, tell us why the concept of helicopter money and universal basic income is completely incompatible and antithetical with the free and democratic society we live in today, which is rooted in free-market capitalism?  

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SK: Answering this political question would imply first setting parameters of the viewpoints for which the cohort of socio-economic and socio-cultural backgrounds the answer should hold. However, I understand that due to one's socio-ecological and socio-economic living environment, opinions can drift apart; therefore, I allow myself to refrain from answering.
 

EG: If negative interest rates are enacted, what impact would this have on real estate and particularly a millennial generation facing the most expensive prices in human history? Is now the best time to buy real estate, or is it better to wait for deflation to finally set in? 
 

SK: This is an interesting question again! The price of real estate is primarily but not only influenced by interest rates. In many advanced economies, the largest cohorts of the so-called baby boomer generation will reach retirement age within the next ten years. If that generation starts selling their houses to live in care homes, for example, a generational change in the real estate sector could lead to an increase in supply and depending on the country, this effect could even lead to an over-supply, dampening prices or, at least, price increases.
 

EG: The Norwegian and Swiss central banks have made sizeable investments in mining stocks, building large portfolios in recent years, including companies like Franco-Nevada, Barrick Gold and Goldcorp to their holdings. Looking at similar events during the Great Depression, explain why mining shares could present an exciting opportunity for investors? What do the central banks know about this sector that non-gold investors do not? 
 

SK: To answer the last question first, unfortunately, I have no insight into what the Swiss National Bank or the sovereign wealth fund of Norway know about the mining stocks sector.

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However, I would not interpret too much into the fact of such investments. For example, the sovereign wealth fund of Norway invests in more than 9,300 companies. As a matter of fact, the allocation in gold mines is tiny and thus negligible, but, in the greater context of the investment mandate, such a vast portfolio will undoubtedly be heavily populated with investments that are as non-correlated as possible, and it is precisely in this area that shares in mining companies can contribute. Moreover, since it seems they invest in established players only, they probably also serve, as do many of their other investments, as a source of income due to dividends.
 

EG: The In Gold We Trust Report is also highly regarded by leading economists and industry heavyweights, including James Turk and Jim Rickards. How may this report add additional value, enabling investors to gain a fundamental understanding of markets and macroeconomic trends? 
 

SK: In Gold We Trust is much more than a study about gold. It explains economic contexts and offers independent opinions on economic and monetary policy facts in today's world. Thanks to the many graphic representations, complex issues can sometimes be conveyed uncomplicated, straightforwardly, and concisely. For our long-time readers, it builds on existing knowledge and develops it further. Nevertheless, the individual chapters are self-contained and can thus also provide new readers with a relatively easy introduction to the respective topic, and best of all, it can be downloaded for free directly from ingoldwetrust.report - Incrementum.   
 

EG: When the dust has settled, the smoke has cleared, all the asset bubbles burst, the U.S. and World Debt Clocks explode, gold prices finally reach $50,000 per OZ, and silver reaches $5,000 per OZ, what does that world look like? 
 

SK: Not a very friendly environment. Large-scale civil unrest would probably be a consequence. Let us hope this will never happen. This is not an environment I would like to live in.   EG