Welcome back to the Worldwide Fiat Currency Race to Debase!
Currencies / Fiat Currency Oct 05, 2010 - 04:56 AM GMTBy: GoldCore
At the close of third quarter 2010, it is clear for the world to see that all fiat currencies around the globe have been getting their paperback-sides kicked in by true hard monies, silver and gold.
To all the paper-bug fiat currency fools out there, we have this to say to you. Scoreboard.
RACE TO DEBASE |
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Year 2010GOLD vs. Fiat Currency + 19.9% |
Quarter 3SILVER vs. Fiat Currency + 29.8% |
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Fiat money has no place to go but gold. If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.
- Alan Greenspan
Many people, like the aforementioned bubble maestro Alan Greenspan, mistakenly refer to fiat currency as fiat money. In order for a currency to also be money it must by definition be a store of value over a long period of time. Only two currencies are money, gold and silver.
Lets delve further into the numbers.
Here is a look at how real monies, gold and silver, have performed against 74 various fiat paper currencies thus far in 2010.
| Fiat Currency vs. One Gold Ounce | 1-Jan-10 | 30-Sep-10 | % Gold Gain |
| Afghanistan Afghanis | 53,343 | 57,162 | 7.2% |
| Albania Leke | 104,997 | 132,216 | 25.9% |
| Algeria Dinars | 78,965 | 95,891 | 21.4% |
| Argentina Pesos | 4,171 | 5,161 | 23.7% |
| Australia Dollars | 1,223 | 1,352 | 10.5% |
| Bahamas Dollars | 1,097 | 1,303 | 18.8% |
| Bahrain Dinars | 414 | 491 | 18.7% |
| Bangladesh Taka | 75,662 | 90,340 | 19.4% |
| Barbados Dollars | 2,195 | 2,606 | 18.7% |
| Bermuda Dollars | 1,097 | 1,303 | 18.8% |
| Brazil Reais | 1,914 | 2,212 | 15.6% |
| Bulgaria Leva | 1,497 | 1,874 | 25.2% |
| CFA BCEAO Francs | 502,190 | 628,614 | 25.2% |
| CFA BEAC Francs | 502,190 | 628,614 | 25.2% |
| Canada Dollars | 1,154 | 1,342 | 16.3% |
| Chile Pesos | 556,850 | 631,042 | 13.3% |
| China Yuan Renminbi | 7,493 | 8,722 | 16.4% |
| Colombia Pesos | 2,244,898 | 2,347,464 | 4.6% |
| Comptoirs Français Francs | 91,358 | 114,358 | 25.2% |
Fiat Currency vs. One Gold Ounce |
1-Jan-10 | 30-Sep-10 | % Gold Gain |
| Costa Rica Colones | 618,358 | 652,479 | 5.5% |
| Croatia Kuna | 5,594 | 7,001 | 25.1% |
| Czech Republic Koruny | 20,134 | 23,558 | 17.0% |
| Denmark Kroner | 5,701 | 7,142 | 25.3% |
| Dominican Republic Pesos | 39,642 | 47,760 | 20.5% |
| East Caribbean Dollars | 2,853 | 3,499 | 22.6% |
| Egypt Pounds | 6,018 | 7,420 | 23.3% |
| Estonia Krooni | 11,979 | 14,994 | 25.2% |
| Euro | 766 | 958 | 25.1% |
| Fiji Dollars | 2,116 | 2,459 | 16.2% |
| Hong Kong Dollars | 8,509 | 10,113 | 18.8% |
| Hungary Forint | 207,032 | 265,249 | 28.1% |
| IMF Special Drawing Rights | 700 | 837 | 19.6% |
| Iceland Kronur | 136,181 | 147,371 | 8.2% |
| India Rupees | 51,147 | 58,608 | 14.6% |
| Indonesia Rupiahs | 10,315,100 | 11,630,461 | 12.8% |
| Iran Rials | 10,869,251 | 13,347,991 | 22.8% |
| Iraq Dinars | 1,265,793 | 1,524,275 | 20.4% |
| Israel New Shekels | 4,136 | 4,754 | 14.9% |
| Jamaica Dollars | 98,024 | 112,069 | 14.3% |
Fiat Currency vs. One Gold Ounce |
1-Jan-10 | 30-Sep-10 | % Gold Gain |
| Japan Yen | 102,084 | 108,834 | 6.6% |
| Jordan Dinars | 779 | 925 | 18.7% |
| Kenya Shillings | 83,234 | 105,293 | 26.5% |
| Kuwait Dinars | 315 | 371 | 17.9% |
| Lebanon Pounds | 1,650,963 | 1,967,079 | 19.1% |
| Malaysia Ringgits | 3,758 | 4,025 | 7.1% |
| Mauritius Rupees | 33,812 | 39,224 | 16.0% |
| Mexico Pesos | 14,371 | 16,459 | 14.5% |
| Morocco Dirhams | 8,666 | 10,744 | 24.0% |
| New Zealand Dollars | 1,512 | 1,779 | 17.6% |
| Norway Kroner | 6,332 | 7,685 | 21.4% |
| Oman Rials | 423 | 502 | 18.6% |
| Pakistan Rupees | 92,518 | 112,539 | 21.6% |
| Peru Nuevos Soles | 3,168 | 3,635 | 14.7% |
