I'm no expert on currencies. But you and I don't need to be experts to know that the US government has been debasing the value of the US Dollar at least since the Fed was created in the early 20th century. The US government isn't alone in eroding the value of its currency -- and in doing so while at the same time protesting that "we want a strong currency."
Oh sure, there are ups and downs along the way. Times when the US Dollar has risen in value. But over the course of your lifetime, the value falls.
That's among the reasons for investing money in stocks (or stock mutual funds if you prefer). Some may argue for gold bullion, and I have nothing against that -- except that I doubt gold (and/or commodities) are the only answer in investing to beat the erosion of our money.
I vote (and am doing so with my own funds) for investing in value stocks over the long term in order to beat the inflation cooked into the currency. And by extension the money held in your savings not to mention your wallet.
I could be wrong, of course, but I don't think so.
Anyway, I pondered currencies reading Michael Sesit's latest Bloomberg column:
Intervention is probably a non-starter. While a country can
easily debase its currency, it is difficult to bolster a weak
one. It would require joint action by several major central
banks, the expenditure of huge sums and have to be relentlessly
applied over an extended period. The intervention must also be
perfectly timed.
Bottom line: Influencing a global currency market that trades $3.2 trillion a day is a tall order.
Well said, and while I agree with those of you saying right now that we need to go back to the gold standard, it won't happen for a while at least. In the meantime, it's investing in stocks for yours truly.
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