GoldMoney

Cheviot Sound Money Conference Title Slide Box Title & Headline Title & Headline GoldMoney The Role of Gold in The 21st Century James Turk 27 January 2011 Cheviot Sound Money Conference London Document slug: date/pp #

Title Slide Box Title & Headline One of the best performing asset classes Title & Headline Title & Headline GoldMoney Gold % Annual Change USD AUD CAD CNY EUR INR JPY CHF GBP 2001 2.5% 11.3% 8.8% 8.1% 5.8% 17.4% 5.0% 5.4% 2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% 3.9% 12.7% 2003 19.6% -10.5% -2.2% 19.5% -0.5% 7.9% 7.0% 2004 5.2% 1.4% -2.0% -2.1% -0.0% 0.9% -3.0% 2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 36.2% 31.8% 2006 14.4% 18.8% 10.2% 20.5% 13.9% 7.8% 2007 31.4% 18.1% 11.5% 22.9% 23.4% 22.1% 29.7% 2008 33.0% 31.1% -1.0% 11.0% 30.5% -14.0% -0.3% 43.7% 2009 23.9% -3.6% 20.4% 18.4% 27.1% 20.3% 12.1% 2010 29.8% 14.0% 24.3% 25.3% 39.1% 25.0% 13.2% 17.0% 34.5% 10-Year Average 11.7% 13.8% 15.7% 14.6% 17.8% 14.9% 12.2% 18.3%

Title Slide Box Title & Headline Crude Oil Prices (Base of 100) Gold is money Title & Headline GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 6000 British pound US dollar 4000 euro goldgram 2000 50 55 60 65 70 75 80 85 90 95 00 05 10

(wealth producing assets) (wealth preserving assets) Title Slide Box Title & Headline Title & Headline Portfolio measurement GoldMoney 100% - Risk / Reward - INVESTMENTS (wealth producing assets) Units of 50% Wealth - Safety - LIQUIDITY (wealth preserving assets)

Gold is special because it is different Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Gold is special because it is different accumulated (saved); not consumed large aboveground stock relative to annual production value derives from usefulness food shelter communication (interaction in society) Gold is special because it is money Document slug: date/pp #

Money is a mental tool that enables economic calculation Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Money is a mental tool that enables economic calculation unchanged throughout history Currency is a medium of exchange improves as a result of technological innovations Document slug: date/pp #

Bank of England established, 1694 Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Bank of England established, 1694 ‘invention’ of paper currency banknotes circulated current in place of gold/silver coins safely stored in vault currency changes from a tangible asset to a bank liability creation of payment risk a/k/a “Herstatt risk” first bank crisis in 1696 Document slug: date/pp #

Newton’s Gold Standard, 1700-1914 Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Newton’s Gold Standard, 1700-1914 defined one British pound as an unchanging weight of gold pound banknote redeemable into gold on demand Bank of England responsible for ensuring redeemability voluntary rules ensure system’s automaticity gold is backbone of British empire Document slug: date/pp #

Peel’s Bank Act, 1844 Title Slide Box Title & Headline Gold, money & currency Title & Headline Title & Headline GoldMoney Peel’s Bank Act, 1844 limits quantity of pound banknotes unintended consequence is the development of deposit currency payment risk escalates new British banking model eventually adopted worldwide seed for “too big too fail” 2 functions within one bank Document slug: date/pp #

Keynesian revolution begins Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Keynesian revolution begins “The gold standard is already a barbarous relic.” J.M. Keynes, 1923 governments chafe at the discipline imposed by the gold standard governments claim that currency managed by central banks can eliminate the boom/bust cycle Document slug: date/pp #

Keynesian revolution succeeds Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Keynesian revolution succeeds ‘Gold Standard’ finally disappears 1971 US dollar and other currencies no longer redeemable into gold governments can now create currency without limit Document slug: date/pp #

Keynesian revolution is ending Title Slide Box Gold, money & currency Title & Headline Title & Headline GoldMoney Keynesian revolution is ending when currency can be created without limit, there are consequences these include inflation, global imbalances and sovereign wealth funds “Gold still represents the ultimate form of payment in the world.” Alan Greenspan, 1999 gold remains the standard by which all things are measured – gold is money Document slug: date/pp #

