Why the dollar ain't what it used to be!

[Learners Quest]

The dollar rate has been steadily declining since its peak in the year 2000. In ten years, the dollar has lost 85% of its value relative to gold. While this has many people worried about whether they should buy gold, it is also a motivation for people to consider investing in other assets. There are several different asset classes that you can use for your retirement portfolio and one of them is real estate investment trusts (REITs). What makes REITs such an attractive option? They are a relatively untapped market which means there will be less competition within the industry. You can also use REITs to diversify your larger stock market investments.

The gold standard was abandoned (first in the U.S., later worldwide) in the early 20th Century because of both political and monetary reasons. The central bankers realized that any currency(s) that is backed by a precious metal would have an inflationary tendency (because it would be worth more over time than when it was created), especially during a time of wars or recessions. They cannot simply alter the money supply like they can with government debt, which is why there are price floors and ceilings for things like gold and silver that limit how much of these metals can be mined at any given time.

 

[Kunde]

I don't get this. Is dollar really lossing it's value that it lost up to 85% to good value? I don't think so, because gold and dollar are not the same and it is known generally that good value always appreciate and this cannot be compared with a fiat currency.

 

[Knowlopedia]

The dollar has changed in a way that experts are calling "an important turning point" in the currency's history. The dollar is now weaker and less valuable on an international basis than it has been at any time since 1804, according to Bloomberg. A number of factors have contributed to this, but one of the most significant is the fact that foreign creditors have begun to doubt America's ability to repay its debts -- what many people call "a slow-motion default". As a result, other countries are converting their greenbacks into stronger currencies like the euro and yen.

The price-changing nature of foreign currency can be difficult for Americans who intend on traveling abroad -- especially if they plan on paying with U.S.