Presentation on theme: "1 … the ingenious way to accumulate gold holdings!"— Presentation transcript:
1 … the ingenious way to accumulate gold holdings!
2 The money thing Kurt W. Kamber
3 … the ingenious way to accumulate gold holdings! The definition of money In ideal conditions, money can be defined as follows: As a measure of value and a stable unit of account As a reliable medium of exchange with payment function As a store of purchasing power (investment) Since the abolition of the Gold standard monetary value has been erratic.
4 … the ingenious way to accumulate gold holdings! The value of money When money is linked to the gold standard it is backed by gold, which means that: It has an intrinsic value It is earned money It is commodity money Banknotes act as "warehouse receipts", that is to say they have an intrinsic value subject to property law
5 … the ingenious way to accumulate gold holdings! Policy of monetary expansion Since the abolition of the Gold standard, politicians are at liberty to control the money supply at will By issuing promissory notes central banks can print money without restraint This is unearned money i.e. debt money It is a vague, undefined promise to repay; this money is subject to the law of obligations!
6 … the ingenious way to accumulate gold holdings! Monetary expansion – the consequences The monetary expansion of the USA is the direct cause of the break-down in the global financial system This constitutes an abuse of the world reserve currency and amounts to global monetary colonisation with private capital! The global economy is reliant on the USA – but their increase in purchasing power is based on pure debt! So the USA purchases enormous amounts of goods, commodities, services, energy and raw materials, which get paid with a seemingly infinite supply of unearned money! This is the fundamental secret of the high US standard of living … it is almost entirely built on sand!./.
7 … the ingenious way to accumulate gold holdings! Monetary expansion – the consequences The consequences of uncontrolled monetary expansion have been all too evident for some time now. Even worse: the US Federal Reserve Bank is a privately- owned institution in the hands of a few influential families and banks such as the Morgans, Rockefellers and Rothschilds (the so- called Eastern Establishment) These very people are naturally the sole beneficiaries in financial crises and at times of excessive monetary expansion ……in end effect it is the state which is the debtor, and therefore ultimately the tax-payer
8 … the ingenious way to accumulate gold holdings! The financial crisis and its causes The main causes of the financial crisis can be defined as follows: Monetary expansion since 1973, i.e. excessive supply of liquidity (abolition of the Gold Standard) Insatiable greed in pursuit of wealth and material happiness Deregulation of the financial markets, which has seriously limited the intervening powers of the central banks as well as the regulating authorities./.
9 … the ingenious way to accumulate gold holdings! The financial crisis – the main causes: (continued) Political pressure to ever expand financial liquidity, with the banks creating their own virtual liquidity leading to the so-called bubble economy The BIS (Bank for International Settlements) would be an ideal tool to supervise the international distortions mentioned above but the bank has never had either the power of sanctions or the authority to issue binding rules. It was only able to make recommendations such as those laid down in “Basel II”, the second of the Basel Accords, which would have prevented the present crisis had all followed their advice.
10 … the ingenious way to accumulate gold holdings! Monetary expansion is no long-term solution for a system crisis. New money can in no way lead to a sustainable stabilisation of the global economy. Instead we will see interest rates rising steeply in an attempt to finance losses and deficits.
11 With no gold standard, money needs to be linked to another value measure. Quite often the GDP (gross domestic product) or economic potential of a given nation are compared with money in circulation; both are vaguely defined measures. As long as both dimensions are growing in unison, one unit GDP will remain equal to one USD. However, if monetary expansion exceeds economic growth the result will be inflation. … the ingenious way to accumulate gold holdings! Value appraisal of money USD GDP
12 … the ingenious way to accumulate gold holdings! The debt trap As debt increases, so the interest and dividend payments grow This leads to the impoverishment of a nation when the debt instruments are purchased internationally! Proof of the pudding is the statistically proven fact that since 1990 the USA has been getting poorer by 0.1 % a month Foreign creditors use this income to purchase companies and real estate in the USA
13 … the ingenious way to accumulate gold holdings! Good reasons for owning physical Gold Gold cannot be destroyed Gold is a liquid tangible value Gold is a safe (personal) currency Gold maintains its intrinsic value (purchasing power) long-term Gold offers optimal insurance protections in a diversified portfolio against value deterioration Gold is an invaluable raw material in modern high-tech industry
14 … the ingenious way to accumulate gold holdings! Potential for Gold price development (in relation to banknotes in circulation (M0) and Gold reserves) CurrencyMOGold holdingsBalanced price of Gold Relation to US$ Per (Mio. Troy ounces)(per Troy ounce) USD EUR GBP JPY CHF 710 Mrd. 529 Mrd. 39 Mrd. 104 Mrd. 41 Mrd ‘ ‘ ‘ ‘212‘ ‘ Source:Research on Gold price development by Dresdner Kleinwort Wasserstein. Official Central Bank Statistics.
