When it comes to sleepless nights, Toimi Soini of Finland originally set the record by using the “toothpicks under the eyelids” method for 11 straight days. In hindsight, Toimi was an amateur. You wouldn’t know it, but the nice people running the Bank of Canada have gone sleepless since 2003 – that’s 3,564 days without sweet dreams. Yet, that’s nothing compared to the very private folks at the Swiss National Bank. These super-secretive bankers have surpassed over 4,660 sleepless nights – despite living in Zzzzzzurich. This, of course brings us to the World record for sleepless nights. At 5,025 nights and counting, the always polite and well dressed chaps over at the Bank of England are reigning champions. Toimi Soini was not a banker and this was his downfall. As for the Canadians, Swiss and British – yes they are all bankers, but not just any bankers. This terrific trio have the displeasure of forever being known as the bankers who sold their gold. The irony of course, is the action of the World’s central bankers themselves is the reason why gold is destined to remain golden for sometime to come. And with gold sitting near $1700/oz, and with no end to the money printing games, the sleepless nights are destined to continue.

1. Our view on global investment markets:
October 2012 – “How to lull a banker to sleep”
Keith Dicker, CFA
Chief Investment Officer
keithdicker@IceCapAssetManagement.com
www.IceCapAssetManagement.com

2. Sleepless in Ottawa
www.IceCapAssetManagement.com
When it comes to sleepless nights, Toimi Soini of Finland originally set
the record by using the “toothpicks under the eyelids” method for 11
straight days. In hindsight, Toimi was an amateur.
You wouldn’t know it, but the nice people running the Bank of
Canada have gone sleepless since 2003 – that’s 3,564 days without
sweet dreams.
Yet, that’s nothing compared to the very private folks at the Swiss
National Bank. These super-secretive bankers have surpassed over
4,660 sleepless nights – despite living in Zzzzzzurich.
This, of course brings us to the World record for sleepless nights. At
5,025 nights and counting, the always polite and well dressed chaps
over at the Bank of England are reigning champions.
Toimi Soini was not a banker and this was his downfall. As for the
Canadians, Swiss and British – yes they are all bankers, but not just
any bankers. This terrific trio have the displeasure of forever being
known as the bankers who sold their gold.
The irony of course, is the action of the World’s central bankers
themselves is the reason why gold is destined to remain golden for
sometime to come. And with gold sitting near $1700/oz, and with no
end to the money printing games, the sleepless nights are destined to
continue.
October 2012 How to lull a banker to sleep
Irrational Exuberance
The roaring 1990s was appreciated for something it wasn’t – an Alan
Greenspan inspired economic miracle. The belief that human beings
could forever alter a business cycle by simply changing interest rates
and borrowing from the future to support current spending was
rampant throughout the Western World.
Of course, this mindset would eventually nearly blow-up the entire
financial planet in 2008, but that was a long decade away. Now, what
wasn’t appreciated in the 1990s was the fact that stock and bond
markets were in the late stages of the greatest secular bull market
ever.
Since 1982, interest rates steadily decreased from 18% to 5% at the
end of the 1990s. Inflation also followed the same road map and this
combination lead to a boon for stock and bond investors. At the time,
financial planners and mutual fund sales robots routinely used 10%+
returns to project your imaginary wealth and freedom at age 55.
Life was good. But not so for the central bankers of the World – their
overlords were just starting to turn up the heat.
We need more money
While stock and bond market investors were rationalizing their
exuberance as skill, governments were beginning to feel the heat of
running fiscal deficits. Although their economies were growing, tax
revenues were no where close enough to meet their irrational
spending habits.
1

