The Capital Gold Group: Shrinking U.S. Dollar
The Capital Gold Group: Shrinking U.S. Dollar
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Since 2001, the U.S. Dollar Index has decreased over 30%, and gold prices have increased over 300%.
At the turn of the century, gold prices were at their lowest levels of the last decade, and the stock market along with the U.S. Dollar Index, which reflects the dollar’s standing compared to the other major currencies of the world, were making new highs.
The markets shifted in 2001, as the terrorist attacks of September 11th followed by massive government deficit spending propelled the dollar ever lower, and as investors sought the safety and protection of gold for their long-term savings and retirement plans.
Now the once mighty U.S. Dollar is no longer just making life more expensive for Americans, it is crashing on currency markets, and its clout is evaporating worldwide as foreign countries, businesses and individuals turn to other stronger currencies such as the euro.
The consensus of experts is that budget deficits, weak employment growth and unstable financial markets are likely to keep the U.S. dollar weak into the future, and that it will take years for the dollar to recover its value and prestige.
As the US dollar declines further, the upward momentum seen in the gold price is likely to continue. For this reason, many investors today prefer to hold a portion of their investment portfolio in physical gold versus a portfolio held completely in dollar-denominated assets.
Tags: Add new tag, gold prices, portfolio, September 11, U.S. Dollar, U.S. Dollar Index