Signs of a Weak US Economy: Gold Screams, Dollar Falls, Euro to the Mainstream?


On Friday, Gold hit a 27 year high as investors around the world ran to safety from the plummeting US dollar. Hitting $752.80 an ounce, Gold is at levels we haven’t seen since January of 1980.

Additionally, the dollar index, which measures the greenback against six major currencies, fell 0.8 per cent to a record low of 77.66 on Friday. The index has fallen 5 per cent since mid-August. (Source: All you have to do is look at this index to see that we’re on a free-fall.

I’ve begun to hear people from around the country asking about putting their money in foreign currencies, something I’ve never personally experienced. It seems as though those people who are aware of what is happening to the Dollar are really getting quite nervous.

To make matters worse, The dollar fell to a record low against the euro for the seventh consecutive session while the Canadian dollar hit a 31-year high as inflation data raised expectations that the Federal Reserve Bank would again lower interest rates. Longer term, the U.S. has been running large trade and budget deficits for years — factors that tend to undermine a country’s currency in the long term, unless they are offset by foreigners willingness to invest their money in the United States. (Source: Yahoo Finance)

Unfortunately, it seems as though there is a new global unwillingness to invest in the US, thanks to the growing fear of recession, and countries pegged to the dollar are wondering how to stop the bleeding in their own countries.

As the Dollar falls, people globally are looking for an alternative, and I think the Euro will reap the benefits of renewed confidence. The Euro will only grow in strength and stature as the Dollar falls.

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Joshua Dorkin

Joshua Dorkin (@jrdorkin, Google+) founded when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 600,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.


  1. These are very serious issues for many investors worldwide. I agree that the trade deficit issue will become far more serious as our currency continues to decline, as mentioned in the Yahoo Business/Finance reference. The issues which currently affect the U.S. are soon to become a major global issue for many of our trade partners, if something drastic isn’t done to prevent a full blown recession.

  2. I don’t think converting dollars to Euros is a good solution. It just seems like very short term thinking to me. Why not invest those dollars in US real estate (if you live here in the US), buying low and selling when the market goes back up.

    Why transfer dollars to Euros? Maybe I’m missing something here…

  3. i dont think its a good idea to put money in the euros either because everytime u convert and reconvert u will get charged and in the long run it will hardly, if at all, benefit you. plus its another hassle. chris has a good point in investing in real estate. my dad recently went in with a bunch of his executive buddies to purchase huge sums of land in san diego. get them houses while they are cheap o_O

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