It's no secret that all paper monies have lost value against gold since this most recent bull market began in early 2001. Some currencies, however, have lost much more than others. A recent table marking gold's path against 37 major currencies shows the wide variance over this period.
What's most interesting to me is the paper currency which has declined the least. And yet, when I think about it, it shouldn't be a surprise.
If someone were to have asked me which one was the strongest, I would have reflexively answered “the Swiss franc”. But it turns out that this was only the second best.
If someone were to have asked me, "which is the most impressive country in Europe, in terms of where it had been and where it is now?", I would answer "the Czech Republic". And this turns out to be the country with the strongest currency, or the one that has lost the least in terms of gold.
From 22 January 2001, to 18 February 2019, gold has risen in terms of the Czech Koruna by 200.58%. The Swiss franc comes in second, at 206.2%.
Then comes the New Zealand dollar (225.16%), a surprise in Thailand’s baht, and then the Australian dollar, the Singapore dollar, China’s yuan (gold is up 308% there), the Danish krone, the Euro, and the Canadian dollar round up the 'top ten'.
Gold has risen 398.73% against the US dollar and all the dwindling number of currencies tied to it: from Saudi Arabia, Bahrain, & Ecuador.
Against four currencies, gold has risen over 1,000%: for Russian, Pakistani, Uruguayan money and the 'winner' being Argentina, where gold has risen 19,180% against their peso.
Besides the surprise of the Czech koruna as the strongest paper currency of the last generation, the fact that even that has seen gold go up by over 200% is also worthy of note, especially when compared to the USD, where gold is up twice that, at nearly 400% since 2001.
I've mentioned it before in these pages, but the Czech Republic is a very impressive place. Visiting there, I got the feeling of a nation going in the right direction and that feeling is rather rare these days.
The long-term powerhouse of the British pound had gold go up 466.26% against it since 2001.
On the list of 37 currencies, Argentina's peso being at the top as the worst performing one against gold and the Czech koruna at number 37 as the best, the British pound ranks 11th and the USD 16th.
And there is a big difference between the Czech Republic and neighboring Hungary, whose forint has seen gold rise 394.83% against it. That's almost twice as bad as the koruna. Poland's Zloty, another neighbor, fared slightly better, at 365.68%. That's number 13 on my list, which would have the Czech Koruna as number 1.
But even against the 'strongest' currency, gold has risen over 200% in terms of Czech's koruna.
That's something to think about and it highlights –whatever your home currency is -- that a temporary fall in gold's price in that currency is just that: temporary.
I think the next 20 years will see gold go much higher against the world's currencies than the last 20 years have. And if you can say that the best of those currencies “only” saw gold rise by 200%, that tells you an awful lot about what the best currency truly is.
And this also answers a question I get from time to time: "After a stock has doubled or so, and you recommend selling your original investment, where do you put that original investment?"
Looking at these 37 currencies since 2001, do you not see a pattern? Even the best-of-the-strongest has seen its value shrink compared to gold’s rise by 200%.
Chris Weber is a money manager and he has been sharing his insights with clients and readers since 1974. He regularly writes and publishes The Weber Global Opportunities Report, www.weberglobal.net, a subscription-only newsletter. With a focus on precious metals investing, the Weber Global Opportunities Report covers a variety of topics that should be of interest to Global Gold subscribers and clients as well.