Game Over –Leaving theDollar                  (and other fiat currencies)John HayesGainesville, FLJanuary, 2013
   Raised in Peterborough, Ontario   Moved to the US in 1996   Began trading commodities „98 (FOREX, PM‟s)   From 2000...
“You always have to ask thequestion why is it that centralbanks hold so much gold whichearns them no interest and whichcos...
"In the absence of the gold standard, there isno way to protect savings from confiscationthrough inflation. ... This is th...
   Brief History of Gold – Very Brief   Commodity vs. Currency   Present Gold Market   Future (Not just my opinion)  ...
Money will become whatever the peopleaccept as the medium of exchange and whengovernment fails to provide that medium, the...
   Gold has performed the task of a currency, or trade-able    form of exchange since the 5th millennia BC       1)   Go...
   First and foremost a commodity in all respects. It must    be mined, refined and defined.    (Can‟t be “wished” into e...
Examples of paper“wealth” at the handsof government – theseall within 100 years
   What is a Dollar? (or a Loonie, Yen, Pound or    Franc)     1913 – 1933 – $20 was equal to 1oz of Gold (fully      co...
Something odd     1996  ∨ ∨
   Gibson Paradox and the price of Gold – The    price of gold is inversely related to the interest    rate of money. As ...
   This is the total number of tonnes of gold    mined since the beginning of civilization.   .. all of which would fit ...
Bulk of global trading in gold and silver is conducted on the over-the-counter (OTC) market.London is by far the largest g...
   The Sellers     Some Central Banks (The Fed, IMF, ECB, BIS)     JP Morgan et al (a cartel?)   Who are the buyers?  ...
   Short list of large Gold buyers     Jean-Marie Eveillard - manages $60 billion     John Embry – manages $10B (Big Ga...
   Perhaps a glimpse       There is an end game for all this – 2018 - 2020       A mixed basket of currencies with Gold...
Wealth is created by, and morally belongs to theindividual creator. As Rand observes, since “manhas to sustain his life by...
   Purchasing “Good Delivery Bars” from a    variety of sources – e.g. – Mints       400 troy oz bars – current value - ...
   Storage – I think that is a moot point here!   What about a currency – a la the Shawnee     Good idea! (Go for it, b...
 Consider  Gold based Savings Accounts (see  GoldMoney) Electronic forms may be just as effective (that will be  for oth...
Common Questions/Queries/Concerns   The Precious Metals market is too volatile!   There is no inflation!   Gold/Silver ...
“You always have to ask the question why isit that central banks hold so much gold whichearns them no interest and which c...
   “You can ignore reality, but you can‟t ignore    the consequences of ignoring reality” - Ayn    Rand   Wealth is crea...
   “I believe that banking institutions are more    dangerous to our liberties than standing armies.” –    Thomas Jeffers...
   Bulk of global trading in gold and silver is conducted on the over-the-counter (OTC)    market.   London is by far th...
How do you miss this opportunity?????
   Storage – I think that is a moot point here!   What about a currency – a la the Shawnee     Good idea! (Go for it, b...
   As mentioned, Gold coins     No collectables     9999‟s purity minimum   Wafers can be as good as coins due to larg...
Avenues to Owning Gold   IMHO, at this stage (economically) there are few avenues left (think in     terms of savings);   ...
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
Gold jan13
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Gold jan13

  1. 1. Game Over –Leaving theDollar (and other fiat currencies)John HayesGainesville, FLJanuary, 2013
  2. 2.  Raised in Peterborough, Ontario Moved to the US in 1996 Began trading commodities „98 (FOREX, PM‟s) From 2000 – 2012 – Director of Marketing and Business Development for a global engineering firm (continued trading) After selling company, on sabbatical, still trading Continuing to pursue my MBA from the school of hard-knocks! “You can ignore reality, but you can‟t ignore the consequences of ignoring reality” - Ayn Rand 2
  3. 3. “You always have to ask thequestion why is it that centralbanks hold so much gold whichearns them no interest and whichcosts them money to store. Theanswer is obvious: they considerit of significant value, and indeedthey consider it the ultimatemeans of payment, one whichdoes not require any form ofendorsement.” 

  4. 4. "In the absence of the gold standard, there isno way to protect savings from confiscationthrough inflation. ... This is the shabby secretof the welfare statists tirades against gold.Deficit spending is simply a scheme for theconfiscation of wealth. Gold stands in theway of this insidious process. It stands as aprotector of property rights. If one grasps this,one has no difficulty in understanding thestatists antagonism toward the goldstandard.”
