Japan Between a Rock and a Hard Spot - Part - IX

January 7, 1998

Gold's Value in Asian Currencies

In my last report I showed a table indicating how much gold appreciated in Southeast Asian currencies. During the 10 month period from mid-March to mid-December 1997 gold's value rose an average 45% in the beleaguered currencies... certainly a well-protected refuge from the devastating aspects of the Domino Effect ravishing the region. UNFORTUNATELY, the malady continues unabated, as the currencies continue to be mercilessly pounded down. Here is an update on gold's relentless INCREASE in value in the five besieged paper money.

The following five charts show the daily value of gold in Thailand's baht, Indonesia's rupiah, Malaysia's ringgit, Philippines' peso and Korea's won.

The numerical significance of the above charts follows - showing gold's percent increase in value in each of the plagued currencies.

Currency

Gold's Increased Value
since early-1997

Indonesian Rupiah
Thailand Baht
Korean Won
Malaysian Ringgit
Philippine Peso

+147.0%
+66.7%
+83.9%
+44.8%
+38.9%

Please recall my last report - only three weeks ago - showed an average 45% increase gold price in the beleaguered currencies. In less than one month the average gold price in these battered currencies soared even further to +76.3% from early 1997. GOLD has, and continues to offer positive refuge from crumbling currencies and the falling stock markets of Southeast Asia. (Note: Charts reflect data through January 6, 1998)

Just a cursory glance at the five charts above clearly demonstrates that any Asian investor would have saved himself a significant amount of material loses and unnecessary grief by having converted his funds into the yellow metal. And as the saying goes, "It's going to get a lot worse, before it gets any better!"

Currency Chaos Continues

Below is a breakdown of foreign exchange action since the beginning of July last year, when the Asian currency turmoil really took hold. The exchange rate shown is January 2, 1998 - please note these currencies continue to lose value DAILY.

Currency movements are in percentage terms and reflect the local unit's fall against the dollar, not the dollar's rise.

Currency

Current value

Move since
July 1, 1997

Indonesian Rupiah
Thailand Baht
Korean Won
Malaysian Ringgit
Philippine Peso
Taiwan Dollar
Singapore Dollar
Hong Kong Dollar

6,625
50.00
1,770
4.050
42.45
33.23
1.710
7.750

-63.30%
-51.00%
-49.85%
-37.80%
-37.60%
-16.50%
-16.25%
-0.05%

Not a few monetary experts forsee an imminent devaluation of China's Yuan (Renminbi)... which most probably will have a devastating impact upon the Hong Kong Dollar and Taiwan Dollar, forcing them down the same devaluation path of all other Asian paper money.

During the last six months of currency chaos and stock market havoc - both which continue as I speak - the average citizen of the average country of this area, who had the foresight of converting his currency into GOLD, would now be about 76% RICHER - reflecting the average increase in gold's value in the five besieged paper currencies.

A one-ounce gold nugget is rarer than a five-carat diamond.

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