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The Best Investment For You Will Depend on Your Financial Goals

The Use of Gold as a Currency's Foundation Does Not Necessarily Ensure the Currency's Stability, So Will BRICS really Affect the US Dollars

By EstalontechPublished about a year ago 7 min read
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The major worry is the Feds will continue to Hike the Interest rate even higher in early January 2023 ,causing the USD to elevate even higher .

The value of the US dollar is not tied to a specific commodity like gold, but rather is determined by the market through supply and demand for the currency. In general, the value of the dollar can be influenced by a variety of factors, including inflation, the strength of the US economy, the stability of the US government, and the interest rates set by the Federal Reserve, among others.

It is true that the Federal Reserve has the ability to influence the value of the dollar through its control of interest rates. When the Fed raises interest rates, it can make borrowing more expensive, which can lead to a stronger dollar as investors seek out higher returns on their investments. However, the Fed also has to consider the impact that its actions will have on the overall economy, and it will try to strike a balance between maintaining price stability and promoting economic growth.

While the US dollar is not backed by a specific commodity like gold, it is still widely accepted as a global reserve currency and is backed by the full faith and credit of the US government.

Oil commodity as an investment 

Because it is a limited resource that is in high demand for a wide variety of applications, such as powering vehicles, heating homes, and serving as a raw material for the production of plastics, chemicals, and other products, oil is frequently regarded as a valuable investment commodity. 

This is due to the fact that oil is a finite resource that is in high demand. It is expected that there will be a continued high demand for oil as a result of the ongoing growth and industrialization of the world's population.

Oil is a commodity that can be traded on financial markets, which enables investors to easily buy and sell oil-based assets such as futures contracts, options, and exchange-traded funds. 

Because oil is a commodity that can be traded on financial markets, it is also a commodity that can be traded on physical markets (ETFs). However, the price of oil can be unpredictable and is sensitive to a wide range of factors, such as the state of the global economy, the unfolding of geopolitical events, as well as the relationship between supply and demand.

Oil is not something that can be simply replaced or changed with another product, which is one of the reasons why it is thought to be a particularly desirable investment commodity. 

Even though there are substitutes for oil, such as renewable energy sources, oil is still widely used in a diverse variety of applications and is difficult to replace on a broad scale. 

This is because oil is not easily recyclable. This indicates that there will likely be a continued high demand for oil, despite the growing number of initiatives that aim to minimize dependency on fossil fuels.

Is the value of the US Dollar inversely proportional to that of the Oil Commodity?

There is neither a direct antithesis nor an inverse relationship between the value of the US dollar and the price of oil. 

The value of the United States dollar is affected by a wide range of factors, such as interest rates, inflation, and the robustness of the economy in general in the United States. On the other hand, the price of oil is affected not only by the dynamics of supply and demand, but also by the geopolitical events that take place and the policies of oil-producing countries.

However, there is a possibility that the value of the US dollar can have some indirect correlations with the price of oil. 

For instance, a stronger US dollar might make the price of oil more expensive for purchasers who are paying with other currencies. This could potentially lead to a reduction in the amount of demand for oil, which would in turn result in a decline in the price of oil. 

On the other hand, a decline in the value of the US dollar may make the price of oil more attractive to purchasers paying in currencies other than the US dollar. This, in turn, might result in an increase in the demand for oil, which would then drive up the price of oil.

It is essential to keep in mind that these are merely broad patterns, and that the connection between the strength of the US dollar and the cost of oil can be intricate and can shift significantly over the course of time. 

Investors should constantly make it a point to carefully evaluate the elements that may affect the performance of an investment and to diversify their portfolios in order to reduce the amount of risk they are exposed to.

This overall trend is also working against the BRICS currency, which is backed by gold. In contrast, the US dollar now has no backing other than the United States' reputation and bonds. 

Will the United States Dollar and the British Pound both eventually fail as currencies, or will they survive?

It is challenging to make an accurate forecast on what the future holds in store for the value of either the United States dollar or the British pound. Even though the United States dollar is not backed by a particular commodity such as gold, it is nonetheless generally acknowledged as a global reserve currency and is supported by the complete faith and credit of the United States government. 

The steadfastness and robustness of the economy of the United Kingdom lend support to another important currency on the global stage: the pound.

It is essential to keep in mind that the supply and demand of a currency on the international currency exchange market are the ultimate determinants of the value of that currency. 

The demand for a particular currency can be affected by a variety of factors, including the robustness of a country's economy, the level of interest rates, and the level of political stability.

It is also important to keep in mind that the use of gold as a basis for a currency is not necessarily a guarantee that the currency will remain stable. 

In the past, several nations have fixed their currencies' values to be equal to the value of gold; however, this strategy has not always led to stable currency exchange rates.

It's difficult to determine which investment is the "best" one, as the value of different assets can fluctuate over time and what is a good investment for one person may not be a good investment for another. 

The best investment for you will depend on your financial goals, risk tolerance, and investment horizon, as well as a range of other factors.

Here are a few things to consider when deciding whether to invest in gold, oil, silver, or the US dollar:

Risk: All investments carry some level of risk, and the specific risks associated with gold, oil, silver, and the US dollar can vary. For example, the price of oil can be influenced by a wide range of geopolitical and economic factors, which can make it more volatile than other investments. Gold, on the other hand, is often seen as a safe haven asset that can potentially provide stability in times of economic uncertainty.

2 . Return: The potential return on an investment is an important consideration, but it's important to keep in mind that past performance is not necessarily indicative of future results.

3. Diversification: It's generally a good idea to diversify your investment portfolio to manage risk. Investing in a mix of different assets, such as stocks, bonds, and commodities, can help to spread risk and potentially provide a more stable overall return.

It's always a good idea to do your own research and carefully consider your financial goals and risk tolerance before making any investment decisions. It may also be helpful to consult with a financial advisor or professional for personalized advice.

#Disclaimer Note : 

Note : This publication is not intended for use as a source of any financial , religion , money making ,political , military , medical or accounting advice.

The author has made every reasonable effort to be as accurate and complete as possible in the creation of this article and to ensure that the information provided is free from errors; however, the author/publisher/ reseller assumes no responsibility for errors, omissions, or contrary interpretation of the subject matter herein and does not warrant or represent at any time that the contents within are accurate due to the rapidly changing nature of the Internet. Any perceived slights of specific persons, peoples, or organizations are unintentional.

This publication is not intended for use as a source of any financial , money making ,political , military , medical or accounting advice. The information contained in this guide may be subject to laws in the United States and other jurisdictions. We suggest carefully reading the necessary terms of the services/products used before applying it to any activity which is, or may be, regulated. We do not assume any responsibility for what you choose to do with this information. This article is not meant for financial nor Military advice , Use with your own judgment

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About the Creator

Estalontech

Estalontech is an Indie publisher with over 400 Book titles on Amazon KDP. Being a Publisher , it is normal for us to co author and brainstorm on interesting contents for this publication which we will like to share on this platform

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