Hinde Gold Fund Singularity â€“ Transcendent Money

Hinde Gold FundSingularity – Transcendent MoneyGold Symposium, Sydney AustraliaNovember 2011

All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed. The presentation is for information purposes only and is not a solicitation to invest. Unauthorized reproduction or distribution is strictly prohibited.

HINDE GOLD FUND November 2011Singularity – Transcendent MoneyConfidential

SINGULARITY – TRANSCENDENT MONEY KEY CONCEPTS

– Singularity

– Exponential vs Linear Growth Trends

– Law of Accelerating Returns vs Law of Diminishing Returns

– Financial Oppression

– Internet Reformation

– Transcendent Money

– Monetary Singularity

02



SINGULARITY - MATHEMATICAL

Source: Ray Kurzweil, 199903



SINGULARITY – SCHWARZCHILD BLACK HOLE

04


SINGULARITY – “MOTHER OF ALL”Big Bang - (Keplers) Supernova nucleosynthesis.

05




SINGULARITY – TECHNOLOGICAL“ The singularity will allow us to transcend the limitations of our biological bodies and brains. There will be no distinction, post singularity, between human and machine.”


COUNTDOWN TO SINGULARITY



SINGULARITY – EXPONENTIAL TRENDLinear vs Exponential trend growth. Note the initial imperceptible growth which accelerates at a point in time called the “Knee of the curve”.


LINEAR VS EXPONENTIAL GROWTH



SINGULARITY – LAW OF ACCELERATING RETURNSExponential curve on Log Scale – the exponential of the rate of exponential.


EXPONENTIAL GROWTH OF COMPUTING



SINGULARITY – MOORE’S LAW Dynamic RAM (Random Access Memory) illustrates Moore’s Law.

DRAM size shrink by half every 5.4 years.Cost of DRAM per square millimeter falling - DRAM bits per dollar doubles every 1.5 years.


DYNAMIC RAM PRICEDYNAMIC RAM

SINGULARITY - PRODUCTIVITYHalf-lifes or Doubling times.




10



SINGULARITY – PROGRESSIVE PURCHASING POWER


PROCESSOR PERFORMANCE



SINGULARITY – PRODUCTIVITYDemand outstrips deflation in cost of information technologies.


TOTAL BITS SHIPPED


SINGULARITY – PRODUCTIVITY MIRACLE?Real GDP growth. A productivity miracle or a function of credit expansion?



REAL GROSS DOMESTIC PRODUCT



SINGULARITY – LAW OF DIMINISHING RETURNS

Source: Marc Faber – Gloom Doom Boom Report14

- 0. 4

- 0. 2

0. 0

0. 2

0. 4

0. 6

0. 8

1. 0

1. 2

1. 4

Sep

-60

Sep

-63

Sep

-66

Sep

-69

Sep

-72

Sep

-75

Sep

-78

Sep

-81

Sep

-84

Sep

-87

Sep

-90

Sep

-93

Sep

-96

Sep

-99

Sep

-02

Sep

-05

Sep

-08

Annual c hange in GD P d ivid ed b y the annual c hange in total d eb t to GD P , 4Q m ov average.

