Monday, October 21, 2013

The life span of Reserve Currency Status

The average life expectancy for a fiat currency is around 27 years. Approximately every 30-40 years the monetary system breaks down and needs to be redefined. The British Pound Sterling is so far the most successful fiat currency in the world.

Source: JP Morgan

As the above graph shows, U.S. reserve status has already lasted as long as Portugal and the Netherlands.

The British Pound Sterling founded in 1694 and 317 years old is the world's oldest fiat currency in existence. Originally is was worth 12 ounces of silver, but since its foundation it has lost around 99.5% of it's value.

Will the dollar last as long as Spain, France or Britain’s reserve currencies ?

Geir Solem

Elliott Wave Technician
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