ArticleBelow is the article I was referring to. But first, let me apologize for sounding condescending in the previous post. I meant that it is surprising how difficult it is to explain this. Again, that's because the yardstick keeps changing, which is a situation we never have to deal with anywhere else. Anyway, here's Chris Weber's attempt to explain the same thing, in terms of a slightly different asset, precious metals ETFs. He's a professional. He can probably explain better than me.
"I just got a letter from one of my subscribers, who asked a question many readers have asked before…
More or less, here's what he wanted to know:
When I buy a silver ETF, should I buy it in Swiss francs, euros, orU.S. dollars? (Either way, I have to go through foreign exchange.) Willthere be any difference in these currency choices after a few years?
To answer, I have to repeat what I have said many times before. When you are buying these sorts of ETFs of precious metals, you are essentially selling – exchanging – paper money and, in return, buying a specific weight of metal.
You may be buying a certain amount of ounces. You may be buying acertain amount of grams or kilograms. It does not matter at all whichcurrency you choose to sell in order to buy the weights of metals.Please, please, stop losing sleep over this.
Ideally, you should just sell your own currency to buy the weights ofmetals. This saves any currency conversion fee. But the idea thatbuying, say, three ounces of gold with Canadian dollars is better thanbuying that same amount with American dollars or buying that weight withSwiss francs is better than using any other currency… this simplymisses the point of what you are doing.
Your aim is to accumulate weights of precious metals.
If you want to get a huge head-start over most everyone else on thisplanet, you will start thinking in terms of ounces, or kilograms, orgrains, or taels – or whatever weight comes naturally to you – andnot in terms of dollars, francs, euros, or dong.
I understand this isn't always easy to do. It may be easiest to own around number of weights so you can easily track how much they are worthin terms of your own currency. For instance, say you own 100,000 ouncesof silver. If silver happens to be trading at $36 per ounce, it is easyto reckon the value of that silver in dollars. In this case, you own$3.6 million of silver.
But that currency amount can always change. What doesn't change –unless you accumulate more – is the fact that you own 100,000 ouncesof silver.
I don't knowhow else to put this. People ask me which currency to hold their goldor silver "in." Which currency has a better chance to hold its valueover the years? This is not the right question. You arenot buying currency. At least, you are not buying paper currency. Youare instead selling it and buying specific weights of gold or silver.
It would be a happier and wealthier world if people stopped thinking interms of national currencies and thought in terms of weights of metals.If this happened, governments would not be able to manipulate the valuesof their national currencies and cause all sorts of misery.
But you can't control this: If it happens at all, it will happen in thefuture – and sadly, probably far into the future. However, thisdoesn't mean you can't stop thinking in terms of national currencieswhenever possible.
I understand that when you go to buy gasoline, milk, or bread, you willbe charged some denomination of some national currency. But the amountof that national currency needed to buy the same amount of bread orgasoline or milk has been increasing over the decades. That means thesenational currencies have been debased.
Some of them have been debased faster and worse than others. But had youkept your money in silver for the last 60 years, you'd be spending lessof it for each gallon of petrol or litre of milk or loaf of bread thanyou are today with your increasingly worthless pieces of national papercurrencies.
Good investing,
Chris Weber"