World's Strongest Currency?

How would such a quality as 'strongest' be defined in terms of world currencies?

Would it mean the currency which has maintained its value the longest relative to gold?

This would be my first choice, but the value of gold also varies with changes in production and demand.

Merrill Lynch for example recently predicted a large jump in gold demand from China, as millions of their population come into the middle class economic status that can afford jewelry.

And I suppose the same could be said for India.

 

Log in or Sign up to hide all adverts.

I cannot figure out why but despite ALL efforts in Canada to keep our dollar low it is rocketing up.

I don't know if that means it's strong.

Currency markets have me so confused I really have no clue what to do...my instinct is always buy gold.

 

Log in or Sign up to hide all adverts.

Rocketing relative the US dollar...or does it only mean that the US dollar is plummeting?

This is why comparisons with other currencies are not a good indication of strength...unless you are comparing a wide variety of currencies.

 

Log in or Sign up to hide all adverts.

http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D8PNLC3G0

 

anyways yes, in the last few months CDN is rising fast against U.S and Euro.

 

the pound and the euro are both very strong right now

 

My google search has uncovered a multitude of answers so far...the Swiss Franc, the Australian dollar, and even the Brazilian Real:

http://www.moneyandmarkets.com/press.asp?cat_id=6&rls_id=775

"Just recently, Brazil's currency, the real, hit a six-year high against the dollar.

It's also gaining against the euro, the Swiss franc, the British pound, the Japanese yen, and eleven other most actively traded currencies tracked by Bloomberg.

In fact, this year, it's the strongest major currency in the world.

A pivotal driving force: Brazil's huge and fast-growing trade surplus.

Just last week, the surplus expanded to $4.2 billion from a revised $3.36 billion in March. And even if it shrinks a bit in the coming months, the long-term trend is firmly in place — more gushers of black ink and a still-stronger Brazilian real."

This is impressive if true, but I'd like to know how the Real has fared relative to gold over the last, say five years???

 

the sterling pound has always been very strong. the usd has become toilet paper to us.



peace.

 

and the yen?

 

what about the yen?

peace.

 

Its been inflated away to almost nothing over the last century. One yen used to be worth 1.5 grams of gold, now the same amount of gold costs 3572 yen.

Relative to the US dollar its getting better.

238 yen to the dollar in 1980.
118 yen to the dollar in 2007.

It peaked at 98 yen to the dollar in 1995, but that was a weird anomaly.

Please Register or Log in to view the hidden image!

 

Carcano has already mentioned the Swiss Franc, and that's the currency I would select as the strongest over the long term.

Following WWII, a system of fixed exchange rates was introduced and was sustained for some years. Back then, the Swiss Franc was worth about US 23 cents. It is currently worth above 80c -- despite the US$ faring much better than most other currencies until quite recently.

Even if you find a currency to match the Swiss Franc in modern times, if you track back a hundred years I believe the Swiss Franc will always come out best.

The more you study inflation and exchange rates, the more scared you get of holding paper currency!

Please Register or Log in to view the hidden image!

 

This might change in the future as there was an ammendment to the Swiss constitution in 2000 that revoked a law backing 40% of the currency with gold reserves.

Many countries have been selling off their gold reserves for decades.

The trend is towards establishing virtual money instead of real money, as its easier for governments to create out of thin air.

Even the coins have been debased to the point where they no longer contain any valuable metal.

For example, in the US prior to 1965(?) the quarters were 90% silver. Even the nickels in Canada were 99.9% actual nickel until 1982.

Now most demonimations are steel with copper/nickel plating.

 

So, this is going to sound really stupid, and nobody will have the patience to answer this...but...

What the hell make currency valuable? I don't understand what we use to determine value. For example, is the American dollar backed by equal amounts of gold or something? I don't get it.

 

It's not a stupid question at all.

The answer is, basically, people believe it has that value. Based on a whole bunch of abstract "values". ALL that money is BANK money. Think "Pyramid scheme" of the largest imaginable level.

 

WHEN CENTRAL BANKS SELL GOLD, THEIR CURRENCIES DEVALUE:

http://www.gold-eagle.com/analysis_98/vronsky020798.html

 

It is not the selling of gold, but the printing of money in excess of the growth of production of goods that does this. The amount of gold owned by government does not matter.

 

It's not, but even if it was, that wouldn't answer your question. That is, what makes gold valuable? It isn't any more useful to you than paper money. You can't eat it and, except for dentistry and electrical connectors, you can't make anything useful out of it. In both cases, the answer is that enough other people believe it to be valuable, and so are willing to trade it for other things. Value is not an inherent property of any object.

 

Value is not an inherent property of any object.

Food, clothing, materials for shelter. Life makes some objects inherently valuable.

Scott

 

the florin