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Gold Money

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  1. GoldMoney

  2. Title Slide Box Title & Headline Title & Headline GoldMoney The Role of Gold in The 21st Century James Turk 27 January 2011 Cheviot Sound Money Conference London Document slug: date/pp #

  3. Title Slide Box Title & Headline Title & Headline One of the best performing asset classes GoldMoney

  4. Title Slide Box Title & Headline Title & Headline Gold is money GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 British pound 6000 4000 2000 0 50 55 60 65 70 75 80 85 90 95 00 05 10

  5. Title Slide Box Title & Headline Title & Headline Gold is money GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 British pound 6000 US dollar 4000 2000 0 50 55 60 65 70 75 80 85 90 95 00 05 10

  6. Title Slide Box Title & Headline Title & Headline Gold is money GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 British pound 6000 US dollar 4000 euro 2000 0 50 55 60 65 70 75 80 85 90 95 00 05 10

  7. Title Slide Box Title & Headline Title & Headline Gold is money GoldMoney Crude Oil Prices (Base of 100) January 1950 through December 2010 8000 British pound 6000 US dollar 4000 euro goldgram 2000 0 50 55 60 65 70 75 80 85 90 95 00 05 10

  8. Title Slide Box Title & Headline Title & Headline Portfolio composition GoldMoney 100% INVESTMENTS 50% LIQUIDITY 0

  9. Title Slide Box Title & Headline Title & Headline Portfolio composition GoldMoney 100% INVESTMENTS (wealth producing assets) 50% LIQUIDITY 0

  10. Title Slide Box Title & Headline Title & Headline Portfolio composition GoldMoney 100% INVESTMENTS (wealth producing assets) 50% LIQUIDITY (wealth preserving assets) 0

  11. Title Slide Box Title & Headline Title & Headline Portfolio composition GoldMoney 100% - Risk / Reward - INVESTMENTS (wealth producing assets) 50% LIQUIDITY (wealth preserving assets) 0

  12. Title Slide Box Title & Headline Title & Headline Portfolio composition GoldMoney 100% - Risk / Reward - INVESTMENTS (wealth producing assets) 50% - Safety - LIQUIDITY (wealth preserving assets) 0

  13. Title Slide Box Title & Headline Title & Headline Portfolio measurement GoldMoney 100% - Risk / Reward - INVESTMENTS (wealth producing assets) Units of 50% Wealth - Safety - LIQUIDITY (wealth preserving assets) 0

  14. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different Document slug: date/pp #

  15. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed Document slug: date/pp #

  16. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production Document slug: date/pp #

  17. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production • value derives from usefulness Document slug: date/pp #

  18. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production • value derives from usefulness • food Document slug: date/pp #

  19. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production • value derives from usefulness • food • shelter Document slug: date/pp #

  20. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production • value derives from usefulness • food • shelter • communication (interaction in society) Document slug: date/pp #

  21. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Gold is special because it is different • accumulated (saved); not consumed • large aboveground stock relative to annual production • value derives from usefulness • food • shelter • communication (interaction in society) • Gold is special because it is money Document slug: date/pp #

  22. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Money is a mental tool that enables economic calculation Document slug: date/pp #

  23. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Money is a mental tool that enables economic calculation • unchanged throughout history Document slug: date/pp #

  24. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Money is a mental tool that enables economic calculation • unchanged throughout history • Currency is a medium of exchange Document slug: date/pp #

  25. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Money is a mental tool that enables economic calculation • unchanged throughout history • Currency is a medium of exchange • improves as a result of technological innovations Document slug: date/pp #

  26. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 Document slug: date/pp #

  27. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 • ‘invention’ of paper currency Document slug: date/pp #

  28. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 • ‘invention’ of paper currency • banknotes circulated current in place of gold/silver coins safely stored in vault Document slug: date/pp #

  29. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 • ‘invention’ of paper currency • banknotes circulated current in place of gold/silver coins safely stored in vault • currency changes from a tangible asset to a bank liability Document slug: date/pp #

  30. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 • ‘invention’ of paper currency • banknotes circulated current in place of gold/silver coins safely stored in vault • currency changes from a tangible asset to a bank liability • creation of payment risk a/k/a “Herstatt risk” Document slug: date/pp #

  31. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Bank of England established, 1694 • ‘invention’ of paper currency • banknotes circulated current in place of gold/silver coins safely stored in vault • currency changes from a tangible asset to a bank liability • creation of payment risk a/k/a “Herstatt risk” • first bank crisis in 1696 Document slug: date/pp #

  32. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 Document slug: date/pp #

  33. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 • defined one British pound as an unchanging weight of gold Document slug: date/pp #

  34. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 • defined one British pound as an unchanging weight of gold • pound banknote redeemable into gold on demand Document slug: date/pp #

  35. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 • defined one British pound as an unchanging weight of gold • pound banknote redeemable into gold on demand • Bank of England responsible for ensuring redeemability Document slug: date/pp #

  36. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 • defined one British pound as an unchanging weight of gold • pound banknote redeemable into gold on demand • Bank of England responsible for ensuring redeemability • voluntary rules ensure system’s automaticity Document slug: date/pp #

  37. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Newton’s Gold Standard, 1700-1914 • defined one British pound as an unchanging weight of gold • pound banknote redeemable into gold on demand • Bank of England responsible for ensuring redeemability • voluntary rules ensure system’s automaticity • gold is backbone of British empire Document slug: date/pp #

  38. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 Document slug: date/pp #

  39. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes Document slug: date/pp #

  40. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes • unintended consequence is the development of deposit currency Document slug: date/pp #

  41. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes • unintended consequence is the development of deposit currency • payment risk escalates Document slug: date/pp #

  42. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes • unintended consequence is the development of deposit currency • payment risk escalates • new British banking model eventually adopted worldwide Document slug: date/pp #

  43. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes • unintended consequence is the development of deposit currency • payment risk escalates • new British banking model eventually adopted worldwide • seed for “too big too fail” Document slug: date/pp #

  44. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Peel’s Bank Act, 1844 • limits quantity of pound banknotes • unintended consequence is the development of deposit currency • payment risk escalates • new British banking model eventually adopted worldwide • seed for “too big too fail” • 2 functions within one bank Document slug: date/pp #

  45. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution begins Document slug: date/pp #

  46. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution begins • “The gold standard is already a barbarous relic.” J.M. Keynes, 1923 Document slug: date/pp #

  47. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution begins • “The gold standard is already a barbarous relic.” J.M. Keynes, 1923 • governments chafe at the discipline imposed by the gold standard Document slug: date/pp #

  48. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution begins • “The gold standard is already a barbarous relic.” J.M. Keynes, 1923 • governments chafe at the discipline imposed by the gold standard • governments claim that currency managed by central banks can eliminate the boom/bust cycle Document slug: date/pp #

  49. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution succeeds Document slug: date/pp #

  50. Title Slide Box Title & Headline Title & Headline Gold, money & currency GoldMoney • Keynesian revolution succeeds • ‘Gold Standard’ finally disappears 1971 Document slug: date/pp #