Hinde Gold Fund: Singularity - Transcendent Money

Hinde Gold Fund Singularity Transcendent Money
Gold Symposium, Sydney Australia November 2011
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
HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential
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 - MATHEMATICAL
Source: Ray Kurzweil, 1999
03
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
06
SINGULARITY EXPONENTIAL TREND

Linear 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
07
SINGULARITY LAW OF ACCELERATING RETURNS

Exponential curve on Log Scale the exponential of the rate of exponential.
EXPONENTIAL GROWTH OF COMPUTING
08
SINGULARITY MOORES LAW

Dynamic RAM (Random Access Memory) illustrates Moores 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 DYNAMIC RAM PRICE
09
SINGULARITY - PRODUCTIVITY
Half-lifes or Doubling times.
10
SINGULARITY PROGRESSIVE PURCHASING POWER

PROCESSOR PERFORMANCE
11
SINGULARITY PRODUCTIVITY
Demand outstrips deation in cost of information technologies.
TOTAL BITS SHIPPED
12
SINGULARITY PRODUCTIVITY MIRACLE?

Real GDP growth. A productivity miracle or a function of credit expansion?
REAL GROSS DOMESTIC PRODUCT
13
SINGULARITY LAW OF DIMINISHING RETURNS

DIMINISHING RETURNS FROM AN ADDITIONAL $1 OF DEBT IN THE US ECONOMY
1. 4 1. 2 1. 0 0. 8 0. 6 0. 4 0. 2 0. 0 - 0. 2 - 0. 4 Sep- 6 0 Sep- 6 3 Sep- 6 9 Sep- 7 2 Sep- 7 8 Sep- 81 Sep- 84 Sep- 90 Sep- 93 Sep- 99 Sep- 02 Sep- 08 Sep- 6 6 Sep- 7 5 Sep- 87 Sep- 96 Sep- 05
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.
Source: Marc Faber Gloom Doom Boom Report 14
SINGULARITY LINEAR DEBT TRENDS

TOTAL DEBT & LIABILITIES AS % OF GDP 400% 200% 0% -200% -400% -600% -800% -10,00% -1,200% -1,400% -1,600% -1,800% Italy Germany France Portugal United States United Kingdom Spain Ireland Greece
Cost of ageing
Structural deficit
Initial debt level
Source: EU Commission, Eurostat, CBO, IMF, Morgan Stanley Research
15
SINGULARITY EXPONENTIAL DEBT TRENDS

THE US M2 FITTED TO AN EXPONENTIAL TREND
12, 000. 0
THE US TOTAL DEBT (IN USD BILLION) FITTED TO AN EXPONENTIAL TREND

6 0, 000. 0
10, 000. 0
5 0, 000. 0
8, 000. 0
40, 000. 0
6 , 000. 0
30, 000. 0
4, 000. 0
20, 000. 0
2, 000. 0
10, 000. 0
0. 0 D ec - 5 8 D ec - 6 0 D ec - 6 2 D ec - 6 4 D ec - 6 8 D ec - 7 0 D ec - 7 2 D ec - 7 4 D ec - 7 8 D ec - 80 D ec - 82 D ec - 84 D ec - 88 D ec - 90 D ec - 92 D ec - 94 D ec - 98 D ec - 00 D ec - 02 D ec - 04 D ec - 08 D ec - 10 D ec - 12 D ec - 6 6 D ec - 7 6 D ec - 86 D ec - 96 D ec - 06
0. 0 D ec - 5 8 D ec - 6 0 D ec - 6 2 D ec - 6 4 D ec - 6 8 D ec - 7 0 D ec - 7 2 D ec - 7 4 D ec - 7 8 D ec - 80 D ec - 82 D ec - 84 D ec - 88 D ec - 90 D ec - 92 D ec - 94 D ec - 98 D ec - 00 D ec - 02 D ec - 04 D ec - 08 D ec - 10 D ec - 12 D ec - 6 6 D ec - 7 6 D ec - 86 D ec - 96 D ec - 06
M 2 (U SD
b illion)
E x ponential F orc ast
T otal D eb t (U SD
b illion)
E x ponential F orc ast
16
SINGULARITY LOG MONETARY TREND

US MONETARY BASE (LOG TERMS)
8.0
7.5
7.0
6.5
6.0 Sep-04 Sep-97 Aug-00 Dec-95 Nov-98 May-02 Aug-07 Jun-06 Jun-99 Jan-00 Dec-02 Nov-05 Feb-97 Feb-04 Mar-01 Jan-07 Jul-96 Oct-01 Jul-03 Apr-98 Apr-05
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SINGULARITY MONEY VELOCITY