DIMINISHING RETURNS FROM AN ADDITIONAL $1 OF DEBT IN THE US ECONOMY



SINGULARITY – LINEAR DEBT TRENDS

15

400%

200%

0%

-200%

-400%

-600%

-800%

-10,00%

-1,200%

-1,400%

-1,600%

-1,800%

Italy Germany France Portugal UnitedStates

UnitedKingdom

Spain Ireland Greece

Source: EU Commission, Eurostat, CBO, IMF, Morgan Stanley Research

TOTAL DEBT & LIABILITIES AS % OF GDP

Cost of ageing Structural deficit Initial debt level



SINGULARITY – EXPONENTIAL DEBT TRENDS

16

0. 0

2, 000. 0

4, 000. 0

6 , 000. 0

8, 000. 0

10, 000. 0

12, 000. 0

Dec

-58

Dec

-60

Dec

-62

Dec

-64

Dec

-66

Dec

-68

Dec

-70

Dec

-72

Dec

-74

Dec

-76

Dec

-78

Dec

-80

Dec

-82

Dec

-84

Dec

-86

Dec

-88

Dec

-90

Dec

-92

Dec

-94

Dec

-96

Dec

-98

Dec

-00

Dec

-02

Dec

-04

Dec

-06

Dec

-08

Dec

-10

Dec

-12

M 2 (U SD b illion) E x ponential F orc ast

0. 0

10, 000. 0

20, 000. 0

30, 000. 0

40, 000. 0

5 0, 000. 0

6 0, 000. 0

Dec

-58

Dec

-60

Dec

-62

Dec

-64

Dec

-66

Dec

-68

Dec

-70

Dec

-72

Dec

-74

Dec

-76

Dec

-78

Dec

-80

Dec

-82

Dec

-84

Dec

-86

Dec

-88

Dec

-90

Dec

-92

Dec

-94

Dec

-96

Dec

-98

Dec

-00

Dec

-02

Dec

-04

Dec

-06

Dec

-08

Dec

-10

Dec

-12

T otal D eb t (U SD b illion) E x ponential F orc ast

THE US M2 FITTED TO AN EXPONENTIAL TREND THE US TOTAL DEBT (IN USD BILLION) FITTED TO AN EXPONENTIAL TREND



SINGULARITY – LOG MONETARY TREND

17

6.0

6.5

7.0

7.5

8.0

Dec-95

Jul-96

Feb-97

Sep-97

Apr-98

Nov-98

Jun-99

Jan-00

Aug-00

Mar-01

Oct-01

May-02

Dec-02

Jul-03

Feb-04

Sep-04

Apr-05

Nov-05

Jun-06

Jan-07

Aug-07

US MONETARY BASE (LOG TERMS)



SINGULARITY – MONEY VELOCITY

18

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Jun-6

1

Jun-6

4

Jun-6

7

Jun-7

0

Jun-7

3

Jun-7

6

Jun-7

9

Jun-8

2

Jun-8

5

Jun-8

8

Jun-9

1

Jun-9

4

Jun-9

7

Jun-0

0

Jun-0

3

Jun-0

6

Jun-0

9

Recessions Monetary Velocity YoY

MONETARY VELOCITY YOY



SINGULARITY – “PUMPTY PUMPTY PUMP...”

19



SINGULARITY – E.F.S.F.European Financial Stability Facility or European FUBAR Slush Fund?

“ It is tied to higher risks of losses and to increased sharing of risks. The way they are constructed, the leveraging instruments are not too different from those which are responsible for creating the crisis, because they are concealed risks.”

Jens Weidmann, President of the German Bundesbank20



21

SINGULARITY – MONOLINEAMBAC: the muni and sub-prime monoline insurer. A taste of things to come for the EFSF monoline insurer?

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0Jul-91

Jul-92

Jul-93

Jul-94

Jul-95

Jul-96

Jul-97

Jul-98

Jul-99

Jul-00

Jul-01

Jul-02

Jul-03

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

AMBAC US (SHARE PRICE)



SINGULARITY – GLOBAL MONETARY TRENDSUK QE has been 45% bigger than the Fed’s QE.

22

0

100,000

200,000

300,000

400,000

500,000

600,000

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

Sep-11

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

Sep-11

BANK OF ENGLAND TOTAL ASSETS ECB TOTAL ASSETS



SINGULARITY – GLOBAL MONETARY TRENDSThe illusion of sobriety.

23

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Oct-

08

Dec-0

8

Feb-0

9

Apr-

09

Jun-0

9

Aug-0

9

Oct-

09

Dec-0

9

Feb-1

0

Apr-

10

Jun-1

0

Aug-1

0

Oct-

10

Dec-1

0

Feb-1

1

Apr-

11

Jun-1

1

Aug-1

1

Oct-

11

Agencies MBS US Treasuries

COMPOSITION OF FED BALANCE SHEET, SECURITIES PORTFOLIO

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Apr-98

Oct-98

Apr-99

Oct-99

Apr-00

Oct-00

Apr-01

Oct-01

Apr-02

Oct-02

Apr-03

Oct-03

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

JAPAN BOJ BALANCE SHEET TOTAL ASSETS (100 MILL JPY)



SINGULARITY – PRICE TRENDSQE impact on corporate bond spreads, S&P500, Commodities and Dollar.

24

300

35 0

400

45 0

5 00

5 5 0

6 00

6 5 0

7 00

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

400

420

440

46 0

480

5 00

QE 1

On H old to 2013

C ontinuous C om m od ity I nd ex

Asian C urrenc y I nd ex (R H S)

QE 2

CONTINUOUS COMMODITY INDEX AND ASIAN CCY INDEX

5 00

7 00

900

1, 100

1, 300

1, 5 00

1, 7 00

1, 900

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

QE 1

QE 2

On H old to 2013

S& P

BAA C orp Spread (sc aled )

BAA CORP SPREAD AND S&P RATIO



SINGULARITY – COMMODITY VS FIAT PAPER MONEYGold price (y) or (1/x) is an inverse function of paper money (x).

