Wednesday, 27 January 2010

the best currency of the decade vs. gold & silver

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http://goldmoney.com/commentary-the-decades-best-national-currency.html

GoldMoney Alert

25 January 2010

The Decade's Best National Currency

In my last alert I presented two tables that showed the appreciation of gold and silver against nine of the world's major currencies. A number of readers have asked me to provide these calculations for more currencies.

Most readers had the same objective. They wanted to know which of the various national currencies of the world ranks as the best one. In other words, they wanted to know which of them lost the least amount of purchasing power when using gold as the numéraire. Gold is an excellent 'measuring stick', but I also did the calculations for silver. The rates of appreciation of gold and silver in terms of 23 world currencies from 2000-to-2009 are presented in the tables below.


Gold's Rate of Appreciation Against 23 World Currencies



2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average

Switzerland
franc -4.1% 5.0% 3.9% 7.0% -3.0% 36.2% 13.9% 22.1% -0.3% 20.3%
10.1%

Denmark
krone 1.3% 7.7% 5.8% -0.2% -2.2% 35.5% 10.2% 18.8% 10.9% 20.3% 10.8%

euro/DEM
euro 1.1% 8.1% 5.9% -0.5% -2.1% 35.1% 10.2% 18.8% 11.0% 20.4% 10.8%

Canada
dollar -2.1% 8.8% 23.7% -2.2% -2.0% 14.5% 22.8% 11.5% 31.1% 5.9% 11.2%

New Zealand
dollar 10.8% 8.9% -0.9% -4.4% -4.2% 25.1% 19.3% 19.5% 40.5% -1.5% 11.3%

Norway
krone 3.6% 4.5% -3.6% 14.9% -4.0% 31.0% 13.5% 14.6% 36.0% 2.8% 11.3%

Australia
dollar 11.2% 11.3% 13.5% -10.5% 1.4% 25.6% 14.4% 18.1% 33.0% -3.6% 11.4%

China
yuan -5.7% 2.5% 24.8% 19.5% 5.2% 15.2% 18.8% 22.9% -1.0% 24.0% 12.6%

Singapore
dollar -2.1% 9.3% 17.2% 17.1% 1.1% 20.4% 13.3% 23.1% 6.0% 21.0% 12.6%

Thailand
baht 5.0% 4.3% 21.8% 9.7% 3.0% 24.9% 8.2% 7.4% 24.6% 19.0% 12.8%

Sweden
krona 4.7% 13.5% 3.7% -1.0% -2.5% 40.7% 5.8% 24.2% 29.1% 12.6% 13.1%

Malaysia
ringgit -5.7% 2.5% 24.7% 19.6% 5.2% 17.6% 14.7% 23.2% 10.3% 22.9% 13.5%

Japan
yen 5.5% 17.4% 13.0% 7.9% 0.9% 35.7% 24.0% 23.4% -14.0% 27.1% 14.1%

Hong Kong
dollar -5.4% 2.4% 24.7% 19.1% 5.4% 17.9% 23.2% 31.8% 5.2% 24.0% 14.8%

USA
dollar -5.7% 2.5% 24.7% 19.6% 5.2% 18.2% 22.8% 31.4% 5.8% 23.9% 14.9%

Taiwan
dollar -0.4% 8.1% 23.7% 17.1% -1.7% 22.1% 22.1% 30.8% 6.9% 20.9% 15.0%

UK
pound 1.8% 5.4% 12.7% 7.9% -2.0% 31.8% 7.8% 29.7% 43.7% 12.1% 15.1%

South Korea
won 5.2% 6.2% 12.6% 20.2% -8.6% 15.3% 13.1% 32.3% 42.7% 14.3% 15.3%

India
rupee 1.3% 5.8% 24.0% 13.5% 0.0% 22.8% 20.5% 17.4% 30.5% 18.4% 15.4%

Brazil
real 1.7% 21.4% 91.0% -2.2% -3.5% 3.9% 12.3% 9.6% 37.9% -6.8% 16.5%

South Africa
rand 15.9% 62.4% -10.8% -6.7% -11.3% 32.5% 36.6% 28.1% 43.5% -1.9% 18.8%

Mexico
peso -4.3% -2.4% 42.0% 28.9% 4.4% 12.7% 24.8% 32.9% 34.0% 17.0% 19.0%

Sri Lanka
rupee 8.8% 15.2% 29.7% 19.6% 13.5% 15.6% 29.3% 32.9% 10.0% 25.5% 20.0%


The best currency compared to gold is the Swiss franc, but even this venerable national currency lost 10.1% per annum on average for the past ten years.


