of a Volcker backed by the resolve of a Reagan emerges in western politics these 3 trends willcontinue. Proof of the spreading doubts about the value of fiat currencies backed by promisesfrom dissolute legislators and toothless central bankers is visible in the next chart. Decliningofficial global gold reserves which declined for 40 years have turned up. Non US and Europeangovernments are now accumulating gold in their reserve portfolios. These counties are forgoingcurrent interest income in order to protect the real purchasing power of their national savings.Central bankers and treasurers are the most inside of insiders and they are voting with their feet.
The simple approach taking advantage of this data is to buy gold. A reasonable strategy.But there are negatives. First even though the strong gold trend has been pronouncedsince Nixon took the dollar off of the gold standard, there still have been long periods of flat or correcting prices which provide no return. A second negative is that gold must besold in order to realize any gains since it has no cash flow to the holder.The Swiss currency does offer a small interest return but is at risk of political attempt to protect Swiss industry by weakening the historic prudence of Swiss monetary authorities.In fact this past year the Swiss Central Bank took billions of dollars in losses as it tried tohold down the value of the CHF. Such behavior is a worrying crack in the foundations of CHF integrity.The ADXY Index offers up some interesting possibilities. Comprised of CNY, HKD,INR, IDR, KRW, MYR, PHP, SGD, TWD, THB the index is therefore still a product back by fiat paper currencies with the attendant risks of all paper money. The differenceis in the fiscal, debt, and growth circumstances of economies. Over 60% of the global population is in this region and yet only around 25 to 30% of global capital is invested