Global Economy History

Global economy history dates back further than you or I should emphasize in our investment decisions. We should take into consideration, however, the rise and fall of major economies over time. All major economies go through similar cycles, and an intelligent investor should factor these cycles into their investment decisions.

Benefiting from Global Economy History

Most Americans have a hard time believing that the United States can lose its role as the economic leader of the world. A very real possibility, however, is the U.S. dollar losing its international dominance. Uncertain political maneuvering and a weak economy are pushing the dollar and the United States into unfavorable global acceptance.

If the U.S. dollar is weak, and the gold standard is a thing of the past, what will foreign investors do with an abundance of dollars? A quick and well grounded argument is the euro. As the euro gains traction in Europe, more and more people view this currency as the closest substitute to the dollar. The past global economy history at least hints that the United States dollar dominance will likely diminish.

Although the U.S. dollar will likely continue to decline, betting on the appreciation of a euro is a mistake. The gains you would receive in a rising euro and falling dollar environment are not commensurate with the risk. Gold provides the perfect compromise and will likely be the safe haven for most foreign capital. You’ll probably see both the Euro and the U.S. dollar simultaneously decline. Gold, however, should benefit by significantly increasing. Global economy history teaches us that holding gold will increase during the rise and fall of all economies.