The document discusses the history and functions of gold and silver as money. It notes that gold has held its value as a currency better than paper money like the US dollar, which has lost over 90% of its purchasing power since 1900. The document also analyzes historical and projected supply and demand trends for gold and silver that suggest their prices could increase substantially in the future as demand grows, especially from China, while new supply remains limited. Central banks own around 19% of the existing stock of gold globally.

1. www.gold-souk-network.com

3. ...until the 30ies....

4. From 1900 to 2000 the US-Dollar has lost more than 90 % of its purchasing power. The loss of purchasing power of the US-Dollar

5. value price Gold is money The purchasing power of gold payment with gold Payment with money 1910: 2010: 1 troy ounce 20 $ 1 troy ounce 1.340 $ Buying power remains constant Inflation (tax) changed the price

6. Gold % Annual Change The „performance“ USD 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% Average 18.4% 11.7% 13.8% 15.7% 14.6% 17.8% 14.9% 12.2% 18.3%

7. Silver % Annual Change The „performance“ USD AUD CAD CNY EUR INR JPY CHF GBP 2001 -0.1% 8.5% 6.1% -0.1% 5.3% 3.1% 14.4% 2.3% 2.7% 2002 4.8% -4.6% 4.0% 4.9% -11.0% 4.3% -5.0% -12.6% -5.3% 2003 24.0% -7.3% 1.4% 23.9% 3.2% 17.7% 11.9% 11.0% 11.9% 2004 14.3% 10.2% 6.5% 14.3% 6.4% 8.6% 9.6% 5.4% 6.5% 2005 29.6% 37.7% 25.5% 26.3% 48.1% 34.6% 48.8% 49.3% 44.4% 2006 45.3% 35.3% 45.3% 40.5% 30.4% 42.6% 46.7% 34.8% 27.5% 2007 15.4% 3.7% -2.1% 7.9% 4.3% 3.1% 8.3% 7.2% 13.9% 2008 -23.8% -4.3% -5.7% -28.8% -20.1% -6.1% -38.1% -28.2% 3.4% 2009 49.3% 16.1% 27.6% 49.3% 45.0% 42.6% 53.0% 44.9% 35.0% 2010 83.7% 61.5% 76.1% 77.4% 97.0% 77.0% 60.3% 65.7% 90.4% Average 24.3% 15.7% 18.5% 21.6% 20.9% 22.7% 21.0% 18.0% 23.0%

8. 10 years The Gold / Silver Ratio

9. Long term ratio between gold and silver: 1:16

10. Gold and silver as a hedge against inflation The price of gold and the US-Dollar were like twins from 1792 until the thirties. Ever since the price of gold has risen in spite of massive central bank selling. 4.0000 2.0000 1.0000 0.5000 0.0250 0.0125 0.0062 00 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 18 gold dollar

11. The banking system collapsing:

12. Since 2006 USD M3 has not been published any more The loss of purchasing power

13. Between 1999 and 2009 the EUR M3 has increased more than 105 % The loss of purchasing power

14. When money dies....

15. The US Government „printed“ (out of thin air) about $ 8.569 trillion worth of paper dollars. If each dollar were backed by gold, that would put the price at $ 9,500.00 an ounce. U.S. Treasury Dept. signals $ 9,500 Gold:

16. The shadow gold price (SGP):

17. The demand for gold Supply of gold 2'400 t per year Increase of exploration during the next 10 years: max. 35% The explorations worldwide are at 46'000 t a range of 18 years only. Demand for gold 3'800 t per year Since 2004 1.3 billion Chinese Citizens are allowed to possess gold. Analysts estimate: The increase in demand in 5 years at 6'000 t in 10 years at 10'000 t The yield within the next 10 years: Gold factor 4 – 7 Silver factor 10 – 20 Gold reserves central banks 2010 USA 8.133 t DE 3.401 t IWF 2.846 t IT 2.451 t FR 2.435 t CN 1.054 t CH 1.040 t JP 765 t NL 612 t RU 775 t ECB 501 t ES 281 t GB 310 t Gold reserves Country 1980 2000 CH 40% 20% USA 35% 18% DE 35% 18% UK 30% 17% FR 30% 20% ES 30% 18%

18. The demand for gold Supply of gold 2'400 t per year Increase of exploration during the next 10 years: max. 35% The explorations worldwide are at 46'000 t a range of 18 years only. Demand for gold 3'800 t per year Since 2004 1.3 billion Chinese Citizens are allowed to possess gold. Analysts estimate: The increase in demand in 5 years at 6'000 t in 10 years at 10'000 t The yield within the next 10 years: Gold factor 4 – 7 Silver factor 10 – 20 Gold reserves Country 1980 2000 CH 40% 20% USA 35% 18% DE 35% 18% UK 30% 17% FR 30% 20% ES 30% 18%

19. Central banks: The central banks own 19% of worldwide existing gold of 153'000 t Gold reserves central banks 2010 USA 8.133 t DE 3.401 t IWF 2.846 t IT 2.451 t FR 2.435 t CN 1.054 t CH 1.040 t JP 765 t NL 612 t RU 775 t ECB 501 t ES 281 t GB 310 t

20. London PM Fix december 2001 – 2008 Central banks hit minimum reserves in 2000

21. value price Gold is money The purchasing power of gold payment with gold Payment with money 1910: 2010: 1 troy ounce 20 $ 1 troy ounce 1,340 $ Buying power remains constant Inflation (tax) changed the price

22. What, if the price of gold goes up to... ?

23. The stock markets crashing:

24. A former global currency Dinar 980 A.D. Dirham 912 A.D.

25. Dead money in the streets – history has seen that before many times...

26. « Money itself does not make happy. You also need gold and silver !» Rico McPato, 1867 ...a good saying ...

27. ...You would dig in the garden of your grandfather and you find two boxes Let us assume that ...

28. Which one would you prefer to keep if you had to choose one? In one you find this... ...and in the other one that Let us assume that ...(cont‘d)

29. www.gold-souk-network.com For part II, how to invest in precious metals go to: