1. GoldMoney

2. 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 #

3. 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%

4. 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

5. (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)

6. 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 #

7. 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
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8. 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 #

9. Newton’s Gold Standard, 1700-1914
Title Slide Box
Gold, money & currency
Title & Headline
Title & Headline
GoldMoney
Newton’s Gold Standard,
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 #

10. 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 #

11. 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 #

12. 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 #

13. 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 #

14. 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

15. 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

16. 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

17. 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
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18. 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 #

19. 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 #

20. 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

21. Title Slide Box Title & Headline
The US dollar’s problem
Title & Headline
GoldMoney
Federal Tax Receipts Tumble As Outlays & Debt Soar
January 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

22. Title Slide Box Title & Headline
The British pound’s problem
Title & Headline
GoldMoney
UK Tax Receipts Tumble As Outlays & Debt Soar
January 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

23. 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 #

24. 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 #

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