The Federal Reserve and the European Central Bank are the two bodies which have the power to decide the global economical trends and thus they are the bodies that are blamed for the decline in value of the U.S dollar. It is them whom we should turn to when we try to find an answer regarding the real truth about the dollar.

The two bodies decide on the policies to be applied when it comes to the U. S. dollar, but their apparent decisions are not always sustained by reality. The strong dollar policy is contradicted by the free fall of the currency, which has decisive impact on the economical market, influencing everything, from higher prices for all commodities, to even higher price of gold, for instance.

The question in anyone’s mind is whether the crisis the dollar is experiencing nowadays is real, or it is willingly induced. There are analysts who point out that the U.S. seem to follow the pattern developed by China with regards to the Chinese national currency, the yuan. China has been several times accused of keeping their yuan devalued, which, in a long run, seems to have helped China in turning into the biggest world exporter. It is no secret that the U.S. want that ‘title’ back and one approached might be the devaluation of the dollar.

However, this move does not seem to have the desired impact, but rather it seems to turn into a loose/ loose situation. On the one hand, this free fall of the dollar influences the inflation and pushes the prices of the commodities at levels higher than ever. At the same time, even the costs of the exporters will have to suffer from the increase, pushing thus the whole situation to a dead end.

In such circumstances, investing in a national currency, be it the strongest available may look like a suicidal gesture. This is why, the number of people investing in gold has boomed. Indeed, the ascendant trend that gold is experiencing together with the large variety of products available, have made gold a solid and handy means of investment to compensate the chaotic movement of the dollar.

For instance, one can opt for gold bullion, with their intrinsic value, or go for a double standard means and buy gold sovereigns coins.

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Filed under: Currency Trading

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