Southeast Asian Silver Savior

January 22, 1998

Early this month this analyst presented the study, "GOLD'S VALUE IN ASIAN CURRENCIES" - which is an integral part of a series started over one year ago at the Kitco Gold Forum. The series is called "JAPAN BETWEEN A ROCK AND A HARD SPOT: Only Solution Is To Dump U.S. Treasuries and Buy GOLD!"

In "GOLD'S VALUE IN ASIAN CURRENCIES" it was shown how the hapless Asians might have averted a great deal of monetary hardship and suffering, had they only converted some of their paper assets into GOLD.

During recent months we have watched in abject horror the Domino Effect ravaging and sweeping through the entire Far-East. Currencies have been savagely raped and stock markets brutally violated in five major countries, formally known as the "Asian Tigers." The economic and financial destruction is so severe in South Korea, Thailand, Malaysia, Indonesia and the Philippines that it has the heretofore behemoth Japanese Banking System teetering on the brink of total collapse. Furthermore, rumors continue to grow that colossal dragon of them all, China is on the verge of a massive devaluation of the Yuan (Renmimbi). Although Sino-Government vehemently denies contemplating a devaluation, regional monetary experts are talking a one-time 25% devaluation, or in its stead a relentless grind-down of a 40% magnitude. Either would prompt an immediate contagion effect of the already beleaguered five currencies. Consequent ramifications would bode ill for all Asia.

In my last report you were shown charts depicting the price of GOLD in the five battered currencies. The charts displayed last time showed the daily value of gold in Thailand's baht, Indonesia's rupiah, Malaysia's ringgit, Philippines' peso and South Korea's won. Recall the average GOLD price in these crumbling currencies soared +76.3% DURING THE LAST NINE MONTHS.

As mentioned in the last report "It's going to get a lot worse, before it gets any better!" Well, it did not take long to get worse. On January 21, 1998 headlines of Asia blared and flashed the dreaded news:


The Indonesian currency's slide to an all-time low against the dollar has taken its toll on fragile Asian stock markets.

A tentative attempt at recovery in troubled Asian stock markets took a body blow as the rupiah plunged to an all-time low against the dollar. The Indonesian currency was down sharply, dropping through the 11,000 level, as a combination of economic and political worries took their toll.

The financial, monetary and economic misery mercilessly continues unabated.

Silver Savior

The charts of GOLD's price in Asian currencies is loud and UNREFUTABLE testimony to the fact that Asians could well have avoided the devastating effects of currency chaos and stockmarket meltdowns had they diversified some of their assets into GOLD. Interestingly, this analyst discovered yet another investment vehicle, whereby the hapless Asians might have SAVED EVEN MORE of their destroyed wealth: SILVER. IN FACT CONSIDERABLY MORE!

Following are charts depicting the price of SILVER in the five beleaguered currencies: Thailand's baht, Indonesia's rupiah, Malaysia's ringgit, Philippines' peso and South Korea's won. Whereas it was common knowledge the pounded currencies were losing value against all other paper money, this analyst must confess the results were indeed astounding with regard to SILVER.

Silver's Increased Value
Last Six Months
Indonesian Rupiah
Thailand Baht
Korean Won
Malaysian Ringgit
Philippine Peso

During the last six months the SILVER price in battered Southeast Asian currencies has rise an astounding 230%. To eliminate any doubt in the mind of the reader about the possibility of a typo in this report, the SILVER rise is herewith spelled out: SILVER ROSE AN AVERAGE OF TWO-HUNDRED AND THIRTY PERCENT AGAINST SOUTHEAST ASIAN CURRENCIES DURING THE LAST SIX MONTHS!

It is meaningful and relevant to recall the last report showed the GOLD as UP a "mere" 76% in these same currencies. The increased value of SILVER in these fiat currencies was MORE THAN TRIPLE THAT OF GOLD. Whereas GOLD was a bonanza for Asians, SILVER was indeed a TREASURE-HOUSE.

The last chart shown above is the US Dollar price of SILVER. It purposely included to convince the few remaining skeptics, who erroneously believe that exchanging the embattled paper currencies for the "almighty" US Dollar was the safest harbor... WELL IT WASN'T! The last chart clearly demonstrates that the value of SILVER ROSE MORE THAN 46% VERSUS THE GREENBACK DURING THE LAST SIX MONTHS! Even the most blind and ardent adherent to paper money is forced to concede THE VISUAL PROOF OF THE SILVER SAVIOR.

Whereas most Asians (India excluded) have heretofore not been BIG traditional silver buyers, recent history may well change that attitude.

Known by the Incas as "Lágrimas de la Luna (teardrops of the moon)," SILVER would be tears of joy for the no-longer wealthy Asian who puts some of his paper assets into "poorman's gold."

Quinoa grows into market gold