Gold And The U.S. Dollar

Over the last decade and more, gold bugs insisted that gold was going to shoot up to stratospheric heights.  The constant hype that every person needed to convert as much of their paper money into gold was ridicules to say the least. Do not misunderstand me, purchasing gold before the gold Bull Run and along the way up was extremely profitable for astute traders. Unfortunately, for the hard core gold believers, the price never went past around $1900 per ounce.

The value of the dollar will be under pressure from time to time, but at the end of the day, and for the foreseeable future, the U.S. dollar is one of the most stable, widely traded currencies on the planet. Yes, America’s DEBT NEEDS TO BE URGENTLY ADDRESSED  so that the country does not go broke in the future, but historically and moving forward, the U.S. is still where many from around the world are parking their cash.

People and companies from all over the globe move their money into American banks, real estate, (especially high-end real estate) stocks, bonds, and other financial instruments, because the cash stashed in America is secure and the people parking their money in the U.S. can sleep in their home countries like church mice. From the Chinese businessman, or politician, to the European retiree, to the Brazilian bureaucrat, or the Mexican drug trafficker, the money continues to flow into the good old USA.

The United States has some of the strictest money laundering laws in the world, but when the cash is washed overseas and wired into the U.S. it is very difficult to track down the original source of that currency movement. Nobody can really give a true estimate on how much investment coming into the United States is illicit from the country of origin. Probably most of the notes coming into America are legitimate, but there is also a large percentage that is not. For instance, during the seventies and eighties, Miami was basically built with cold hard cash, coming from the cocaine cartels of Latin America.

For all of the problems in America, the country is stable. Although the United States has way too many laws,  it is rock solid. When the population wakes up in the morning, there has not been a coup, or religious uprising, or other calamity, that has brought down the government. The money that is deposited in a bank is approved by the Federal Reserve is insured to at least $250,000 by the United States Government.  This is safety and security for a person’s or companies coin deposited in a U.S. bank. Furthermore, the U.S. Dollar is also traded throughout the international financial system and widely used all over the world. Furthermore, people overseas, from all walks of life, love to collect those USA C-notes ($100 bills). Likewise, the gold bugs who went on and on about the dollar falling off a cliff and becoming worthless never factored into their predictions the cachet that the U.S Dollar still holds around the globe.

 

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Edge of Humanity Magazine provides opinion pieces and unbiased coverage of international relations and the global economy. Our think tank type analysis is not academic. Instead, it includes forecasting international political, and economic trends, from the perspective of laypersons that are well-informed, and have done extensive independent hard travel. The magazine investigates, dissects, and summarizes, how all the polished stones of the global political puzzle move across the immense go board.

 

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