25P urch asing P ow er of F iat M oney (incr easing) >

Gold P rice

PURCHASING POWER OF FIAT MONEY AND THE GOLD PRICE



SINGULARITY – FINANCIAL OPPRESSION

Monetary and Fiscal Policy at a ‘practical limit’

Financial Legislation, regulation and taxation enables ‘Capital Conscription’

Conscripted Capital ie ‘grab’ capital mandatorily

• Quantitative and Qualitative Easing (financial repression) • ‘Dodd-Frank –esque’ Global Financial Regulation Acts • Nationalisation of Money Centres and Pension companies • FATCA, FTT or Tobin Tax, Double Tax Treaties (US, UK and Switzerland)

• Mining Taxes, Windfall Taxes, Nationalisation of Mines

26



SINGULARITY – FINANCIAL OPPRESSIONGame of Twist(er) anyone?

27

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Jan-80

Jan-82

Jan-84

Jan-86

Jan-88

Jan-90

Jan-92

Jan-94

Jan-96

Jan-98

Jan-00

Jan-02

Jan-04

Jan-06

Jan-08

Jan-10

US 30Y GOVERNMENT BOND YIELDS



SINGULARITY – FINANCIAL OPPRESSIONNet central bank purchases of US Treasuries as a % of total issuance.

Central Bank printers financing US government.

Source: Russell Napier, CLSA 28

HINDE GOLD FUND OUTPERFORMANCE(BASED AT 100 ; OCTOBER 2008)

75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11

Cumulative Net Overall AlphaCumulative Strategic (Gross)Cumultaive Juniors (Gross)

160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NET CENTRAL - BANK PURCHASES OF US TREASURIES AS A % OF ISSUANCE

(%)

FOREIGN CENTRAL BANKS’ SHARE OF TREASURY MARKET HAS PEAKED

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)

SHARE OF TREASURY MARKET NOT OWNED BY CENTRAL BANKS

90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)

US PAPER COMMERCIAL OUTSTANDING

2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)

US CORPORATE PROFITS AFTER TAX (NIPA DATA) AND S&P500 REPORTED EPS

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0

US CORPORATE PROFITS AFTER TAXS&P500 REPORTED EARNINGS (RHS)

(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10

CORPORATE TAX TAKE AS A % OF GDP



SINGULARITY – FINANCIAL OPPRESSIONForeign central banks’ Treasury market share peaked at close to 40%.



75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11


160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


(%)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)


90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)


2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)


81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0


(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10




SINGULARITY – FINANCIAL OPPRESSIONTreasury Market share not owned by central banks.



75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11


160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


(%)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)


90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)


2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)


81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0


(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10




SINGULARITY – FINANCIAL OPPRESSIONUS commercial paper outstanding is falling as government issuance crowds out private sector.

Source: Russell Napier, CLSA31


75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11


160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


(%)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)


90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)


2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)


81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0


(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10




SINGULARITY – FINANCIAL OPPRESSIONCorporate profits too high in US.



75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11


160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


(%)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)


90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)


2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)


81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0


(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10




SINGULARITY – FINANCIAL OPPRESSIONCorporate tax rate only going to rise.



75

100

125

150

175

Oct

-08

Dec

-08

Feb

-09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb

-10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb

-11

Apr

-11

Jun-

11


160

140

120

100

80

60

40

20

0

(20)

(40)2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


(%)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

20

18

22

24

26

28

30

30

34

36

38

40 (%)


90

85

80

75

70

65

60

55

501961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

(%)


2007 2008 2009 2010 2011

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

(US$bn)


81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 110

90

80

70

60

50

40

30

20

10

1,100

1,100

900

800

700

600

500

400

300

200

100

0


(US$bn)

(%)

150

2

3

4

5

6

7

8

9

55 60 65 70 75 80 85 90 95 00 05 10




SINGULARITY – OCCUPY WALL STREETA singular misjudgment by protestors?

34



SINGULARITY – INTERNET REFORMATIONAn exponential social paradigm – the World Wide Web.


MASS USE OF INVENTIONS

SINGULARITY – GOVT INDUCED MONEY AMNESIA

Dali’s Disintegration of Memory A metaphor for government induced ‘Money Amnesia’?



36


SINGULARITY – EVOLUTION OF FACEBOOKFacts & figures: Since 2004

People on FacebookMore than 800 million active usersMore than 50% of our active users log on to Facebook in any given day

Activity on Facebook More than 900 million objects that people interact with (pages, groups, events and community pages) On average, more than 250 million photos are uploaded per day

Global ReachMore than 70 languages available on the site

PlatformOn average, people on Facebook install apps more than 20 million times every day

MobileMore than 350 million active users currently access Facebook through their mobile devices More than 475 mobile operators globally work to deploy and promote Facebook mobile products

Source: www.website-monitoring.com 37




SINGULARITY – Twitter, and Facebook more widely used in India, Indonesia vs any other countries.

