investment options for a devalued dollar

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Brian N Naber's picture
Brian N Naber
Status: Member (Offline)
Joined: Aug 25 2009
Posts: 1
investment options for a devalued dollar

Folks...

I'm new to this site and I am actively looking for non-dollar investment options so that when the dollar resumes it's drop in value I can protect my assets, especially in a deflationary environment.

I'm interested in your investment options to a devalued dollar. And what if the Fed devalues the dollar to help pay for the massive US debt? What the? Can you see why I'm looking for non-dollar assets right now?

Thanks for your input.

"Moose"

ivoryjackal's picture
ivoryjackal
Status: Bronze Member (Offline)
Joined: Oct 10 2008
Posts: 88
Re: investment options for a devalued dollar

Hi Moose

Welcome to the site.  Check through the archives as you'll see a lot of questions similar to yours and discussions that go all sorts of ways that might be helpful.  It's a pretty general question - there are a lot of things that are valuable and can be purchased right now with dollars that may become scarce or more valuable depending on what happens with the dollar.  I'd advise that you take some time to study some history, too - our national conundrum has been faced countless time by different cultures thorughout history and governments have used all sorts of creative solutions to get through them - currency devaluation being very popular but not the only solution (think price controls, massive taxation, genocide, and the perrenial favorite, changing all the rules and enforcing them with the military).  Was that pessimistic?  You may find one or two examples of cultures bucking up and doing the right thing, too.  It's always possible.

There's no way to guarantee the safety of your wealth, but I don't think anyone on this site would fault me for recommending you look into:

Precious metals:  Gold and silver have been accepted as a valuable means of exchange for about as long as humans have recorded history.  Good trend backing that one.  If you're new to this idea, though, let me warn you away from ETF's and paper promises of gold or silver.  Get yourself some bullion.

Food and Land:  MRE's, canned food, a thriving garden, some livestock.  I have no idea where you live but some of this is probably doable for you.  Sure, you'll look like a survival nut getting deliveries of cases of astronaut food, but at least you'll have a new best friend when the UPS guy has to come back begging for some food for his family if the worst happens.  Or maybe he wont ask, which leads to the next...

Guns and ammo:  Yeah, it's starting to look a little paranoid at this point.  I do believe, though, that these are not only functionally necessary at the basic level for human survival, but are not a bad investment, especially if they become scarce due to Gov't controls (see above).  You may have religious or other philosophical opposition to this, but perhaps you can think of these things as tools.  Statistically less deadly than a car, easily less complicated to use than a table saw (and again, statistically less likely to take a body part with it).  Don't let common cultural prejudice keep you from it - but do learn how to use it properly and safely (just like that car or table saw...)

Knowledge:  People are group animals - not individual survivors.  We depend on each other to fulfill all of our needs and then desires.  If things change significantly in the future, you may find that the skills and knowledge you have become obsolete (are you a financial advisor, for instance?).  Think of a role you'd like to be able to fulfil that is very basic to necessity (watchmaker, carpenter, farmer, hunter, blacksmith, etc) and go seek out information and training.  It may not even take money.  And it'll be time really well spent, no matter what the future brings.

If your vision of the future is less severe, there are all sorts of investments you could make to try to protect the value you have in dollars.  Too much for me to even get into.  In a highly inflationary period, a simple s&p 500 index would save you some value (the s&p will rise not because it's getting more valuable but because the measurement is getting less valuable).  I would argue, though, that a lot of those kind of things will return nominal increases in wealth and real decreases (and you'll be taxed on your nominal increase).  I'd stick closer to home and look after your health and wealth (in a real sense, not a dollar denominated sense) and that of your family's.

Hope that helps

Daniel

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