The Decade's Best National Currency

2010-JAN-25

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.

Tags: buy gold, oil prices

Author: James Turk

Current Precious Metal Prices

	Gold: Gold Buy Rates	$55.4817/gg $1,725.70/oz
	Silver: Silver Buy Rates	$33.6200/oz
	Platinum: Platinum Buy Rates	$51.9904/pg $1,617.10/oz
	Palladium: Palladium Buy Rates	$22.4097/pd $697.00/oz