38



SINGULARITY – THE FACEBOOK REVOLUTIONSocial consequences of the evolution of the World Wide Web.

“Money won’t create success, the freedom to make it will.” Nelson Mandela

39



SINGULARITY – DEMOTIXA citizen journalism and photo agency website. Co-founded by Jonathan Tepper of Hinde Capital. Now in partnership with Corbis, a Bill Gate’s owned company.

A Hindu woman lights lamps on the occasion of Diwali and Laxmi Puja. Diwali is popularly known as the ‘Festival of Lights’. 40



SINGULARITY – TRANSFORMATIONAL TECHNOLOGYSnaptu: ‘A world of free apps on any phone’! Social networking & lifestyle application’s running ‘in the Cloud’.

• Founded August 2007, acquired by Facebook April 2011 for $70m• 42m users, growing at 3.5m per month• Funded by Sequoia Capital (Google, YouTube, Yahoo…)

41



SINGULARITY – EXPONENTIAL ADOPTION RATES

Source: Snaptu marketing presentation 201142

45,000,000

40,000,000

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

JAN

09

MA

R 0

9

MAY

09

JUL

09

SE

P 09

NO

V 0

9

JAN

10

MA

R 1

0

MAY

10

JJU

L 10

SE

P 10

NO

V 1

0

JAN

11

MA

R 1

10

TOTAL SNAPTU UNIQUE USERS

POWER LAW OF PARTICIPATION

COLLABORATIVE INTELLIGENCE

COLLECTIVEINTELLIGENCE

PERIPHERY CORE

HIGH ENGAGEMENT

WITH COMMUNITY

LOW THRESHOLD WITH TOOL

READFAVORITE

TAGCOMMENT

SUBSCRIBESHARENETWORK

WRITEREFACTORCOLLABORATE

MODERATELEAD



SINGULARITY – POWER LAW OF PARTICIPATIONPower Law of Participation. Content created by the few taken up by the many.

43

45,000,000

40,000,000

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

JAN

09

MA

R 0

9

MAY

09

JUL

09

SE

P 09

NO

V 0

9

JAN

10

MA

R 1

0

MAY

10

JJU

L 10

SE

P 10

NO

V 1

0

JAN

11

MA

R 1

10

TOTAL SNAPTU UNIQUE USERS

POWER LAW OF PARTICIPATION

COLLABORATIVE INTELLIGENCE

COLLECTIVEINTELLIGENCE

PERIPHERY CORE

HIGH ENGAGEMENT

WITH COMMUNITY

LOW THRESHOLD WITH TOOL

READFAVORITE

TAGCOMMENT

SUBSCRIBESHARENETWORK

WRITEREFACTORCOLLABORATE

MODERATELEAD

US $ Trillion US $ Trillion



SINGULARITY – EXPONENTIAL ASSET GROWTHGlobal financial assets have risen 17-fold over the last 3 decades from $12.3 trillion to nearly $210 trillion.

Gold has not kept up with this rate of growth, and this doesn’t account for the quadrillion dollars in worldwide derivatives.

Source: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group44

Percent Percent



SINGULARITY – GOLD ADOPTION RATES LOWGold investor holdings stands at $2.0 trillion (Nov 2011), 0.96% of Global Financial Assets (GFA). In 2000 gold holdings were worth $227 billion, or 0.2% of GFA, but this isn’t the whole story...

Source: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group, as of end of Dec. 201045

Gold Investor Holdings = 0.96% of Global Financial Assets (Nov 2011)



SINGULARITY – GOLD ADOPTION RATES LOW• Today 0.2% would be worth $1.45 trillion ($1800 troy oz. Au) or 0.7% of Global Financial

Assets (GFA).

• Therefore new investment gold only provided 0.26% increase in % gold holdings.

• In 1968 to 1970 % gold holdings of GFA = 5%, to attain this % at current values of gold ($1,800), $10.4 trillion dollars need to be invested.

• $10.4 trillion is equivalent to 5.8 billion troy oz at $1,800 or 1.2 x gold ever produced.

• 5.8 billion troy oz. is 3.6 x known gold reserves (based on US Geological Survey).

• Clearly not only is public ownership miniscule, but to return to the 70s % holdings requires too much gold than these prices can handle.

• This transfer of gold will take place at much higher prices.

46



47

SINGULARITY – GOLD NOT EXPONENTIAL YETThe US monetary base is backed 15% by gold.