3. Anything But Commodities
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October 2012 How to lull a banker to sleep
Governments you see, are no different than people. When money
gets tight, you begin to look everywhere for some spare change – and
this is where central banks and their gold came into play.
Every country has a central bank. Unlike the big box banks, central
banks are not owned by shareholders, they do not lend money to
individuals or businesses and they certainly do not sell you expensive
mutual funds.
Rather, the role of a central bank is to promote a safe and sound
financial system for your country. It guides your economy by utilizing
its economic acumen to adjust interest rates up and down.
Also of importance is the responsibility of ensuring your country
maintains a safe and secure currency. Unknown to many, it is this
latter responsibility that is wreaking havoc with rapid eye movements
for certain central bankers these days.
While soaring stock and bond markets were helping stock brokers
buy more yachts in the 1990s, commodity markets were horrible
investments for most people involved. The problem with
commodities was simple – it just wasn’t their time to shine.
Although the greatest commodity bull market in history was just
around the corner, investors at the time knew there was only one
game in town and it was called ABC – anything but commodities.
It’s important to understand the environment during the 1990s as
central banks everywhere held gold bullion in some form or fashion.
2
How and when they acquired it has long been forgotten, yet central
bankers and politicians everywhere knew they were sitting on a
jackpot. Except this golden jackpot wasn’t paying out.
The argument was that once you looked beyond the obvious shiny
appeal, gold held very little economic interest to anyone. Gold didn’t
pay any dividends, it certainly didn’t grow revenues or earnings and
worst of all it didn’t create any jobs – let’s face it, this barbaric relic
was useless.
As momentum grew, central bankers increasingly convinced
themselves that perhaps it would be ok to sell their gold. After all,
they could buy nice little bonds that paid interest. In addition, by this
time central bankers around the World, realized that they now
possessed the economic and financial skills to forever control
inflation and currencies. That settled it – gold was no longer required.
The Bank of England lead by Gordon Brown, was first up to sell gold
–at an average price of $270 an ounce. To measure the success of this
transaction, one only needs to know that the price of gold at that
time is forever known as “Brown’s Bottom.”
Next up were the Swiss. Financially, Switzerland ranks amongst the
most respected countries in the World. It is reported they currently
hold over 1000 tonnes of gold and have always respected its “store of
value” attributes. Yet, between 2000 and 2005 the Swiss National
Bank sold over 1300 tonnes of the now very precious metal. The

4. Three hands
www.IceCapAssetManagement.com
October 2012 How to lull a banker to sleep
3
official reason for the dramatic reduction was to further diversify
across foreign currencies. Today however, with gold now 4-8 times
higher than the 2000-2005 period combined with the ill-fated
decision to link the once-mighty Swiss Franc to the future-not-so-
mighty Euro, the Swiss central bankers will eventually earn a
nickname even less kind than “Brown’s Bottom.”
And then there was Canada. The 1990s financial version of the Great
White North was anything but prolific. In fact, Canada was so
unprolific that the Canadian Dollar was known in some circles as the
Hudson Bay Peso.
Canada struggled with its debt load and a weakening currency, yet
something happened that isn’t happening elsewhere today – the
government acted decisively to reduce spending, increase taxes and
pay down its debt. Granted, unlike today where everyone has a debt
problem, Canada was able to stick to this financial diet and greatly
benefited from doing this when most others were financially healthy.
Canada’s persistence was rewarded as today it compares quite
favourable relative to other Western World countries.
However, all is not rosy in Ottawa. While Canada’s government debt
levels have improved dramatically, as has its fiscal position, the
household sector continues to bloat its debt levels. Taken in isolation,
this wouldn’t be too bad, after all if the previously unconstrained
federal government could swallow a financial diet, surely every Bob
and Doug could as well.
Yet this is where the Bank of Canada is trying to thread the financial
needle. On one hand, Mr. Carney and his team would love to raise
interest rates to temper household borrowing. On the other hand,
Mr. Carney has to consider the actions and policies of his central bank
brethren. Considering the Japanese, Americans, British and
Europeans are fully committed to printing unlimited amounts of
money for an undetermined time – any action by Canada to raise
interest rates would act as a beacon to attract even more foreign
safe-seeking investors which will further increase the now-mighty
Loonie, and in the process destroy market share for exporting
companies.
Then of course, on Mr. Carney’s other, other hand, if he does nothing
he runs the risk of Canada’s household debt problem turning into an
even bigger household debt problem.
Today Mark Carney is doing his darndest not to print loonies and
devalue the currency. As Canada is the only major country in the
World without ANY gold, should the Bank of Canada ever decide to
print money, Canada will have nothing except good manners and
good hockey players to support the currency. The gold is long gone.
But where did the gold go?
These days, most Asian countries recognize the destructive money
printing ways of the Western World. And, if you can’t beat them and
don’t want to join them, the only way to protect your self is to use a
great defense. Chart 1 (next page) shows the biggest buyer of gold.

