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The Gold Symposium Keynote Presentation 14 & 15 November 2011 Luna Park

The Gold Symposium Keynote Presentation 14 & 15 November 2011 Luna Park


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  • 1. Hinde Gold FundSingularity – Transcendent MoneyGold Symposium, Sydney AustraliaNovember 2011
  • 2. Singularity – tranScendent MoneyKey ConCepTS– Singularity– exponential vs Linear Growth Trends– Law of Accelerating Returns vs Law of diminishing Returns– Financial Oppression– internet Reformation– Transcendent Money– Monetary Singularity 02Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 3. Singularity - MatheMatical 03Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 4. Singularity – Schwarzchild Black hole 04Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 5. Singularity – “Mother of all”Big Bang - (Keplers) Supernova nucleosynthesis. 05Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 6. Singularity – technological“The singularity will allow us to transcend the limitations of our biological bodies and brains. There will be no distinction, post singularity, between human and machine.” CoUnTDoWn To SInGULARITy 06Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 7. Singularity – exponential trendLinear vs exponential trend growth. note the initial imperceptible growth which acceleratesat a point in time called the “Knee of the curve”. LIneAR VS eXponenTIAL GRoWTH 07Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 8. Singularity – law of accelerating returnSexponential curve on Log Scale – the exponential of the rate of exponential. eXponenTIAL GRoWTH oF CoMpUTInG 08Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 9. Singularity – Moore’S lawdynamic RAM (Random Access Memory) illustrates Moore’s Law.dRAM size shrink by half every 5.4 years.Cost of dRAM per square millimeter falling - dRAM bits per dollar doubles every 1.5 years. DynAMIC RAM DynAMIC RAM pRICe 09Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 10. Singularity - productivityHalf-lifes or doubling times. 10Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 11. Singularity – progreSSive purchaSing power pRoCeSSoR peRFoRMAnCe 11Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 12. Singularity – productivitydemand outstrips deflation in cost of information technologies. ToTAL BITS SHIppeD 12Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 13. Singularity – productivity Miracle?Real GdP growth. A productivity miracle or a function of credit expansion? ReAL GRoSS DoMeSTIC pRoDUCT 13Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 14. Singularity – law of diMiniShing returnS DIMInISHInG ReTURnS FRoM An ADDITIonAL $1 oF DeBT In THe US eConoMy 1.4 Annual change in GDP divided by the annual change in total debt to GDP, 4Q mov average. 1.2 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 Sep-60 Sep-63 Sep-66 Sep-69 Sep-72 Sep-75 Sep-78 Sep-81 Sep-84 Sep-87 Sep-90 Sep-93 Sep-96 Sep-99 Sep-02 Sep-05 Sep-08Source: Marc Faber – Gloom Doom Boom Report 14Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 15. Singularity – linear deBt trendS TOTAL DEBT & LIABILITIES AS % OF GDP 400% 200% 0% -200% -400% -600% -800% -10,00% -1,200% -1,400% -1,600% -1,800% Italy Germany France Portugal United United Spain Ireland Greece States Kingdom Cost of ageing Structural deficit Initial debt level Source: EU Commission, Eurostat, CBO, IMF, Morgan Stanley Research 15Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 16. Singularity – exponential deBt trendS THe US M2 FITTeD To An eXponenTIAL TRenD THe US ToTAL DeBT (In USD BILLIon) FITTeD To An eXponenTIAL TRenD 12,000.0 60,000.0 10,000.0 50,000.0 8,000.0 40,000.0 6,000.0 30,000.0 4,000.0 20,000.0 2,000.0 10,000.0 0.0 0.0 Dec-58 Dec-60 Dec-62 Dec-64 Dec-66 Dec-68 Dec-70 Dec-72 Dec-74 Dec-76 Dec-78 Dec-80 Dec-82 Dec-84 Dec-86 Dec-88 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 Dec-58 Dec-60 Dec-62 Dec-64 Dec-66 Dec-68 Dec-70 Dec-72 Dec-74 Dec-76 Dec-78 Dec-80 Dec-82 Dec-84 Dec-86 Dec-88 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 M2 (USD billion) Exponential Forcast Total Debt (USD billion) Exponential Forcast 16Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 