MONETARY VELOCITY YOY
8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% Jun-61 Jun-64 Jun-67 Jun-70 Jun-73 Jun-76 Jun-79 Jun-82 Jun-85 Jun-88 Jun-91 Jun-94 Jun-97 Jun-00 Jun-03 Jun-06 Jun-09
Recessions
Monetary Velocity YoY
18
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 Bundesbank 20
SINGULARITY MONOLINE
AMBAC: the muni and sub-prime monoline insurer. A taste of things to come for the EFSF monoline insurer?
AMBAC US (SHARE PRICE)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0 Jul-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
21
SINGULARITY GLOBAL MONETARY TRENDS

UK QE has been 45% bigger than the Feds QE.
BANK OF ENGLAND TOTAL ASSETS

600,000 3,500
ECB TOTAL ASSETS
3,000 500,000
2,500 400,000
2,000 300,000 1,500
200,000 1,000
100,000 500
0 Jun-06 Sep-06 Jun-07 Sep-07 Jun-08 Sep-08 Jun-09 Sep-09 Jun-10 Sep-10 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-11 Sep-11 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
0 Jun-06 Sep-06 Jun-07 Sep-07 Jun-08 Sep-08 Jun-09 Sep-09 Jun-10 Sep-10 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-11 Mar-07 Mar-08 Mar-09 Mar-10 Sep-11 Mar-11
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SINGULARITY GLOBAL MONETARY TRENDS

The illusion of sobriety.
JAPAN BOJ BALANCE SHEET TOTAL ASSETS (100 MILL JPY)

1,800,000
100%
COMPOSITION OF FED BALANCE SHEET, SECURITIES PORTFOLIO
1,600,000
90%
80%
1,400,000
70%
1,200,000
60%
1,000,000
50%
800,000
40%
30%
600,000
20%
400,000
10%
200,000
0% Jun-09 Aug-09 Jun-10 Aug-10 Dec-08 Dec-09 Dec-10 Jun-11 Feb-09 Feb-10 Aug-11 Apr-09 Oct-08 Oct-09 Apr-10 Oct-10 Feb-11 Apr-11 Oct-11
0 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
Agencies
MBS
US Treasuries
23
SINGULARITY PRICE TRENDS

QE impact on corporate bond spreads, S&P500, Commodities and Dollar.
BAA CORP SPREAD AND S&P RATIO

1, 900 7 00 6 5 0
CONTINUOUS COMMODITY INDEX AND ASIAN CCY INDEX

5 00
1, 7 00
480 6 00
1, 5 00 5 5 0 1, 300 5 00 1, 100 45 0 900 400 7 00 35 0 5 00 Jan- 08 Jan- 09 Jan- 10 Jul- 08 Jul- 09 Jul- 10 Jan- 11 Apr- 08 Oc t- 08 Apr- 09 Oc t- 09 Apr- 10 Oc t- 10 Apr- 11 Jul- 11 Jan- 06 Jan- 07 Apr- 06 Oc t- 06 Apr- 07 Oc t- 07 Oc t- 11 Jul- 06 Jul- 07 300 Jan- 08 Jan- 09 Jan- 10 Jul- 08 Jul- 09 Jul- 10 Jan- 11 Oc t- 08 Oc t- 09 Oc t- 10 Apr- 08 Apr- 09 Apr- 10 Apr- 11 Jul- 11 Jan- 06 Jan- 07 Oc t- 06 Oc t- 07 Apr- 06 Apr- 07 Oc t- 11 Jul- 06 Jul- 07 400 420 440 46 0
QE 1 QE 2 On H old to 2013
S& P BAA C orp Spread (sc aled ) QE 1 QE 2 On H old to 2013 Asian C urrenc y I nd ex (R H S) C ontinuous C om m od ity I nd ex
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SINGULARITY COMMODITY VS FIAT PAPER MONEY

Gold price (y) or (1/x) is an inverse function of paper money (x).
PURCHASING POWER OF FIAT MONEY AND THE GOLD PRICE
Gold P rice
P urch asing P ow er of F iat M oney (incr easing) >
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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 (nancial 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
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Game of Twist(er) anyone?
US 30Y GOVERNMENT BOND YIELDS
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0 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
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Net central bank purchases of US Treasuries as a % of total issuance. Central Bank printers nancing US government.
NET CENTRAL - BANK PURCHASES OF US TREASURIES AS A % OF ISSUANCE 160 140 120 100 80 60 40 20 0 (20) (40) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (%)
FOREIGN CENTRAL BANKS SHARE OF TREASURY MARKET HAS PEAKED

Source: Russell Napier, CLSA
40
28
(%)
38
36 34
60

20 0
40
Foreign central banks Treasury market share peaked at close to 40%.

