The Federal Reserve Bank's QE2 is going to debase dollar. Market already react to that expectation and dollar has lost 7% of its value against a basket of currencies since June. Gold rallied along with Yen, Canadian dollar, Australian dollar, and Brazilian real.
Dollar, the FRB note, is a claim on the US economy as a whole. More dollar with the same amount of GDP means every dollar has to claim a smaller share.
This is unprecedented move by the FRB to counter liquidity trap - when banks won't lend, business won't invest, and consumer try to save. People are hoarding cash out of fear for the uncertain future. But the likely result is that the more people save the less the value of their savings.
How do you protect the purchasing power of your dollar?