0%

20%

40%

6 0%

80%

100%

120%

140%

16 0%

1920 1930 1940 195 0 196 0 197 0 1980 1990 2000 2010$ 0

$ 300

$ 6 00

$ 900

$ 1, 200

$ 1, 5 00

$ 1, 800

$ 2, 100

$ 2, 400

$ 2, 7 00

Gold R eserves to M oney Supply R atio L ow (Gold U nd ervalued )

Gold R eserves to M oney Supply R atio H igh (gold E xp ensive)

M oney Supply D oub les

Gol

d R

eser

ves

as P

erce

nt M

oney

Sup

ply

US GOLD RESERVES AND MONEY SUPPLY



SINGULARITY – GOLD LINEAR PRICE TARGETS Gold is re-setting. The minimum target is US$4,000 formulated on 40% base money, which is the non-levered component ie exclusive of credit. This is the linear price target.

48

$ 10

$ 100

$ 1, 000

$ 10, 00019

20

1945

1954

1959

1964

1969

1974

1979

1983

1988

1993

1998

2003

2008

100% of M onetary Base = $ 10, 15 8/ oz 40% of M onetary Base = $ 4, 06 3/ ozAc tual Spot Gold P ric e = $ 1, 7 20/ oz

Pric

e of

Gol

d ($

oz)

100% M onetary Base 40% M onetary BaseSpot Gold P x

US GOLD RESERVES AND GOLD PRICE



SINGULARITY – GOLD EXPONENTIAL PRICE TARGETSGold is re-setting itself. The confluence of existing exponential global monetary growth, plus the spread of gold information virally via the Web – will lead to rejection of fiat currency.

49

*The underlying methodology is worth emphasizing. Global means the ECB, Fed and the PBOC (China)The implied value of Gold is found by taking the average gold backing 2010/11 times latest gold price and assuming a 40% backingThe gold used as backing of the money supply is equal to the latest holdings of Gold in FX reserves held by the ECB, the Fed and the PBOC (IMF data)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

24, 5 04

6 3, 849

16 , 336

0

10, 000

20, 000

30, 000

40, 000

5 0, 000

6 0, 000

7 0, 000

Glob al M 2 T otal C red it (U S) U S M 2

GLOBAL MONEY SUPPLY BACKED BY GOLDIMPLIED GOLD PRICE IN USD ASSUMING 40% BACKING OF MONEY SUPPLY



SINGULARITY – AUSSIE GOLD HOLDINGSIf we assume a 40% backing of gold using the gold reserves of Australia, the gold price in USD would be 232,857 USD, but clearly this figure is nonsensical as Australian gold holdings are next to none!

50

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%Nov-84

Nov-85

Nov-86

Nov-87

Nov-88

Nov-89

Nov-90

Nov-91

Nov-92

Nov-93

Nov-94

Nov-95

Nov-96

Nov-97

Nov-98

Nov-99

Nov-00

Nov-01

Nov-02

Nov-03

Nov-04

Nov-05

Nov-06

Nov-07

Nov-08

Nov-09

Nov-10

AUSTRALIAN MONEY SUPPLY (M3) BACKED BY GOLD



SINGULARITY – AUSSIE GOLD PROTECTIONAussie house prices have increased strongly in AUD terms, but they have fallen in gold terms. In addition, there seems to be a good correlation between declines in house prices (in AUD terms) and the price of gold (in AUD terms).

An investment in gold for an AUD dominated investor with a high exposure to the real estate market is a good hedge.

51

- 10%

- 5 %

0%

5 %

10%

Dec

-02

Apr

-03

Aug

-03

Dec

-03

Apr

-04

Aug

-04

Dec

-04

Apr

-05

Aug

-05

Dec

-05

Apr

-06

Aug

-06

Dec

-06

Apr

-07

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Dec

-10

Apr

-11

Aug

-11

- 4%

- 3%

- 2%

- 1%

0%

1%

2%

3%

4%

5 %

6 %

7 %

Gold in AU D , QoQ, sm oothed Australian H ouse P ric es, QoQ (inverse)

45

6 5

85

105

125

145

16 5

Dec

-02

Apr

-03

Aug

-03

Dec

-03

Apr

-04

Aug

-04

Dec

-04

Apr

-05

Aug

-05

Dec

-05

Apr

-06

Aug

-06

Dec

-06

Apr

-07

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Dec

-10

Apr

-11

Aug

-11

I n AU D I n Gold

AUSTRALIA ESTABLISHED HOUSE PRICE INDEX (2003 - 2004 = 100)

AUSTRALIA ESTABLISHED HOUSE PRICE INDEX IN AUD AND GOLD (2003 - 2004 = 100)



SINGULARITY – HYPER(BOLE)METAL CRITICALITY?

