The Thai, a thrifty people
Of course, many Thai borrow more than is wise. Often for a (too) expensive car, but even more often out of necessity, for example for the children's studies, for the purchase of fertilizer, for the start of a small business or for unexpected expenses.
What also influences the picture are the stories that regularly circulate that the Thai does not look beyond today's day and that is then illustrated with stories about barmaids who - at least before the covid crisis - had a large income but where the money flew out the door just as easily. But most Thais have to work hard for their money and therefore realize the value of money even more than the average farang realizes. And in their environment they also see countless examples of people who have to make ends meet on 600 baht a month in their old age or who are grounded due to setbacks in life and poor social services. Those Thai want to protect themselves against such a disaster by putting something aside now and then if possible. I will give some examples of that.
For example, I know an assistant teacher with a monthly income of 10.000 baht. More than enough for her because she lives frugally, still lives with her parents and has no children. She donates money from her income a few times a week to charities ranging from people who lost their homes to starving elephants and of course the necessary Buddhist institutions. In addition, she invests in a government fund with a return of 4% to which she has access as a teacher. She is currently taking an investment course because she also wants to invest in shares. I also know a student who is in his last year of study and has already bought some shares. Of course these are just two examples, but it is striking that they both told me this unsolicited, independently of each other. Possibly a trend among young people in Thailand with a good education.
Elderly
I cannot give any examples of the elderly in my area (Isaan) investing in shares. They usually save in a different way. For example, I know an elderly couple whose husband has an estimated income of 30.000 baht and the wife probably also earns more than the minimum income as a hairdresser. In addition to purchasing a car, they occasionally buy pieces of land as security for their old age. But ordinary farming families also do this if they have the means to do so. For example, there is a family where the man works as a truck driver in addition to working his rice field and where his wife sells vegetables on the local markets. Yet they also manage to buy some additional land every now and then.
But undoubtedly the most popular retirement provision in Thailand is gold. And there are several reasons for that. For example, there are virtually no bank branches in the countryside and many Thai people who live in the countryside hardly ever visit cities. Gold is then used as a good alternative to a bank account. In a provincial capital like Ubon alone, there are dozens of gold shops where you can buy but also sell gold, where the difference between the purchase and sale price is only about 3% in the case of coins and a little more for the more popular chains. That gold can also be temporarily exchanged for money with a pawnbroker or serve as collateral for a loan from acquaintances. For example, we once received an unsolicited gold chain as collateral for a loan. With such collateral you can of course be assured that you will get your money back. Gold has moreover proven itself for about 3000 years as an investment that retains its value, although it is of course subject to price fluctuations. Besides, who knows that gold has outperformed any stock exchange this century? And with the current frankly extreme measures taken by many central banks, you can expect that trend to continue for years to come.
Gold
Anyone who doubts the gold ownership of the average Thai has not been paying attention and missed the queues at the gold shops in recent months. The people in those lines stood there to sell their gold and the supply was so great that some gold stores had to close because they no longer had money to buy the gold. That gold was eventually sold to Switzerland (while Thailand is usually an importer of gold) and in such large quantities that, according to the central bank of Thailand, it had a large share in Thailand's positive trade balance in those months and even resulted in a markedly higher rate of the baht. The Bangkok Post stated that large supply of gold from the high gold price. Thai people would buy gold when it's cheap and sell it when it's expensive, unlike many Western investors who don't buy until the rise has been going on for a while. The Bangkok Post is undoubtedly right, but it is only a partial explanation.