  5. 5.  Brief History of Gold – Very Brief Commodity vs. Currency Present Gold Market Future (Not just my opinion) Strategy
  6. 6. Money will become whatever the peopleaccept as the medium of exchange and whengovernment fails to provide that medium, theycreate their own fiat system.“I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson
  7. 7.  Gold has performed the task of a currency, or trade-able form of exchange since the 5th millennia BC  1) Gold is the money of kings  2) Silver is the money of the working class  3) Barter is the money of peasants, but  4) Debt is the money of slaves. Gold‟s functionality lent itself to this role:  Rarity  Malleable  Density  Portability
  8. 8.  First and foremost a commodity in all respects. It must be mined, refined and defined. (Can‟t be “wished” into existence) Role as a currency is not unlike the Government fiat currencies - $, ¢, £, ¥, €, ₠ Value is based on what others are willing to exchange for it. Portable store of wealth It is the canary in the coal mine (30yr bond, M3) What gold is NOT (or Definition in reverse):  An investment (it offers no guaranteed financial return – 0% interest, no dividends and it costs money to store it)  A debt (it is unencumbered by any government or debt facility)  Cure for economic malfeasance (A Gold standard will not cure nor prevent governments from making bad decisions)
  9. 9. Examples of paper“wealth” at the handsof government – theseall within 100 years
  10. 10.  What is a Dollar? (or a Loonie, Yen, Pound or Franc)  1913 – 1933 – $20 was equal to 1oz of Gold (fully convertible – or $1 = 1/20oz of Gold)  1933 – 1944 - $35 was equal to 1oz of Gold (not convertible)  1944 – 1971 - $42 was equal to 1oz of Gold (only countries allowed to redeem US Treasuries for Gold  1971 – Nixon closes the Gold window and the $ is worth a wing and a prayer  By 1980 – Gold is worth >$800 ($1 = 1/800 oz)  Current price of gold $1675 ($1 = 1/1675 oz) "...The man that controls Britain‟s money supply controls the British Empire, and I control the British money supply.” - Nathan Rothschild
  11. 11. Something odd 1996 ∨ ∨
  12. 12.  Gibson Paradox and the price of Gold – The price of gold is inversely related to the interest rate of money. As interest rates rise due to a rising demand for sound money, the price of gold will decline and vice versa. L. Sumners What was more important than the $40 Billion/month ad nausea from the FED?  Locking interest rates to essentially 0% through 2015  From a LIRP to NIRP (very Gold friendly)
  13. 13.  This is the total number of tonnes of gold mined since the beginning of civilization. .. all of which would fit into a crate of 20 metres cubed.
  14. 14. Bulk of global trading in gold and silver is conducted on the over-the-counter (OTC) market.London is by far the largest global centre for OTC transactions followed by New York, Zurich,and Tokyo.Exchange-based trading has grown in recent years with Comex in New York and Tocom inTokyo generating most of the activity.Annual world gold production 2 500 metric tonnes1 metric tonne = 32,150.7466 troy ounces2 500 tonnes = 80 million oz80 million x $1700 = $136,000,000,000.00 BillionU.S. is creating new paper at a rate 9 - 10 times faster (1.3T/136B = 10) – think annual deficitAverage daily volume of gold cleared on the London Bullion Market Association (LBMA) isapproximately 18 million oz ($32 B per day)Annual gold mine production is cleared through the LBMA approximatelyevery 4.4 daysIs the price manipulated, or managed?Yes (and not just in my opinion) “You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!” – President Andrew Jackson
  15. 15.  The Sellers  Some Central Banks (The Fed, IMF, ECB, BIS)  JP Morgan et al (a cartel?) Who are the buyers?  Central Banks (the same group that was selling in „98 – ‟00)  Some Institutional  Large Funds  The 1%  The Chinese  The Indians
  16. 16.  Short list of large Gold buyers  Jean-Marie Eveillard - manages $60 billion  John Embry – manages $10B (Big Gator Fan)  John Paulson – Hedge Fund($25 billion)  John Hathaway – Tocqueville PM ($2 billion)  Felix Zulauf - Zulauf Asset Management  Egon von Greyerz – Matterhorn Asset Management  Caesar Bryan - Gabelli & Company ($33 billion)  George Soros – Hedge Fund ($10 B)  Bill Gross – PIMCO ($1 T)  Warren Buffett - (yes even him – the Old Dog)
  17. 17.  Perhaps a glimpse  There is an end game for all this – 2018 - 2020  A mixed basket of currencies with Gold a major component – perhaps as much as 20%  At this point Gold ceases to trade – the price of Gold will be fixed (applicable to later conversation)  There will be inflation, deflation and hyperinflation, much of this occurring simultaneously around the world
  18. 18. Wealth is created by, and morally belongs to theindividual creator. As Rand observes, since “manhas to sustain his life by his own effort, the man whohas no right to the product of his effort has nomeans to sustain his life. The man who produceswhile others dispose of his product, is a slave.”
