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

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Presentation on theme: "GoldMoney. Title Slide Box Document slug: date/pp # Title & Headline The Role of Gold in The 21 st Century James Turk 27 January 2011 Cheviot Sound Money."— Presentation transcript:

1 GoldMoney

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

3 Title Slide Box Title & Headline GoldMoney One of the best performing asset classes Gold % Annual Change USDAUDCADCNYEURINRJPYCHFGBP 20012.5%11.3%8.8%2.5%8.1%5.8%17.4%5.0%5.4% 200224.7%13.5%23.7%24.8%5.9%24.0%13.0%3.9%12.7% 200319.6%-10.5%-2.2%19.5%-0.5%13.5%7.9%7.0%7.9% 20045.2%1.4%-2.0%5.2%-2.1%-0.0%0.9%-3.0%-2.0% 200518.2%25.6%14.5%15.2%35.1%22.8%35.7%36.2%31.8% 200622.8%14.4%22.8%18.8%10.2%20.5%24.0%13.9%7.8% 200731.4%18.1%11.5%22.9%18.8%17.4%23.4%22.1%29.7% 20085.8%33.0%31.1%-1.0%11.0%30.5%-14.0%-0.3%43.7% 200923.9%-3.6%5.9%24.0%20.4%18.4%27.1%20.3%12.1% 201029.8%14.0%24.3%25.3%39.1%25.0%13.2%17.0%34.5% 10-Year Average 18.4%11.7%13.8%15.7%14.6%17.8%14.9%12.2%18.3%

4 Title Slide Box Title & Headline GoldMoney Gold is money Crude Oil Prices (Base of 100) January 1950 through December 2010 50556065707580859095000510 0 2000 4000 6000 8000 British pound

5 Title Slide Box Title & Headline GoldMoney Gold is money Crude Oil Prices (Base of 100) January 1950 through December 2010 50556065707580859095000510 0 2000 4000 6000 8000 British pound US dollar

6 Title Slide Box Title & Headline GoldMoney Gold is money Crude Oil Prices (Base of 100) January 1950 through December 2010 50556065707580859095000510 0 2000 4000 6000 8000 British pound US dollar euro

7 Title Slide Box Title & Headline GoldMoney Gold is money Crude Oil Prices (Base of 100) January 1950 through December 2010 50556065707580859095000510 0 2000 4000 6000 8000 British pound US dollar euro goldgram

8 Title Slide Box Title & Headline GoldMoney Portfolio composition INVESTMENTS 100% 0 50% LIQUIDITY

9 Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) 100% 0 50%

10 Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50%

11 Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50% - Risk / Reward -

12 Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50% - Risk / Reward - - Safety -

13 Title Slide Box Title & Headline GoldMoney Portfolio measurement LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) - Safety - - Risk / Reward - 100% 0 50% Units of Wealth

14 Title Slide Box Document slug: date/pp # Title & Headline Gold is special because it is different GoldMoney Gold, money & currency

15 Title Slide Box Document slug: date/pp # Title & Headline Gold is special because it is different –accumulated (saved); not consumed GoldMoney Gold, money & currency

16 Title Slide Box Document slug: date/pp # Title & Headline Gold is special because it is different –accumulated (saved); not consumed –large aboveground stock relative to annual production GoldMoney Gold, money & currency

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

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

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

20 Title Slide Box Document slug: date/pp # Title & Headline 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) GoldMoney Gold, money & currency

21 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

22 Title Slide Box Document slug: date/pp # Title & Headline Money is a mental tool that enables economic calculation GoldMoney Gold, money & currency

23 Title Slide Box Document slug: date/pp # Title & Headline Money is a mental tool that enables economic calculation –unchanged throughout history GoldMoney Gold, money & currency

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

25 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

26 Title Slide Box Document slug: date/pp # Title & Headline Bank of England established, 1694 GoldMoney Gold, money & currency

27 Title Slide Box Document slug: date/pp # Title & Headline Bank of England established, 1694 –invention of paper currency GoldMoney Gold, money & currency

28 Title Slide Box Document slug: date/pp # Title & Headline Bank of England established, 1694 –invention of paper currency –banknotes circulated current in place of gold/silver coins safely stored in vault GoldMoney Gold, money & currency

29 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

30 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

31 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

32 Title Slide Box Document slug: date/pp # Title & Headline Newtons Gold Standard, 1700-1914 GoldMoney Gold, money & currency

