Yes… but it’s a great currency, unlike gold or Bitcoin.
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions.
The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
Seriously look at the last 10 year chart of Bitcoin vs USD (or if you want purchasing power) - its far, far too volatile to be a store of value.
That's not the case for most people in most countries. There are billions of people who are not even able to open a bank account, let alone a US stock brokerage account. Bitcoin and gold are way more accessible to the average person.
I agree that every instrument has a different set of tradeoffs though.
Your bank knows you, perhaps for many years. Then you move country, or lose your phone, and suddenly they have forgotten you, and you face an uphill nightmare to retain your old accounts.
A share certificate should be a bearer asset, but it is not accepted anywhere outside the original jurisdiction (e.g. EEA for UK/European shares).
Which country? Last week I travelled on planes in USA and may have carried 35 pounds of silver coin, about a pound of gold coin, and >$10k cash. No problems other than being careful putting bag in overhead bin.
Travelling in/out of countries like Turkey with metal in carry-on has always been easy. One time the screener was curious and wanted to see some coin, but no problem.
Diversified bearer instruments are a prudent way to proceed into the coming government chaos in next ten years.
> Well you can sell the stock and convert it into dollars
How well did that work the entire week after 9/11?
Shipping valuables as insured cargo is another option.
That happens with account balances in USA. Try to fight an account seizure after the fact in courts in USA, and be prepared to lose.
Tangible items including metal are diversification, and bitcoin and ethereum are incredible across borders.
Assets are assets.
Claiming that an asset is better than a currency because it’s better at what assets are supposed to do and currencies are explicitly not supposed to do is strange to say the least.
Currency is exceptionally liquid (interchangeable) and nearly-universally accepted within a particular region.
Stocks, bonds, and other financialised instruments tend to be better inflation hedges, as currency will, does, and should inflate and deflate to meet actual transaction needs, and to dilute excessively burdensome debts.
Real estate is exceptionally durable, tends to hold value well (excepting speculative bubbles), and serves excellently as collateral for debt. Other long-term tangible property (e.g., industrial plant and equipment) can play a similar role.
Commodities tend to be intermediate between cash and other forms of financialised instruments, generally having inherent liquidity (that is, the commodity can be sold for use-value), as well as its investment role.
Collectables ranging from fine arts to wines to luxury automobiles tend to have hold value well (again, modulo speculative bubbles), and are both more readily stored and transported than real estate.
Cryptocurrencies tend to most strongly resemble the latter, in both their intrinsic durability (which is NOT the same as price stability), and their portability, which is to say that they serve as a highly effective way of moving financial wealth between jurisdictions, often without any external visibility, though of course blockchain transactions, like diamonds, are forever.
Power and ATMs were out for two weeks on Puerto Rico, which is basically run by the USA. Maybe keep a couple weeks of cash under the mattress.
https://www.cnn.com/2022/10/01/us/hurricane-fiona-puerto-ric...