17. Singularity – log Monetary trend US MoneTARy BASe (LoG TeRMS) 8.0 7.5 7.0 6.5 6.0 Dec-95 Jul-96 Sep-97 Nov-98 Jun-99 Jan-00 Aug-00 Dec-02 Jul-03 Sep-04 Nov-05 Jun-06 Jan-07 Aug-07 Feb-97 Apr-98 Mar-01 Oct-01 May-02 Feb-04 Apr-05 17Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 18. Singularity – Money velocity MoneTARy VeLoCITy yoy 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% Jun-61 Jun-64 Jun-67 Jun-70 Jun-73 Jun-76 Jun-79 Jun-82 Jun-85 Jun-88 Jun-91 Jun-94 Jun-97 Jun-00 Jun-03 Jun-06 Jun-09 Recessions Monetary Velocity YoY 18Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 19. Singularity – “puMpty puMpty puMp...” 19Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 20. Singularity – e.f.S.f.european Financial Stability Facility or european FUBAR Slush Fund?“it is tied to higher risks of losses and to increased sharing of risks. The way they are constructed, the leveraging instruments are not too different from those which are responsible for creating the crisis, because they are concealed risks.”Jens Weidmann, President of the German Bundesbank 20Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 21. Singularity – MonolineAMBAC: the muni and sub-prime monoline insurer.A taste of things to come for the eFSF monoline insurer? AMBAC US (SHARe pRICe) 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Jul-91 Jul-92 Jul-93 Jul-94 Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 21Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 22. Singularity – gloBal Monetary trendSUK Qe has been 45% bigger than the Fed’s Qe. BAnK oF enGLAnD ToTAL ASSeTS eCB ToTAL ASSeTS600,000 3,500 3,000500,000 2,500400,000 2,000300,000 1,500200,000 1,000100,000 500 0 0 Jun-06 Sep-06 Dec-06 Jun-07 Sep-07 Dec-07 Jun-08 Sep-08 Dec-08 Jun-09 Sep-09 Dec-09 Jun-10 Sep-10 Dec-10 Jun-06 Sep-06 Jun-07 Sep-07 Jun-08 Sep-08 Jun-09 Sep-09 Jun-10 Sep-10 Jun-11 Sep-11 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-11 Sep-11 Mar-07 Mar-08 Mar-09 Mar-10 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-11 22Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 23. Singularity – gloBal Monetary trendSThe illusion of sobriety. JApAn BoJ BALAnCe SHeeT ToTAL ASSeTS (100 MILL Jpy) CoMpoSITIon oF FeD BALAnCe SHeeT, SeCURITIeS poRTFoLIo1,800,000 100% 90%1,600,000 80%1,400,000 70%1,200,000 60%1,000,000 50% 800,000 40% 30% 600,000 20% 400,000 10% 200,000 0% Dec-08 Jun-09 Aug-09 Dec-09 Jun-10 Aug-10 Dec-10 Jun-11 Aug-11 Oct-08 Feb-09 Apr-09 Oct-09 Feb-10 Apr-10 Oct-10 Feb-11 Apr-11 Oct-11 0 Apr-98 Oct-98 Apr-99 Oct-99 Apr-00 Oct-00 Apr-01 Oct-01 Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Agencies MBS US Treasuries 23Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 24. Singularity – price trendSQe impact on corporate bond spreads, S&P500, Commodities and dollar. BAA CoRp SpReAD AnD S&p RATIo ConTInUoUS CoMMoDITy InDeX AnD ASIAn CCy InDeX 700 500 1,900 650 1,700 480 600 1,500 550 460 1,300 500 1,100 440 450 900 400 420 700 350 500 300 400 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 QE1 S&P QE2 BAA Corp Spread (scaled) QE1 Asian Currency Index (RHS) On Hold to 2013 QE2 Continuous Commodity Index On Hold to 2013 24Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 25. Singularity – coMModity vS fiat paper MoneyGold price (y) or (1/x) is an inverse function of paper money (x). pURCHASInG poWeR oF FIAT Money AnD THe GoLD pRICe Gold Price Purchasing Power of Fiat Money (increasing) > 25Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 26. Singularity – financial oppreSSionMonetary and Fiscal Policy at a ‘practical limit’Financial Legislation, regulation and taxation enables ‘Capital Conscription’Conscripted Capital ie ‘grab’ capital mandatorily• Quantitative and Qualitative easing (financial repression)• ‘dodd-Frank –esque’ Global Financial Regulation Acts• nationalisation of Money Centres and Pension companies• FATCA, FTT or Tobin Tax, double Tax Treaties (US, UK and Switzerland)• Mining Taxes, Windfall Taxes, nationalisation of Mines 26Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 27. Singularity – financial oppreSSionGame of Twist(er) anyone? US 30y GoVeRnMenT BonD yIeLDS 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Jan-80 Jan-82 