Well, I don't think I would bet on the Euro. But I wouldn't bet on the dollar. I would not bet on the YEN. How about any other currency? Maybe the CDN dollar?

No... paper currencies are done. We are only left with gold and silver.

I've always struggled with the concept of gold rising to higher levels as long as the dollar is pegged to the basket of currencies that it is. After all, the US may not back their currency with gold but they do back it with the BOMB and that will continue to make it the best choice for a paper reserve currency. All the currencies that we typically discuss as examples of currencies that have collapsed have had one thing in common, which the US doesn't. That is, their regimes, their countries could all have potentially collapsed. What's more, there was always another paper currency that was there as an alternative... namely the USD.

This holds for the Weimar Republic, Argentina and even the UK.

The Euro is looking shaky now and could well collapse. After all, there is nothing really solid backing it and that is also the problem with the USD but the USD is still the worlds safest currency from the fact that it is backed by the worlds most powerful country. No matter what happens, they still have that bomb. They still have a huge military. And fact is, they are still the largest reserve currency so there is really no other paper alternative.

However, what I am starting to grasp is that as other currencies fail or collapse, it will leave less alternatives other than gold. The US itself will have to buy gold for it's own reserves as they can't hold their own currency. Eventually, the USD will look stronger than ever against the basket but people won't really care. The basket will have little meaning.

Countries outside the US will have to diversify their reserves as they are now, leaving them only gold and silver. So now we're seeing gold starting to climb with the dollar and that trend will only continue eventually seeing gold far outpace the dollar. The Europeans will not sell their quotas. The won't be able to unless they wish to be left with nothing of any value.