I say this because I am proud of my country. I also say this because the good ole greenback is kicking tail! The USD has just hit a 16 month high against the Euro. This is due to the continuing ‘uncertainly’ over the state of European sovereign debt. This has been written about at length and I won’t go into it here.
The USD has been the world’s reserve currency for over 50 years. The Greenback is the most commonly used currency in all kinds of business deals, legal and otherwise. Foreign governments hold millions of USD due to its ease of use and nearly universal acceptance.
That being said in times of financial uncertainty, or outright currency collapse most investors go to what is safe, and what they know. So the USD would get even stronger due to increased demand.
If/When the Greeks abandon or are forced out of the Euro demand for the USD will skyrocket, I think we are already seeing the beginning of this trend. How would one profit from this? Well you could buy FX options on the USD, but there is no way I am willing to accept that kind of risk. The other is of course holding your assets in cash, and hold them in USD. Luckily as a citizen of the United States I get paid in dollars and have one or two stocked away I the bank.
Dolla Dolla bills ya'll
