Quote:
Originally Posted by aka123
First of all "everything" is not even loosely "pegged" to USD. Secondly, as you speak about loss of confidence: gold's price is very fluctuative and most of it's value is speculative.
Loss of confidence to fiat money is not any big danger
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Well it would be better to say that some are pegged but all others trade around the USD because it is the reserve currency, mode of trade and because all commodities are measured in USD.
The USA is still the largest trading partner so countries have to peg to the USD in some way shape or form. EUR and USD basically trade within a wide band of each other. It has to be that way for trade flows (import/export) to operate normally.
As for loss of confidence, I guess time will tell.... but the rise in precious metals over the last ten years is basically resultant of the loss of confidence in paper money. Precious metals don't generally go up in value, rather paper money goes down in value when measured against them.
Sure all precious metals are volatile but then so is the USD, the stock market etc. In any case, its just marginal diversification that wealth managers recommend. Im sure Bonds also might be a part of your portfolio, but unlike precious metals, you have counter party risk.
Where do you see the Gold price, for example, ten years from now?