52

y = 2E-13x4 - 2E-08x3 + 0.0011x2 - 21.005x + 152036

-1,000.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

De

c-5

8

De

c-6

1

De

c-6

4

De

c-6

7

De

c-7

0

De

c-7

3

De

c-7

6

De

c-7

9

De

c-8

2

De

c-8

5

De

c-8

8

De

c-9

1

De

c-9

4

De

c-9

7

De

c-0

0

De

c-0

3

De

c-0

6

De

c-0

9

De

c-1

2

De

c-1

5

De

c-1

8

De

c-2

1

Gold USD per oz 4th order polynomial forecast

GOLD PRICE IN US DOLLAR FITTED TO A POLYNOMIAL TREND



SINGULARITY – CRITICAL EVENTS Silver Criticality – a taste of what is to come?

A mini-parabola in Silver manifested by Internet Chatter about Silver shortages. Originated by a few spread by a many.

53



SINGULARITY – HYPER(BOLE)INFLATION?High (Hyper) Inflation is a political occurrence.

“ The figures demonstrate clearly that deficits amounting to 40 per cent or more expenditures cannot be maintained. They lead to high inflation and hyperinflations...”

Peter Bernholz “Monetary Regimes & Inflation pp.71”

High (hyper) inflation is caused by financing huge public deficits through money creation.

Even 20% deficits were behind but four cases of hyperinflation.

The US government deficit is 10% of GDP, but currently the US deficit is over 30% of all government spending. The world reserve currency is in the red.

54



SINGULARITY – HYPERINFLATIONDeficit levels relative to expenditures before hyperinflation.

Source: Monetary Regimes and Inflation, Peter Bernholz55

BUDGET DEFICITS BEFORE FIVE HYPERINFLATIONS

30%

-4 -3 -2 -1 0 1

20%

40%

60%

FRANCE

80%

100%

Years prior to money reform

% o

f Spe

ndin

g m

onet

ised

BOLIVIA

BRAZIL

POLAND

GERMANY



SINGULARITY – MONEY ALIVE OR DEAD?

56



SINGULARITY – MONETARY SINGULARITY

57

SINGULARITY

LAW OF ACCELERATING RETURNS

LAW OF DIMINISHING RETURNS

FINANCIAL OPPRESSION

INTERNET REFORMATION

TRANSCENDENT MONEY

MONETARY SINGULARITY

TRANSCENDENT MONE



SINGULARITY Gold – the secret key to the financial universe.

58



HINDE GOLD FUND Hinde Gold Fund maintains a managed long exposure to the precious metals complex, primarily physical gold bullion. The Fund offers investors the opportunity to seek preservation of, and an increase in, capital.

• The Fund targets a significant return in excess of its designated benchmark, the USD spot gold bullion price.

• The core of the Fund’s investment is in allocated physical gold stored in secure vaults in a leading Swiss private bank, Julius Baer.

• The Fund provides exposure to the upside appreciation in the precious metals sector while smoothing out downside volatility.

• The Fund also has an allocation to companies engaged in mining, exploration and production in the precious metals sector.

59



60

HINDE GOLD FUND TRACK RECORD



61

HGF NOW 79% AHEAD OF ITS BENCHMARKFrom November 2008 (until October 2011), gold is up 136%, while HGF is up 215%. This equates to an outperformance of 79% points, net of all fees.

HGF - TOTAL ' OUTPERFORM ANCE' TO GOLD FROM NOV 2008

- 10%

10%

30%

5 0%

7 0%

90%

Feb-

09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb-

10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb-

11

Apr

-11

Jun-

11

Aug

-11

Oct

-11

H GF ' s outperf orm anc e to gold in % pts f rom Novem b er 2008 stand s at alm ost 7 9% (net of f ees).



HINDE GOLD FUND OUTPERFORMANCE• HGF is solidly outperforming other gold funds.

• Hinde Gold Fund is outperforming its benchmark. The benchmark until October 2008 was 50% gold and 50% gold equities. From November 2008 onwards, the benchmark has been 100% gold.

62

HGF AB OV E ITS B ENCHM ARK

20

7 0

120

17 0

220

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Benc hm ark w as 5 0% gold / 5 0% gold eq uities until Oc tob er 2008. T hereaf ter, the b enc hm ark has b een 100% gold .

W ell K now n Gold E q uity F und I Benc hm arkH ind e Gold F und W ell K now n Gold E q uity F und I I



HINDE GOLD FUND - LOWER VOLATILITY• Hinde Gold Fund’s volatility has been very close to that of its benchmark.

• Other funds have displayed considerably more volatility.

