The Us Dollar since the end of World War II has been viewed as the world’s reserve currency. The international financial system under the Bretton Woods system fixed the US Dollar as the reserve currency. This allowed for Europe & Japan recover more quickly from the ravages of war by devaluing their currencies.
Over the past 65 years, the US has enjoyed a higher standard of living and marginally higher purchasing power on the commodities market due to our reserve status. The mismanagement by Ben Bernanke & the Fed along with the government funded bail out of Wall-Street has led to reconsideration of using the Dollar as the world’s reserve. Over the past 5 years the Dollar has lost almost 25% of its purchasing power.
The results of losing our status as the world’s reserve currency would be devastating. Sam Zell, the chairman of the Tribune Company & Equity Group Investments told CNBC today, My single biggest financial concern is the loss of the dollar as the reserve currency. I can’t imagine anything more disastrous to our country. I think you could see a 25% reduction in the standard of living in this country if the US dollar was no longer the world’s reserve currency, that’s how valuable it is.
Warren Buffet, CEO of Berkshire Hathaway, said in his annual question & answer interview on CNBC, The dollar will become less important over time because the— America’s dominance of the world economic system will diminish. Others have made similar observations on the Dollar as of late.
The diminishing Dollar makes the investment into a Tangible Asset Portfolio even more imperative for the diversified investor. Holding a conservative 10% to aggressive 20% of your net worth in physical silver, gold, & rare coins will keep you insured against the inevitable down-turn in the Dollar.
Another 25% drop in the value of the Dollar would bring purchasing power in the US down 50% from its 2006 pre-crash levels. Imagine your life with 50% less. Then ask, when do I start protecting my family, my future, my children’s future with my own Tangible Asset Portfolio.