(40) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(20)
FOREIGN CENTRAL BANKS SHARE OF TREASURY MARKET HAS PEAKED 40 38 36 34 30 30 28 26 24 22 20 18 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (%)
SHARE OF TREASURY MARKET NOT OWNED BY CENTRAL BANKS (%)

29
90
85 80
28

24 20 22 18 Treasury Market share not owned 2004central banks. 2001 2002 2003 by 2005 2006 2007 2008 2009 2010 2011
26
SHARE OF TREASURY MARKET NOT OWNED BY CENTRAL BANKS 90 85 80 75 70 65 60 55 50 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 (%)
30
The presentation is for information purposes only and is not a US PAPER COMMERCIAL OUTSTANDING solicitation to invest. Unauthorized reproduction or distribution is strictly prohibited.
All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed.
55

50 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011
US commercial paper outstanding is falling as government issuance crowds out private sector.
US PAPER COMMERCIAL OUTSTANDING 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 2007 2008 2009 2010 2011 (US$bn)
US CORPORATE PROFITS AFTER TAX (NIPA DATA) AND S&P500 REPORTED EPS
1,100 1,100
31
(US$bn)
90 80 70
900 800
All material is compiled from sources believed to be accurate, but no accuracy can be guaranteed. The presentation US CORPORATE PROFITS AFTER TAX is for information purposes only and is not a solicitation to invest. Unauthorized S&P500 REPORTED EARNINGS (RHS) reproduction or distribution is strictly prohibited.
1,600

1,200 1,000 800
1,400
Corporate prots too high in US.

2007 2008 2009 2010 2011
US CORPORATE PROFITS AFTER TAX (NIPA DATA) AND S&P500 REPORTED EPS 1,100 1,100 900 800 700 600 500 400 300 200 100 0 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11
US CORPORATE PROFITS AFTER TAX S&P500 REPORTED EARNINGS (RHS)
(US$bn)
90 80 70 60 50 40 30 20 10 0
CORPORATE TAX TAKE AS A % OF GDP 9 8 (%)

32
200
20 10 0

0 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11
100
Corporate tax rate only going to rise.

CORPORATE TAX TAKE AS A % OF GDP 9 8 7 6 5 4 3 2 1 50 55 60 65 70 75 80 85 90 95 00 05 10 (%)
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SINGULARITY OCCUPY WALL STREET

A singular misjudgment by protestors?
34
SINGULARITY INTERNET REFORMATION

An exponential social paradigm the World Wide Web.
MASS USE OF INVENTIONS
35
SINGULARITY GOVT INDUCED MONEY AMNESIA
Dalis Disintegration of Memory A metaphor for government induced Money Amnesia?
36
SINGULARITY EVOLUTION OF FACEBOOK

Facts & gures: Since 2004 People on Facebook More than 800 million active users More 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 Reach More than 70 languages available on the site Platform On average, people on Facebook install apps more than 20 million times every day Mobile More 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 REVOLUTION

Social consequences of the evolution of the World Wide Web. Money wont create success, the freedom to make it will. Nelson Mandela
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SINGULARITY DEMOTIX
A citizen journalism and photo agency website. Co-founded by Jonathan Tepper of Hinde Capital. Now in partnership with Corbis, a Bill Gates 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 TECHNOLOGY

Snaptu: A world of free apps on any phone! Social networking & lifestyle applications 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)
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SINGULARITY EXPONENTIAL ADOPTION RATES

TOTAL SNAPTU UNIQUE USERS
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 MAR 09 MAY 09 JUL 09 SEP 09 NOV 09 JAN 10 MAR 10 MAY 10 JJUL 10 SEP 10 NOV 10 JAN 11 MAR 11 0
Source: Snaptu marketing presentation 2011
POWER LAW OF PARTICIPATION

COLLABORATIVE INTELLIGENCE
42
LEAD 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. MODERATEprohibited. Unauthorized reproduction or distribution is strictly COLLABORATE
HIGH ENGAGEMENT WITH
5,000,000 JAN 09 MAR 09 MAY 09 JUL 09 SEP 09 NOV 09 JAN 10 MAR 10 MAY 10 JJUL 10 SEP 10 NOV 10 JAN 11 MAR 11
SINGULARITY POWER LAW OF PARTICIPATION

