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October 26, 2009

Analysis of 100 Currencies
by Mike Hewitt

As of September 2009, the total amount of physical paper bills and coins throughout the world is approaching US$4.5 trillion. The following figure indicates the countries and monetary unions included in this analysis.

Three of the five monetary unions are clearly seen above. The remaining two are the IEOM which uses the French Pacific Franc in three member countries, and the East Caribbean Currency Union which uses the East Caribbean Dollar in eight member countries.

The following graph shows the growth of global money supply since 1971, a year selected for the reason that the last remaining currency to be convertible to gold (the US dollar) was made inconvertible on August 15, 1971.

Since 1971 the total value of global currency in circulation has been increasing at a rate of 9.09% compounded annually.

The four largest currencies (EUR, USD, JPY and CNY) comprise nearly 75% of all circulating banknotes and coins within the public domain.

Country/Union	Currency Code	Amount (Billion US$)	Percent of all Circulating Currency
European Union	EUR	1067.6	24.00%
United States	USD	862.3	19.39%
Japan	JPY	805.4	18.11%
China (Mainland)	CNY	539.7	12.13%
India	INR	144.7	3.25%
Russia	RUB	116.4	2.62%
United Kingdom	GBP	89.0	2.00%
Canada	CAD	49.9	1.12%
Brazil	BRL	46.5	1.05%
Switzerland	CHF	42.9	0.96%
Poland	PLN	41.1	0.92%
Australia	AUD	38.4	0.86%
Mexico	MXN	35.3	0.79%
South Korea	KRW	27.1	0.61%
Taiwan	TWD	26.8	0.60%
Hong Kong	HKD	23.8	0.53%
Others (87)	-	490.8	11.04%
Total	-	4447.7	100.00%

It is apparent that the quantities of money are increasing in an accelerating fashion. In 1990, the total amount of currency in circulation passed US$1 trillion. Twelve years later, the total amount exceeded US$2 trillion. This doubled again less than six years later in early 2008.

The author is of the opinion that these substantial increases to the amount of circulating currency will ultimately lead to decreased purchasing power.

Mike Hewitt
DollarDaze.org

Mike Hewitt is the editor of www.DollarDaze.org, a website pertaining to commentary on the instability of the global fiat monetary system and investment strategies on mining companies.

Disclaimer: The opinions expressed above are not intended to be taken as investment advice. It is to be taken as opinion only and I encourage you to complete your own due diligence when making an investment decision.