Preparing Yourself for the Downfall of the Dollar

It has come to my attention thru various readings that do to the increase in government spending and debt the dollar is slowly turning worthless. Here is one such article. So what are we supposed to do to protect ourselves? I bet alot of you fatwalleters will have good ideas on investing to avoid this and probably turning all of your assests over to a different currency I guess.

I am preparing for the downfall of the dollar by placing myself as near to the ground as possible, such that I may catch the dollar as it falls.

Other ideas:

-Butterfly net
-Vacuum cleaner

Think about what the masses will do, and then position yourself to profit from it.

Those GoldKit.com ads on tv are a good example.

ifyouhavetoask said: Think about what the masses will do, and then position yourself to profit from it.

Those GoldKit.com ads on tv are a good example.

Thanks, I like that idea. The problem is, what do you do about investments and money in bank accounts that are constantly falling? (other than vacuuming them up)

WalStMonky said: What makes you so confident that the future is so easily predictable? I recall when the Euro was introduced...the common 'wisdom' was, who would want that? Look how storng the dollar is, it's just going to get stronger...IME when everybody decides something is a given, it's time to get to the other side of the boat.

How Contrarian you are. Logically I think the info is in and that the dollar has no choice but to fall due to our economic policy. I think the plan is to inflate away our debt and that the Fed is hoping this happens with a soft landing. The problem is I am highly Contrarian and with everyone coming to this conclusion I am not sure what to do. I have taken a Buffet, Jim Rogers approach to this. 1 I am borrowing as much free money as I can (credit cards, student loans) in hopes that inflation will make my loans worthless. 2 I am investing most of my money aboard or in companies that do business abroad, 3 I am fairly bullish on Commodities (Mostly Oil & Steel).

the dollar collapse. lmfao. must be another Russian or eastern European trying to cause panic. lmfao.

what makes you think the dollar hasn't been ENGINEERED to this level to help corporate profits. american companies that export have an advantage because of the weaker dollar. american companies that generate returns in other countries show greater profits in american dollars because of the exchange rate.

here is food for thought. how about the collapse of the british pound and the euro. those are two currencies that are EXTREMELY overbought.

the dollar has been weakening for five or six years. Have you had your head under a rock?

It's about time to start accumulating dollars as yields are on the rise.

I think the op has a good point. If the US dollar is weakening then we have less money in the big picture and less buying power on a world scale.

Personally, I have found that my COGs have gone up as the dollar has weakened against foreign currencies. I am trying to hedge against this by opening up businesses in markets where the US dollar is weak to capitalize on the currency arbitrage and bring home more US dollars relative to just a US business.

We'll see how it pans out.

kcm18 said: It has come to my attention thru various readings that do to the increase in government spending and debt the dollar is slowly turning worthless. Here is one such article. So what are we supposed to do to protect ourselves? I bet alot of you fatwalleters will have good ideas on investing to avoid this and probably turning all of your assests over to a different currency I guess.

all money is slowly turning worthless (that is call inflation) --- that is why you own assets that are slowly turning worth more (that is called investing)

If the dollar continues to fall then there will be significant inflation occuring. This will be a bad thing for most but in my opinion can be a good thing for some if they successfully prepare for it. The best way to fight inflation is to obtain tangible assets (gold, real estate, etc.) and foreign investments which can be used to offset the rising costs of inflation. Granted, when it comes to foreign investments you would actually be making the situation worse if you were to invest a significant ammount of money (several millions of dollars), however (no offense) I dont think anyone reading this board will be conducting activities of that nature as they are usually conducted by major corporations and or hedge funds.

A good example of a way to fight inflation is the following example.

Let's say that you have a home which has a mortgage payment (excluding interest, pmi, taxes, etc.) of 1300.00. 30 years ago in 1977 that same home would have a mortgage payment of $383.36 (less than 1/3rd of the dollar ammount today). Although the dollar ammount is different the value is the same. With home mortgages however, you can lock interest rates and refinance when interest rates go down which actually works out in your favor because in the end the inflation (factoring job market keeping up with inflation) is letting you pay your debt significantly faster and thus opening up your home or homes for income related uses (landlording, renting, etc.).

Once again, this is all assumming that the job market is keeping up w/inflation.

this would impact the bottomline of companies as they would have to pay more (due to depreciated $) to get the same work done.

ScootyPuffSr said: not going to happen. If anything, corporations will send even more jobs oversea to reduce labor costs.

Except that a "cheaper" dollar and a more expensive foreign currency is only going to make outsourcing more expensive and reduce marginal benefit to doing it.

If anything a falling dollar should reduce the outsourcing you are talking about.

when there is wage parity between US workers and Chinese/Indian/Korean/Others workers, you will be correct.

Milk is at 5/gallon. What do you think a gallon of milk will cost when parity takes place?

ifyouhavetoask said: agentpt5 said: frankm said:


Stagflation -- this one is gonna be a killer.

Stagflation in the 70's was an interesting experience.

However, back then everyone wasn't walking around with $10,000 of credit card debt, and a second mortgage on the upside down house, and $30,000 in student loans.

The Federal Reserve will try to print us out of this current mess. Will it work? It might, if China plays ball.

If it doesn't work, the collapse will bring the world to its knees.

Those who aren't concerned about the dollar, obviously haven't looked at how far out of line things have gotten in the past couple of years. The 2010's might end up making the 30's look like the 90's.</blockquote>THE SKY IS FALLING!!! THE SKY IS FALLING!!!</blockquote>

ifyouhavetoask said: If it doesn't work, the collapse will bring the world to its knees.

Those who aren't concerned about the dollar, obviously haven't looked at how far out of line things have gotten in the past couple of years. The 2010's might end up making the 30's look like the 90's.I'm not worried...I bought tons of gold, so when the global economy collapses, I can wave my gold bars in everyone's face and gloat that I'm super wealthy!

kmith said: ifyouhavetoask said: ... The Federal Reserve will try to print us out of this current mess. Will it work? It might, if China plays ball.

If it doesn't work, the collapse will bring the world to its knees...
This is a great discussion, but I don't understand it.

If the dollar falls, then holders of dollar-denominated assets (bonds) lose.
Why would that bring the world to its knees?

Because the dollar is the reserve currency of the world. Lots of commpanies own dollar-denominated assets and debt instruments (bonds). And if the U.S. economy tanks, the whole world economy comes crashing down with it. It's a global economy now, and the U.S. is the biggest pillar - still the biggest producer, purchaser, etc. in the world.

As for inflation, as a saver, it bothers me that the Federal Reserve can take away the value of my savings with a hidden tax just by printing more money whenever they want. If, every time they printed money, your bank account went from $100,000 to $90,000 or you had to write a check to the IRS, there would be a revolution. But they do the same thing through inflation and 90% of the people think there's no problem because the numbers in their account are going up (even while purchasing power is going down).

Are there any good investing strategies other than investing in foregin companies? What about trading currency.