Exter's Prophecy: A former central banker shows how the

financial crisis will end

The Gold Symposium 2012

Luna Park, Sydney

By Dan Denning

The Original Oracle of Omaha

“For if human liberty is to survive in America, we must win the battle to restore honest money. There is no more important challenge facing us than this issue – the restoration of your freedom to secure gold in exchange for the fruits of your labours.”

The Roles and Requirements of a Reserve Currency

• Medium of exchange

• Store of value

• Unit of account

• Deep and liquid debt markets

• Backed by a strong economy

• Sustainable (moral) fiscal policy

• Stable monetary policy and sound money

The Four Competitors

Chinese Steps Toward Internationalising the Remnimbi

• Dim Sum Bonds

• Currency swaps

• Iron ore contracts between FMG and steel producers denominated in RMB

• Off shore trading centres

• Bi-lateral trade conducted in RMB

Paths to a new world reserve currency

• Orderly

• Disorderly

• Non-existent

• More of the same

Turning Debt into Equity

• The Bank of England

• The Resolution Trust Corporation

• Debt must be extinguished: creditors prefer deflation, debtors and voters prefer inflation

• Look for Fed adaptation, not dollar capitulation

Extinguishing Debt Through Gold

• Gold as the ultimate Tier-1 capital in the banking system

• Revaluation of central bank gold reserves

• Gold-backed government bonds

The DNA of a liberal order

• Sound money

• Free markets (value discovered in exchange)

• The rule of law (right over might)

• Private property

• Low taxes

106 &207: Surveillance State 101

“If you wish to destroy a nation, you must first corrupt its currency. Thus must sound money be the first bastion of a society’s defence.”

Adam Ferguson, When Money Dies: The Nightmare of the Weimar hyper-inflation

Thank you!

dan@portphillippublishing.com.au

www.dailyreckoning.com.au