athrone wrote:magician wrote:If not, then return to my original question: devaluation (of USD) with respect to what?
Everything outside of the USD... such as Gold or Euros in my example. How else do you measure a devaluation if not with respect to all other things? If the price of Gold in all currencies doubles overnight, then all currencies are depreciating wrt to gold. If Euros/Gold/Oil/All Other Currencies/Etc. double overnight wrt to the USD, then only the USD is depreciating.
I don't understand the point you are making. It seems to be that you don't care about Gold or Euros because you don't think those things affect you.
First, I never said (nor intimated) that I don't care about euros; that's your construct, not mine.
The point I'm making is that your example sounded as if the price of gold would double with respect to USD and nothing else. You presented that as an appreciation of gold, which it isn't; it's a depreciation of the dollar.
So your original statement boils down to this: if the dollar depreciates (with respect to everything), that would likely indicate an instance of dollar devaluation. A true statement, of course, but not particularly profound.
However, an overnight doubling of the price of gold in USD without a similar price increase in every other currency is . . . well . . . unlikely to say the least. And if all that's happening is that the price of gold is doubling with respect to everything else, that's not a big deal. (Sure, the people who own a bunch of gold will be pleased, if they sell the gold to get twice as much of the everything else (which means that they do so before the price of gold declines again), but I'm never going to own enough gold that losing that opportunity will be a catastrophe. Nor will the lion's share of the investing public.)