GoldMoney Foundation. Title Slide Box Document slug: date/pp # Title & Headline Private Currency...

GoldMoneyFoundation

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Document slug: date/pp #

Title & HeadlineTitle & Headline

Private CurrencyJames Turk3 March 2011

Digital Money ForumLondon

GoldMoney

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• Money is a mental tool that enables economic calculation

GoldMoneyMoney & currency

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• Money is a mental tool that enables economic calculation– unchanged throughout history


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• Currency is a medium of exchange


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• Currency is a medium of exchange1. improves as a result of technological innovations


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2. essential nature has fundamentally changed


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2. essential nature has fundamentally changed

– “government currency” or “private currency”


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• Bank of England established, 1694

GoldMoneyKey events in the history of currency

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• Newton’s Gold Standard, 1700-1914


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• Peel’s Bank Act, 1844


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• Keynesian revolution


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• Keynesian revolution– “The gold standard is already a barbarous relic.” J.M. Keynes,

1923


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• Keynesian revolution– “The gold standard is already a barbarous relic.” J.M. Keynes, 1923

– ‘Gold Standard’ ends 1971, currencies no longer redeemable into gold


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• Keynesian revolution– “The gold standard is already a barbarous relic.” J.M. Keynes, 1923

– ‘Gold Standard’ ends 1971, currencies no longer redeemable into gold

– gov’ts can create currency without limit


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• Keynesian ‘chalkboard’ theories fail


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• Keynesian ‘chalkboard’ theories fail– when currency can be created without

limit, there are consequences


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• Keynesian ‘chalkboard’ theories fail– when currency can be created without limit,

there are consequences

– these include inflation, global imbalances and sovereign wealth funds


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• Keynesian ‘chalkboard’ theories fail– when currency can be created without limit, there are

consequences


– “Gold still represents the ultimate form of payment in the world.” Alan Greenspan, 1999


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• Keynesian ‘chalkboard’ theories fail– when currency can be created without limit, there are consequences


– “Gold still represents the ultimate form of payment in the world.” Alan Greenspan, 1999

– gold remains the standard by which all things are measured – gold is money


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Gold is money

Crude Oil Prices (Base of 100)January 1950 through December 2010

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2000

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6000

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British pound


Gold is money


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British pound

US dollar


Gold is money


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British pound

US dollar

euro


Gold is money


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US dollar

euro

goldgram

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• Gold is special because it is different

GoldMoneyGold, money & currency

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• Gold is special because it is different– accumulated (saved); not consumed


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– large aboveground stock is the gold ‘money supply’


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– value derives from usefulness


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– value derives from usefulness• food


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• shelter


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• shelter

• communication (interaction in society)


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• shelter

• communication (interaction in society)

• Gold is special because it is money



Gold is money


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goldgram


Portfolio composition

ASSETS• Investments• Other Assets

100%

0

50%

LIQUIDITY

Units of

Wealth

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• A safe place to put our currency

GoldMoneyCurrency for the 21st century

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• A safe place to put our currency–Not banks because of the boom

and bust cycle caused by fractional reserve banking


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• A safe place to put our currency–Not banks because of the boom

and bust cycle caused by fractional reserve banking

• An efficient – low cost – currency for global commerce


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• A safe place to put our currency–Not banks because of the boom and

bust cycle caused by fractional reserve banking

• An efficient – low cost – currency for global commerce–No clearing, settlement, payment risk

or political risk


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“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to

produce as many U.S. dollars as it wishes at no cost.”

Federal Reserve Chairman Ben Bernanke

GoldMoney


Loss of nat’l currency purchasing power

Gold % Annual ChangeUSD AUD CAD CNY EUR INR JPY CHF GBP

2001 2.5% 11.3% 8.8% 2.5% 8.1% 5.8% 17.4% 5.0% 5.4%

2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% 3.9% 12.7%

2003 19.6% -10.5% -2.2% 19.5% -0.5% 13.5% 7.9% 7.0% 7.9%

2004 5.2% 1.4% -2.0% 5.2% -2.1% -0.0% 0.9% -3.0% -2.0%

2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 36.2% 31.8%

2006 22.8% 14.4% 22.8% 18.8% 10.2% 20.5% 24.0% 13.9% 7.8%

2007 31.4% 18.1% 11.5% 22.9% 18.8% 17.4% 23.4% 22.1% 29.7%

2008 5.8% 33.0% 31.1% -1.0% 11.0% 30.5% -14.0% -0.3% 43.7%

2009 23.9% -3.6% 5.9% 24.0% 20.4% 18.4% 27.1% 20.3% 12.1%

2010 29.8% 14.0% 24.3% 25.3% 39.1% 25.0% 13.2% 17.0% 34.5%10-Year

Average 18.4% 11.7% 13.8% 15.7% 14.6% 17.8% 14.9% 12.2% 18.3%

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“In a free country the monetary unit rests upon a fixed

foundation of gold or gold and silver, independent of the

ruling politicians.” Howard Buffett, father of Wall Street

legend Warren Buffett

GoldMoneyAn important reason for private currency

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[email protected]

www.goldmoneyfoundation.org

GoldMoney

GoldMoney Foundation. Title Slide Box Document slug: date/pp # Title & Headline Private Currency...

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