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GoldMoney Foundation
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Title Slide Box Document slug: date/pp # Title & Headline Money, Gold and Hyperinflation James Turk 1 March 2011 The Phantom of Hyperinflation Conference Belgium GoldMoney
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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%
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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
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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
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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
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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
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Title Slide Box Title & Headline GoldMoney Portfolio composition INVESTMENTS 100% 0 50% LIQUIDITY
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Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) 100% 0 50%
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Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50%
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Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50% - Risk / Reward -
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Title Slide Box Title & Headline GoldMoney Portfolio composition LIQUIDITY INVESTMENTS (wealth producing assets) (wealth preserving assets) 100% 0 50% - Risk / Reward - - Safety -
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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
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Title Slide Box Document slug: date/pp # Title & Headline Gold is special because it is different GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Gold is special because it is different –accumulated (saved); not consumed GoldMoney Gold, money & currency
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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
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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
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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
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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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline Money is a mental tool that enables economic calculation GoldMoney Gold, money & currency
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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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline Bank of England established, 1694 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Bank of England established, 1694 –‘invention’ of paper currency GoldMoney Gold, money & currency
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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
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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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline Newton’s Gold Standard, 1700-1914 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Newton’s Gold Standard, 1700-1914 –defined one British pound as an unchanging weight of gold GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Newton’s 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
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Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Peel’s Bank Act, 1844 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Peel’s Bank Act, 1844 –limits quantity of pound banknotes GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Peel’s Bank Act, 1844 –limits quantity of pound banknotes –unintended consequence is the development of deposit currency GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Peel’s Bank Act, 1844 –limits quantity of pound banknotes –unintended consequence is the development of deposit currency –payment risk escalates GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline 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” GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline 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 GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution begins GoldMoney Gold, money & currency
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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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution succeeds GoldMoney Gold, money & currency
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Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution succeeds –‘Gold Standard’ finally disappears 1971 GoldMoney Gold, money & currency
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline Keynesian revolution is ending GoldMoney Gold, money & currency
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline A safe place to put our money GoldMoney Money for the 21 st century
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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
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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
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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 or political risk GoldMoney Money for the 21 st century
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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 or political risk GoldMoney Money for the 21 st century
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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
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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)
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Title Slide Box Title & Headline GoldMoney The path to hyperinflation Correlation of Fed Monetizing to S&P 500 Index January 2, 2009 through February 11, 2011 200920102011 800 1,000 1,200 $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
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Title Slide Box Title & Headline GoldMoney The US dollar’s 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
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Title Slide Box Title & Headline GoldMoney The US dollar’s 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
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Title Slide Box Title & Headline GoldMoney The US dollar’s 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
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Title Slide Box Title & Headline GoldMoney The US dollar’s 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
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Title Slide Box Title & Headline GoldMoney The British pound’s 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
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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
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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
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Title Slide Box Document slug: date/pp # Title & Headline james.turk@gmyf.org www.goldmoneyfoundation.org GoldMoney
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