63

HGF - LOW V OLATILITY ( 12M V OL, ANNUALIZ ED)

0%

10%

20%

30%

40%

5 0%

6 0%

7 0%Ja

n-09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

H GF has show n less volatility in its returns than other w ell- k now n gold f und s

W ell K now n Gold E q uity F und I Benc hm arkH ind e Gold F und W ell K now n Gold E q uity F und I I



64

HINDE GOLD FUND OUTPERFORMANCE: QOQ

HINDE GOLD FUND: QUARTER ON QUARTER SOURCE OF ALPHA GENERATION

-10%

-5%

0%

5%

10%

15%

20%

Q3

2011

Q2

2011

Q1

2011

Q4

2010

Q3

2010

Q2

2010

Q1

2010

Q4

2009

Q3

2009

Q2

2009

Q1

2009

Q4

2008

Overall Alpha (Net) Bullion Strategy (Gross) Juniors (Gross)



WHY HINDE GOLD FUND? • Hinde Gold Fund exposes investors to upside appreciation in the precious metals sector

while smoothing out any downside volatility.

• ETFs track the gold price, with a cost. They are also a paper promise: there is no direct gold ownership. Other funds merely exaggerate the gold price, potentially losing investors more on the downside, and with higher return volatility.

• Hinde Gold Fund aims to significantly outperform the spot gold price each year, net of all fees.

Spot Gold -25% -15% 0% +15% +25%

Typical ETF -25.4% -15.4% -0.4% +14.6% +24.6%

Typical Gold Equity -50% -30% 0% +30% +50% Fund

Hinde GF* -10% 0% +15% +30% +40%

(table is illustrative)*Idealized returns on a 12m rolling basis for given return in gold.

Actual return may deviate from this. 65



66

HINDE GOLD FUND – INVESTMENT SUMMARYHinde Gold Fund is an ideal way to gain exposure to a managed investment in gold:

• A long bias gold bullion fund, which smooths downside volatility

• Aim to create a solid return above the USD spot gold price

• Invests up to 25% in small-cap gold mining holdings; average is 15%

• A secure method of owning allocated physical gold (held in Swiss Private Bank, Julius Baer)

• Three share classes available: USD, EUR and GBP

• A liquid investment – no subscription or redemption fees, and same month dealing

• Listed on the Cayman Stock Exchange



67

HINDE CAPITAL: A HIGHLY SECURE INVESTMENT ETFs and other vehicles for gold investment have inherent risks investors may be unaware of. An investment in gold should hedge out all possible credit risks. Hinde Gold Fund achieves this by investing in allocated gold bullion.

Hinde Gold Fund employs KPMG Switzerland to undertake an annual audit of its gold holdings.

Allocated Gold Bullion (stored at secure vaults in viable jurisdiction)

Unallocated Gold Bullion

Comex & Tocom Futures (warning potential hotspot)

Physical Bullion ETFs (warning hotspot)

Swaps & Derivatives

Other

Wealth Store

Default Risk

Safer

Increased Risk

Default Risk

Wealth Store

Increased Risk

Safer



68

HINDE CAPITAL: ORGANIZATION Hinde Capital’s structure ensures the Firm’s operations are thoroughly audited and transparent.

Investment Manager

Hinde Gold Fund Ltd(BVI)

Hinde Equity Fund Ltd (Cayman)

Auditor KPMG (Ireland)

Hinde Gold Feeder Fund L.P. (Delaware)

Hinde Gold Feeder Fund Ltd (Cayman Stock

Exchange listed)

Hinde Equity Feeder Fund L.P. (Delaware)

Hinde Equity Feeder Fund Ltd (Cayman)

Prime BrokerNewedge (UK)

Legal UKCummings

Legal BVI/CatmanAppleby

Bullion CustodianBank Julius Bar Zurich

(Switzerland)

AdministratorSwiss Financial Services

(Ireland)



HINDE CAPITAL: INVESTMENT MANAGERSBen Davies (CEO) and Mark Mahaffey (CFO), former colleagues from RBS Greenwich Capital, established Hinde Capital in early 2007, primarily to focus on the precious metals and commodity sector. Hinde Gold Fund, BVI Ltd, was launched in October 2007. The Fund is now into its fourth year.

Ben Davies has over 17 years experience within financial and commodity markets, starting his career in 1994 trading credit fixed-income at Credit Lyonnais. In 1999 Ben moved to Greenwich Capital in London where he traded multi-asset classes. He left Greenwich in 2001 following the merger with RBS and took a position as a portfolio manager for Blue Sky Capital Australia, a Japan equity hedge fund. In 2002 he returned to Greenwich Capital to take up the position as Head of Fixed Income and Macro Proprietary Trading. In 2007 Ben co-founded Hinde Capital with Mark Mahaffey to focus on the precious metals and commodities sectors. Hinde Gold Fund has proven itself to be an exemplary performer in the precious metals sector.

