Quote:
Originally posted by Dottore
Euros and Sterling.
Get some of each. Both very strong and likely to remain so.
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All major currencies are fiat currencies -- there is nothing of intrinsic value backing them.
All fiat currencies are being inflated -- some faster than others, but all are being inflated for the benefit of "politically connected" banking/financial interests and to the detriment of the productive individuals. (The inflation of the money supply causes price inflation; it is a "tax" few understand they pay.)
If you're savvy, you can play one currency for another -- but remember you won't have the "inside information" others in the market will have. (You do understand that there are generally no laws prohibiting Federal Reserve members -- or other central bankers -- from communicating privately, or trading for themselves using information they know about policy decisions regarding money supply?)
In the end, the only really solid protection against fiat currencies is hard assets. But hard assets, whether precious metals, or real estate, or collectable Porsches all have risks of their own.
For me -- though I rarely have an "excess cash" problem -- it comes down to an "always active" investment mindset. With the fiat currency structure we have in the world today, you can't just expect to buy something that you can forget about and it will be "safe" for the next x-number of years. You have to be
constantly aware of the changes going on in the financial world and be "readjusting" your investment strategy based upon the constantly changing economy.