Title Slide Box Title & Headline Crude Oil Prices (Base of 100) Gold is money Title & Headline GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 6000 British pound US dollar 4000 euro goldgram 2000 50 55 60 65 70 75 80 85 90 95 00 05 10

Title Slide Box Title & Headline Dow Jones Industrials in Gold Stocks or Cash Title & Headline Title & Headline GoldMoney Dow Jones Industrials in Gold December 1913 through December 2010 goldgrams ounces 40 DJIA expensive / gold cheap 1000 30 20 500 10 200 5 100 2 50 DJIA cheap / gold expensive Log Scale 1 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10

Title Slide Box Title & Headline Title & Headline Boom & Bust GoldMoney December 1913 through December 2010 goldgrams ounces Stocks expensive / gold cheap 40 1000 30 Dow Jones FTSE 20 500 10 200 5 100 DAX 2 50 stocks cheap / gold expensive Log Scale 1 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10

A safe place to put our money Title Slide Box Money for the 21st century Title & Headline Title & Headline GoldMoney A safe place to put our money Not banks because of the boom and bust cycle caused by fractional reserve banking An efficient – low cost – currency for global commerce No clearing, settlement & payment risk Document slug: date/pp #

GoldMoney Open system Modern built Asset based Private issued Title Slide Box Title & Headline Title & Headline GoldMoney GoldMoney Open system Modern built Asset based Private issued Market based National currency Cartel Legacy built Liability based Gov’t issued Politics based Document slug: date/pp #

Federal Reserve Chairman Ben Bernanke Title Slide Box Title & Headline Title & Headline GoldMoney “The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.” Federal Reserve Chairman Ben Bernanke Document slug: date/pp #

Title Slide Box Title & Headline The path to hyperinflation Title & Headline Title & Headline GoldMoney Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 trillions S&P 500 $2.5 1,300 Fed Ends "QE" Fed Announces End of "QE" 1,200 $2.0 S&P 500 Index 1,100 (left scale) "QE2" Begins $1.5 1,000 Fed Monetization 900 of Securities $1.0 (right scale) 800 Fed Announces 700 "Quantitative Easing" $0.5 2009 2010 2011

Title Slide Box Title & Headline The US dollar’s problem Title & Headline GoldMoney Federal Tax Receipts Tumble As Outlays & Debt Soar January 2000 - December 2010 (US dollars in billions) 350 15,000 300 Outlays (12-mon. mov.avg.) - left scale 12,000 Receipts (12-mon. mov.avg.) - left scale 250 Federal Debt, quarterly - right scale 10,000 Log scales 8,000 200 6,000 150 125 4,000 00 01 02 03 04 05 06 07 08 09 10 11

Title Slide Box Title & Headline The British pound’s problem Title & Headline GoldMoney UK Tax Receipts Tumble As Outlays & Debt Soar January 2005 - November 2010 (British pounds in billions) 1,000 50 Outlays (12-mon. mov.avg.) - left scale 800 Receipts (12-mon. mov.avg.) - left scale 45 700 UK Debt, quarterly - right scale 600 Log scales 500 40 400 35 300 05 06 07 08 09 10 11

Robert Mundell, Nobel Laureate, 1999 Title Slide Box Title & Headline Title & Headline GoldMoney “The main thing we miss today is a universal money, a standard of value, the link between the past and the future and the cement of civilization linking remote parts of the human race to one another.” Robert Mundell, Nobel Laureate, 1999 Document slug: date/pp #

Jerry Jordan, President, Federal Reserve Bank of Cleveland, 1996 Title Slide Box Title & Headline Title & Headline GoldMoney “Money in the 21st century will surely prove to be as different from the money of the current century as our money is from that of the previous century.” Jerry Jordan, President, Federal Reserve Bank of Cleveland, 1996 Document slug: date/pp #

www.goldmoney.com jamesturk@goldmoney.com Title Slide Box Title & Headline Title & Headline GoldMoney jamesturk@goldmoney.com www.goldmoney.com Document slug: date/pp #