Louis Boulanger- Gold rises against fiat abuse 111114


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

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Louis Boulanger- Gold rises against fiat abuse 111114

  1. 1. Gold RISES ... against Fiat Abuse! Louis Boulanger, CFA Founder and Director, LB Now Ltd BMG Bullion Bars Authorized Dealer Presentation at The Gold Symposium 2011“Facts do not cease to exist because they are ignored.”~ Aldous Huxley“Its never too late to buy gold and silver, to be helduntil the end of the fiat money era.” ~ James Dines
  2. 2. 3FACTS:1. All Currencies Are Being Debased (to ZERO?)2. Gold Ownership Offers Protection from this Ongoing Insane Fiat Abuse and Delusion... • Whether it‟s Deflation or Inflation or Both • Until the End of our Unsound Money Era • Until the End of Irredeemable Currencies
  3. 3. 4Fiat currencies What makes a currency a „fiat‟ currency?  when it has value only because of government regulation or law (i.e. legal tender laws) What‟s „legal tender‟?  anoffered payment that, by law, cannot be refused in settlement of a debt Example of fiat currency?  Federal Reserve Note (also known as US dollar or $)
  4. 4. 5Money What is „money‟?  anythingthat is generally accepted as payment for goods and repayment of debts Why was money once based on gold?  because of human action and human nature (read Carl Menger‟s “On the Origins of Money”) Why is gold now outside the monetary system?  because we have been misled and deceived!
  5. 5. 6“Up until August 15, 1971, there has never inhistory been an era when no paper currencywas linked to Gold.In all other eras of history, people could alwaysescape to other currencies, whose Goldbacking remained intact.But, since 1971, there is NO escape becauseNO paper currency has any link to Gold.”“The global paper currency system is veryyoung. It depends for its continued functioningon the BELIEF that the debt upon which it isbased will, someday, be repaid.”- William A. M. BucklerPublisher of The Privateerwww.the-privateer.com
  6. 6. 7 Gold‟s essential role Society needs to relearn that: 1. Gold is Money and Nothing Else a. It‟s what turns fiat money into sound money b. Fiat only money has no discipline or measure 2. Gold offers a reliable standard of value a. Its characteristics make it ideal for such a role b. Currencies‟ should be defined in gold terms Armed with this knowledge… You can protect wealth from fiat abuse!
  7. 7. 8Here‟s the problem Without the ability to redeem any currency on demand in gold at defined weights, as a result, today‟s currencies are only as good as:  the ability of the issuing state to pay its debts AND/OR  the belief that holders of financial assets have that the value of currencies (in which all such assets are denominated) will be maintained It’s all a confidence game! (with central bankers as croupiers)
  8. 8. 9How good is the magic trick? A good magic trick consists of three stages :  The Pledge  The Turn, and...  The Prestige We‟ve seen the Pledge (fiat paper promises) The Turn (turning gold into fiat paper money) Will there be a Prestige? (turn paper into gold)
  9. 9. 10The ongoing mind game There is an expectation that our leaders will know what to do when the time comes Our leaders encourage us to have this belief We end up expecting miracles from them… Soon, we find ourselves no longer able to see our own folly/insanity/false beliefs/delusion Is our confidence/delusion going to last?
  10. 10. 11
  11. 11. 12US debt (i.e. US$) is the key! Since 1961 the US national debt has never gone down It took the US government 191 years – from 1791 until 1982 – to run up its first US$1 trillion in debt The national debt stood at US$10.6 trillion on the day Barack Obama took office as President Obama has already added more than US$4 trillion to that debt (it now already stands at US$14.99 trillion!) US debt „ceiling‟ increased in August 2011 (93rd time!) by… US$2.4 trillion (0.4/0.5/1.5) to US$16.7 trillion Will it be enough to last until 2012 Presidential elections?
  12. 12. The tragedy in human terms…Make that $48,000 now… and STILL growing!THAT‟S MORE THAN IN GREECE!! ($36,000)
  13. 13. 14Are you (honestly) confident… …that the US federal government will one day start paying back (i.e. settle) its debt? …that the US federal government will continue to be able to service its debt forever? …that the US won‟t default on its external debt?Or… is it that you expect/‟hope‟ the Fed (central bankers) will keep inflating the problem away…
  14. 14. Consider this: Source: Bud Conrad, Chief Economist, Casey Research, October 2010
  15. 15. 16How long do you expect „it‟ to last?
  16. 16. 17There is a lot more of it now…
  17. 17. 18No matter how it‟s „measured‟
  18. 18. 19It‟s the banking system stupid!
  19. 19. What the hell?!!...“There must be somekind of way out of here,”said the joker to the thief. (Bob Dylan)
  20. 20. 21There is too much confusion... This is not a coincidence This is what the monetary elite want They wanted you to think it was a credit crisis They now say it‟s a European debt crisisThe above are just symptoms/manifestations of… The Global Monetary Crisis now unfolding  was it all planned? what‟s the „end game‟??
