1.) Would it be a good idea to convert American dollars to Euro dollars to avoid the inflation that is obviously happening in the US?
The Euro is likely to do better than the dollar in the short term, as the dollar loses its reserve currency status. In the long term, the Euro is just another fiat currency. Because of differences in "management style" among the member countries, it's possible that Euro won't even last much longer.
2.) If our dollar crashes will other currencies crash along with ours?
Some might. All fiat currencies are being inflated. Some countries have increased inflation to keep pace with the dollar. Other currencies are actually pegged to the dollar.
3.) If this would be a good idea, what is the best way to convert money? Can it be done at a local bank?
Your local bank is likely to give you a poor exchange rate; you can lose as much as 5% or more of the transaction amount if you aren't careful. A better approach is to open an account specifically designed to hold foreign currencies. If you live in a big city, some foreign banks have US offices, which is a good way. Otherwise, you might look into Everbank and their foreign currency denominated CDs, or possibly the Merk Fund, which is a basket of currencies. There are also ETFs that trade on the stock market that invest in specific currencies.
I was afraid of this. The thing that scares me about gold is the idea that the government has the power to snatch it up. I guess that they actually did this during the depression?
The reason for the gold confiscation in the depression is that the dollar was defined as a certain amount of gold, but the government wanted to devalue the dollar. The only way to do that was by changing the price of gold. Since people held $20 gold pieces with a certain amount of gold in them, the only way the government could change the price to $35 for that same amount of gold was to confiscate everything in circulation. So the first thing to keep in mind is that same motivation doesn't exist today, since the dollar is no longer defined in terms of gold.
The second thing is that if you store your gold out of the country, it becomes even harder for the government to touch it if they somehow became motivated to do so. Companies like
BullionVault allow you to store gold in a vault in Switzerland, for example, in allocated storage (so if the company goes bankrupt, the creditors can't touch your gold).
is any currency still on the gold standard?
No. Switzerland went off in like 2000 or so. They were the last hold-outs.
If you prefer currencies over gold, I would recommend looking at the commodity-oriented economies like Canada, Australia and New Zealand. They are likely to come out of this best since commodity prices should hold up well. Canada is tied a little too much into the US economy for my taste, so I prefer AUS and NZ. A basic bank savings account in NZ (where I live) pays 7.75%, which is another plus.