Mark Mahaffey has 26 years experience in the international markets having held senior posts at several leading investment banks. He trained as a fixed income specialist at Daiwa Securities before joining Midland Montagu as Director of the US government trading desk. In 1990 he jointly set up the Greenwich Capital office in London where he managed a portfolio focusing on global macro themes, before joining IBJI in 2001. His most recent appointment from 2005 was Managing Director of Bank of America London Proprietary desk. In 2007 Mark left BoA to set up Hinde Capital.

69



HINDE CAPITAL: KEY PERSONNELJonathan Tepper started his career as generalist equity analyst at SAC Capital in Stamford, Connecticut concentrating on special situations: recapitalizations, spinoffs, and restructurings. After working alongside Mark Mahaffey at Bank of America he has worked at various funds intensifying his research into the resource sector as both a macro and mining analyst. He is a Rhodes Scholar with an M.Litt. in modern history from Oxford University. He graduated with highest honours in history and economics from the University of North Carolina at Chapel Hill in 1998.

Simon White is a University of Cambridge mathematics graduate with a background in interest rate and proprietary trading. After graduation Simon joined JPMorgan on the USD Rates desk, followed by a position at Bank of America as a proprietary trader, where he worked with both Mark Mahaffey and Jonathan Tepper. After a position at a start-up macro hedge fund, he joined Hinde Capital in October 2008.

Paul Burton is Managing Director and partner of GFMS World Gold Analyst. Paul was formerly editor of the World Gold Analyst, a position he held for over eleven years. In August 2002, Paul completed a management buyout of World Gold Analyst from the Mining Communications Ltd. Before joining the Mining Journal in 1996, Paul spent over twenty years in various positions within the mining industry. After initially working as a mining engineer he spent much of his career in mineral economics, most notably at Gold Fields, and minerals marketing in South Africa.

70



71

HINDE CAPITAL: CONTACT INFORMATIONWebsitewww.hindecapital.com

EmailBen Davies, CEO: [email protected] Mark Mahaffey, CFO: [email protected]

Phone +44 (0)20 7648 4600

Hinde Capital10 New StreetLondon EC2M 4TPUnited Kingdom



72

HINDE CAPITAL: DISCLAIMERHinde Gold Fund Ltd is an open-ended multi-class investment company incorporated in the British Virgin Islands.

This document is issued by Hinde Capital Limited, 10 New Street, London EC2M 4TP, which is authorised and regulated by the Financial Services Authority. This document is for information purposes only. In no circumstances should it be used or considered as an offer to sell or a solicitation of any offers to buy the securities mentioned in it. The information in this document has been obtained from sources believed to be reliable, but we do not represent that it is accurate or complete. The information concerning the performance track record is given purely as a matter of information and without legal liability on the part of Hinde Capital. Any decision by an investor to offer to buy any of the securities herein should be made only on the basis of the information contained in the relevant Offering Memorandum. Opinions expressed herein may not necessarily be shared by all employees and are subject to change without notice. The securities mentioned in this document may not be eligible for sale in some states or countries and will not necessarily be suitable for all types of investor. Questions concerning suitability should be referred to a financial adviser. The financial products mentioned in this document can fluctuate in value and may be subject to sudden and large falls that could equal the amount invested. Changes in the rate of exchange may also cause the value of your investment to go up and down. Past performance may not necessarily be repeated and is not a guarantee or projection of future results. The Fund is categorised in the United Kingdom as an unregulated collective investment scheme for the purposes of the Financial Services and Markets Act 2000 and their Shares cannot be marketed in the UK to general public other than in accordance with the provisions of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemption) Order 2001, as amended, or in compliance with the rules of the Financial Services Authority made pursuant to the FSMA. Participants in this investment are not covered by the rules and regulations made for the protection of investors in the UK. Participants will not have the benefit of the rights designed to protect investors under the Financial Services and Markets Act 2000. In particular, participants will lose the right to claim through the Financial Services Compensation Scheme. The securities referenced in this document have not been registered under the Securities Act of 1933 (the “1933 Act”) or any other securities laws of any other U.S. jurisdiction. Such securities may not be sold or transferred to U.S. persons unless such sale or transfer is registered under the 1933 Act or is exempt from such registration. This information does not constitute tax advice. Investors should consult their own tax advisor or attorney with regard to their tax situation.

Documents

Hinde Gold Fund Singularity â€“ Transcendent Money