The value of the dollar in comparison to other countries around the world is falling. Meanwhile, my net worth is increasing, so naturally I began thinking. Is it possible that although I’m earning income, saving, and investing, I’m not actually gaining ground from a global perspective? Furthermore, does a global perspective matter to me? I haven’t been outside the country in years.
From January 31, 2007 to January 31, 2008, my net worth increased from $75,121 to $125,770, an increase of of 67%. During that time, the dollar has decreased in value compared to other currencies and commodities. I ran some calculations.
I would have done better if I had been earning my salary in euros. With a strict currency conversion using rates from OANDA, my net worth was valued at EUR 57,964 at the beginning of the period and EUR 85,083 at the end. My former 67% increase in dollars translates to a less impressive 47%.
What about gold? I’ve heard people claim that the economy would be better if we never left the “gold standard.” I’m not quite sure it would make a difference. All value is arbitrary, whether it’s a metal or paper. Anyhow, converting my net worth in dollars to ounces of gold would result in a starting point of 114.61 ounces ending with 135.92 ounces. Thanks to the dollar’s decline and gold’s rise, my value in gold increased only 18% in the last year.
Does any of this matter? I don’t use either euros or gold for the exchange of goods and services. Yet, I still can’t overcome the feeling that I’m not getting ahead as much as the USD numbers claim.
New Day, New Low for Dollar [AP]
Updated February 10, 2011 and originally published February 29, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.