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Hinde Gold Fund Singularity – Transcendent Money Gold Symposium, Sydney Australia November 2011

Ben Davies

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The Gold Symposium Keynote Presentation 14 & 15 November 2011 Luna Park

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Page 1: Ben Davies

Hinde Gold FundSingularity – Transcendent MoneyGold Symposium, Sydney AustraliaNovember 2011

Page 2: Ben Davies

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

Page 3: Ben Davies

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 - MatheMatical

Source: Ray Kurzweil, 199903

Page 4: Ben Davies

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 – Schwarzchild Black hole

04

Page 5: Ben Davies

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.

Singularity – “Mother of all”Big Bang - (Keplers) Supernova nucleosynthesis.

05

Hinde GOLd FUnd november 2011Singularity – Transcendent MoneyConfidential

Page 6: Ben Davies

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 – 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.”

Source: Ray Kurzweil, 199906

CoUnTDoWn To SInGULARITy

Page 7: Ben Davies

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 – exponential trendLinear vs exponential trend growth. note the initial imperceptible growth which accelerates at a point in time called the “Knee of the curve”.

Source: Ray Kurzweil, 199907

LIneAR VS eXponenTIAL GRoWTH

Page 8: Ben Davies

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 – law of accelerating returnSexponential curve on Log Scale – the exponential of the rate of exponential.

Source: Ray Kurzweil, 199908

eXponenTIAL GRoWTH oF CoMpUTInG

Page 9: Ben Davies

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 – 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.

Source: Ray Kurzweil, 199909

DynAMIC RAM pRICeDynAMIC RAM

Page 10: Ben Davies

Singularity - productivityHalf-lifes or doubling times.

Source: Ray Kurzweil, 1999

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

10

Page 11: Ben Davies

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 – progreSSive purchaSing power

Source: Ray Kurzweil, 199911

pRoCeSSoR peRFoRMAnCe

Page 12: Ben Davies

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 – productivitydemand outstrips deflation in cost of information technologies.

Source: Ray Kurzweil, 199912

ToTAL BITS SHIppeD

Page 13: Ben Davies

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.

Singularity – productivity Miracle?Real GdP growth. A productivity miracle or a function of credit expansion?

Source: Ray Kurzweil, 199913

Hinde GOLd FUnd november 2011Singularity – Transcendent MoneyConfidential

ReAL GRoSS DoMeSTIC pRoDUCT

Page 14: Ben Davies

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 – 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 change in GDP divided by the annual change in total debt to GDP, 4Q mov average.

DIMInISHInG ReTURnS FRoM An ADDITIonAL $1 oF DeBT In THe US eConoMy

Page 15: Ben Davies

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 – 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

Page 16: Ben Davies

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 – 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

M2 (USD billion) Exponential Forcast

0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

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

Total Debt (USD billion) Exponential Forcast

THe US M2 FITTeD To An eXponenTIAL TRenD THe US ToTAL DeBT (In USD BILLIon) FITTeD To An eXponenTIAL TRenD

Page 17: Ben Davies

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 – 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)

Page 18: Ben Davies

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 – 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

Page 19: Ben Davies

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 – “puMpty puMpty puMp...”

19

Page 20: Ben Davies

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 – 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

Page 21: Ben Davies

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

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)

Page 22: Ben Davies

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 – 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

Page 23: Ben Davies

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 – 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)

Page 24: Ben Davies

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 – price trendSQe impact on corporate bond spreads, S&P500, Commodities and dollar.

24

300

350

400

450

500

550

600

650

700

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

460

480

500

QE1

On Hold to 2013

Continuous Commodity Index

Asian Currency Index (RHS)

QE2

ConTInUoUS CoMMoDITy InDeX AnD ASIAn CCy InDeX

500

700

900

1,100

1,300

1,500

1,700

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

QE1

QE2

On Hold to 2013

S&P

BAA Corp Spread (scaled)

BAA CoRp SpReAD AnD S&p RATIo

Page 25: Ben Davies

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 – coMModity vS fiat paper MoneyGold price (y) or (1/x) is an inverse function of paper money (x).