33 Title Slide Box Document slug: date/pp # Title & Headline Newtons Gold Standard, 1700-1914 –defined one British pound as an unchanging weight of gold GoldMoney Gold, money & currency

34 Title Slide Box Document slug: date/pp # Title & Headline Newtons Gold Standard, 1700-1914 –defined one British pound as an unchanging weight of gold –pound banknote redeemable into gold on demand GoldMoney Gold, money & currency

35 Title Slide Box Document slug: date/pp # Title & Headline Newtons 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 GoldMoney Gold, money & currency

36 Title Slide Box Document slug: date/pp # Title & Headline Newtons 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 systems automaticity GoldMoney Gold, money & currency

37 Title Slide Box Document slug: date/pp # Title & Headline Newtons 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 systems automaticity –gold is backbone of British empire GoldMoney Gold, money & currency

38 Title Slide Box Document slug: date/pp # Title & Headline Peels Bank Act, 1844 GoldMoney Gold, money & currency

39 Title Slide Box Document slug: date/pp # Title & Headline Peels Bank Act, 1844 –limits quantity of pound banknotes GoldMoney Gold, money & currency

40 Title Slide Box Document slug: date/pp # Title & Headline Peels Bank Act, 1844 –limits quantity of pound banknotes –unintended consequence is the development of deposit currency GoldMoney Gold, money & currency

41 Title Slide Box Document slug: date/pp # Title & Headline Peels Bank Act, 1844 –limits quantity of pound banknotes –unintended consequence is the development of deposit currency –payment risk escalates GoldMoney Gold, money & currency

42 Title Slide Box Document slug: date/pp # Title & Headline Peels 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 GoldMoney Gold, money & currency

43 Title Slide Box Document slug: date/pp # Title & Headline Peels 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 GoldMoney Gold, money & currency

44 Title Slide Box Document slug: date/pp # Title & Headline Peels 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 GoldMoney Gold, money & currency

45 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution begins GoldMoney Gold, money & currency

46 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution begins –The gold standard is already a barbarous relic. J.M. Keynes, 1923 GoldMoney Gold, money & currency

47 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

48 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

49 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution succeeds GoldMoney Gold, money & currency

50 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution succeeds –Gold Standard finally disappears 1971 GoldMoney Gold, money & currency

51 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution succeeds –Gold Standard finally disappears 1971 –US dollar and other currencies no longer redeemable into gold GoldMoney Gold, money & currency

52 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

53 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution is ending GoldMoney Gold, money & currency

54 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution is ending –when currency can be created without limit, there are consequences GoldMoney Gold, money & currency

55 Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution is ending –when currency can be created without limit, there are consequences –these include inflation, global imbalances and sovereign wealth funds GoldMoney Gold, money & currency

56 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

57 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency

58 Title Slide Box Title & Headline GoldMoney Gold is money Crude Oil Prices (Base of 100) January 1950 through December 2010 50556065707580859095000510 0 2000 4000 6000 8000 British pound US dollar euro goldgram

59 Title Slide Box Title & Headline GoldMoney Stocks or Cash Dow Jones Industrials in Gold December 1913 through December 2010 1520253035404550556065707580859095000510 50 100 200 500 1000 1 2 5 10 20 30 40 Log Scale goldgramsounces DJIA expensive / gold cheap DJIA cheap / gold expensive

60 Title Slide Box Title & Headline GoldMoney Dow Jones Industrials in Gold December 1913 through December 2010 1520253035404550556065707580859095000510 50 100 200 500 1000 1 2 5 10 20 30 40 Log Scale goldgramsounces DJIA expensive / gold cheap DJIA cheap / gold expensive Stocks or Cash

61 Title Slide Box Title & Headline GoldMoney Boom & Bust December 1913 through December 2010 1520253035404550556065707580859095000510 50 100 200 500 1000 1 2 5 10 20 30 40 Log Scale goldgramsounces Stocks expensive / gold cheap stocks cheap / gold expensive Dow Jones

62 Title Slide Box Title & Headline GoldMoney Boom & Bust December 1913 through December 2010 1520253035404550556065707580859095000510 50 100 200 500 1000 1 2 5 10 20 30 40 Log Scale goldgramsounces Stocks expensive / gold cheap stocks cheap / gold expensive Dow JonesFTSE

