Louis Boulanger presented at The Gold Symposium 2011 on the abuse of fiat currencies and how gold ownership offers protection. He summarized that all currencies are being debased to zero potentially, and that gold provides protection from ongoing fiat currency insanity and delusion until the end of the unsound monetary system. He argued that without currencies being redeemable for gold, today's monetary system relies entirely on confidence in governments and their ability to repay debt, which is not guaranteed and the system could collapse.

1. Gold RISES
... against Fiat Abuse!
Louis Boulanger, CFA
Founder and Director, LB Now Ltd
BMG Bullion Bars Authorized Dealer
Presentation at The Gold Symposium 2011
“Facts do not cease to exist because they are ignored.”
~ Aldous Huxley
“It's never too late to buy gold and silver, to be held
until the end of the fiat money era.”
~ James Dines

3. 3
FACTS:
1. All Currencies Are Being Debased (to ZERO?)
2. Gold Ownership Offers Protection from this
Ongoing Insane Fiat Abuse and Delusion...
• Whether it‟s Deflation or Inflation or Both
• Until the End of our Unsound Money Era
• Until the End of Irredeemable Currencies

4. 4
Fiat currencies
 What makes a currency a „fiat‟ currency?
 when it has value only because of government
regulation or law (i.e. legal tender laws)
 What‟s „legal tender‟?
 anoffered payment that, by law, cannot
be refused in settlement of a debt
 Example of fiat currency?
 Federal Reserve Note (also known as US dollar or $)

5. 5
Money
 What is „money‟?
 anythingthat is generally accepted as payment
for goods and repayment of debts
 Why was money once based on gold?
 because of human action and human nature
(read Carl Menger‟s “On the Origins of Money”)
 Why is gold now outside the monetary system?
 because we have been misled and deceived!

6. 6
“Up until August 15, 1971, there has never in
history been an era when no paper currency
was linked to Gold.
In all other eras of history, people could always
escape to other currencies, whose Gold
backing remained intact.
But, since 1971, there is NO escape because
NO paper currency has any link to Gold.”
“The global paper currency system is very
young. It depends for its continued functioning
on the BELIEF that the debt upon which it is
based will, someday, be repaid.”
- William A. M. Buckler
Publisher of The Privateer
www.the-privateer.com

7. 7
Gold‟s essential role
 Society needs to relearn that:
1. Gold is Money and Nothing Else
a. It‟s what turns fiat money into sound money
b. Fiat only money has no discipline or measure
2. Gold offers a reliable standard of value
a. Its characteristics make it ideal for such a role
b. Currencies‟ should be defined in gold terms
 Armed with this knowledge…
 You can protect wealth from fiat abuse!

8. 8
Here‟s the problem
 Without the ability to redeem any currency on
demand in gold at defined weights, as a result,
today‟s currencies are only as good as:
 the ability of the issuing state to pay its debts
AND/OR
 the belief that holders of financial assets have
that the value of currencies (in which all such
assets are denominated) will be maintained
 It’s all a confidence game! (with central bankers as croupiers)

9. 9
How good is the magic trick?
 A good magic trick consists of three stages :
 The Pledge
 The Turn, and...
 The Prestige
 We‟ve seen the Pledge (fiat paper promises)
 The Turn (turning gold into fiat paper money)
 Will there be a Prestige? (turn paper into gold)

10. 10
The ongoing mind game
 There is an expectation that our leaders
will know what to do when the time comes
 Our leaders encourage us to have this belief
 We end up expecting miracles from them…
 Soon, we find ourselves no longer able to
see our own folly/insanity/false beliefs/delusion
 Is our confidence/delusion going to last?

11. 11

12. 12
US debt (i.e. US$) is the key!
 Since 1961 the US national debt has never gone down
 It took the US government 191 years – from 1791 until
1982 – to run up its first US$1 trillion in debt
 The national debt stood at US$10.6 trillion on the day
Barack Obama took office as President
 Obama has already added more than US$4 trillion to
that debt (it now already stands at US$14.99 trillion!)
 US debt „ceiling‟ increased in August 2011 (93rd time!)
by… US$2.4 trillion (0.4/0.5/1.5) to US$16.7 trillion
 Will it be enough to last until 2012 Presidential elections?

13. The tragedy in human terms…
Make that $48,000 now… and STILL growing!
THAT‟S MORE THAN IN GREECE!! ($36,000)

14. 14
Are you (honestly) confident…
 …that the US federal government will one day
start paying back (i.e. settle) its debt?
 …that the US federal government will continue
to be able to service its debt forever?
 …that the US won‟t default on its external debt?
Or… is it that you expect/‟hope‟ the Fed (central
bankers) will keep inflating the problem away…

15. Consider this:
Source: Bud Conrad, Chief Economist, Casey Research, October 2010

16. 16
How long do you expect „it‟ to last?

17. 17
There is a lot more of it now…

18. 18
No matter how it‟s „measured‟

19. 19
It‟s the banking system stupid!

20. What the hell?!!...
“There must be some
kind of way out of here,”
said the joker to the thief.
(Bob Dylan)

21. 21
There is too much confusion...
 This is not a coincidence
 This is what the monetary elite want
 They wanted you to think it was a credit crisis
 They now say it‟s a European debt crisis
The above are just symptoms/manifestations of…
 The Global Monetary Crisis now unfolding
 was it all planned? what‟s the „end game‟??

