Buy dollars?

[Dover]

This article does not make sense to me. Someone please enlighten me. It suggests that because the dollar is at an all time low it's a good investment option (buy, buy, buy). But it seems to me that the dollar is in a death spiral and will ultimately be replaced by some new currency, perhaps a global currency or something like it. Except for those who are essentially daily traders looking to trade on the frequent ups and downs of the dollar even as it declines overall, is the dollar really a good investment in the long run?

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In the end the Fed announced it was prepared to inject $600 billion between now and next June in a move nicknamed QE2 (quantitative easing, phase 2).

While it's often been said that if America sneezes the rest of the world catches a cold, it could be argued that the States has full-blown flu. Even so, the dollar is still the world's principal currency. For the last 40 years it has dominated all currency transactions.

As a rule of thumb, if the dollar falls then other currencies strengthen. So it comes as no surprise that the dollar has weakened as investors sell the dollar, which in turn has boosted other currencies. The Fed's move shows it is not going to raise its interest rate anytime soon, so investors have gone in search of higher returns on their money elsewhere. ...cont'd

http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8120156/Forex-focus-better-buy-dollars.html

[RUMMYisFROSTED]

1. I lean toward spend.

[Jim__]

2. Buy dollars with what?

Based on the claims in the article, buying dollars with euros sounds like an idea he may be pushing. And, of course, that's his opinion. Do you know if his advice has been good in the past?

[Dover]

3. No, don't know anything about him. But that publication is directed at English expatriots.

So he is speaking to them or those with an economy based in some other currency.

[Art_from_Ark]

4. Yes, the article is directed toward Brits

The "expats" the author refers to are British citizens who are living in other countries.

My interpretation of the article:

If you are a British citizen, it might be a good time to buy US dollars since the pound sterling is the strongest it has been in 10 months vis-a-vis the US dollar.

However, if you are a British citizen living in Australia or New Zealand, it might be better to convert the local currency into pound sterling if you can, since the Aussie and Kiwi dollars are strong vis-a-vis the pound sterling right now.

The pound sterling is also strong vis-a-vis the euro, but the euro has several problems and might go lower.

[OllieLotte]

5. In the short run for 2010, I think the dollar looks good.

Not because it's pretty, but because isn't not some of the other currencies. The Euro is having trouble due to the PIIGS (Portugal, Italy, Ireland, Greece, Spain)and their debt. Other countries, like Brazil, are also attempting to keep their currency from rising against the dollar.

In the long run, I'm not crazy about any paper money as governments are printing lots of it to either pay off debt or to keep their currency from rising and hurting their exports.

[Taitertots]

6. Global currency is not going to happen

It is an insanely stupid idea. Everyone has known this for decades. Shared currency is a major underlying problem in the EU debt crisis.

[roamer65]

7. Long term...do not use fiat currency as a "store of value".

There simply has been too much money creation since the Panic of 2008. I doubt we will see hyperinflation, but double digit inflation is very possible.