| Philippines Pesos | 50,741 | 57,240 | 12.8% |
| Poland Zlotych | 3,128 | 3,808 | 21.7% |
| Qatar Riyals | 3,997 | 4,744 | 18.7% |
| Romania New Lei | 3,227 | 4,091 | 26.8% |
| Russia Rubles | 33,265 | 39,881 | 19.9% |
Fiat Currency vs. One Gold Ounce |
1-Jan-10 | 30-Sep-10 | % Gold Gain |
| Saudi Arabia Riyals | 4,116 | 4,887 | 18.7% |
| Singapore Dollars | 1,542 | 1,715 | 11.3% |
| South Africa Rand | 8,108 | 9,121 | 12.5% |
| South Korea Won | 1,277,096 | 1,486,002 | 16.4% |
| Sri Lanka Rupees | 125,504 | 145,586 | 16.0% |
| Sudan Pounds | 2,452 | 3,092 | 26.1% |
| Sweden Kronor | 7,848 | 8,819 | 12.4% |
| Switzerland Francs | 1,137 | 1,278 | 12.4% |
| Taiwan New Dollars | 35,063 | 40,755 | 16.2% |
| Thailand Baht | 36,597 | 39,531 | 8.0% |
| Trinidad and Tobago Dollars | 6,949 | 8,301 | 19.5% |
| Tunisia Dinars | 1,453 | 1,851 | 27.4% |
| Turkey Lira | 1,646 | 1,891 | 14.9% |
| United Arab Emirates Dirhams | 4,030 | 4,787 | 18.8% |
| United Kingdom Pounds | 679 | 828 | 22.0% |
| United States Dollars | 1,097 | 1,303 | 18.8% |
| Venezuela Bolivares Fuertes | 2,359 | 5,603 | 137.5% |
| Vietnam Dong | 20,278,046 | 25,352,451 | 25.0% |
| Zambia Kwacha | 5,092,801 | 6,317,655 | 24.1% |
Why do central banks and governments around the world continue to overprint and weaken the values of their respective fiat currencies? Countries need to export their products and trade. By having a weaker currency, a country can more easily sell and trade their products throughout the world. The quandary is not every country can have a weak currency at the same time. Remember, fiat currencies trade in relative terms. Paper currencies are simply valued against one another therefore dollars are always priced in euros, yen, pesos, pounds, and so on. If one fiat currency weakens, one or more of the other fiat currencies strengthens. When nations battle to faster debasement of their respective currency in the hope to bolster export demand (to perhaps maintain an economic status quo) this is what is called competitive debasement. In the 1930’s the term for this was "beggar thy neighbor."
Is the biggest gainer likely to be gold? What about silver? |
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Base Currency vs. One Silver Ounce |
1-Jan-10 | 30-Sep-10 | % Silver Gain |
| Afghanistan Afghanis | 821 | 952 | 16.0% |
| Albania Leke | 1,616 | 2,203 | 36.3% |
| Algeria Dinars | 1,215 | 1,598 | 31.5% |
| Argentina Pesos | 64 | 86 | 34.0% |
| Australia Dollars | 19 | 23 | 19.7% |
| Bahamas Dollars | 17 | 22 | 28.6% |
| Bahrain Dinars | 6 | 8 | 28.5% |
| Bangladesh Taka | 1,165 | 1,505 | 29.3% |
| Barbados Dollars | 34 | 43 | 28.6% |
| Bermuda Dollars | 17 | 22 | 28.6% |
| Brazil Reais | 29 | 37 | 25.1% |
| Bulgaria Leva | 23 | 31 | 35.5% |
| CFA BCEAO Francs | 7,730 | 10,474 | 35.5% |
| CFA BEAC Francs | 7,730 | 10,474 | 35.5% |
| Canada Dollars | 18 | 22 | 25.8% |
| Chile Pesos | 8,571 | 10,515 | 22.7% |
| China Yuan Renminbi | 115 | 145 | 26.0% |
| Colombia Pesos | 34,553 | 39,115 | 13.2% |
| Comptoirs Français Francs | 1,406 | 1,906 | 35.5% |
Base Currency vs. One Silver Ounce |
1-Jan-10 | 30-Sep-10 | % Silver Gain |
| Costa Rica Colones | 9,518 | 10,872 | 14.2% |
| Croatia Kuna | 86 | 117 | 35.5% |
| Czech Republic Koruny | 310 | 393 | 26.7% |
| Denmark Kroner | 88 | 119 | 35.6% |
| Dominican Republic Pesos | 610 | 796 | 30.4% |
| East Caribbean Dollars | 44 | 58 | 32.8% |
| Egypt Pounds | 93 | 124 | 33.5% |
| Estonia Krooni | 184 | 250 | 35.5% |
| Euro | 12 | 16 | 35.6% |
| Fiji Dollars | 33 | 41 | 25.8% |
| Hong Kong Dollars | 131 | 169 | 28.7% |
| Hungary Forint | 3,187 | 4,420 | 38.7% |
| IMF Special Drawing Rights | 11 | 14 | 29.6% |
| Iceland Kronur | 2,096 | 2,456 | 17.2% |
| India Rupees | 787 | 977 | 24.1% |
