JANUARY 2013                                                                     Download PDF Version

Super-fortunes and Super-currency status

                                                                       

In last quarter’s newsletter we looked at the richest people of the previous century and asked our readers who their candidates would be for the upcoming decades. Before unveiling the results it is worth revisiting a more subtle lesson from the super-fortunes of yesteryear.


If we look at the base currencies of our past century’s rich-list we find that the majority of the ‘winners’ were Americans with their wealth denominated in the US$. The sole Sterling winner was the lonely Nizam of Hyderabad, since his currency was pegged to the Pound. The Yen dominated in the 1980s while the ‘other’ category includes the Mexican Peso and Saudi Riyal, which is pegged to the US dollar.  If we were to run this pie chart for the 19th century we would expect the Sterling and British Empire moguls to be firmly in the majority.









The chart below lists the richest men of each decade of the twentieth century in relation to the world’s global currency reserves.  After the decade of WWI, Sterling never recovered its pre-eminent position to the US$ and by end of WWII, Sterling’s decline as a reserve currency was sealed. The rise of the American super-fortune was underpinned by the dominant position of the US$. 

Currency mattered.

















The United States had replaced the British Empire as the world’s military and financial power; American dollars became the only symbol of measurable wealth of the 20th century. 

If we now turn to our unscientific, yet popular result to the question posed at the end of last quarter’s letter we can extrapolate some very interesting conclusions. Below are twelve personalities along with their currency area that were put forth:




























There were a number of other excellent suggestions, however, the ‘twelve Olympians’ above provide a sufficient snapshot. We can use this small poll to create the pie chart below about the leading global currency for the 21st century. On this basis the US$ will go from 70% of the global reserve currency (as at 2000) to 25%, which is similar to the path Sterling took in the 20th century.













CONCLUSIONS

  1. It is clear from this most imprecise poll that supremacy is moving away from the US$ but there is no clear single replaceable currency. 

  2. The super-fortunes of the future shall be created in the ‘other’ markets with a dramatic drop for Americans.

  3. The ‘other’ category is definitively non-Western.

The remaining question is: what shall be the assets that drive the super-fortunes for this coming century and how can mere mortals benefit. We will discuss this in the next quarterly letter.

 

Media

Newsletters


About Clarmond  |  Advisory Complex  |  Media  |  Our Team