5. Chart 1 – Chinese shifting USD into gold
www.IceCapAssetManagement.com 4
October 2012 How to lull a banker to sleep
While Chinese
imports of gold
have sky-rocketed
Chinese
purchases of US
Treasury Bonds
have flat-lined
since 2011
Source: Ned Davis Research Source: Ned Davis Research
Copyright 2012 Ned Davis Research, Inc. Further distribution prohibited without prior permission.
All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html. For data vendor
disclaimers refer to ww.ndr.com/vendorinfo/.

6. Best Friends Forever
www.IceCapAssetManagement.com 5
The forever told fable of China selling all of their US Treasuries is just
that – a fable. You and I can sell currencies and buy other currencies
without affecting the World. Big countries cannot. The chain event
reaction would become circular at the end of the day.
In addition, if the China did choose to collapse the US Dollar, it would
also collapse its export industries who invariably sell to the
Americans. Additionally, many of China’s Asia trade partners have
currencies and monetary policy linked to the US dollar. Asian trade
would crumble as well.
Canada meanwhile is topping the fiscal charts on many fronts. Yet
should the Bank of Canada ever venture down the road of printing
money to stimulate the economy, its complete lack of gold bullion
will provide little support for the primary goal of the central bank -
currency stability.
So, exactly how do you lull a banker to sleep? For starters, place
plenty of gold bullion under their pillow. And to seal the deal – gently
remind them that they in fact cannot control the economy by printing
money. This sweet dream formula will be good for all of us.
The Nobel Peace Prize
Help two countries turn into BFFs and you win the Nobel Peace Prize.
Successfully engineer a treaty between warring nations – expect a
call from Oslo. Since 1901, the good folks in Norway have been
recognizing the extraordinary efforts by people and countries for
creating peace on earth.
Then came 2009. It seems that seven years of war in Iraq &
Afghanistan combined with the Great Global Recession created a
cloud over everyone’s head. Something had to be done, and it was
Oslo who stepped up to the plate.
After only 38 days in office, President Obama became the hands
down winner of this most esteemed award. According to Oslo, “his
extraordinary efforts to strengthen international diplomacy and
cooperation between peoples” was the reason for his selection. If
October 2012 How to lull a banker to sleep
Gold Reserves
(tonnes)
% of Foreign
Currency Reserves
USA 8,134 75.3%
Germany 3,396 72.3%
Italy 2,452 71.9%
France 2,435 72.0%
China 1,054 1.7%
Switzerland 1,040 16.9%
Russia 896 9.1%
Japan 765 3.2%
The Netherlands 613 60.2%
India 558 9.9%
Canada - 0.0%
Gold Reserves
Country
However, China can maintain
its stable diet of US Treasury
purchases while also buying
gold bullion with excess
reserves. This is exactly what
is happening now and with
China’s gold reserves = 1.7%
of its foreign currency
reserves – expect plenty
more gold bullion purchases
in the future. And while
considering that the US and
other countries hold gold
bullion greater than 70% of their foreign currency reserves, the
upside for Chinese purchases is substantial.
Source: World Gold Council June 2012