0
Power Law of Participation. Content created by the few taken up by the many.
POWER LAW OF PARTICIPATION

COLLABORATIVE INTELLIGENCE
LEAD MODERATE COLLABORATE REFACTOR WRITE NETWORK
COLLECTIVE INTELLIGENCE
HIGH ENGAGEMENT WITH COMMUNITY
READ
FAVORITE
TAG
SHARE SUBSCRIBE COMMENT PERIPHERY CORE
LOW THRESHOLD WITH TOOL

43
SINGULARITY EXPONENTIAL ASSET GROWTH

Global 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 doesnt account for the quadrillion dollars in worldwide derivatives.
US $ Trillion US $ Trillion
Source: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group 44
SINGULARITY GOLD ADOPTION RATES LOW

Gold 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 isnt the whole story...
Percent
Gold Investor Holdings = 0.96% of Global Financial Assets (Nov 2011)
Percent
Source: World Federation of Exchanges, The Economist, McKinsey, IMF and CPM Group, as of end of Dec. 2010 45
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
SINGULARITY GOLD NOT EXPONENTIAL YET

The US monetary base is backed 15% by gold.
US GOLD RESERVES AND MONEY SUPPLY
16 0% 140% 120% 100% 80% $ 1, 200 6 0% 40% 20% 0% 1920 1930 1940 195 0 196 0 197 0 1980 1990 2000 2010 Gold R eserves to M oney Supply R atio L ow (Gold U nd ervalued ) $ 900 $ 6 00 $ 300 $ 0 Gold R eserves to M oney Supply R atio H igh (gold E xp ensive) $ 2, 7 00 $ 2, 400 $ 2, 100 M oney Supply D oub les $ 1, 800 $ 1, 5 00
Gold R eserves as P erc ent M oney Supply
47
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.
US GOLD RESERVES AND GOLD PRICE
$ 10, 000
100% of M onetary Base = $ 10, 15 8/ oz 40% of M onetary Base = $ 4, 06 3/ oz Ac tual Spot Gold P ric e = $ 1, 7 20/ oz
$ 1, 000 Pr i c e o f Go l d ( $ o z ) $ 100
$ 10 1920 195 4 195 9 196 4 196 9 197 4 197 9 1983 1988 1993 1998 2003 2008 1945
100% M onetary Base Spot Gold P x
40%
M onetary Base
48
SINGULARITY GOLD EXPONENTIAL PRICE TARGETS

Gold is re-setting itself. The conuence of existing exponential global monetary growth, plus the spread of gold information virally via the Web will lead to rejection of at currency.
IMPLIED GOLD PRICE IN USD ASSUMING 40% BACKING OF MONEY SUPPLY
4.0%
GLOBAL MONEY SUPPLY BACKED BY GOLD
7 0, 000
6 3, 849
3.5%
6 0, 000
3.0%
5 0, 000
2.5%
40, 000
2.0%
30, 000
24, 5 04
20, 000
1.5%
16 , 336
1.0%
10, 000
0.5%
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jul-99
Jul-00
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Jan-11
*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% backing The 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)
49
Jul-11
Glob al M 2
T otal C red it (U S)
U SM 2
0.0%
SINGULARITY AUSSIE GOLD HOLDINGS

If 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 gure is nonsensical as Australian gold holdings are next to none!
AUSTRALIAN MONEY SUPPLY (M3) BACKED BY GOLD
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% 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
50
SINGULARITY AUSSIE GOLD PROTECTION

Aussie 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).
AUSTRALIA ESTABLISHED HOUSE PRICE INDEX IN AUD AND GOLD (2003 - 2004 = 100)
16 5 145 125 105 85 -5 % 6 5 45 Aug- 03 Aug- 04 Aug- 08 Aug- 09 Aug- 10 D ec - 02 D ec - 03 D ec - 04 D ec - 08 D ec - 09 D ec - 10 Apr- 03 Apr- 04 Apr- 08 Apr- 09 Apr- 10 Aug- 11 Apr- 11 Aug- 05 Aug- 06 Aug- 07 D ec - 05 D ec - 06 D ec - 07 Apr- 05 Apr- 06 Apr- 07 - 10% Aug- 03 Aug- 04 Aug- 08 Aug- 09 Aug- 10 D ec - 02 D ec - 03 D ec - 04 D ec - 08 D ec - 09 D ec - 10 Apr- 03 Apr- 04 Apr- 08 Apr- 09 Apr- 10 Aug- 05 Aug- 06 Aug- 07 D ec - 05 D ec - 06 D ec - 07 Aug- 11 Apr- 05 Apr- 06 Apr- 07 Apr- 11 5 % 10%
AUSTRALIA ESTABLISHED HOUSE PRICE INDEX (2003 - 2004 = 100)

