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PRECIOUS METALS,
DIAMONDS & GEMSTONES
INVESTMENT SUMMIT
                9.30 – 10.00
                A Fund Manager's View of Precious Metals
                Ned Naylor-Leyland – Investment Director,
                Cheviot Asset Management




THE LONDON CHAMBER OF COMMERCE AND INDUSTRY   ● THURSDAY, 20 MAY 2010
www.ObjectiveCapitalConferences.com
Precious Metals, Diamonds and Gemstones
           Investment Summit


       Ned Naylor-Leyland
    Cheviot Asset Management
               20th May 2010




                                          1
ARE YOU A…




A


GOLDBUG CONSPIRACY THEORIST


B

PAPERBUG COINCIDENCE THEORIST




                                2
Market Madness




• Nationalise losses, privatise gains


• €750bn bailout of German/French/UK banks


• PIIGS 3 year debt refinancing needs around €2 trillion


• Goldman + JPMorgan had PERFECT trading quarter


• Around 60% of NYSE volume is ‘program trading’

                                                           3
Diminishing Marginal Productivity of
Debt in the US Economy (in Dollars)




                                       4
US Mortgage Resets




                     5
G.A.T.A

           GOLD ANTI-TRUST ACTION COMMITTEE


• Short-selling paper vs physical


• Central Bank leasing + swapping


• Throwing light on esoteric subjects




                                              6
Gold in

                              £




                       €




Source: Bloomberg
                                  7
Gold + DXY (Dollar Index)




Source: Bloomberg
                                                8
Gold vs NASDAQ
                    Secular Bull Market Comparison




Source: Bloomberg
                                                     9
Alan Greenspan Quotes




  1966: “In the absence of the Gold Standard, there is no way to protect savings from
confiscation through inflation. There is no safe store of value... deficit spending is simply
    a scheme for the confiscation of wealth. Gold stands in the way of this insidious
                                         process.”


2009: “The rise in gold and silver is strictly a monetary phenomenon and is an indication
    of the very early stage of an endeavour to move away from paper currencies’.”
                                                            25.5%                            30.1%




                                                           8.0%
                                                                                             7.3%

                                                                                          4.4%
                                                                    17.1%          5.4%
                                                                            2.2%                     10
                                                                                                      10
Monetary Star Wars




‘Buy Gold’

             ‘Audit the Fed’




                      25.5%                            30.1%




                     8.0%
                                                       7.3%

                                                    4.4%
                              17.1%          5.4%
                                      2.2%                     11
                                                                11
Why Silver ?




               12
Gold/Silver Availability




                           13

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Objective Capital Precious Metals, Diamonds and Gemstones Investment Summit: A Fund Manager's View of Precious Metals - Cheviot Asset Management

  • 1. PRECIOUS METALS, DIAMONDS & GEMSTONES INVESTMENT SUMMIT 9.30 – 10.00 A Fund Manager's View of Precious Metals Ned Naylor-Leyland – Investment Director, Cheviot Asset Management THE LONDON CHAMBER OF COMMERCE AND INDUSTRY ● THURSDAY, 20 MAY 2010 www.ObjectiveCapitalConferences.com
  • 2. Precious Metals, Diamonds and Gemstones Investment Summit Ned Naylor-Leyland Cheviot Asset Management 20th May 2010 1
  • 3. ARE YOU A… A GOLDBUG CONSPIRACY THEORIST B PAPERBUG COINCIDENCE THEORIST 2
  • 4. Market Madness • Nationalise losses, privatise gains • €750bn bailout of German/French/UK banks • PIIGS 3 year debt refinancing needs around €2 trillion • Goldman + JPMorgan had PERFECT trading quarter • Around 60% of NYSE volume is ‘program trading’ 3
  • 5. Diminishing Marginal Productivity of Debt in the US Economy (in Dollars) 4
  • 7. G.A.T.A GOLD ANTI-TRUST ACTION COMMITTEE • Short-selling paper vs physical • Central Bank leasing + swapping • Throwing light on esoteric subjects 6
  • 8. Gold in £ € Source: Bloomberg 7
  • 9. Gold + DXY (Dollar Index) Source: Bloomberg 8
  • 10. Gold vs NASDAQ Secular Bull Market Comparison Source: Bloomberg 9
  • 11. Alan Greenspan Quotes 1966: “In the absence of the Gold Standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value... deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process.” 2009: “The rise in gold and silver is strictly a monetary phenomenon and is an indication of the very early stage of an endeavour to move away from paper currencies’.” 25.5% 30.1% 8.0% 7.3% 4.4% 17.1% 5.4% 2.2% 10 10
  • 12. Monetary Star Wars ‘Buy Gold’ ‘Audit the Fed’ 25.5% 30.1% 8.0% 7.3% 4.4% 17.1% 5.4% 2.2% 11 11