Jan-84 Jan-86 Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 27Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 28. Singularity – financial oppreSSionnet central bank purchases of US Treasuries as a % of total issuance.Central Bank printers financing US government. NET CENTRAL - BANK PURCHASES OF US TREASURIES AS A % OF ISSUANCE 160 (%) 140 120 100 80 60 40 20 0 (20) (40) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FOREIGN CENTRAL BANKS’ SHARE OF TREASURY MARKET HAS PEAKEDSource: Russell Napier, CLSA 28 40 (%) 38Hinde GOLd FUnd november 2011Singularity – Transcendent Money 36 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed. The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited. 34
  • 29. 60 40Singularity – financial oppreSSion 20 0 (20)Foreign central banks’ Treasury market share peaked at close to 40%. (40) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FOREIGN CENTRAL BANKS’ SHARE OF TREASURY MARKET HAS PEAKED 40 (%) 38 36 34 30 30 28 26 24 22 20 18 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 SHARE OF TREASURY MARKET NOT OWNED BY CENTRAL BANKSSource: Russell Napier, CLSA 29 90 (%)Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money 85 The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited. 80
  • 30. 28 26Singularity – financial oppreSSion 24 22 20Treasury Market share not owned 2004central banks. 18 2001 2002 2003 by 2005 2006 2007 2008 2009 2010 2011 SHARE OF TREASURY MARKET NOT OWNED BY CENTRAL BANKS 90 (%) 85 80 75 70 65 60 55 50 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011Source: Russell Napier, CLSA 30Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money US PAPER COMMERCIAL OUTSTANDING solicitation to invest. The presentation is for information purposes only and is not aConfidential Unauthorized reproduction or distribution is strictly prohibited.
  • 31. 55Singularity – financial oppreSSion 50 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011US commercial paper outstanding is falling as government issuance crowds out private sector. US PAPER COMMERCIAL OUTSTANDING 2,200 (US$bn) 2,000 1,800 1,600 1,400 1,200 1,000 800 2007 2008 2009 2010 2011 US CORPORATE PROFITS AFTER TAX (NIPA DATA) AND S&P500 REPORTED EPSSource: Russell Napier, CLSA 31 1,100 (US$bn) 90 1,100 80Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money 900 US CORPORATE PROFITS AFTER TAX is for information purposes only and is not a solicitation to invest. The presentationConfidential S&P500 REPORTED EARNINGS (RHS) reproduction or distribution is strictly prohibited. Unauthorized 70 800
  • 32. 1,600 1,400Singularity – financial oppreSSion 1,200 1,000Corporate profits too high in US. 800 2007 2008 2009 2010 2011 US CORPORATE PROFITS AFTER TAX (NIPA DATA) AND S&P500 REPORTED EPS 1,100 (US$bn) 90 1,100 80 900 US CORPORATE PROFITS AFTER TAX S&P500 REPORTED EARNINGS (RHS) 70 800 700 60 600 50 500 40 400 30 300 20 200 100 10 0 0 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11Source: Russell Napier, CLSA 32 CORPORATE TAX TAKE AS A % OF GDPHinde GOLd FUnd november 2011Singularity – Transcendent Money 9 (%) All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed. The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited. 8
  • 33. 20 200 100 10Singularity – financial oppreSSion 0 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 0Corporate tax rate only going to rise. CORPORATE TAX TAKE AS A % OF GDP 9 (%) 8 7 6 5 4 3 2 1 50 55 60 65 70 75 80 85 90 95 00 05 10Source: Russell Napier, CLSA 33Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 34. Singularity – occupy wall StreetA singular misjudgment by protestors? 34Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 35. Singularity – internet reforMationAn exponential social paradigm – the World Wide Web. MASS USe oF InVenTIonS 35Source: Ray Kurzweil, 1999Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 36. Singularity – govt induced Money aMneSiaDali’s Disintegration of MemoryA metaphor for government induced ‘Money Amnesia’? 36Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 37. Singularity – evolution of faceBookFacts & figures: Since 2004people on FacebookMore than 800 million active usersMore than 50% of our active users log on to Facebook in any given dayActivity on FacebookMore than 900 million objects that people interact with (pages, groups, events and community pages)On average, more than 250 million photos are uploaded per dayGlobal ReachMore than 70 languages available on the siteplatformOn average, people on Facebook install apps more than 20 million times every dayMobileMore than 350 million active users currently access Facebook through their mobile devicesMore than 475 mobile operators globally work to deploy and promote Facebook mobile productsSource: www.website-monitoring.com 37Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 38. Singularity –Twitter, and Facebook more widely used in india, indonesia vs any other countries. 38Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 39. Singularity – the faceBook revolutionSocial consequences of the evolution of the World Wide Web.“Money won’t create success, the freedom to make it will.” nelson Mandela 39Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 40. Singularity – deMotixA citizen journalism and photo agency website. Co-founded by Jonathan Tepper of HindeCapital. now in partnership with Corbis, a Bill Gate’s owned company.A Hindu woman lights lamps on the occasion of diwali and Laxmi Puja. diwali is popularly known as the ‘Festival of Lights’. 40Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 41. Singularity – tranSforMational technologySnaptu: ‘A world of free apps on any phone’!Social networking & lifestyle application’s running ‘in the Cloud’.• Founded August 2007, acquired by Facebook April 2011 for $70m• 42m users, growing at 3.5m per month• Funded by Sequoia Capital (Google, YouTube, Yahoo…) 41Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 42. Singularity – exponential adoption rateS TOTAL SNAPTU UNIQUE USERS 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 JAN 09 MAR 09 MAY 09 JUL 09 SEP 09 NOV 09 JAN 10 MAR 10 MAY 10 JJUL 10 SEP 10 NOV 10 JAN 11 MAR 11Source: Snaptu marketing presentation 2011 POWER LAW OF PARTICIPATION 42 COLLABORATIVE INTELLIGENCEHinde GOLd FUnd november 2011 LEAD HIGH All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential MODERATEprohibited. Unauthorized reproduction or distribution is strictly ENGAGEMENT COLLABORATE WITH
  • 43. 5,000,000Singularity – power law of participation 0 JAN 09 MAR 09 MAY 09 JUL 09 SEP 09 NOV 09 JAN 10 MAR 10 MAY 10 JJUL 10 SEP 10 NOV 10 JAN 11 MAR 11Power Law of Participation. Content created by the few taken up by the many. POWER LAW OF PARTICIPATION COLLABORATIVE INTELLIGENCE LEAD HIGH MODERATE ENGAGEMENT COLLABORATE WITH REFACTOR COMMUNITY COLLECTIVE WRITE INTELLIGENCE NETWORK SHARE SUBSCRIBE COMMENT TAG FAVORITE PERIPHERY CORE READ LOW THRESHOLD WITH TOOL 43Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 44. Singularity – exponential aSSet growthGlobal financial assets have risen 17-fold over the last 3 decades from $12.3 trillionto nearly $210 trillion.Gold has not kept up with this rate of growth, and this doesn’t account for the quadrilliondollars in worldwide derivatives. US $ Trillion US $ TrillionSource: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group 44Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 45. Singularity – gold adoption rateS lowGold investor holdings stands at $2.0 trillion (Nov 2011), 0.96% of Global Financial Assets (GFA).In 2000 gold holdings were worth $227 billion, or 0.2% of GFA, but this isn’t the whole story... Percent Percent Gold investor Holdings = 0.96% of Global Financial Assets (nov 2011)Source: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group, as of end of Dec. 2010 45Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 46. Singularity – gold adoption rateS low• Today 0.2% would be worth $1.45 trillion ($1800 troy oz. Au) or 0.7% of Global Financial Assets (GFA).• Therefore new investment gold only provided 0.26% increase in % gold holdings.• In 1968 to 1970 % gold holdings of GFA = 5%, to attain this % at current values of gold ($1,800), $10.4 trillion dollars need to be invested.• $10.4 trillion is equivalent to 5.8 billion troy oz at $1,800 or 1.2 x gold ever produced.• 5.8 billion troy oz. is 3.6 x known gold reserves (based on US Geological Survey).