Arguably the largest share of the sale has been the gold owner's appeal to the function of gold as a resource in troubled times. And times have been tough for many Thais in recent months, so they've been forced to monetize some of their gold in order to survive. Because gold is not primarily an investment, but more of a reliable insurance against setbacks. That assurance could prove invaluable if, as some economists expect, hyperinflation comes to the Western world as occurred in the Weimar Republic 90 years ago. And that expectation is based on the current extreme money creation and on the fact that it is impossible for central banks to raise interest rates much with the current debt position of many governments, companies and individuals. When inflation reared its ugly head 40 years ago, that inflation could be successfully suppressed by, for example, raising the interest rate on government debt and on mortgages to 13% in the Netherlands and even to over 20% in the UK. Such an emergency measure is no longer possible. Should hyperinflation come – which I do not expect and certainly do not predict but also do not rule out – the Thai rice farmer will be lucky in his position as a food producer and with his gold holdings. And the farang with its worthless euros, yens, dollars or pounds will often depend on that rice farmer. The roles are then drastically reversed. An extra reason to be nice to our Thai fellow man now because we may need them badly in some time.
Irrational loan
Finally, an example of an unnecessary and irrational loan from a Thai rice farmer. With which I do not want to show that the average Thai takes out irresponsible loans, but that the motives for irrational behavior differ little from those of the average farang. The rice farmer in question was not well off - no car, for example - but what undoubtedly gnawed at him was that of the 4 family members - in addition to the farmer, his wife and two daughters - he contributed the least to the family income. More importantly, he had his eye on a young woman and he was eager to impress her. He decided to purchase an agricultural machine which would of course have to be financed with a loan with his wife's land as collateral. His wife was against this but eventually gave in.
There was also talk that we would borrow money, but my wife thought that was irresponsible because there were already enough agricultural machines in the village in question and, moreover, it involved quite a bit of money. The farmer's family finally managed to arrange the financing and we are now two years further. Fortunately, until recently they succeeded in paying the repayments and interest payments on time, but currently a penalty interest due to late or insufficient payments is imminent. My wife has put her hand over her heart – fortunately it was not a large amount – so they are safe for another year. And the rice farmer? He was indeed successful with his girlfriend because she is now pregnant, although she has also found out in the meantime that owning an agricultural machine does not necessarily mean that you are successful in life.
Is something like that typical Thai? No, my high school history teacher already explained the behavior of many rulers with the slogan “cherchez la femme”, which translated means “find the woman”. From Julius Caesar to the French kings, he could explain their sometimes extremely strange decisions by pointing to the women around them. Incidentally, that cry does not come from a historian but from a writer, but this aside.
That strange behavior is not limited to French kings. For example, an acquaintance once told me in a candid mood that in his youth he had run many miles in his youth to lose weight in a probably hopeless attempt to gain the favors of a young lady he had such an eye for. traps. And what man will deny that he ever did foolish things to win the favor of a woman. At least not, although I won't go into detail.
Ask our readers: are women also that irrational?
Nice article, but the stock market does not only consist of an increase in value as is the case with gold, take the dividend into account and you get a completely different picture. Total Return Stock Index of the last 50 years :
Stock-market : 13.611%
Gold : 4.772%
That's quite a difference. Source :https://www.longtermtrends.net/stocks-vs-gold-comparison/
Scroll down 1 chart for the “Including Dividends: Total Return Stock Index”
You are of course right that you should include dividends. And that the choice of the period is of great importance. But even if you include the dividend, gold has been superior this century so far. Certainly not in a period of 50 years. But actually it is about future developments and that always remains uncertain. And gold should not be seen as an investment but more as an insurance policy, for example against hyperinflation.
Dear Hans, it was about numbers and then I always want to take a look and then used the same link from Mike. Even in a century = 100 years you can compare a hare with a snail:
gold: 8166% increase
equities (total return stock index) : 1482131% increase
indeed I've checked a few, really a return of 1,4 million percent for the shares and that's a return of 181 times that. Give me a kilo of stock instead of a kilo of gold or something.
That's not correct, 100 years of stock market vs gold”
Stock market : 1.482.000 %
Gold: 8.166
Even without dividends, the stock market has outperformed gold in 100 years: 24.533%
Gold is a nice investment when the stock market goes wrong, but those are usually short periods with the exception of the 1929-1939 situation. However, we now have a completely different economy than the one before WW2. Unfortunately, the biggest change since then is the abandonment of the gold standard by the USA sometime in the 70s.
