THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

Let us look at the scorecard. For example, consider the performance
over two decades of the Deutschemark, the world's most 'stable'
currency since the World War II. If you had kept 100 Deutschemark
under your mattress since 1971, the following table shows its
purchasing power would have shrunk to 42.28 DM by end of
1996.321 In other words, even the best- performing currency in the
world lost more than half of its value in that period.
Similarly, in 1996, 100 Swiss francs would be worth only 39.79 SF
from 20 years earlier. The purchasing power of US$ 100 is just over
US$24.72; and Pound 100, Pound 12.57, and so on.
Sometimes inflation can get really out of hand, with devastating
consequences for the societies, which experience them (see sidebar).
Managing savings intelligently therefore boils down to allocating
cash between the three classical major asset classes: real estate, bonds,
and stocks. Over the past decade, another major asset class has
appeared that is of particular interest to us: currencies. A few words
about the changing role of each asset class over time puts this
development into perspective.
Real Estate
From the beginning of the Agricultural Revolution until last
century, real estate, particularly land, was the dominant form of
savings available in the world. The wealth of individuals could
usually be evaluated by the quality and the size of the real estate they
had accumulated. This all changed with the Industrial Age when
stocks and bonds in commercial enterprises became a favourite
investment vehicle. Today, most people's real estate holdings are
limited to their house, and typically even that is mortgaged.
Stocks