7. www.IceCapAssetManagement.com 6
President Obama achieved this after only 38 days in office, imagine
what he’d do over the next 1,422 days in office. High expectations
indeed.
In 2012, Oslo once again thought it was time to improve the World’s
morale and future expectations. And what better place to start than
Europe.
It’s no secret by now that Europe has been struggling somewhat. It
seems that all these money problems really can harm the psyche
after a while. Since no one in Brussels, Paris, Berlin or Washington
have been able to set things right, once again it was up to Oslo to
lead the way. And lead they did, by announcing that the 2012 winner
of the Nobel Peace Prize was – the European Union.
The committee noted that for over “six decades,” the European
Union has “contributed to the advancement of peace and
reconciliation, democracy and human rights in Europe.” Well, at least
they didn’t base it upon 38 days of work.
While the European Council and the Council of European Union
celebrate this much deserved award, celebrations elsewhere across
the old world are somewhat muted.
After all, democracy is when the most votes win. Yet, forcing Ireland
to continue having EU related referendums until they vote “yes” and
forcing unelected leaders on the people of Greece and Italy (and soon
to be followed in Spain) doesn’t exactly meet the sniff test.
October 2012 How to lull a banker to sleep
As for “peace and reconciliation,” chart 2 on the next page shows
exactly how that’s working out in Europe these days.
It is true that France and Germany haven’t been to war for a long
time. It is also true the Italians have not tried to re-establish the
original axis of evil. Yet, the imagination that the European Union has
set the stage for World peace has been stretched to its limits.
Perhaps Oslo is right, a little hope and change will help resolve the
European debt crisis. Or perhaps not.
From our perspective, bad debt continues to clog the system, while
private capital seeks safer places to sleep. There’s no question that a
financial war has indeed been waged. However, the days of foreign
troops patrolling conquered streets are no where close to becoming a
reality a this point. Rather, the real threat to the European Union’s
Nobel Peace prize lies within the social strife enveloping the
nations. From dramatic marches, demonstrations and strikes in the
southern countries to the growing political unease in the northern
countries.
European times are a-changin’. And in some ways, perhaps the folks
in Oslo were correct to bring this to the World’s attention. After all,
no one else is interested in taking the lead at this point in time.
Inflation
Inflation is often misunderstood by many. Most people see inflation
as the price of goods as measured by the CPI. Yet, inflation exists in
Bob Dylan wins Nobel Peace Prize

8. Chart 2: Nobel Peace Prize Winner 2012 - Europe
www.IceCapAssetManagement.com 7
October 2012 How to lull a banker to sleep
2012 Athens, Greece 2012 Barcelona, Spain
2012 Rome, Italy 2012 Lisbon, PortugalSource: the internet

9. Don’t cross the Rubicon
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October 2012 How to lull a banker to sleep
8
This scenario is happening in real life Europe today. Banks and
governments are doing their best stop it. While few so called financial
experts refuse to step back, adjust their glasses, it's actually quite
easy to see the private capital fleeing Greece, Spain and Italy while
the governments in charge desperately try to replace private capital
with capital created out of thin air.
Europe remains in serious trouble, do not be fooled into thinking
that all money and capital is equal because it isn't. Long-term
sustainable economic growth, product innovation and profit is
created by private capital - not fake printed money.
Today, of course we get to watch not only the Europeans destroy
their currency, but also the Americans, Japanese and British. The not
so funny thing is that, as each of these formidable economic super
powers rush to crush their own currency, they actually do not lose
value relatively to each other. Rather, the true loss in real terms will
be relative to the countries who are not printing money including
Canada, Australia, New Zealand and Singapore as well as to gold.
While each of these countries will always remain economically
sensitive, the absence of money printing should attract foreign direct
investment which will lead to stronger economies, stronger banks
and stronger currencies.
The point to never forget is that the moment you cross the money
printing Rubicon, is the moment you raise the white flag and
surrender yourself to a future of currency debasement.
other goods or assets as well. Today, money printing effectively
increases the supply of money available to buy stuff. Yet, the stuff
people are buying is stocks and bonds, and this is where many
financial and investment pundits are missing the boat. While stocks
are going higher, it is not due to earnings increasing rather it is due to
asset inflation resulting from the money printing.
Unfortunately, many not so funny things can happen along the road
of asset inflation. Firstly, some type of commodity will attract money
and it's price will rise. However, unlike iPhones or Chevy volts, the
supply of many commodities is inelastic meaning additional supply
cannot quickly be created to meet new demand - this results in the
price inflation that we normally think of.
Now, the big whopper called hyper inflation does not start due to
rising prices from inventory adjustments. Rather the hyper inflation
many are so afraid of today will undoubtedly be caused by money
printing. However the catalyst of this hyper inflation trigger will be
the resulting currency crisis.
As an economy quickly declines, private investors increasingly pull
their money from the banks forcing the banks to collapse which
simultaneously contributes to the currency collapsing. The result is a
lack of confidence and faith in that country which starts a currency
crisis. It is this severe decline in the currency that ultimately leads to
hyper inflation, but only for that specific country.