• Clearly not only is public ownership miniscule, but to return to the 70s % holdings requires too much gold than these prices can handle.• This transfer of gold will take place at much higher prices. 46Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 47. Singularity – gold not exponential yetThe US monetary base is backed 15% by gold. US GoLD ReSeRVeS AnD Money SUppLy 160% $2,700 140% $2,400 Gold Reserves as Percent Money Supply Gold Reserves to Money $2,100 120% Supply Ratio High Money Supply (gold Expensive) Doubles $1,800 100% $1,500 80% $1,200 60% $900 40% $600 Gold Reserves to 20% Money Supply Ratio Low $300 (Gold Undervalued) 0% $0 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 47Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 48. Singularity – gold linear price targetSGold is re-setting. The minimum target is US$4,000 formulated on 40% base money,which is the non-levered component ie exclusive of credit. This is the linear price target. US GoLD ReSeRVeS AnD GoLD pRICe $10,000 100% of Monetary Base = $10,158/oz 40% of Monetary Base = $4,063/oz Actual Spot Gold Price = $1,720/oz $1,000 Price of Gold ($ oz) $100 $10 1920 1945 1954 1959 1964 1969 1974 1979 1983 1988 1993 1998 2003 2008 100% Monetary Base 40% Monetary Base Spot Gold Px 48Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 49. Singularity – gold exponential price targetSGold is re-setting itself. The confluence of existing exponential global monetary growth,plus the spread of gold information virally via the Web – will lead to rejection of fiat currency. IMpLIeD GoLD pRICe In USD ASSUMInG 40% BACKInG GLoBAL Money SUppLy BACKeD By GoLD oF Money SUppLy 4.0%70,000 63,849 3.5%60,000 3.0%50,000 2.5%40,000 2.0%30,000 24,504 1.5%20,000 16,336 1.0%10,000 0.5% 0 0.0% Global M2 Total Credit (US) US M2 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11*The underlying methodology is worth emphasizing.Global means the eCB, Fed and the PBOC (China)The implied value of Gold is found by taking the average gold backing 2010/11 times latest gold price and assuming a 40% backingThe gold used as backing of the money supply is equal to the latest holdings of Gold in FX reserves held by the eCB, the Fed and the PBOC (iMF data) 49Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 50. Singularity – auSSie gold holdingSif we assume a 40% backing of gold using the gold reserves of Australia, the gold price inUSd would be 232,857 USd, but clearly this figure is nonsensical as Australian gold holdingsare next to none! AUSTRALIAn Money SUppLy (M3) BACKeD By GoLD 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Nov-84 Nov-85 Nov-86 Nov-87 Nov-88 Nov-89 Nov-90 Nov-91 Nov-92 Nov-93 Nov-94 Nov-95 Nov-96 Nov-97 Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 50Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 51. Singularity – auSSie gold protectionAussie house prices have increased strongly in AUd terms, but they have fallen in gold terms.in addition, there seems to be a good correlation between declines in house prices(in AUd terms) and the price of gold (in AUd terms). AUSTRALIA eSTABLISHeD HoUSe pRICe InDeX In AUD AnD GoLD AUSTRALIA eSTABLISHeD HoUSe pRICe InDeX (2003 - 2004 = 100) (2003 - 2004 = 100) -4%165 10% -3% -2%145 -1% 5%125 0% 1%105 0% 2% 3% 85 4% -5% 5% 65 6% 45 -10% 7% Dec-02 Aug-03 Dec-03 Aug-04 Dec-04 Aug-05 Dec-05 Aug-06 Dec-06 Aug-07 Dec-07 Aug-08 Dec-08 Aug-09 Dec-09 Aug-10 Dec-10 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Aug-11 Apr-11 Dec-02 Aug-03 Dec-03 Aug-04 Dec-04 Aug-05 Dec-05 Aug-06 Dec-06 Aug-07 Dec-07 Aug-08 Dec-08 Aug-09 Dec-09 Aug-10 Dec-10 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Aug-11 Apr-11 In AUD In Gold Gold in AUD, QoQ, smoothed Australian House Prices, QoQ (inverse)An investment in gold for an AUd dominated investor with a high exposure to the real estatemarket is a good hedge. 51Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 52. Singularity – hyper(Bole)Metal criticality? GoLD pRICe In US DoLLAR FITTeD To A poLynoMIAL TRenD 7,000.0 y = 2E-13x4 - 2E-08x3 + 0.0011x2 - 21.005x + 152036 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 0.0 -1,000.0 Dec-58 Dec-61 Dec-64 Dec-67 Dec-70 Dec-73 Dec-76 Dec-79 Dec-82 Dec-85 Dec-88 Dec-91 Dec-94 Dec-97 Dec-00 Dec-03 Dec-06 Dec-09 Dec-12 Dec-15 Dec-18 Dec-21 Gold USD per oz 4th order polynomial forecast 52Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 53. Singularity – critical eventSSilver Criticality – a taste of what is to come?A mini-parabola in Silver manifested by internet Chatter about Silver shortages.Originated by a few spread by a many. 53Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 54. Singularity – hyper(Bole)inflation?High (Hyper) Inflation is a political occurrence.“The figures demonstrate clearly that deficits amounting to 40 per cent or more expenditures cannot be maintained. They lead to high inflation and hyperinflations...” Peter Bernholz “Monetary Regimes & Inflation pp.71”High (hyper) inflation is caused by financing huge public deficits through money creation.even 20% deficits were behind but four cases of hyperinflation.The US government deficit is 10% of GdP, but currently the US deficit is over 30% of allgovernment spending. The world reserve currency is in the red. 54Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 55. Singularity – hyperinflationdeficit levels relative to expenditures before hyperinflation. BUDGET DEFICITS BEFORE FIVE HYPERINFLATIONS 100% FRANCE BOLIVIA 80% BRAZIL POLAND % of Spending monetised GERMANY 60% 40% 20% 30% -4 -3 -2 -1 0 1 Years prior to money reformSource: Monetary Regimes and Inflation, Peter Bernholz 55Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 56. Singularity – Money alive or dead? 56Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 57. Singularity – Monetary Singularity MONETARY SINGULARITY TRANSCENDENT MONEY INTERNET REFORMATION FINANCIAL OPPRESSION LAW OF DIMINISHING RETURNS LAW OF ACCELERATING RETURNS SINGULARITY 57Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 58. SingularityGold – the secret key to the financial universe. 58Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 59. hinde capital: inveStMent ManagerSBen Davies (CEO) and Mark Mahaffey (CFO), former colleagues from RBS Greenwich Capital,established Hinde Capital in early 2007, primarily to focus on the precious metals and commoditysector. Hinde Gold Fund, BVI Ltd, was launched in October 2007. The Fund is now into its fourth year.Ben Davies has over 17 years experience within financial and commodity markets, startinghis career in 1994 trading credit fixed-income at Credit Lyonnais. In 1999 Ben moved toGreenwich Capital in London where he traded multi-asset classes. He left Greenwich in 2001following the merger with RBS and took a position as a portfolio manager for Blue Sky CapitalAustralia, a Japan equity hedge fund. In 2002 he returned to Greenwich Capital to take up theposition as Head of Fixed Income and Macro Proprietary Trading. In 2007 Ben co-foundedHinde Capital with Mark Mahaffey to focus on the precious metals and commodities sectors.Hinde Gold Fund has proven itself to be an exemplary performer in the precious metals sector.Mark Mahaffey has 26 years experience in the international markets having held seniorposts at several leading investment banks. He trained as a fixed income specialist at DaiwaSecurities before joining Midland Montagu as Director of the US government trading desk.In 1990 he jointly set up the Greenwich Capital office in London where he managed a portfoliofocusing on global macro themes, before joining IBJI in 2001. His most recent appointmentfrom 2005 was Managing Director of Bank of America London Proprietary desk. In 2007 Markleft BoA to set up Hinde Capital. 59Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 60. hinde capital: key perSonnelJonathan Tepper started his career as generalist equity analyst at SAC Capital in Stamford,Connecticut concentrating on special situations: recapitalizations, spinoffs, and restructurings.After working alongside Mark Mahaffey at Bank of America he has worked at various fundsintensifying his research into the resource sector as both a macro and mining analyst. He isa Rhodes Scholar with an M.Litt. in modern history from Oxford University. He graduated withhighest honours in history and economics from the University of North Carolina at Chapel Hillin 1998.Simon White is a University of Cambridge mathematics graduate with a background in interestrate