22. 22
The true nature of the problem
 What passes for „money‟ today is just debt!
 ‘Money’ no longer has a reliable MEASURE
 You can‟t solve a problem with more of the same
 the problem (debt) can‟t also be the solution!
 A fiat only monetary system perpetuates debt
 it‟s a financial bubble making machine!
 TO RESTORE CONFIDENCE:
 Currencies should again be redeemable in gold
AND
 trade deficits should again be SETTLED in gold

23. 23
This is where
the bubble is!
Source: Hugo Salinas Price presentation at GATA‟s Gold Rush 2011 conference in London

24. 24
So how do you protect yourself?
 SIMPLE: Don‟t invest all your assets
 DEFER investing some of your money…
 SELL some investments (financial assets)
 EXCHANGE the proceeds for some bullion!
 Take some of your money ‘OFF THE TABLE’
 instead of investing 100% invest only (100-X)%
 „X‟ (bullion) depends on what you BELIEVE in:
central banking?… or settlement of debts?

25. FACT: all currencies are dying…

26. 26
Currency debasement is not new
US Dollar Purchasing Power Valued Against Gold
1833-Q3 2011
20.00%
0.00%
-20.00%
-40.00%
-60.00%
-80.00%
-100.00%
1833- 1867 1885 1903 1921 1939 1957 1975 1993 2011
49* Source: NMA.org, PacificExchange. ©2011 Bullion Management Group Inc.

27. 27
This is just the latest chapter…
Gold 'Price' Annual Change 2001-2011
USD AUD CAD CNY EUR INR JPY NZD CHF GBP Average
2001 2.5% 11.3% 8.8% 2.5% 8.1% 5.8% 17.4% 8.6% 5.0% 5.4% 7.5%
2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% -1.1% 3.9% 12.7% 14.5%
2003 19.6% -10.5% -2.2% 19.5% -0.5% 13.5% 7.9% -4.5% 7.0% 7.9% 5.8%
2004 5.2% 1.4% -2.0% 5.2% -2.1% 0.0% 0.9% -4.0% -3.0% -2.0% 0.0%
2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 25.0% 36.2% 31.8% 26.0%
2006 22.8% 14.4% 22.8% 18.8% 10.2% 20.5% 24.0% 19.2% 13.9% 7.8% 17.4%
2007 31.4% 18.6% 10.4% 23.0% 17.9% 17.5% 24.7% 20.5% 21.5% 29.2% 21.5%
2008 5.8% 32.5% 32.4% -1.1% 11.9% 30.4% -14.9% 39.0% 0.2% 44.3% 18.0%
2009 24.0% -3.6% 6.0% 24.0% 20.4% 18.4% 27.1% -0.7% 20.2% 12.0% 14.8%
2010 29.7% 13.3% 22.5% 25.2% 38.5% 24.4% 13.5% 20.1% 16.6% 33.3% 23.7%
Annual
18.0% 10.9% 13.2% 15.3% 13.8% 17.4% 14.0% 11.4% 11.6% 17.4% 14.3%
Compounded
1,000 Invested
5,216 2,826 3,443 4,158 3,652 4,975 3,720 2,934 2,997 4,971 3,889
On 1 January 2000
And 2011?
21.1% 17.0% 21.3% 16.9% 16.5% 32.2% 16.5% 16.2% 13.1% 17.3% 18.8%
Year to Date (31/10)

28. 28
In summary:
 Fiat currencies (in which financial securities
are all denominated) are rapidly losing value
 There is no exception; there are only timing
differences and currency volatility is increasing
 This has happened before and, if history is
any guide, then there is still a long way to go
 So… if fiat money is dying, what can you do?
 DIVERSIFY AWAY from fiat currencies!

29. It‟s a currency war!
“All warfare is based on
deception.”
(Sun Tzu)

30. The Race to Debase
Base Currency is Gold Ounces
Increase from March 2001 - September 2011
600%
500%
400%
300%
200%
100%
0%
Australia Dollars Switzerland Japan Yen Euro Canada Dollars British Pound United States
Francs Dollars
Source: Goldsilver.com

31. 31
Perception management
 1924: John Maynard Keynes famously says:
“In truth, the gold standard is already
a barbarous relic.”
 1971: US President Nixon famously says:
“I’m temporarily closing the gold window.”
 2011: Ben Shalom Bernanke famously says:
“Gold is not money.”

32. 32
The deception now relies on…
 Keeping interest rates artificially low
and…
 Making you believe this is a good thing
and…
 Making you forget about real INFLATION
WHY?

33. 33
Servicing that huge debt!
 Keeping interest rates low is crucial
 Monetizing the debt (QE) if necessary
 Hiding the true monetary inflation
 In the meantime…
 your financial wealth is surreptitiously eroded
 to baby boomers looking to retire, the working
middle class, this means financial repression
 UNLESS YOUR MONEY IS NOT ‘ALL IN’!

34. What is Inflation?
“Inflation is an increase in the amount of currency
in the circulation, resulting in a relative sharp and
sudden fall in its value and a rise in prices of
goods and services.”
- Webster’s Dictionary, 1983

36. 36
Gold and real interest rates
Source: US Global Investors‟ Investor Alert dated 2 September 2011

37. 37
Outlook is good for gold
 Negative real interest rates have historically
been good for gold owners/hoarders
 Ben Bernanke says zero rates are here to stay
until at least mid 2013
 The Fed, BOE, ECB, basically all central banks
are expected to continue to debase currencies
 This means real interest rates will likely remain
negative for quite some time to come (WEE)

38. 38
But remember… it‟s only money!
 You‟ll need to sell your bullion eventually
 Bullion ownership merely stores wealth
 Bullion in itself is not an investment
 It‟s money waiting to be redeployed (invested)
 Only when you later sell your bullion to buy
stuff or invest that money again will your
wealth increase (assuming you invest wisely)

39. 39

40. Thank You.
Any questions?
Louis Boulanger, CFA
Founder & Director,
Louis Boulanger Now Ltd
tel: +64 9 528 3586
mob: +64 275 665 095
louis@lbnow.co.nz
www.lbnow.co.nz