In this Peter Schiff This Week in Money Appearance, he speaks about the surprising strength of the US dollar.
The Euro recently hit an 18 month low against the Euro. But the dollar is not strong. It has simply been less weak compared to the Euro. Both the dollar and the Euro are losing value.
Long term, the problems in the United States are actually worse. People are worried about the Euro, but they aren’t paying attention to the more imminent demise of the dollar.
The numbers speak for themselves. There are certain countries in Europe that you might argue are in worse fiscal shape than the United States, but if you take the collection of nations in Europe and compare them to the collection of states in America, then you will see that the States are in far worse shape as a whole.
The Canadian dollar or the Australian dollar, or the New Zealand dollar would be far better investments if you would rather own a fiat currency instead of gold or silver.
All that these governments do when they print money is to kick the can down the road. But the chickens are going to come home to roost, probably sooner than most people think.
People think that the problems in Europe are causing problems for the United States, but it is actually the opposite. All of the problems in Europe are helping to prop up this phony economy in the United States.
Ultimately, the United States will go into bankruptcy and all the same banks are going to fail again. You might want to get a wheelbarrel so that you can tote around all the worthless dollars you’ll need in the future.
The United States dollar is down 30% over the past decade. By contrast, gold is up by over 300%. That 300% number is far closer to the true value of how much the dollar is lost. However, sometimes it looks like the dollar is gaining just because it is sometimes losing value more slowly than the Euro.
The media always want to focus on the fact that gold is off its record high. But how often is a market always at its all time high? New all-time record highs are coming in 2012, 2013, and 2014. This bull market still has a long way to go.
Wealthy people don’t view gold as an investment. They see is as a means for preserving wealth. The governments are trying to fight deflation. But they can’t stop that. In terms of real money, certain asset classes will always deflate. They can print as much money as they want, but gold will always tell the true story. If you want to reap the benefits of deflation, then you need to own gold.
The dollar is going down. It just isn’t going down against the Euro. Just because there are weaknesses in the Euro or other currencies, it doesn’t mean that the dollar is strong. People are just buying dollars as a safe haven. However, once the dollar starts to fall, gold will be the only safe haven left.
Last year was one of the least volatile markets. 2012 could be a bit more volatile, but there is a good chance that the market will basically just trend sideways.
