PM Abhisit Warns Thai Baht May Rise Even Further

[Jose]

Jose, Do you have USD vs Gold for reference?

USD vs Gold in % terms since y2000

[orpheus454]

Jose, Do you have USD vs Gold for reference?

USD vs Gold in % terms since y2000

Thanks.

Now try one from 1980 to 2000, or even one from 1980 to the present, inflation adjusted, and we'll see that as a store of wealth gold is a complete dud...

[Jose]

Sorry orpheus, but I'm not interested in cherry-picking dates.

From "Gold - a real and stable currency":

Putting aside temporary market fluctuations, Gold is as close to an absolute and constant measurement of wealth over time as can be found. It is a precious commodity that can neither be artificially created nor destroyed.

It has been proposed by one author that at the time of Caesar Augustus (first Roman Emperor 2,000 years ago), an ounce of Gold would buy a fine toga, sandals and a sash.

At the end of the American Revolutionary War (1783), an ounce of Gold would buy a good tailored suit, a pair of shoes and a belt.

At the end of the Spanish-American War (1898), an ounce of Gold would buy the same items.

At the end of the Second World War (1945), the same.

Nowadays, well after the end of the Cold War, an ounce of Gold will buy the same goods.

In 1908 a basic US tradesman's weekly salary was approx US$25 or 1.2oz Gold - in 2008 it is approximately $900-$1000, or 1oz Gold. 80 years ago, a Model-T Ford cost US$300, or 15oz Gold - now a 2008 Ford Focus is priced at around US$14,000, or 15oz Gold.

However, the same goods and services that are bought today for $100 would (if they were available then) be paid for with $4 in 1913. The US dollar today is not worth a 1913 nickel.

In other words, in terms of buying power, Gold retains its purchasing value over time - its price rising at a rate roughly on par with the devaluation of the USD paper currency.

Gold has truly withstood the test of time - realistically it is the best long-term hedge against monetary devaluation (i.e. inflation).

[orpheus454]

Sorry orpheus, but I'm not interested in cherry-picking dates.

From "Gold - a real and stable currency":

Putting aside temporary market fluctuations, Gold is as close to an absolute and constant measurement of wealth over time as can be found. It is a precious commodity that can neither be artificially created nor destroyed.

It has been proposed by one author that at the time of Caesar Augustus (first Roman Emperor 2,000 years ago), an ounce of Gold would buy a fine toga, sandals and a sash.

At the end of the American Revolutionary War (1783), an ounce of Gold would buy a good tailored suit, a pair of shoes and a belt.

At the end of the Spanish-American War (1898), an ounce of Gold would buy the same items.

At the end of the Second World War (1945), the same.

Nowadays, well after the end of the Cold War, an ounce of Gold will buy the same goods.

In 1908 a basic US tradesman's weekly salary was approx US$25 or 1.2oz Gold - in 2008 it is approximately $900-$1000, or 1oz Gold. 80 years ago, a Model-T Ford cost US$300, or 15oz Gold - now a 2008 Ford Focus is priced at around US$14,000, or 15oz Gold.

However, the same goods and services that are bought today for $100 would (if they were available then) be paid for with $4 in 1913. The US dollar today is not worth a 1913 nickel.

In other words, in terms of buying power, Gold retains its purchasing value over time - its price rising at a rate roughly on par with the devaluation of the USD paper currency.

Gold has truly withstood the test of time - realistically it is the best long-term hedge against monetary devaluation (i.e. inflation).

And a pound of copper? A barrell of oil? A slab of iron? Inflation adjusted, they've held their value too!

If you want to store your wealth, go ahead, but I want to grow mine.

Productive assets is where that happens: shares, stocks, even real estate.

Gold sits there and tracks inflation over the long term, and costs you to keep it.

That said, I'm a gold bull at present: China sees the risk in buying further US Treasuries, so what can they do with their foreign reserves?

Gold, I suspect. So I'll buy gold mining companies, thanks...

[Somnambulist]

As far as I know currencies rise and fall only in relation to each other; that's the currency market. Gold is a commodity, though I suppose it retains some sentimental value from its previous life as currency. I think oil's increased more in price- 'held its value' if you prefer- over the last decade than gold.

QUOTE

Obviously, you have a profound lack of understanding of what a currency is, and is for. It's used to buy real things (hence the term, "in real terms"), such as gas, food, clothing, services, etc. If you've seen no drop in the purchasing power of your currency over the last ten years, whichever it is, you must have been in a coma. Gold, on the other hand, buys just as much stuff now as it did ten years ago, and is obviously more portable, divisible and accepted by vendors, wives, etc. than 55 gallon drums of oil.

7-11 on my street doesn't accept gold in payment, sorry if that isn't profound enough for you...

If that's the best you can do, no worries. Now where's that ignore button?

[wintermute]

That said, I'm a gold bull at present: China sees the risk in buying further US Treasuries, so what can they do with their foreign reserves?

Gold, I suspect. So I'll buy gold mining companies, thanks...

It's not necessarily gold because the value of gold is also very artificial in their point of view.

They are looking more towards productive commodities for manufacturing like steel mills, hydro plants, ore mining companies, concrete plants, oil companies, etc.. to invest in.

[mommysboy]

I can't see anything but a further weakening of the dollar for a couple of years: first there's the sense that it is only being propped up because it's the world reserve currency, then more QE set to come, and then that's what deficit economies have to do anyway to become competitive! It's a frightening prospect but 10-15% devaluation is entirely realistic IMHO.

And that's before the strength of the baht is considered.

What gets me, is that I don't see this big Thai rebound at ground level. My in laws continue to struggle, my suppliers are going to the wall, and the condo I live in can't pay its way. Everybody seems to have the same story of dwindling custom, lower revenue, and higher living costs.

My guess is that the powers that be and the big investors are looking for a consumer/credit led boom in Thailand, and it will probably work just because they have ploughed large sums in and are determined to make it happen.

However, never are the words 'This is Thailand' more appropriate- big or small farang always pays, and the fun game is fleecing us, that is their business.