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

• NRR better than last year, but still negative.

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

• 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%

• According to the US Treasury the US has 261.5 million oz 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.

• US National Debt is currently almost $16.8 trn

• US Total Debt is $59trn

• US Monetary base now = $3 trn

• US Monetary base now = $3 trn

• 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 …

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

• $17 trn / 261 million =

LOL

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

• $17 trn / 261 million =

$65,134 per ounce

• 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.

• 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. Tullett Prebon report 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?

Cameron and Osborne’s Economic Policy

Target 6 – UK Govt. buys

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

Why is gold falling?

Because it is.

• 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

Biggest lesson investing :

Nobody knows anything