and proprietary trading. After graduation Simon joined JPMorgan on the USD Rates desk,followed by a position at Bank of America as a proprietary trader, where he worked with bothMark Mahaffey and Jonathan Tepper. After a position at a start-up macro hedge fund, he joinedHinde Capital in October 2008.paul Burton is Managing Director and partner of GFMS World Gold Analyst. Paul was formerlyeditor of the World Gold Analyst, a position he held for over eleven years. In August 2002, Paulcompleted a management buyout of World Gold Analyst from the Mining Communications Ltd.Before joining the Mining Journal in 1996, Paul spent over twenty years in various positionswithin the mining industry. After initially working as a mining engineer he spent much of his careerin mineral economics, most notably at Gold Fields, and minerals marketing in South Africa. 60Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.
  • 61. hinde capital: diSclaiMerHinde Gold Fund Ltd is an open-ended multi-class investment company incorporated in the British Virgin Islands.This document is issued by Hinde Capital Limited, 10 New Street, London EC2M 4TP, which is authorised and regulated by the FinancialServices Authority. This document is for information purposes only. In no circumstances should it be used or considered as an offer to sellor a solicitation of any offers to buy the securities mentioned in it. The information in this document has been obtained from sources believedto be reliable, but we do not represent that it is accurate or complete. The information concerning the performance track record is givenpurely as a matter of information and without legal liability on the part of Hinde Capital. Any decision by an investor to offer to buy any of thesecurities herein should be made only on the basis of the information contained in the relevant Offering Memorandum. Opinions expressedherein may not necessarily be shared by all employees and are subject to change without notice. The securities mentioned in this documentmay not be eligible for sale in some states or countries and will not necessarily be suitable for all types of investor. Questions concerningsuitability should be referred to a financial adviser. The financial products mentioned in this document can fluctuate in value and may besubject to sudden and large falls that could equal the amount invested. Changes in the rate of exchange may also cause the value of yourinvestment to go up and down. Past performance may not necessarily be repeated and is not a guarantee or projection of future results.The Fund is categorised in the United Kingdom as an unregulated collective investment scheme for the purposes of the Financial Servicesand Markets Act 2000 and their Shares cannot be marketed in the UK to general public other than in accordance with the provisions ofthe Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, the Financial Services and Markets Act 2000 (Promotionof Collective Investment Schemes) (Exemption) Order 2001, as amended, or in compliance with the rules of the Financial Services Authoritymade pursuant to the FSMA. Participants in this investment are not covered by the rules and regulations made for the protection of investorsin the UK. Participants will not have the benefit of the rights designed to protect investors under the Financial Services and Markets Act2000. In particular, participants will lose the right to claim through the Financial Services Compensation Scheme. The securities referencedin this document have not been registered under the Securities Act of 1933 (the “1933 Act”) or any other securities laws of any other U.S.jurisdiction. Such securities may not be sold or transferred to U.S. persons unless such sale or transfer is registered under the 1933 Act oris exempt from such registration. This information does not constitute tax advice. Investors should consult their own tax advisor or attorneywith regard to their tax situation. 61Hinde GOLd FUnd november 2011 All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.Singularity – Transcendent Money The presentation is for information purposes only and is not a solicitation to invest.Confidential Unauthorized reproduction or distribution is strictly prohibited.