- 4% - 3% - 2% - 1% 0% 1% 0% 2% 3% 4% 5 % 6 % 7 %
I n AU D
I n Gold
Gold in AU D , QoQ, sm oothed
Australian H ouse P ric es, QoQ (inverse)
An investment in gold for an AUD dominated investor with a high exposure to the real estate market is a good hedge.
51
SINGULARITY HYPER(BOLE)METAL CRITICALITY?

GOLD PRICE IN US DOLLAR FITTED TO A POLYNOMIAL TREND
7,000.0 y = 2E-13x4 - 2E-08x3 + 0.0011x2 - 21.005x + 152036 6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0.0
-1,000.0 Dec-58 Dec-61 Dec-64 Dec-67 Dec-70 Dec-73 Dec-76 Dec-79 Dec-82 Dec-85 Dec-88 Dec-91 Dec-94 Dec-97 Dec-00 Dec-03 Dec-06 Dec-09 Dec-12 Dec-15 Dec-18 Dec-21
Gold USD per oz
4th order polynomial forecast
52
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) Ination is a political occurrence. The gures demonstrate clearly that decits amounting to 40 per cent or more expenditures cannot be maintained. They lead to high ination and hyperinations...
Peter Bernholz Monetary Regimes & Ination pp.71
High (hyper) ination is caused by nancing huge public decits through money creation. Even 20% decits were behind but four cases of hyperination. The US government decit is 10% of GDP, but currently the US decit is over 30% of all government spending. The world reserve currency is in the red.
54
SINGULARITY HYPERINFLATION
Decit levels relative to expenditures before hyperination.
BUDGET DEFICITS BEFORE FIVE HYPERINFLATIONS 100% FRANCE BOLIVIA 80% % of Spending monetised BRAZIL POLAND GERMANY 60%
40%
20%
30% -4 -3 -2 -1 0 1
Years prior to money reform
Source: Monetary Regimes and Ination, Peter Bernholz 55
SINGULARITY MONEY ALIVE OR DEAD?
56
SINGULARITY MONETARY SINGULARITY
MONETARY SINGULARITY TRANSCENDENT MONE MONEY INTERNET REFORMATION FINANCIAL OPPRESSION LAW OF DIMINISHING RETURNS LAW OF ACCELERATING RETURNS SINGULARITY
57
SINGULARITY
Gold the secret key to the nancial 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 signicant return in excess of its designated benchmark, the USD spot gold bullion price. The core of the Funds 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
HINDE GOLD FUND TRACK RECORD
60
HGF NOW 79% AHEAD OF ITS BENCHMARK

From 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 90% 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). 7 0%
NOV 2008
5 0%
30%
10%
- 10% Aug- 09 Aug- 10 D ec - 09 D ec - 10 Apr- 09 Oc t- 09 Apr- 10 Jun- 09 Jun- 10 Oc t- 10 F eb - 11 Jun- 11 F eb - 09 F eb - 10 Aug- 11 Apr- 11 Oc t- 11
61
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.
HGF AB OV E ITS B ENCHM ARK 220 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 . 17 0
120
7 0
20 Oc t- 08 Oc t- 09 Jan- 08 Jan- 09 Jan- 10 Oc t- 10 Apr- 08 Apr- 09 Apr- 10 Jan- 11 Jul- 08 Jul- 09 Jul- 10 Apr- 11 Jul- 11 Oc t- 11
W ell K now n Gold E q uity F und I H ind e Gold F und
Benc hm ark W ell K now n Gold E q uity F und I I
62
HINDE GOLD FUND - LOWER VOLATILITY