You are absolutely right in pointing out the abandonment of the gold standard. Before that time (1971/Nixon) the gold price was more or less frozen, so comparison is pointless. The fact that I have chosen a relative period of 20 years (“this century”) is because money creation has only really started in the last 20 years and that explains why gold has done so well in that period. And because we can expect that the money presses will still be working overtime for the time being, you can also expect a further increase in gold. That is of course not a prediction of mine, I do not venture to that.
This is a valuable story, Hans, and I fully support it. Most Thais manage their money reasonably well, and save quite a lot. There are many village funds where people invest money, for example as a kind of funeral insurance. Certain types of life insurance also serve as a kind of piggy bank: they pay out at a higher age.
It is nice that you are so well informed about what is going on in Thailand. :
Thanks Tino,
Coincidentally, I also once heard how much such a village funeral insurance paid out. A very high amount considering the low premium. I think that is because the people who leave the village no longer pay premiums and therefore no longer receive benefits. They then lose that invested money and that in turn benefits those left behind. And apparently no overhead costs as in the Netherlands.
Oh yes, and then you also have a kind of private savings groups, the village bank. You put in a little money every month and then you can borrow if suddenly necessary.
Dear Tino, I have not been able to easily find anything about those village funds on the internet, but it is actually extremely interesting, partly because I think that it may have been functioning reasonably well for a hundred years without expertise in terms of investing, determining premium levels and determining the amount of the benefits (in my pride I almost feel the urge to give advice, but I won't). It seems very sensitive to fraud, but apparently that is not a problem. It also points to strong social cohesion.
I think most Thai people can't save because there is simply no money.
Many will have to hand in their car to the bank because they can no longer afford it.
Or you can borrow a smart move from the bank.
To help you down even more
Sometimes you are surprised that very poor people turn out to own gold. Indeed, those will not be the people who bought a car with borrowed money. I also know a Laotian woman who has been living in Thailand for decades in an extremely shabby hut, even by Isan standards. Still, she had a 50-bar gold necklace and when her financial situation improved a bit, she exchanged it for a 1 baht necklace – for an additional payment, of course.
In 'Welcome to Bangkok slaughterhouse', in which Father Joe describes life in the slum of Klong Toey, an anecdote occurs about a fire that burns part of the neighborhood to ashes. After the fire has been extinguished, the residents quickly go to dig in the remains for their hidden gold (chains, etc.).
And thanks again for this solid piece dear Hans. 🙂
Difference buying – selling gold would be only 3 percent. Unfortunately this is something different.
Don't buy properties with a 3 percent difference!
The gold price is also not stable! Now the gold price per baht is high.
When selling, the customer is always the victim, because the gold shop and goldsmith is not interested
in private gold.
You have to pay interest at the pawnbroker and then you will indeed soon have to pay more than 3%. But the gold shop would like to have your gold because he lives from buying and selling. And if the supply is large as in recent months, it can always be exported to Switzerland. The costs of transport are low, even including the necessary theft insurance.
This is clearly different in the Netherlands, because personnel costs (and all kinds of taxes) necessitate a large margin.
What Hans says is correct, my wife bought gold a few years ago for 18000 Bth per bath and has now sold for 24,500 Bth per bath.
(Tip) It also strongly depends on which store you trade in, sometimes saves more than 1000 baht per store.
So inquire first, it is not the case that you get the same price in every store.
Another tip: sell the gold in the same store where you bought it, if possible with the proof of purchase. You will probably get the best price then. That may also explain the difference of 1000 baht.
The story doesn't match the title at all. It's really just about buying and selling gold. I don't think it has much to do with saving but with inheritance. Most of the gold and the money from the monetization of that gold has sometimes been in the family for decades. People often don't know how it ended up in the family, but sometimes because of grandma's sin-sod.
