1. The Euro is not 30% backed by gold. Rather, the ECB consolidated balance sheet includes exchange reserve assets, of which gold and gold receivables make up 30%. Those reserves are primarily made up dollars. Which the ECB hasn't used--yet.
If the Euro were "backed" by 30% gold., it's price vis a vis gold would have been fixed, in which case it would have maintained parity against the dollar since January.
2. Your criticism of the structural problems with the European and other economies is a valid point. However, if these problems, which the Euro block has always had, mean that these countries have little choice but to devalue their currencies, then why have the D mark and swiss franc consistently outperformed the dollar since WWII?
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3. The U.S. Dollar is the only currency whose exchange rate is supported by massive foreign demand (as evidenced by the trade deficit). And that, in turn, is related to the dollar's CB reserve status (which also explains why the dollar and U.S. economy strengthened in these times of crisis) . When that status changes, dollar fundamentals will manifest themselves.
4. It's true that U.S. "growth" has always been faster than that of other major industrialized nations. It's also true that this country's fiscal and monetary irresponsibility has resulted in interest rates (i.e., govt borrowing rates) usually double or triple those in Japan and Germany. A country's need to monetize its debt--the engine of inflation and devaluation--depends not only on the growth of its tax base, but also its borrowing costs.
So the relevant figure is: Interest Rates minus Gowth in Tax Base = What We Will Have to Monetize Some Day. |