Silver's Rate of Appreciation Against 23 World Currencies



2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average

New Zealand
dollar -0.4% 6.2% -16.7% -0.9% 4.1% 37.2% 41.2% 4.9% 1.1% 18.6% 9.5%

Australia
dollar -0.1% 8.5% -4.6% -7.3% 10.2% 37.7% 35.3% 3.7% -4.3% 16.1% 9.5%

Canada
dollar -12.0% 6.1% 4.0% 1.4% 6.5% 25.5% 45.3% -2.1% -5.7% 27.6% 9.7%

Norway
krone -6.9% 1.8% -18.9% 19.1% 4.3% 43.6% 34.3% 0.6% -2.1% 23.8% 10.0%

Switzerland
franc -13.9% 2.3% -12.6% 11.0% 5.4% 49.3% 34.8% 7.2% -28.2% 44.9% 10.0%

Denmark
krone -9.0% 5.0% -11.1% 3.5% 6.2% 48.5% 30.3% 4.3% -20.2% 44.8% 10.3%

euro/DEM
euro -9.1% 5.3% -11.0% 3.2% 6.4% 48.1% 30.4% 4.3% -20.1% 45.0% 10.3%

Thailand
baht -5.6% 1.7% 2.4% 13.7% 12.0% 36.9% 28.0% -5.7% -10.4% 43.3% 11.6%

Sweden
krona -5.9% 10.6% -12.8% 2.6% 6.0% 54.2% 25.1% 9.1% -7.1% 35.5% 11.7%

Singapore
dollar -12.0% 6.5% -1.5% 21.4% 9.8% 32.0% 34.1% 8.1% -23.7% 45.7% 12.0%

China
yuan -15.3% -0.1% 4.9% 23.9% 14.3% 26.3% 40.5% 7.9% -28.8% 49.3% 12.3%

Malaysia
ringgit -15.3% -0.1% 4.8% 24.0% 14.3% 28.9% 35.7% 8.2% -20.6% 48.0% 12.8%

Brazil
real -8.6% 18.3% 60.5% 1.4% 4.9% 13.9% 32.9% -3.8% -0.8% 12.2% 13.1%

UK
pound -8.5% 2.7% -5.3% 11.9% 6.5% 44.4% 27.5% 13.9% 3.4% 35.0% 13.2%

South Korea
won -5.5% 3.5% -5.3% 24.6% -0.7% 26.4% 33.8% 16.2% 2.7% 37.6% 13.3%

India
rupee -9.0% 3.1% 4.3% 17.7% 8.6% 34.6% 42.6% 3.1% -6.1% 42.6% 14.1%

Taiwan
dollar -10.5% 5.4% 3.9% 21.5% 6.8% 33.9% 44.4% 14.9% -23.1% 45.6% 14.3%

Hong Kong
dollar -15.0% -0.2% 4.9% 23.4% 14.5% 29.3% 45.8% 15.8% -24.3% 49.3% 14.3%

USA
dollar -15.3% -0.1% 4.8% 24.0% 14.3% 29.6% 45.3% 15.4% -23.8% 49.3% 14.4%

Japan
yen -5.2% 14.4% -5.0% 11.9% 9.6% 48.8% 46.7% 8.3% -38.1% 53.0% 14.4%

South Africa
rand 4.1% 58.3% -25.0% -3.2% -3.7% 45.3% 61.6% 12.5% 3.3% 18.1% 17.1%

Mexico
peso -14.0% -4.9% 19.4% 33.6% 13.4% 23.5% 47.7% 16.7% -3.5% 41.0% 17.3%

Sri Lanka
rupee -2.3% 12.3% 9.0% 24.0% 23.3% 26.7% 52.9% 16.8% -20.9% 51.2% 19.3%


The best currency compared to silver is a tie between the New Zealand dollar and Australian dollar. They lost 9.5% per annum on average for the past ten years.


So what really is the world's best currency in terms of preserving purchasing power? It is gold, and silver is a close second. When viewed in terms of the above tables, no national currency even comes close. This conclusion is also confirmed by the following chart which presents a base-100 analysis of crude oil prices against three national currencies and the precious metals.


chart


Both gold and silver purchase essentially the same amount of crude oil they did at the beginning of this decade. In fact, an ounce of gold or silver purchases basically the same amount of crude oil that they did at any time during the past 60-year time span presented in the above chart. The precious metals have a proven track record of preserving purchasing power.


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