>Srdjan,
>
>The whole "inflation" argument requires that reserves are maintained for spending. This may be true for smaller currencies, but for major ones like the US$ Euro or Yen, pricing, conversion or interest differences are negligible. Apart from countries like China with huge surpluses, the major reason for large foreign currency reserves is to protect your own currency. See http://en.wikipedia.org/wiki/Foreign_exchange_reserves


Yes that is more less what I was refering to.
Countries bought dollars for x amount of money and it is now worted x-1
That is taxation that guy was talking about.

Now weather it is easier to balance currency on sliding or stable dollar is beyond my (non existing) expertise on financial matters.
I would however opt to have liquid assets in euro, while keeping my debts in dollars ;)