25Purchasing Power of Fiat Money (increasing) >

Gold Price

pURCHASInG poWeR oF FIAT Money AnD THe GoLD pRICe

Page 26: Ben Davies

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 – 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

Page 27: Ben Davies

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 – 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

Page 28: Ben Davies

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 – 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

Page 29: Ben Davies

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 – financial oppreSSionForeign central banks’ Treasury market share peaked at close to 40%.

Source: Russell Napier, CLSA 29

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

Page 30: Ben Davies

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 – financial oppreSSionTreasury Market share not owned by central banks.

Source: Russell Napier, CLSA 30

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

Page 31: Ben Davies

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 – financial oppreSSionUS commercial paper outstanding is falling as government issuance crowds out private sector.

Source: Russell Napier, CLSA31

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

Page 32: Ben Davies

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 – financial oppreSSionCorporate profits too high in US.

Source: Russell Napier, CLSA 32

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

Page 33: Ben Davies

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 – financial oppreSSionCorporate tax rate only going to rise.

Source: Russell Napier, CLSA 33

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

Page 34: Ben Davies

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 – occupy wall StreetA singular misjudgment by protestors?

34

Page 35: Ben Davies

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 – internet reforMationAn exponential social paradigm – the World Wide Web.

Source: Ray Kurzweil, 199935

MASS USe oF InVenTIonS

Page 36: Ben Davies

Singularity – govt induced Money aMneSia

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

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

36

Page 37: Ben Davies

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.

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

Hinde GOLd FUnd november 2011Singularity – Transcendent MoneyConfidential

Page 38: Ben Davies

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 – Twitter, and Facebook more widely used in india, indonesia vs any other countries.

38

Page 39: Ben Davies

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 – 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

Page 40: Ben Davies

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 – 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

Page 41: Ben Davies

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 – 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

Page 42: Ben Davies

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 – 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

Page 43: Ben Davies

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 – 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

Page 44: Ben Davies

US $ Trillion US $ Trillion

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 – 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

Page 45: Ben Davies

Percent Percent

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 – 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)

Page 46: Ben Davies

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 – 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

Page 47: Ben Davies

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

47

Singularity – gold not exponential yetThe US monetary base is backed 15% by gold.

0%

20%

40%

60%

80%

100%

120%

140%

160%

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

$2,700

Gold Reserves to Money Supply Ratio Low (Gold Undervalued)

Gold Reserves to Money Supply Ratio High (gold Expensive)

Money Supply Doubles

Gol

d R

eser

ves

as P

erce

nt M

oney

Sup

ply

US GoLD ReSeRVeS AnD Money SUppLy

Page 48: Ben Davies

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 – 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 Monetary Base = $10,158/oz 40% of Monetary Base = $4,063/ozActual Spot Gold Price = $1,720/oz

Pric

e of

Gol

d ($

oz)

100% Monetary Base 40% Monetary BaseSpot Gold Px

US GoLD ReSeRVeS AnD GoLD pRICe

Page 49: Ben Davies

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 – 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

24,504

63,849

16,336

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Global M2 Total Credit (US) US M2

GLoBAL Money SUppLy BACKeD By GoLDIMpLIeD GoLD pRICe In USD ASSUMInG 40% BACKInG oF Money SUppLy

Page 50: Ben Davies

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 – 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

Page 51: Ben Davies

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 – 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 AUD, QoQ, smoothed Australian House Prices, QoQ (inverse)

45

65

85

105

125

145

165

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

In AUD In Gold

AUSTRALIA eSTABLISHeD HoUSe pRICe InDeX (2003 - 2004 = 100)

AUSTRALIA eSTABLISHeD HoUSe pRICe InDeX In AUD AnD GoLD (2003 - 2004 = 100)

Page 52: Ben Davies

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 – 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

Page 53: Ben Davies

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 – 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

Page 54: Ben Davies

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 – 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

Page 55: Ben Davies

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 – 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

Page 56: Ben Davies

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 – Money alive or dead?

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Page 57: Ben Davies

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 – Monetary Singularity

57

SINGULARITY

LAW OF ACCELERATING RETURNS

LAW OF DIMINISHING RETURNS

FINANCIAL OPPRESSION

INTERNET REFORMATION

TRANSCENDENT MONEY

MONETARY SINGULARITY

Page 58: Ben Davies

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 Gold – the secret key to the financial universe.

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Page 59: Ben Davies

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

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.

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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

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.

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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.

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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.