Based on the figures, the Thais are not a thrifty people at all, but a strong consumerist people: what you see (at the neighbours) you must have (car, mobile phone, flat screen, moped) and as soon as possible. And so there is borrowing and gambling because those are the fastest ways (people think) to get cash money. Loans are usually not repaid, but one gap is covered by another. And with gambling a lot of money is lost, sometimes even borrowed money. I have not 1 of these in my own condo building, but dozens of examples. And there are also thrifty Thais, but that is a large minority. My ex-girlfriend was not thrifty, she was miserly: never again (only second-hand), even on weekends she wore her company uniform (because it was free); food was never thrown away but reheated for the next day's lunch, the moped was 40 years old and was constantly patched up. As a result, she had two houses and poor health. (especially stomach and intestinal complaints)
The massive selling of gold in recent months while normally more gold is bought than sold (Thailand mostly imports gold) strongly suggests that the gold has been sold to keep it afloat. And that's what you save for. When you buy gold you hope it will never be necessary to sell and then it passes to the children.
And furthermore, I suspect that the purchase of gold is not included in the figures you refer to.
You save to keep your head above water????? No, the Thais have sold their gold to keep their heads above water because they have nothing, including no savings. In fact, some poor wretches don't even have a bank account.
Yes, yes, Chris.
The figures say that in Thailand 10% of the national income is saved (that will be for a large part among the middle and higher incomes), Private debts are 85% of the national domestic product, in the Netherlands in more than 200 %.
Loans are usually not paid off? Really and truly? Who will lend then? I don't believe what you say. Most loans are repaid.
Maybe you should look beyond your condo.
I do, and very often, and my wife comes all over Thailand for her work.
it seems that the gwneThai is sacred to you and the row of Thais and the army of course the bad guys, the bad guys.
But maybe you should read something about the debt problems of Thai households. Will give a first, but there are dozens of other articles (besides the difficult to find unofficial debts with loansharks and savings cooperatives).
https://www.thailand-business-news.com/banking/75454-thailands-dangerous-debt-addiction.html
https://www.bangkokpost.com/business/1804389/household-debt-up-7-4-in-2019-amid-economic-woes
htthttps://www.thaiexaminer.com/thai-news-foreigners/2019/09/18/personal-debt-thailand-bank-governor-suffiency-economic-thinking-young-thai-people/ps://tradingeconomics. com/thailand/households-debt-to-gdp
https://news.cgtn.com/news/2020-03-28/COVID-19-leaves-Thailand-high-household-debts-high-odds-of-recession–Pel2pphmJq/index.html
https://www.bangkokpost.com/thailand/general/1910092/student-loans-boost-as-crisis-bites
http://www.en.moe.go.th/enMoe2017/index.php/articles/476-student-loan-defaults-blamed-on-poor-discipline
That 85% means nothing at all if the real GDP is made by a minority of the population. In the Netherlands, many more people contribute to GDP. Just look at the median incomes.
OK, Chris, I'll pick one source:
https://www.bangkokpost.com/business/1804389/household-debt-up-7-4-in-2019-amid-economic-woes
Quote from that article:
Mr Thanavath said Thailand's household debt has increased every year, but the ratio to GDP remains below 80%.
“Most debts are incurred for necessary items such as car purchases and housing loans,” he said. “The rate now of 78% to GDP is not yet regarded as worse.”
Thai private debt 'is not yet worrisome'.
From another source I know that in Thailand more than 50% of the debts are mortgages (a form of savings…), 25% vehicles and the rest many other things. The biggest problem is with the loan sharks who charge a lot of interest, which is not allowed, but which the government does little about. Three guesses why not.
And I will never say anything bad about the military again. Army commander Apirat said the army is 'sacred', using the Thai word 'saksit', sacred as God or the Buddha.
Moderator: Off topic.
I do not know the reliability of the link, but something would have been done about the loan shark thing.
The fact that a loan shark can be this has much more to do with the lack of being able to put the consumption to the business. Borrowers are not victims, but cause of a problem, except in a few cases, of course.
https://www.pattayamail.com/business/thai-police-arrests-nearly-5500-loan-sharks-and-debt-collectors-305732
Tino,
The ratio to GDP is based on official loans through the bank I assume.
The actual debt burden is not visible in figures.
