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GOLD …. What’s Going On? UK Investor Show, April 13, 2012. Target 1: Dow : Gold … 2: 1. Target 2: UK House Prices < 100 oz of gold. Target 3: End Of Negative Real Rates. CPI = 2.8 % RPI = 3.2% Is real inflation higher? Bank Of England Rate 0.5%. Cash loses you c. 3% per year

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slide1

GOLD …

What’s Going On?

UK Investor Show, April 13, 2012

target 3 end of negative real rates
Target 3: End Of Negative Real Rates
  • CPI = 2.8%
  • RPI = 3.2%
  • Is real inflation higher?
  • Bank Of England Rate 0.5%.
  • Cash loses you c. 3% per year
  • NRR better than last year, but still negative.
target 4 us gold matches us debt
Target 4: US gold matches US debt

Gold's role "during periods of monetary stress" is to "balance the international balance sheet of the USA". Jim Sinclair

slide8

21st January 1980 Sinclair sold his gold, the day it spiked it to $850.

  • The value of US gold ($221bn) exceeded US monetary base ($160bn) by 140%
slide9

According to the US Treasury the US has 261.5 millionoz of gold.

  • Fort Knox gold has not been independently audited in 50 years.
  • In his book Good As Gold Chris Weber argues all the gold is not there. Let us assume it is.
  • At $1,500 per oz that gold is worth $392 billion, or $0.392 trillion.
slide10

US National Debt is currently almost $16.8 trn

  • US Total Debt is $59trn
  • US Monetary base now = $3trn
slide11

US Monetary base now = $3trn

  • If US gold = 100% US paper, gold price would be $11,494 oz(3trn/261m oz)
  • If US Gold = 140% US paper, gold would be $16,000 oz
  • And rising …
slide12

If US were to pay all its $16trn debt with its gold, gold price would be …

  • $17 trn / 261 million =
slide14

If US were to pay all its $16trn debt with its gold, gold price would be …

  • $17 trn / 261 million =

$65,134 per ounce

slide16

In a world awash in unpayable debt …

  • Obsessed with growth
  • Where so-called austerity makes governments unpopular … and unelectable …
  • system that relies on ever-expanding debt to function and grow
target 5 fiscal sanity returns to govt
Target 5: Fiscal Sanity Returns to Govt.
  • Rates are too low, yet will stay low.
  • Policy-makers always take the path of least resistance, which means they will print.
  • Austerity a sham. TullettPrebonreport shows public spending has hardly been reduced. 1% down on last year. 3.4% UP on Labour’s last year.
  • Deficit only been cut through tax rises.
  • Do public and media want spending cuts?
slide21

Can you explain to me why, with currency wars, currency debasement, European turmoil, confiscation in Cyprus, economic and political uncertainty, North Korea etcetc, why gold is behaving like a risk asset ?

slide27

In March COT reported Gold short positions reached the highest level in over a decade

  • In early March Gold's Public Opinion reached one of the lowest levels in at least a decade
  • Last week COT reported Silver short positions reached the highest level in almost two decades
  • Last week Silver's Public Opinion reached one of the lowest levels in at least a decade