63 Title Slide Box Title & Headline GoldMoney Boom & Bust December 1913 through December 2010 1520253035404550556065707580859095000510 50 100 200 500 1000 1 2 5 10 20 30 40 Log Scale goldgramsounces Stocks expensive / gold cheap stocks cheap / gold expensive DAX Dow JonesFTSE

64 Title Slide Box Document slug: date/pp # Title & Headline A safe place to put our money GoldMoney Money for the 21 st century

65 Title Slide Box Document slug: date/pp # Title & Headline A safe place to put our money –Not banks because of the boom and bust cycle caused by fractional reserve banking GoldMoney Money for the 21 st century

66 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Money for the 21 st century

67 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Money for the 21 st century

68 Title Slide Box Document slug: date/pp # Title & Headline GoldMoney Open system National currency Cartel

69 Title Slide Box Document slug: date/pp # Title & Headline GoldMoney Open system Modern built National currency Cartel Legacy built

70 Title Slide Box Document slug: date/pp # Title & Headline GoldMoney Open system Modern built Asset based National currency Cartel Legacy built Liability based

71 Title Slide Box Document slug: date/pp # Title & Headline GoldMoney Open system Modern built Asset based Private issued National currency Cartel Legacy built Liability based Govt issued

72 Title Slide Box Document slug: date/pp # Title & Headline GoldMoney Open system Modern built Asset based Private issued Market based National currency Cartel Legacy built Liability based Govt issued Politics based

73 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney

74 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 trillions S&P 500 S&P 500 Index (left scale) Fed Monetization of Securities (right scale)

75 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions S&P 500 S&P 500 Index (left scale) Fed Monetization of Securities (right scale)

76 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions S&P 500 S&P 500 Index (left scale) Fed Monetization of Securities (right scale)

77 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions S&P 500 S&P 500 Index (left scale) Fed Monetization of Securities (right scale)

78 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions Fed Announces End of "QE" S&P 500 S&P 500 Index (left scale) Fed Monetization of Securities (right scale) FGMR.com

79 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions Fed Announces End of "QE" S&P 500 Fed Ends "QE" S&P 500 Index (left scale) Fed Monetization of Securities (right scale) FGMR.com

80 Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through January 21, 2011 200920102011 700 800 900 1,000 1,100 1,200 1,300 $0.5 $1.0 $1.5 $2.0 $2.5 Fed Announces "Quantitative Easing" trillions Fed Announces End of "QE" S&P 500 Fed Ends "QE" S&P 500 Index (left scale) Fed Monetization of Securities (right scale) "QE2" Begins

81 Title Slide Box Title & Headline GoldMoney The US dollars problem Federal Tax Receipts Tumble As Outlays & Debt Soar January 2000 - December 2010 (US dollars in billions) 000102030405060708091011 125 150 200 250 300 350 Outlays (12-mon. mov.avg.) - left scale Log scales

82 Title Slide Box Title & Headline GoldMoney The US dollars problem Federal Tax Receipts Tumble As Outlays & Debt Soar January 2000 - December 2010 (US dollars in billions) 000102030405060708091011 125 150 200 250 300 350 Outlays (12-mon. mov.avg.) - left scale Receipts (12-mon. mov.avg.) - left scale Log scales

83 Title Slide Box Title & Headline GoldMoney The US dollars problem Federal Tax Receipts Tumble As Outlays & Debt Soar January 2000 - December 2010 (US dollars in billions) 000102030405060708091011 125 150 200 250 300 350 Outlays (12-mon. mov.avg.) - left scale Receipts (12-mon. mov.avg.) - left scale Log scales

84 Title Slide Box Title & Headline GoldMoney The US dollars problem Federal Tax Receipts Tumble As Outlays & Debt Soar January 2000 - December 2010 (US dollars in billions) 000102030405060708091011 125 150 200 250 300 350 4,000 6,000 8,000 10,000 12,000 15,000 Federal Debt, quarterly - right scale Outlays (12-mon. mov.avg.) - left scale Receipts (12-mon. mov.avg.) - left scale Log scales

85 Title Slide Box Title & Headline GoldMoney The British pounds problem UK Tax Receipts Tumble As Outlays & Debt Soar January 2005 - November 2010 (British pounds in billions) 05060708091011 35 40 45 50 300 400 500 600 700 800 1,000 UK Debt, quarterly - right scale Outlays (12-mon. mov.avg.) - left scale Receipts (12-mon. mov.avg.) - left scale Log scales

86 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney

87 Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney

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


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