As far as vehicles are concerned, there is often a very low purchase amount and a monthly payment.
This is therefore not a loan, but if you do not pay for a few months, the car will be confiscated and you will lose your previously paid installments.
Mortgages on a house do not occur among the poorer population.
You do not need a mortgage on corrugated iron and a number of masonry stones.
Gambling and alcohol addiction create debts.
Except for the last sentence, I agree with you khun moo.
From previous responses from you, I understand that alcohol and gambling addiction is the biggest culprit in your immediate environment, but that is less the case in my Thai environment. The last 2 years it is mainly a lack of income, because no work. There was hardly any support from the Thai government.
This contribution from Hans Pronk is from 2 years ago and since then the debt burden has deteriorated considerably, as can be seen in this graph (https://tradingeconomics.com/thailand/households-debt-to-gdp) of trading economics.
In the beginning of the corona pandemic, many people were able to pay their living costs and debt by drawing on their savings and selling gold, but you can see the debt burden rising steadily from Q1 2020 onwards. I don't know why Q2 2021 shows a dip, but maybe it's because people are selling their gold en masse?
In Q3 2021, the debt burden will skyrocket (all the gold has already been sold?) and borrowing is needed to make ends meet.
The people at the bottom of society, who as always take the hardest blows, have already sold or pawned everything of value and can only turn to loansharks. In the absence of collateral, those people usually charge 20% interest per month.
30% to 60% per month interest and loansharks have spread like wildfire throughout Thailand.
At the top, the big bosses of the loansharks are senior military and police officials
example Thai woman borrows 5000 baht at 1% per day interest.
The Thai woman has been paying 1 baht interest for 1500 year, so she has paid 1 baht interest in 18000 year on an amount of 5000 baht due to the fact that she cannot repay the remaining 5000 baht and now pays 1500 baht rete per month until the end of the days.
Yes, the fact that the Netherlands has a high debt burden is due to the mortgages. But that is just capital accumulation and the mortgage debts are then offset by the value of the home, which is on average twice as large and is therefore positive on balance. Another advantage of the mortgage debt is that it yields tax benefits and therefore more disposable income. Comparison with Thailand is completely wrong, for example, the Dutch also save a lot for social security and are insured for any kind of calamity such as unemployment, long-term illness, etc. And they are obliged to save for pensions, which makes them among the highest savings in the world.
https://economie.rabobank.com/publicaties/2018/juli/nederlandse-huishoudens-weinig-vrij-spaargeld/
within this link are many references to others in which more is explained and explained.
Chris, you're probably assuming that gold isn't money. I would like to point out that some see gold as the only money: “Money Is Gold, and Nothing Else” Gold is money. … Following the Panic of 1907, John Pierpont Morgan was called to testify before Congress in 1912 on the subject of Wall Street manipulations.”
Admittedly a statement from more than a century ago, but given that central banks still own gold and even buy additional gold, you can assume that nothing has changed in all that time. However, at that time all currencies were disconnected from gold and thus backed by nothing except the trust that others will accept it for the provision of services and goods. And as you no doubt know, confidence goes on horseback and comes on foot.
In my opinion, gold is not money, but precious metal like silver, which brings in money when I sell it. Just like oil, vintage cars and rare objects such as vases, paintings, coins and stamps and land.
The advantage of gold (and silver) is that it is small, you don't need to know the value because it is sold and bought by weight and so there are hundreds of shops in Thailand where you can buy and sell gold; and hardly any shops with stamps or antiques.
But I'm sure it's better to spend your money on art than on gold. Or in an internet company like Amazon or Facebook. But yes, for that you have to gather a lot of knowledge.
Chris, that gold is not money is an indefensible proposition. The following is stated on the website of the DNB: “Central banks such as DNB therefore traditionally have a lot of gold in house. Gold is the ultimate nest egg: the confidence anchor for the financial system. If the entire system collapses, the gold stock provides collateral to start over.”
