The current US Dollar index started in March 1973 when its value was declared as the USDX. The value of the U.S. Dollar Index was 100.000. It has traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008. The current value has traded below 90 for almost a week.
It is a weighted geometric mean of the dollar's value relative to other select currencies:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight
The U.S. Dollar Index (USDX, DXY) is an index (or measure) of the value of the United States currency.
The weighted basket as above has been adjusted once since 1973 when the European Union combined their currencies into the euro at the start of 1999. The make up of the basket is being reviewed for a revision as China, Russia, Mexico, South Korea and Brazil are major trading entities, but not part of the index. The Sweden and Switzerland currencies, independent of the Euro, are continuing as part of the index, but as a small percentage of the overall index.
Gold is a precious metal (Priced in US Dollars), oil is a commodity (also priced in US Dollars) and the US dollar is a currency. These three asset classes are the most influential in the current financial markets.
We can see that gold has withheld the test of time. While gold's value has increased and decreased ever since the US dropped the gold standard, its value in US dollars has continued to rise over time.
Buying power of one U.S. dollar compared to the USD in 1774
Year Equivalent buying power
1774 $1.00
1780 $0.59
1790 $0.89
1800 $0.64
1810 $0.66
1820 $0.69
1830 $0.88
1840 $0.94
1850 $1.03
1860 $0.97
1870 $0.62
1880 $0.79
1890 $0.89
1900 $0.96
1910 $0.85
1920 $0.39
1930 $0.47
1940 $0.56
1950 $0.33
1960 $0.26
1970 $0.20
1980 $0.10
1990 $0.06
2000 $0.05
2007 $0.04
2008 $0.04
2009 $0.04
2010 $0.035
2011 $0.034
2012 $0.03
Due to inflation, we are depreciating our last 3%, so I believe you know what is going to happen next.
Keep stacking. Go get ya some.
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