  19. 19.  Purchasing “Good Delivery Bars” from a variety of sources – e.g. – Mints  400 troy oz bars – current value - $710,000 US  $10 M ≅ 14 GDB  $100M ≅ 141 GDB  ≅ 80 GDB = 1 metric tonne
  20. 20.  Storage – I think that is a moot point here! What about a currency – a la the Shawnee  Good idea! (Go for it, but with caution – make a call)  Native Americans have issued their own commemorative coins.  The Shawnee Tribe of the Indian Nations, which is a Sovereign Nation (Oklahoma) began issuing commemorative coins in 2002 and were the first Native Americans to do so.  The Five Dollar denomination coin contains 1/5 oz. or 6.22 grams of pure (99.9% fine) gold.  Having been struck by the Perth Mint in Australia the 2002 Shawnee Proof Gold coins have a proof grade quality. These coins are also legal tender within the Shawnee reservation.
  21. 21.  Consider Gold based Savings Accounts (see GoldMoney) Electronic forms may be just as effective (that will be for others to determine) One other reason – you may be premature
  22. 22. Common Questions/Queries/Concerns The Precious Metals market is too volatile! There is no inflation! Gold/Silver aren‟t liquid, like cash!  “You can‟t buy groceries with a Gold coin”  (You can and you will probably only need Silver) Gold (Silver) are in a bubble  Actually they have simply kept up with the paper They cost money to store  True, Gibson‟s Paradox (low interest rates and you own PM‟s outright – they are not encumbered
  23. 23. “You always have to ask the question why isit that central banks hold so much gold whichearns them no interest and which costs themmoney to store. The answer is obvious: theyconsider it of significant value, and indeedthey consider it the ultimate means ofpayment, one which does not require anyform of endorsement.” 

  24. 24.  “You can ignore reality, but you can‟t ignore the consequences of ignoring reality” - Ayn Rand Wealth is created by, and morally belongs to the individual creator. As Rand observes, since “man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.”
  25. 25.  “I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance. -James Madison You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!
  26. 26.  Bulk of global trading in gold and silver is conducted on the over-the-counter (OTC) market. London is by far the largest global centre for OTC transactions followed by New York, Zurich, and Tokyo. Exchange-based trading has grown in recent years with Comex in New York and Tocom in Tokyo generating most of the activity. Theaverage daily volume of gold and silver cleared at the London Bullion Market Association (LBMA) in November 2008 was 18.3 million ounces (worth $13.9 billion) and 107.6 million ounces (worth $1.1 billion) respectively. This means that an amount equal to the annual gold mine production was cleared at the LBMA every 4.4 days, and to the annual silver production every 6.2 days.[1]. The Gold Anti-Trust Action Committee claims that clearing data substantially understates the true amount of gold traded, due to the netting of trades in the calculation of Clearing Statistics.[2] They claim the LBMA market is $5.4 trillion a year.[3]
  27. 27. How do you miss this opportunity?????
  28. 28.  Storage – I think that is a moot point here! What about a currency – a la the Shawnee  Good idea! (Go for it, but with caution – make a call)  Native Americans have issued their own commemorative coins.  The Shawnee Tribe of the Indian Nations, which is a Sovereign Nation (Oklahoma) began issuing commemorative coins in 2002 and were the first Native Americans to do so.  The Five Dollar denomination coin contains 1/5 oz. or 6.22 grams of pure (99.9% fine) gold.  Having been struck by the Perth Mint in Australia the 2002 Shawnee Proof Gold coins are have a proof grade quality. These coins are also legal tender within the Shawnee reservation.
  29. 29.  As mentioned, Gold coins  No collectables  9999‟s purity minimum Wafers can be as good as coins due to larger volumes – 10oz, 100oz etc. Purchasing “Good Delivery Bars” from a variety of sources – e.g. Mints  400 troy oz bars – current value - $710,000 US
  30. 30. Avenues to Owning Gold IMHO, at this stage (economically) there are few avenues left (think in terms of savings);  The physical acquisition of Gold (and Silver) Bullion  Coins are best for Gold (Eagles, Maple Leafs, etc)  Investing in Gold/Silver Mutual Funds (or ETF‟s)  Caution here, these are probably not good long term  The GDXJ (Gold Index of Junior Gold Miners)  On an investment play – this may be the best >100% ROI in 12- 24 months  Individual Gold Stocks – Goldcorp, Agnico Eagle

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