'Dollar weakness doesn't work at all for economic well-being. The corollary to the Fed's policy of manipulating interest rates downward at the expense of savers is declining median incomes. When the currency weakens, the prices of staples rise faster than wages, hurting all but the rich who buy protection.'

In other words, currency manipulation is not beneficial to the economy as a whole. It's nothing but a shameful redistribution of wealth. Or perhaps shameless. And it just so happens that this manipulation would be at the expense of a growing voting block of Australians - those with accumulated retirement savings.

For every dollar of export benefit from a lower Australian dollar, how much are those holding dollars losing? How much will their cost of living rise? How much return will they lose on savings accounts as interest rates fall?

Savers in Europe and the US have been stung badly by currency war policies there. And, apart from in Germany, there doesn't seem to be much of an export boom despite a plunging euro. (We've done our bit by buying Greek olives.) So does the policy of printing money to lower your currency work at all?

It definitely has various other effects. They outweigh any export benefit in our opinion.

But don't worry too much about all these worldly concerns. Our friends at the following institutions are working hard to solve the problems:

International Monetary Fund, European Parliament, European Commission, World Bank, Bank of International Settlements, European Central Bank, Bundesbank, Reserve Bank of Australia, Bank of England, Federal Reserve, European Financial Stability Fund, Australian Prudential Regulation Authority, Australian Securities and Investments Commission, Financial Services Authority, Securities and Exchange Commission, Federal Deposit Insurance Corporation, International Swaps and Derivatives Association, Institute of International Finance, Financial Industry Regulatory Authority, World Trade Organisation, Organisation for Economic Cooperation and Development, Committee of European Securities Regulators , the Committee of European Banking Supervisors the Committee of European Insurance and Occupational Pensions Supervisors, the International Organization of Securities Commissions, the Basel Committee on Banking Supervision and, our personal favourite, the Plunge Protection Team.

What could possibly go wrong?

Iran's Solution to Western Meddling Is Your Solution

We prefer to answer a different question to 'what could go wrong?' Instead, 'what could go well when things go wrong?' And we've found something. In fact, it could go gangbusters. The gold price is a barometer of monetary instability. Or irresponsibility if you prefer. And there is plenty of that going around.

While central bankers are busy trashing their currency, why not own the 'anti-currency'?

Jim Rickards, author of Currency Wars, which we were reading when our Kindle took a tumble, suggests as much in [They] don't need the western banking system... This could be the beginning of the end of the dollar.

Is this the beginning of a return to the gold standard? If it is, what do you think that means for the demand for gold? And what will that do to its price?

We'd rather be holding the currency of the future than the past.

Oh, by the way, Rickards' book isn't the only Currency Wars out there. The Chinese have their own version with the same title. This from [The book] is a bestselling book in China, reportedly selling over 200,000 copies and is reportedly being read by many senior level government and business leaders in China.

The Chinese know what's going on. That's why they are accumulating gold. At what point will they turn the tables on the US and implement the same currency war strategies the global superpower currently uses for itself?

Until next week,

Nickolai Hubble.
The Daily Reckoning Weekend Edition