| Indonesia Rupiahs | 158,766 | 193,796 | 22.1% |
| Iran Rials | 167,295 | 222,415 | 32.9% |
| Iraq Dinars | 19,484 | 25,399 | 30.4% |
| Israel New Shekels | 64 | 79 | 24.4% |
| Jamaica Dollars | 1,509 | 1,867 | 23.8% |
Base Currency vs. One Silver Ounce |
1-Jan-10 | 30-Sep-10 | % Silver Gain |
| Japan Yen | 1,571 | 1,813 | 15.4% |
| Jordan Dinars | 12 | 15 | 28.6% |
| Kenya Shillings | 1,281 | 1,754 | 37.0% |
| Kuwait Dinars | 5 | 6 | 27.6% |
| Lebanon Pounds | 25,411 | 32,777 | 29.0% |
| Malaysia Ringgits | 58 | 67 | 15.9% |
| Mauritius Rupees | 520 | 654 | 25.6% |
| Mexico Pesos | 221 | 274 | 24.0% |
| Morocco Dirhams | 133 | 179 | 34.2% |
| New Zealand Dollars | 23 | 30 | 27.4% |
| Norway Kroner | 97 | 128 | 31.4% |
| Oman Rials | 7 | 8 | 28.6% |
| Pakistan Rupees | 1,424 | 1,875 | 31.7% |
| Peru Nuevos Soles | 49 | 61 | 24.2% |
| Philippines Pesos | 781 | 954 | 22.1% |
| Poland Zlotych | 48 | 63 | 31.8% |
| Qatar Riyals | 62 | 79 | 28.5% |
| Romania New Lei | 50 | 68 | 37.2% |
| Russia Rubles | 512 | 665 | 29.8% |
Base Currency vs. One Silver Ounce |
1-Jan-10 | 30-Sep-10 | % Silver Gain |
| Saudi Arabia Riyals | 63 | 81 | 28.5% |
| Singapore Dollars | 24 | 29 | 20.5% |
| South Africa Rand | 125 | 152 | 21.8% |
| South Korea Won | 19,657 | 24,761 | 26.0% |
| Sri Lanka Rupees | 1,932 | 2,426 | 25.6% |
| Sudan Pounds | 38 | 52 | 36.5% |
| Sweden Kronor | 121 | 147 | 21.7% |
| Switzerland Francs | 17 | 21 | 21.8% |
| Taiwan New Dollars | 540 | 679 | 25.8% |
| Thailand Baht | 563 | 659 | 16.9% |
| Trinidad and Tobago Dollars | 107 | 138 | 29.3% |
| Tunisia Dinars | 22 | 31 | 37.9% |
| Turkey Lira | 25 | 32 | 24.4% |
| United Arab Emirates Dirhams | 62 | 80 | 28.6% |
| United Kingdom Pounds | 10 | 14 | 32.1% |
| United States Dollars | 17 | 22 | 28.6% |
| Venezuela Bolivares Fuertes | 36 | 93 | 157.1% |
| Vietnam Dong | 312,112 | 422,443 | 35.3% |
| Zambia Kwacha | 78,386 | 105,270 | 34.3% |
We're in the midst of an international currency war. This threatens us because it takes away our competitiveness. Advanced countries are seeking to devalue their currencies.
- Guido Mantega, Brazil's finance minister
The competing currency war is ramping up, with gross interventions, open disputes, notable desperation, friction among trade partners, and urgent need to take action. Nations are taking positions against each other increasingly. In defending their economies, they are pitting themselves against allies and foes alike. The number of bilateral squabbles has never been greater. The winner will be Gold, as all paper currencies will circle the toilet and lose. The Gold price acts as a meter; it will rise in spectacular fashion. It rises due to the profound debasement in a death process of the currency system.
- Jim Willie CB, aka "The Golden Jackass"
Over the long haul, only money maintains its purchasing power. Gold and silver are money and they are destined to be the world champions of purchasing power.
The 74 different fiat paper currencies listed above are not money. They are poor stores of value for they don’t and won’t maintain their purchasing power over the longterm. We forecast that their worth will continue to fall, that their face values will simply purchase less and less as we continue to witness this ongoing worldwide race to debase.
Yes! Physical silver and gold bullion coins and bars are for winners!
Mike Maloney is the owner and founder of GoldSilver.com, an online precious metals dealership that specializes in delivery of gold and silver to a customer's doorstep, arranges for special secured storage, or for placement in one's IRA account. Additionally, GoldSilver.com provides invaluable research and commentary for its clients, assisting them in their wealth building endeavors.
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