{"id":6415,"date":"2011-08-11T19:32:33","date_gmt":"2011-08-11T11:32:33","guid":{"rendered":"http:\/\/www.intmath.com\/blog\/?p=6415"},"modified":"2016-09-19T11:14:27","modified_gmt":"2016-09-19T03:14:27","slug":"singapore-dollar-backed-by-gold","status":"publish","type":"post","link":"https:\/\/www.intmath.com\/blog\/mathematics\/singapore-dollar-backed-by-gold-6415","title":{"rendered":"Singapore dollar - backed by gold"},"content":{"rendered":"

It seems we're heading into yet another financial crisis as I write.<\/p>\n

What causes these crises? Quite simply, people are greedy and they want what they can't afford. There's always some financial institution that's willing to lend because they're desperate for profit.<\/p>\n

It's the same with many governments - the US, Eurozone and Japanese governments are all broke - but they stick their heads in the sand and pretend everything will turn out OK in the end. Trouble is, you eventually need to pay the piper.<\/p>\n

\n

\"Singapore
\nCover of commemorative coin<\/p>\n<\/div>\n

A few years ago I was at some event in Singapore and they were selling a commemorative coin. The packet contained some brief information about the history of Singapore's dollar.<\/p>\n

When Singapore was first established by the British in the 1800s, a range of "silver dollars" were in use for trade. These included the Mexican dollar, the Spanish dollar, the Indian rupee and the Dutch guilder. <\/p>\n

Singapore then used the British pound, before establishing the Malayan dollar used throughout present-day Malaysia, Brunei and Singapore. <\/p>\n

The Singapore dollar (like most currencies) was pegged to the weight of gold (0.290299 grams). This meant any paper money or coins could be exchanged for real gold (or silver). <\/p>\n

\"Singapore<\/p>\n

Most countries went off the Gold Standard in the early 1970s, when President Nixon succumbed to pressure from the French. (The French wanted gold for their US dollar reserves. I won't be surprised if the Chinese start making the same demands on the US in the near future, as Treasurys are seen as losing value.)<\/p>\n

<\/ins><\/div>\n

SGD backed by gold <\/h2>\n

The following statement on the commemorative coin caught my eye, especially considering the parlous state of the US financial system: <\/p>\n

\"Singapore<\/p>\n

It seems that not too many of the major currencies can claim they are \"100% backed by gold and external assets\". <\/p>\n

Debt vs reserves<\/h2>\n

Check this out - US Debt Clock.<\/a> It shows in real time an estimate of the current debt and compares it to the tax revenue (currently only about 1\/7 of the debt).<\/p>\n

And don't miss this Visualization of US Debt<\/a>. A series of US-initiated crises is inevitable. <\/p>\n

On the other hand, from the get-go, Singapore has run things very prudently. Their reserves have almost doubled in the last 5 years to around $250 billion. Not bad for a country with 5 million residents and no natural resources. <\/p>\n

During the financial crisis of 2008, Singapore drew on these healthy reserves, cleverly kept people in work (by providing a training subsidy to employers) and came out of it growing faster than any other country in the world. Unemployment is hovering around 2% and GDP growth is around 12%. Singapore has a triple-A sovereign credit rating - one of the few countries in the world to have this.<\/p>\n

And the US? It just got itself more into debt.<\/p>\n

Considering the state of the rest of the world, it certainly seems the 21st century will belong to Asia. <\/p>\n

See the 1 Comment<\/a> below.<\/p>\n","protected":false},"excerpt":{"rendered":"

\"Singapore<\/a>Once debt starts to spiral out of control, there's not much you can do. Here's one country that is in a healthy position.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":""},"categories":[4],"tags":[125,131],"_links":{"self":[{"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/posts\/6415"}],"collection":[{"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/comments?post=6415"}],"version-history":[{"count":0,"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/posts\/6415\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/media?parent=6415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/categories?post=6415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.intmath.com\/blog\/wp-json\/wp\/v2\/tags?post=6415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}