10. Fake money
www.IceCapAssetManagement.com 9
Global Growth
Since the bazooka money printing announcements by the Americans
and Europeans in September, all headline making systems have been
shut down.
No more news about Spain being broke. No more news about Greece
needing a 25th bailout, and certainly no more news about Bollinger
and banks being naughty. Until the US Election is over, the financial
World will continue to operate in a vacuum.
However, that hasn’t stopped some people from taking notice.
Originally the European debt crisis would only affect the periphery -
the core was safe.
Now that the core certainly is being dragged lower, it was widely
believed that China and the rest of Asia wouldn’t be affected.
Of course, now that China and Asia are being affected, analysts and
pundits have drawn a line in the American sand – there is no way
possible the European recession would hit American shores.
Well, now it seems we (and countless big American companies) have
news for you – the American slowdown is coming and it’s right
around the bend. Yes, US Q3 GDP was respectable at +2%. Yet this
was for the last three months. Looking forward all you need to do is
to listen and read the warning shots coming from real companies in
real industries.
McDonalds, General Electric, DuPont, Microsoft, IBM and even i-
crazy Apple have all said that next quarter their revenues and
earnings will be less than originally forecast. These daily economic
barometers are telling us that the World is slowing and it will hit the
American economy later this year.
Will the slowdown be enough to cause a recession? We don’t know.
What we do know is that any hopes for a recovery at escape velocity
speed will be greatly disappointed.
People tend to forget that between 1900 and 2008, the economy
produced countless escape velocity type recoveries. Yet, during this
same period we had no instances of 0% interest rates, nor did we see
any money printing from the World economic powers.
Instead, today interest rates are effectively at 0% everywhere and we
have almost $6 trillion in fake money printing over the last 4 years.
October 2012 How to lull a banker to sleep
$0
$1,000,000,000,000
$2,000,000,000,000
$3,000,000,000,000
$4,000,000,000,000
$5,000,000,000,000
$6,000,000,000,000
$7,000,000,000,000
Total Fake Money
1930 to 2008
Total Fake Money
2009 to 2012
Quantitative Easing by
USA, Britain, Europe and Japan
Source: IceCap Asset Management and Goldman Sachs Global Economics

11. Relative calmness is over
www.IceCapAssetManagement.com
We still caution people, investors and machines to respect that the
financial World today remains stuck in a moment never experienced
before. Weird, wonderful and un-wonderful things will occur and for
that reason we suggest you remain alert and do not become
hypnotized from the state of relative calmness recently experienced.
Our Strategy
A short month ago, we concluded that we remain very concerned
about both the real economy and the now all-in actions of money
printing by the Americans and Europeans. Simultaneously, we
balanced this economic outlook with the likelihood that financial
markets would react positively and that we would be adjusting our
strategy.
While our bond strategies have changed to capture additional yield,
our stock holdings have not changed. Stock market optimism has
improved from elevated levels, and we’ll continue to remain patient
until this subsides further.
Once the American election is over, the market’s relative state of
calmness will also be over. Europe and Greece and Spain will once
again make headlines, as will the pending American fiscal cliff. In
short, prepare yourself for a year-end market frenzy – up or down.
Going forward, the key will be whether America falls into recession. If
it does, financial markets will react to the negative side. If not, we
continue to see near-term opportunities in short duration credit as
well as within equities.
The potential for Europe’s crisis to deteriorate even further is alive
and well. In just a few short days, Greece will need another bailout.
Meanwhile, everyone waits to see exactly when Spain requests their
bailout. The waiting game continues.
Regarding gold bullion, we continue to hold it in our portfolios which
naturally allows us to sleep very well at night.
As always, we’d be pleased to speak with anyone about our
investment management capabilities. As well, we encourage you to
share our global market outlook with those who you think may find it
of interest.
Please feel free to contact:
John Corney at johncorney@IceCapAssetManagement.com or
Keith Dicker at keithdicker@IceCapAssetManagement.com.
Thank you for sharing your time with us.
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October 2012 How to lull a banker to sleep