Where to Invest if the Dollar Crashes
Talking about the dollar crashing, very scary. And every now and then we have an individual come in and they kind of bring that up or they have concerns about that. You know I think back in time and I think those concerns may be stem from a couple different areas. One, if you remember back when the government started quantitative easing or QE, people talked about it, you know, that generated some concerns. I mean the printing of money and stuff like that and making more of it, people were wondering, wow, that does that do to the dollar in my pocket? The other time back I think back in 1971 when the United States got off the gold standard. A lot of people go back to that and say oh boy, what’s really backing our dollar anymore? You know, so when you think of a currency crashing, you know really what that means is the users of that currency, right, have lost faith in that, that it really is meaningful. And it’s lost its purpose as a general exchange to be able to purchase goods. So therefore, the dollar bills in your wallet or purse then become useless or less valuable than they did before, right? So what does that mean? The U.S. currency is really valued against other currencies in the world. Currently the U.S. dollar is used for exchange on the international market. So like commodities and stuff like that, exports are bought and sold with U.S. currency. So they compare that to other currencies. So when you hear that the dollar is getting weaker, well it’s getting weaker in comparison to other currencies. Stronger, obviously it’s getting stronger in comparison to other currencies. So a weaker dollar does make our exports more attractive. So it’s not always bad. But us as consumers typically want a strong dollar. So you look at if we have, let’s say a devaluing currency if we ever got into that situation, maybe where would you look at? Well one, since we’re valuing against other currencies, what other currencies are doing well? You know maybe it’s something to look at, international currencies if that was the case. You hear all the time, commercials on T.V.. You know buy gold and silver, the dollar is crashing or something along those lines. Potentially, looking back over time, gold and silver has been a relative hedge against that. But like any investment, we don’t want to put all of our eggs in that one basket. So other things, you know looking at like real estate or certain commodities, you know, more harder assets in a lot of times when you have a devaluing dollar. If you’re interested in stocks, considering stocks that maybe have a multi-national spread. You know they’re getting their incomes from all over the place, not just in the U.S.. Maybe looking at international or emerging markets during that time you know if the U.S. dollar is particularly struggling. So when we look at this, it’s just one of those maybe Black Swan events out there that potentially could happen. And how is your retirement plan positioned for this? Once again, if this is something that is concerning you, have you had this conversation and do you know how your particular investments would react? So once again, as we always offer free, no obligation here with any of our Advisors in our four locations here in northern Michigan. We’d love to sit down with you to help you plan to retire well.