Hinde Gold Funds volatility has been very close to that of its benchmark. Other funds have displayed considerably more volatility.
HGF - LOW 7 0% V OLATILITY ( 12M V OL, ANNUALIZ ED)
6 0% H GF has show n less volatility in its returns than other w ell- k now n gold f und s
5 0%
40%
30%
20%
10%
0% Sep- 09 Sep- 10 Nov- 09 Nov- 10 Jan- 11 Jul- 09 Jul- 10 M ay- 09 M ay- 10 M ay- 11 Jan- 09 Jan- 10 M ar- 11 M ar- 09 M ar- 10 Sep- 11 Jul- 11
W ell K now n Gold E q uity F und I H ind e Gold F und
Benc hm ark W ell K now n Gold E q uity F und I I
63
HINDE GOLD FUND OUTPERFORMANCE: QOQ
HINDE GOLD FUND: QUARTER ON QUARTER SOURCE OF ALPHA GENERATION

20%
15%
10%
5%
0%
-5%
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Overall Alpha (Net)
Bullion Strategy (Gross)
Juniors (Gross)
Q3 2011
-10%
64
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 signicantly outperform the spot gold price each year, net of all fees.
Spot Gold Typical ETF Typical Gold Equity Fund Hinde GF*
-25% -25.4% -50% -10%
-15% -15.4% -30% 0%
0% -0.4% 0% +15%
+15% +14.6% +30% +30%
+25% +24.6% +50% +40%
(table is illustrative) *Idealized returns on a 12m rolling basis for given return in gold. Actual return may deviate from this.
65
HINDE GOLD FUND INVESTMENT SUMMARY

Hinde 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
66
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.
Default Risk Increased Risk Other
Default Risk
Increased Risk
Swaps & Derivatives
Physical Bullion ETFs (warning hotspot)
Comex & Tocom Futures (warning potential hotspot)
Unallocated Gold Bullion
Wealth Store
Wealth Store
Allocated Gold Bullion (stored at secure vaults in viable jurisdiction) Safer
Safer
67
HINDE CAPITAL: ORGANIZATION

Hinde Capitals structure ensures the Firms operations are thoroughly audited and transparent.
Hinde Gold Feeder Fund Ltd (Cayman Stock Exchange listed) Hinde Equity Feeder Fund Ltd (Cayman) Hinde Gold Fund Ltd (BVI) Hinde Equity Fund Ltd (Cayman)
Hinde Gold Feeder Fund L.P. (Delaware) Investment Manager
Hinde Equity Feeder Fund L.P. (Delaware)
Auditor KPMG (Ireland)
Administrator Swiss Financial Services (Ireland)
Prime Broker Newedge (UK)
Bullion Custodian Bank Julius Bar Zurich (Switzerland)
Legal UK Cummings
Legal BVI/Catman Appleby
68
HINDE CAPITAL: INVESTMENT MANAGERS

Ben 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 PERSONNEL

Jonathan 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
HINDE CAPITAL: CONTACT INFORMATION

Website www.hindecapital.com Email Ben Davies, CEO: ben.davies@hindecapital.com Mark Mahaffey, CFO: mark.mahaffey@hindecapital.com Phone +44 (0)20 7648 4600 Hinde Capital 10 New Street London EC2M 4TP United Kingdom
71
HINDE CAPITAL: DISCLAIMER

Hinde 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.
72

Hinde Gold Fund: Singularity - Transcendent Money

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Hinde Gold Fund Singularity Transcendent Money

Gold Symposium, Sydney Australia November 2011

SINGULARITY TRANSCENDENT MONEY

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY SCHWARZCHILD BLACK HOLE

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY MOTHER OF ALL

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY EXPONENTIAL TREND

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY LAW OF ACCELERATING RETURNS

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY MOORES LAW

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY PROGRESSIVE PURCHASING POWER

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY PRODUCTIVITY MIRACLE?

Source: Ray Kurzweil, 1999

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY LAW OF DIMINISHING RETURNS

Source: Marc Faber Gloom Doom Boom Report 14

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY LINEAR DEBT TRENDS

Initial debt level

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

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY EXPONENTIAL DEBT TRENDS

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

E x ponential F orc ast

E x ponential F orc ast

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY LOG MONETARY TREND

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY MONEY VELOCITY

Monetary Velocity YoY

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY PUMPTY PUMPTY PUMP...

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY GLOBAL MONETARY TRENDS

BANK OF ENGLAND TOTAL ASSETS

ECB TOTAL ASSETS

2,000 300,000 1,500

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY GLOBAL MONETARY TRENDS

JAPAN BOJ BALANCE SHEET TOTAL ASSETS (100 MILL JPY)

COMPOSITION OF FED BALANCE SHEET, SECURITIES PORTFOLIO

HINDE GOLD FUND November 2011 Singularity Transcendent Money Condential

SINGULARITY PRICE TRENDS