Here’s an interesting paper (pdf) by economists Obstfeld and Rogoff on the prospects for the dollar, arguing that the differences in savings rates between countries will be important in the continuing decline in the dollar relative to other currencies. I don’t put too much faith in their attempts to forecast the size of the decline (in part because of the problems with measuring savings rates), but the basic ideas behind the paper seem sensible. It makes me wonder whether I have a big enough position in gold (the short-term outlook seems unclear, but my long-term outlook is that gold is a pretty good investment).