Yes, if the system collapses, DNB will probably issue new money that is linked to gold and that is therefore not subject to inflation and that will have the confidence of everyone in this world. Now you really can't exchange your euros for gold at the DNB. If you try that, they will say, “go somewhere else and try to change your papers or your zeros and ones on a computer into gold. You don't get our gold."
You don't understand the crucial function of gold.
I can pay with money, in the supermarket, at the bakery and butcher and I can pay my rent. You can't do that with gold. And THAT is why gold is not money. Gold is value and valuable and it turns out that value is sustainable. But gold by itself is worth nothing. That's why we express that in currency and that's just an agreement. More sustainable sometimes than the currency I use to do my shopping. But just for fun, try paying for the weekly groceries at Tesco with a gold ring. Good luck.
Sorry Chris, disagree; currency is worth nothing a piece of paper costs 10 ct I believe I once heard
You forget 1 thing; you can print money, just look at the USA with their printing debt of 21 trillion. Gold is not, hence the stability of value over the centuries.
A few months ago a house was bought in Vietnam and paid for in gold. It is possible, although it is still a major exception because, among other things, the greenhouse systems are not set up for it. But cryptocurrencies are already being developed that are linked to gold and then you can pay in milligrams or even micrograms of gold, provided that the counterparty accepts that of course. But that could take a huge flight because the gold price is almost the same everywhere worldwide.
Paying with gold coins or gold rings will always remain awkward and that is why paper money was introduced. Originally linked to and redeemable for gold. You actually paid with gold back then. Unfortunately, that system has been diluted by politicians and central bankers and as a result there is now a risk of a total collapse of the current system, as De Nederlandsche Bank also indicates. And we may go back to the old system, of course on a modern basis. And then we pay with gold again.
Now you are convinced, aren't you?
In some countries you can pay with gold, in most not. It is not legal tender. Whether the seller accepts something as countervalue is up to the seller. I can probably also buy a house with a real Van Gogh.
The current system is about to collapse because it is no longer the Central Bank that creates money by printing money, but because all banks create book money through loans that did not exist before.
https://www.monetaryalliance.org/how-is-money-created-today/
We will never pay with gold again, but with local currencies that can only be used to pay regionally. This has been going on for a long time in many countries or districts.
No Chris, you can't buy a house with a Van Gogh. A Van Gogh does not meet all the requirements that money must meet. For example, you can saw a gold bar in half without really changing the value. If you do that with a Van Gogh, you have nothing left. See for example https://medium.com/datadriveninvestor/why-was-gold-used-as-money-over-all-other-elements-56fd3f943f84.
Gold has been money for thousands of years for a reason. And I'd be surprised if that wasn't the case with extraterrestrial civilizations.
Yes Chris with your voucher > money can pay you as long as there is no hyperinflation.
Say goodbye to your Euro,s… if it continues like this!
Many countries have become afraid that their bank balances may be frozen by America in the future if they no longer follow suit.
Vladimir Putin Unveils Creation of New International Reserve Currency at 14th BRICS Summit – Turkey, Egypt and Saudi Arabia Consider Joining BRICS
https://fintechs.fi/2022/07/25/brics-nations-plan-to-create-a-new-international-reserve-currency/
In addition, Turkey, Egypt and Saudi Arabia are considering joining the BRICS group. Analysts believe BRICS' move to create a reserve currency is an attempt to undermine the US dollar and the IMF's SDRs.
small addition from Wikipedia:
Gold is the most famous example of commodity money. However, there were drawbacks to gold: the quality, although much more constant than many other types of commodity money, was not always the same and, moreover, every transaction required a scale to determine the amount of gold. In the earliest times, a touchstone was used to check the quality of gold. Alexander the Great was the first to coin gold from the government, that is, to stamp it to guarantee quality and weight. Confidence in the stamp was necessary: people trusted that the gold indeed has the value indicated by the stamp, but in case of doubt you can of course check the gold yourself.
Using gold as a means of payment was very risky. When a large payment had to be made, large bags of gold had to be transported from the payer to the recipient. The risk of such a gold transport being raided was very high. Other cash payment instruments also had this disadvantage.
and also:
Gold is not legal tender. The value of the legal tender is guaranteed by gold.
