How to Protect Yourself From the USD’s Weakness
The world economy is not yet in a recession, but there are many who are affected by currency fluctuations. As many have experienced, the value of the dollar can plummet overnight due to a natural disaster such as hurricane Katrina. This makes it difficult for Americans to make their purchases.
Many American companies have been hurt due to the sudden decrease in the value of the dollar. Even though the economy is recovering, it has been slow to return to normal. This is also the reason that Americans are unable to buy American products.
Since so many Americans are finding it difficult to buy goods and services, many have decided to keep on living in Greece. You see, many American citizens moved to Greece when the prices of the dollar sky rocketed. When the values of the dollar dipped, the Greeks were forced to watch their money go up in value.
But what happens if different countries such as Greece increase the value of their currency? The dollar will also become devalued. So how can you protect yourself from this happening?
As much as I would like to say that the currency is one strong protection against the currency fluctuation, that is not true. Currency fluctuations happen when there is a change in the political world. In the recent past, the European Union had caused the value of the euro to go up.
It would be impossible for Greeks to live comfortably without being able to purchase American goods and services. For that reason, they decided to continue living in Greece. This is a brilliant decision because their currency value will slowly decrease and their standard of living will eventually increase as the EUR/USD exchange rate goes down.
As long as the USD keeps increasing in value, it will keep sinking in the EUR/USD exchange rate. How is this beneficial to you? Well, your dollar is worth far less than the EUR/USD exchange rate is now. By being in Greece, you can enjoy the low cost of living of a Greek citizen.
In addition, the higher the EUR/USD exchange rate, the more you will have in your pocket. That means if you live in Greece, you will enjoy spending much more money on food, clothes, and other items. And because you will have so much more money, you will also be able to invest a lot more into the US dollar.
Another thing that many people have found is that when they are in Greece, they can purchase a lot of American goods and services. The euro is the most popular currency in the world. You see, the Greek people have learned to appreciate American products and services.
So, when buying American products and services, you can easily find them in Greece at a much lower price. You can spend less than you would have ever thought possible. Therefore, the purchasing power of the US dollar is directly proportional to the EUR/USD exchange rate.
To sum it up, the dollar is weak on a person standpoint but strong on a country standpoint. When the value of the dollar decreases, the value of the EUR/USD exchange rate increases. So as a Greek citizen, you can be very financially comfortable.
In conclusion, one of the most important things to know is that the value of the currency is dependent on many factors. You should always use a currency that is consistent with the exchange rate.