  21. 21. 22The true nature of the problem What passes for „money‟ today is just debt! ‘Money’ no longer has a reliable MEASURE You can‟t solve a problem with more of the same  the problem (debt) can‟t also be the solution! A fiat only monetary system perpetuates debt  it‟s a financial bubble making machine! TO RESTORE CONFIDENCE:  Currencies should again be redeemable in gold AND  trade deficits should again be SETTLED in gold
  22. 22. 23 This is where the bubble is!Source: Hugo Salinas Price presentation at GATA‟s Gold Rush 2011 conference in London
  23. 23. 24So how do you protect yourself? SIMPLE: Don‟t invest all your assets DEFER investing some of your money… SELL some investments (financial assets) EXCHANGE the proceeds for some bullion! Take some of your money ‘OFF THE TABLE’  instead of investing 100% invest only (100-X)% „X‟ (bullion) depends on what you BELIEVE in: central banking?… or settlement of debts?
  24. 24. FACT: all currencies are dying…
  25. 25. 26Currency debasement is not new US Dollar Purchasing Power Valued Against Gold 1833-Q3 2011 20.00% 0.00% -20.00% -40.00% -60.00% -80.00%-100.00% 1833- 1867 1885 1903 1921 1939 1957 1975 1993 2011 49* Source: NMA.org, PacificExchange. ©2011 Bullion Management Group Inc.
  26. 26. 27This is just the latest chapter… Gold Price Annual Change 2001-2011 USD AUD CAD CNY EUR INR JPY NZD CHF GBP Average 2001 2.5% 11.3% 8.8% 2.5% 8.1% 5.8% 17.4% 8.6% 5.0% 5.4% 7.5% 2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% -1.1% 3.9% 12.7% 14.5% 2003 19.6% -10.5% -2.2% 19.5% -0.5% 13.5% 7.9% -4.5% 7.0% 7.9% 5.8% 2004 5.2% 1.4% -2.0% 5.2% -2.1% 0.0% 0.9% -4.0% -3.0% -2.0% 0.0% 2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 25.0% 36.2% 31.8% 26.0% 2006 22.8% 14.4% 22.8% 18.8% 10.2% 20.5% 24.0% 19.2% 13.9% 7.8% 17.4% 2007 31.4% 18.6% 10.4% 23.0% 17.9% 17.5% 24.7% 20.5% 21.5% 29.2% 21.5% 2008 5.8% 32.5% 32.4% -1.1% 11.9% 30.4% -14.9% 39.0% 0.2% 44.3% 18.0% 2009 24.0% -3.6% 6.0% 24.0% 20.4% 18.4% 27.1% -0.7% 20.2% 12.0% 14.8% 2010 29.7% 13.3% 22.5% 25.2% 38.5% 24.4% 13.5% 20.1% 16.6% 33.3% 23.7% Annual 18.0% 10.9% 13.2% 15.3% 13.8% 17.4% 14.0% 11.4% 11.6% 17.4% 14.3% Compounded 1,000 Invested 5,216 2,826 3,443 4,158 3,652 4,975 3,720 2,934 2,997 4,971 3,889 On 1 January 2000 And 2011? 21.1% 17.0% 21.3% 16.9% 16.5% 32.2% 16.5% 16.2% 13.1% 17.3% 18.8%Year to Date (31/10)
  27. 27. 28In summary: Fiat currencies (in which financial securities are all denominated) are rapidly losing value There is no exception; there are only timing differences and currency volatility is increasing This has happened before and, if history is any guide, then there is still a long way to go So… if fiat money is dying, what can you do?  DIVERSIFY AWAY from fiat currencies!
  28. 28. It‟s a currency war!“All warfare is based ondeception.” (Sun Tzu)
  29. 29. The Race to Debase Base Currency is Gold Ounces Increase from March 2001 - September 2011600%500%400%300%200%100% 0% Australia Dollars Switzerland Japan Yen Euro Canada Dollars British Pound United States Francs Dollars Source: Goldsilver.com
  30. 30. 31Perception management 1924: John Maynard Keynes famously says: “In truth, the gold standard is already a barbarous relic.” 1971: US President Nixon famously says: “I’m temporarily closing the gold window.” 2011: Ben Shalom Bernanke famously says: “Gold is not money.”
  31. 31. 32The deception now relies on… Keeping interest rates artificially lowand… Making you believe this is a good thingand… Making you forget about real INFLATION WHY?
  32. 32. 33Servicing that huge debt! Keeping interest rates low is crucial Monetizing the debt (QE) if necessary Hiding the true monetary inflation In the meantime…  your financial wealth is surreptitiously eroded  to baby boomers looking to retire, the working middle class, this means financial repression  UNLESS YOUR MONEY IS NOT ‘ALL IN’!
  33. 33. What is Inflation? “Inflation is an increase in the amount of currency in the circulation, resulting in a relative sharp and sudden fall in its value and a rise in prices of goods and services.” - Webster’s Dictionary, 1983
  34. 34. 36Gold and real interest ratesSource: US Global Investors‟ Investor Alert dated 2 September 2011
  35. 35. 37Outlook is good for gold Negative real interest rates have historically been good for gold owners/hoarders Ben Bernanke says zero rates are here to stay until at least mid 2013 The Fed, BOE, ECB, basically all central banks are expected to continue to debase currencies This means real interest rates will likely remain negative for quite some time to come (WEE)
  36. 36. 38But remember… it‟s only money! You‟ll need to sell your bullion eventually Bullion ownership merely stores wealth Bullion in itself is not an investment It‟s money waiting to be redeployed (invested) Only when you later sell your bullion to buy stuff or invest that money again will your wealth increase (assuming you invest wisely)
  37. 37. 39
  38. 38. Thank You. Any questions?Louis Boulanger, CFAFounder & Director,Louis Boulanger Now Ltdtel: +64 9 528 3586mob: +64 275 665 095louis@lbnow.co.nzwww.lbnow.co.nz