Idk Hans gold is money.
I don't feel like investing at all.
And therefore bought gold coins in 2016 at the purchase of 1.130 euros each.
Purchase price today = € 1.816,00 each
Buyback guarantee : is 100% of the spot price.
see:https://zilvergoudwinkel.nl/nld/goud-zilver-verkopen
Spot price today 16:52 PM = 1.714,89
The SDR was initially defined as equivalent to 0,888671 grams of fine gold – which was also equivalent to one US dollar at the time. After the collapse of the Bretton Woods system, the SDR was redefined as a basket of currencies.
https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR
A basket of currencies determines the value of the SDR
SDR VALUE
The SDR value in US dollar terms is determined daily from spot exchange rates observed around noon London time and is posted on the IMF website.
The SDR was initially defined as equivalent to 0,888671 grams of fine gold – which was also equivalent to one US dollar at the time. After the collapse of the Bretton Woods system, the SDR was redefined as a basket of currencies.
Currencies included in the SDR basket must meet two criteria: the export criterion and the freely usable criterion. A currency meets the export criterion if the issuer is an IMF member or a monetary union that includes IMF members, and is also among the top five world exporters. To make a currency “freely usable” by the IMF,
================================================== ===================
In 2008, the mutual confidence of the Banks was 0,000%.
Gold is then a solution!
Zimbabwe introduces gold coins as a rescue !
https://goudzaken.nl/kennisbank/zimbabwe-introduceert-gouden-munten-als-redmiddel/
In addition to the course of a fiat currency, history shows that the role of gold has been the same in society for almost 5000 years. In any case, it is no coincidence that countries hold large gold reserves.
https://goudzaken.nl/kennisbank/zimbabwe-introduceert-gouden-munten-als-redmiddel/
Zimbabwe Inflation is now at 191,6% and interest rates are at 200%. None of the measures seem to work to counter inflation. Zimbabwe therefore chooses to fall back on gold.
VAT The cash you receive from the bank is in fact no more than one voucher.
The Bank only has one best efforts obligation if things go wrong.
And the taxpayer may pay for your savings up to 100.000 euros?
But if that is going to be very difficult???? Will Mr. Rutte just make it 25.000 euros tomorrow.....? in the form of …..a voucher? Ha Ha
btw… in china there is currently n Bankenrun.
They have their money on their mobile phone…. COLOR = RED !
Once again I completely agree with Hans; There is a difference between currency and money and the latter includes gold. Currency can crash but gold less so (full story). The latter has lasted centuries in value.
Gold costs money. Almost every country has gold and stores it. In economic calculation models, this is then taken into account and there is only trade to prevent gold from fluctuating too much. The price is artificially kept at a level and not just gold.
I was once allowed to read that the Netherlands had 600 tons of gold. Stored for decades in various countries.
What would be paid for guarding that gold? That runs into tens, perhaps 100 millions/year. So gold only costs immensely in large quantities.
However, the same money.
The gold may therefore cost due to calculation models, it is not used to pay off government debts. For that you just raise taxes and continue wasting that money.
At a certain point, the Netherlands could borrow money AND receive money. That has never been offered to me.
Thai need a guarantor for a loan, if there isn't one, you get nothing. So then to loanshark.
I have read that Thailand is doing something about this and there were cases known that the Thai got his possessions back (Asean Now). It's been a while, don't know if it's still there.
Save Thai? Perhaps there are, but it is just the same as in the Netherlands. Very often people think that one should spend it on the stupidest things, so don't save and get into trouble.
It's a choice.
A Thai family member met the wrong person, would invest money and ... lost.
She's just too young and too naive. Acted too quickly and without consultation. But you do learn. Experience is the best teacher. Although some never learn.
On a side note…100 years ago a suit cost 1/4 Ounce/Gold…and it is still the same today. People paid a few dollars for that tailor-made suit, now a lot more. Gold keeps its value, always. A stable investment…