By my count, there are no less than 180 currencies circulating as legal tender in the world today. There are several dozen alternative and digital currencies in play, although how useful they are remains debatable.
But for the time being, just five currencies – the Big Five – fuel the global economy. They are, in order: gold (anyone who tells you gold is a commodity and not a currency is an idiot – probably a dangerous one, like Ben Bernanke);
- gold (anyone who tells you gold is a commodity and not a currency is an idiot – probably a dangerous one, like Ben Bernanke);
- the U.S. dollar;
- the euro;
- the Chinese yuan; and
- the Japanese yen.
These are different currencies, of course, but no currency is an island unto itself; nothing operates in isolation. Each of these currencies impacts and pressures the others, along with a whole host of "minor player" currencies, like the Australian dollar or Swiss franc.
I won't sugarcoat this: In the long view, central bankers run amok will eventually succeed in their collective Don Quixote-like quest of destroying the value of paper money, leaving gold as the only currency left standing – or worth owning.
Until that day (which just might get here sooner than you think), these currencies will go up and down relative to one another in a kind of domino effect.
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