What is the soundest fiat currency right now?

[hugolp]

In what sector do you foresee inadequate production capacity in the short term?  Surely there is no expectation of inflation in the computer chip sector?

As far as food goes, if prices are rising because of the use of corn for ethanol for example, that problem could disappear as rapidly as it did two years ago when everybody parks their SUVs again and oil drops back below $30/barrel.

Housing for example. There is too much capital created for housing during the previous years. All that capital could have been used to created capital that created production more according to consumer needs.

[srb123]

Most of our recent success is attibuted to the boom in China

Not to mention that the previous government paid off the national debt before the US/Europe financial crisis.

I'm a fan of the Howard/Costello Govt, but I think their good management was matched by the good luck of the China Boom. Apart from the DotCom Bust and 9/11, the 11 years they had were very hassle free in terms of the Economy.

Throiugh Mining exports, China has indirectly paid of our debt for the 10 years leading up to the GFC, when the GFC did hit, Shares went down, but everything else stayed largely the same. Wages and Jobs stayed up, thanks largely to the demand from the Mining sector (China again.), that meant our Homes didn't become Toxic assets.
Company profits, especially Banks barely dipped, so once the U.S. finds it feet, out Share prices will probably come back too.

The only "victim" in Australia was Retail. Who cares? Retail is changing due to the Internet, not the GFC.



At preset, Australia could probably stave off another crisis, but it would be a disaster for the Eurozone and the US. (Taking the EUR and USD with them.)

[ShadowOfHarbringer]

What is the soundest FIAT currency ?

FIAT cars/car parts i would say

[ribuck]

I'm a fan of the Howard/Costello Govt, but I think their good management was matched by the good luck of the China Boom.

Contrast the Australian experience with the Blair/Brown government in the UK.

Gordon Brown preached fiscal responsibility. He emphasized the need to get the national debt down to 40% of GDP. He claimed repeatedly that it was OK for the government to borrow at the low point of the "economic cycle", provided they paid it back during the good years.

Of course the problem with that is that you can't know the duration of an economic cycle until after it has happened.

As the 2000s progressed, Gordon Brown somehow convinced himself, the government, and the people that we were in the "lean years" and that now was the time to borrow. In fact, those turned out to be the boom years.

So when the banks imploded, the UK was already in a bad situation regarding government debt.

[S3052]

This is based on technical analysis of the dollar index (DXY)

It already bottomed in 2008 and also made a mid term low in Nov '10, and is rallying since then.

There is at least 20% upside from here.

As forecast, the dollar has bottomed and did not break its 2008 low.
Significant upside (more +20% in the DXY to above 90)

[hazek]

There's not a single national currency around the world which isn't controlled and inflated at will by it's issuing government. Not one.

It's scary really to think about it. Especially since if you can't protect your money from getting stolen through the invisible tax which is monetary inflation then are you really free? The answer of course is you are not. You are a slave to the fiat system.

[Justsomeforumuser]

I still wouldn't put bitcoin under 'fiat'.

clear. BTC is not fiat, and will be stronger

BTC is about as Fiat in the sense of "make-believe" (fiat" => make it be/let it be so) as it can get.

It's based on people believing in it. How is that different from any other "fiat"?



As for safety - if you stay within the same economic zone as your home currency and the economy thereof doesn't go under, you are relatively safe as long as goods and services don't take off and wages remain semi-stable.

There's constant talk of inflation and the EUR getting flak with Greece and so forth, but food prices here the last few years are actually negative year on year. It's commodity speculation that causes capricious pricing on various things, not crappy money printing on it's own.
See/read also everything regarding Goldman Sachs and the last 30+ years of the commodity exchanges / regulation..

Then again, before the european PIGS and debt issues the ECB was free to hike as needed, now we're between a rock and a hard place..

[hazek]

Wrong. Food prices in my country have doubled since 07 when we adopted the euro. DOUBLED.

[BitterTea]

BTC is about as Fiat in the sense of "make-believe" (fiat" => make it be/let it be so) as it can get.

It's based on people believing in it. How is that different from any other "fiat"?

If that's your definition of fiat, then all money is fiat. Gold only has value because people believe in it, federal reserve notes only have value because people believe in the federal reserve.

A more meaningful (and I believe more widely accepted) definition is "money that only has value because of government regulation or law".

[NoValues]

Traditionally british pounds are used in this capacity, and there
value still doesn't change much.

[GHDPink]

here's constant talk of inflation and the EUR getting flak with Greece and so forth, but food prices here the last few years are actually negative year on year. It's commodity speculation that causes capricious pricing on various things, not crappy money printing on it's own.
See/read also everything regarding Goldman Sachs and the last 30+ years of the commodity exchanges / regulation..

[joewandy]

Below commodities and Bitcoin, what currency is the soundest in its backing and future?

Any country with low government debt. There are even countries that have no debt and own sovereign wealth funds too.

If I wanted to hold fiat, I would consider Australian dollars. Central bank interest rates are not artificially low, at 4.5%. Government debt is tiny compared to the USA and Europe. There is plenty of land, and plenty of natural resources, for the population.

However, as is inevitably the case, the market has already priced this into the exchange rates, and the Australian dollar has risen enormously in recent years.

Singapore satisfies all your criteria. Zero government debt and at least $142b of sovereign wealth. An extremely stable (read: 'authoritarian') government which maintains an iron-fist on economic growth at the expenses of everything else. Healthy GDP growth and one of the strongest in the region.

From my personal experience, it's a good place to earn money and invest, but not so for the actual living

[Jason Keith]

Not to mention that the previous [Australian] government paid off the national debt before the US/Europe financial crisis.

They didn't. Not even close. Government at every level but the Federal government most notably have enormous unfunded superannuation liabilities. The coalition government was a disaster for Australia especially with their pumping of the real estate bubble and welfare for the upper class and elderly.

[GHDPink]

http://www.dutchraiders.nl/index.php?topic=55178.0

[Catallaxy]

Below commodities and Bitcoin, what currency is the soundest in its backing and future?

Jim Rogers advises to buy Japanese Yen, chinese RenMimbi (not sure about the spelling for this one) and Swiss Franc.

Renminbi might be the next reserve currency. People in China are making it easier to transact in what same say is a move toward making it an international currency. Setting up dual currency credit cards and bank branches in other countries. Two branches in the US in New York and California. Jim Rogers predicts the renminbi will eventually be freely convertible.