15 … the ingenious way to accumulate gold holdings! Future potential for the gold price In the past, the gold/silver ratio was on average 1:15 to 1:20. These days it is around 1:52 The gold/DJIA* ratio is currently around 1:8.3, in times of crisis it is 1:1! The previous high for the gold price was in 1981 and amounted to $852 an ounce; inflation-adjusted, this would represent a gold price of nearer $3’500 an ounce! Gold will get scarce! We can expect to see average production prices of way over 1’000 USD an ounce Some so-called exhausted mines will have to be closed sooner or later. Opening a new mine takes around 7 years due to environmental regulations. *Dow Jones Industrial Average
16 … the ingenious way to accumulate gold holdings! Experts concur that the gold price will only then reach its peak when the last investor is convinced he should have physical gold. As long as central banks pursue a policy of monetary expansion, Money will decrease in value and gold will be on an upward trend. Gold is a real alternative to currency. Above all, it is a currency which one has personally under control.
17 … the ingenious way to accumulate gold holdings! Will government intervention eventually become successful? For over 70 years we have been without a serious depression, deflation or global financial crisis. This success story has made us arrogant. We believed we had triumphed over the force of fundamental cycles Are all market participants behaving reasonably? Are we finding our way back to healthy dimensions? Do the financial regulators have the courage to do their job without being too restrictive? If this is not the case then we will experience hyperinflation, which will lead to dramatic deflation.
18 … the ingenious way to accumulate gold holdings! Is there an alternative to the Debt crisis? It seems that the Western world is working on an alternative solution similar to the one which the US President, Franklin D. Roosevelt, used back in He dramatically increased the gold price so that the Federal Reserve Bank could print a sufficient amount of “good” money, i.e. with an intrinsic value through the underlying physical gold. It indeed created a solid and sustained economic recovery! Bretton Woods experts have calculated that the gold price would have to be set at minimum US$20’ per Troy Ounce to ensure the same effect as in They believe that as long as the gold price is too low, it will continue to create inflation and an economic deflation!
19 … the ingenious way to accumulate gold holdings! Is there an alternative to the Debt crisis? (continued…) One reason for the change of mind in Western countries is the fact that China is working on the introduction of the Gold Standard for their own currency in the hope that they can attract the placement of currency reserves in the Yuan (Renminbi) from other countries to replace the US Dollar as the world’s key currency. In fact, at the last IMF summit meeting in Japan, the BRIC nations (Brazil, Russia, India and China) decided to settle their internal payment settlements directly and no longer via the US Dollar! For our own protection, we need a sufficient “Liquidity Reserve” in physical gold to tide us over any future crises of this type!
20 … the ingenious way to accumulate gold holdings! How should we manage our assets? ●Get away from the casino mentality! Instead look for reliability and solid values ●Choose instruments carefully and build on them soundly Go for sustainability, liquidity, high-quality management and technical superiority ●Buy cheaply, but not at any price Currencies are not necessarily strong when the exchange rate strengthens, but often when the demand is there ●Don’t place too much importance on market prices The gold price, for example, is volatile, despite its strong upward trend, for one simple reason: Some interest groups want to keep the gold price low.
21 … the ingenious way to accumulate gold holdings! Price trend of a 100g gold bar in physical form at the London am fixing coupled with cost of safe rental for safe-keeping as compared to gold purchase via the SwissGoldPlan with gratuitous safe-keeping and including an annual bonus
22 … the ingenious way to accumulate gold holdings! The advantages of SwissGoldPlan at a glance Gold is physically available Transparent pricing: basis price is the London Afternoon Gold Fixing plus a commission of between 2 % and 6.5 % No annual custody and/or administration fees Annual bonus in the form of physical gold (compound interest effect) Physical delivery possible at any time, with free choice of bullion size Gold balance can be monitored at any time online Unlike other metals and raw materials, gold possesses an additional monetary advantage. In times of economic crisis gold is often seen as a substitute for paper money and therefore employed as a measure to safeguard liquidity.
23 … the ingenious way to accumulate gold holdings! Thank you for your attention! Kurt W. Kamber January 2013