Buying gold coins is becoming more and more popular these days as the global economy and the US Dollar continues to come into question. The US Dollar seems to be at the very center of this conversation. The world is concerned with the Fed printing money and rightfully so.  Since the Federal Reserve was established in 1913 the dollar has lost approximately 95% of its purchasing power, all through inflation (money printing).

It took 214 years for our country to print the first $1 trillion. The Fed did that in the first seven months of 2010. Money is now being printed faster than it ever has in the history of our country. If the dollar lost 95% in the last 97 years, how fast do you think the next 95% will be lost?

This is the question that countries and investors around the world are concerned with. This is because the Dollar is the world’s reserve currency and therefore if countries want to trade they need Dollars to do it. If the US prints money it devalues the savings that those countries have in Dollars and reduces their purchasing power. This is why China and Russia are advocating for a new reserve currency.

China recently announced that they are transitioning their currency (the Renminbi) into a fully convertible currency. Surely somewhere down the road this means they will un-peg it from the Dollar which will cause it to appreciate against the Dollar.

When the US losses its status as the world’s reserve currency the money printing game here will be up. We will no longer be able to sustain an economic recovery supported with liquidity. Prices will rise in the US dramatically and the standard of living we are so accustomed to will go down.

The world realizes that the Dollar is being treated with reckless abandon and the smart countries are diversifying away from the dollar. China is now importing more than five times the amount of gold then they were in 2009, and I bet they are using US Dollars that they have in reserves to do it.  They are acquiring hard assets. China is also putting trade deals together with other nations to circumvent the use of the Dollar. This trend can only be bad for the citizens of the US and will continue to erode the dominance of the US Dollar.