Dollar Down

The U.S. dollar has been down quite a bit over the last several weeks.  It has had the effect of causing the U.S. dollar price of gold to go up.  But gold has not exploded and it will not explode until a major event happens or until price inflation becomes a more obvious threat.

It is always interesting to keep an eye on the dollar.  Just remember that you are comparing it to other fiat currencies.  Everything is relative.

If the U.S. economy hits another major downturn (which looks likely), then don't be surprised to see the dollar strengthen as it did in the fall of 2008.  There is still a mindset that when there is fear in the economy, the place to go is to the U.S. dollar.  The tide will have turned when fear in the economy causes people to get out of dollars and into something that can't be created out of thin air, such as gold and silver.