A Closer Look at the Weak Dollar

I’ve been talking a lot this year about how the U.S. dollar is weak and will get weaker. Here’s a chart showing how many dollars it takes to buy one euro. In other words, as the line goes up, the dollar is worth less and less.

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The reason the dollar is down is that our government has flooded our economy with fresh greenbacks. When you increase the supply of something, the price naturally drops and that’s what’s happening right now. It’s not an accident; the government is trying to do this.

The consequence of a weak dollar is higher commodity prices because most of the world’s commodities are traded in dollars. Gold, for example, just made a new all-time high. All investors need to understand the importance of what a weak dollar means, and how it will impact our portfolios. This is the single most important theme of our investing strategy right now.

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