John Exter (A.D. 1910 – A.D. 2006) was an American economist, member of the Board of Governors of the United States Federal Reserve System, founder of the Central Bank of Sri Lanka, vice president in charge of international banking and precious metal operations for the Federal Reserve Bank of New York, senior vice president of the First National City Bank of New York (then the world’s second largest bank; now Citibank) and a member of Council on Foreign Relations.
Mr. Exter was “connected” to banking. He worked the banking industry around the world and was equipped by education, intelligence and position to truly know how the “system” works.
• Exter is best known for creating “Exter’s Inverted Pyramid”—a graphic used to illustrate the organization and comparative value of asset-classes measured in terms of risk and size.
In Exter’s theory, gold forms the Inverted Pyramid’s small base as the most reliable value. Successively higher “asset classes” are increasingly larger (in terms of nominal value) but also increasingly risky. At the broad top of the Pyramid, investors may have almost no chance of being paid in full.