Richard,
If you're trying to get me to state that gold showed those traits throughout history, I would agree to a certain extent (depending on the period of history you were referring to). Gold has had its periods of over-supply (16th century Europe) and undersupply (19th century US). When there is oversupply, there is massive inflation. When there was undersupply, they resorted to a bi-metal system of gold/silver.
But current history has clearly moved beyond gold capabilities to serve as a functional monetary currency. There just isn't enough of it available to back up the currency required to develop a modernized global economy. With the growing realization that gold can't prove useful in an electronic currency market where trillions change hands everyday, it has fallen in value. Now is being artificially supported by those who would prevent it from being bought and sold like any other currency.
As for the Baht, depending on when you acquired that currency, it has been a lousy or terrific investment. Before the Asian contagion, the Baht was highly overvalued. Afterward, people made a killing buying it and the Thai stock market while there was blood in the streets.
Those who forsaw that the Thai currency was overvalued converted to dollars or some other currency which acted as their temporary SOV. They could have bought gold or silver, but there are more dollars available worldwide, and there is greater liquidity in that Forex market.
Now just like the Thai bhat, the Japanese Yen is becoming grossly overvalued. This situation will correct itself and capital will return to the US dollar seeking a SOV.
And ultimately, the best SOV is the nation possessing the strongest economy, greatest productivity, and is not physically bordering any major rivals or enemies.
Have you noticed that the US is bordered by TWO very large and deep oceans? And that we have the strongest navy and air forces in the world??
That is where a true SOV is created. A nation that is operated by a rule of law and would be very difficult to disrupt or overthrow.
Regards,
Ron |
