What to Own When the Dollar Collapses
Something has changed about the value of money. The ‘gold standard’ upon which money in circulation was regulated till the mid-20th century was thrown out of the window and in came the fiat currency. What this implies is that the value of a currency is defined by the power of the government that issues it, and not it’s worth against a physical commodity such as gold or silver.
Now, when American civilization as we know it collapses (whether due to zombies or our own failures), the dollar ain’t going to be worth the paper it’s printed on. So it’s best to start prepping now. This post will tell you exactly what to own when the dollar collapses (or, ideally, before).
Inflation! Inflation! Inflation!
One of the good sides about a fiat currency is that, in times of economic crisis, introducing more of the currency can ease the stall of the economy, which would not be the case if it was tied to a physical commodity. But there is a downside to this. While increasing the currency in circulation in a period of crisis keeps the wheels of an economy rolling, the same move increases the rate of inflation. Put in the simplest terms, inflation points to the rate at which the average price of a commodity or service increases over time. Deductively, a period of inflation points to a decrease in the purchasing power of a currency.
There are several implications of inflation for a country. Summed in a few statements, a country in inflation:
- Is most likely running a trade deficit with the value of imports exceeding that of the exports.
- Is putting her investors in jitters at the thought of losing their capital.
- Is risking losing its own citizens as customers since they may readily buy goods at cheaper prices from other countries.
- May have to withdraw certain social securities for its citizens.
These, and many other aspects of inflation, are all indicators of a currency in the verge of collapse.
So, Is the Dollar Collapsing?
Unfortunately, the current world economic superpower has lived the situation described by the foregoing for a while now. The probable consequence is that the US currency, the dollar, is at the verge of collapse. If that should happen, the country will go through what other nations with a currency collapse have experienced: the government will introduce a new currency while the citizens may seek to survive by using a black market currency. But the key question for you and me is: what will happen to any wealth you might have saved up in dollars? Differently put, if the buck is at risk, what should you own when it collapses?
Own Wealth Beyond the Dollar
The power of a currency is in the stability of its value. But if a currency loses its value, so does anything valued on it. If you invest your entire wealth on something that is solely valued by Americans in the US, the collapse of the dollar will equally mean your doom. Your question on what to own when the dollar collapses is, therefore, best answered by the statement: “Own wealth beyond the dollar.”
With this answer comes a consequent question, “What is it that has value beyond the dollar?” Here are the top 4 options on the list of what to own when the dollar collapses.
Despite its replacement by the fiat currency, gold still holds as a solid economic standard and, hence, a reliable wealth to own when the dollar collapses. Someone will say that gold, and other precious metals, is the only real money. If you have them freezing in a bank, turn your dollars into gold, you have a more valuable asset than your current bills should the dollar collapse.
Your primary motivation to invest in gold is that it has a constant value. It is also safer to invest in gold ETFs as they have a higher liquidity, which works to your advantage when inaccessibility to the dollar finally set in. In addition, you can choose from the many available choices of Exchange-Traded Funds including gold shares and trusts among others.
A promising foreign currency is your next best option. From a short term approach, you may directly buy the currency or invest in a currency mutual fund. If you are thinking long term, consider investing in stock markets or bond funds of countries whose currency has a steady value appreciation.
Assets that generate cash flows in strong and appreciating currencies are a solid option when you decide on what to own when the dollar collapses. For example, buying a company that generates profits in strong foreign currencies will mean that the produce from these companies will have more value in dollars, even though that may be measured in the subsisting currency. In the zombie apocalypse, of course, the best assets you can store up are food, fuel, and firepower (the 3 Fs).
There are several reasons you should invest in the world’s first digital currency (cryptocurrency), the bitcoin:
- The world economy is becoming more and more reliant on the internet, and the bitcoin is an anticipated medium of digital trading.
- While the bitcoin is a fiat currency just like the dollar, the bitcoin is scarce, with a finite amount, and does not allow for surplus printing in a time of economic crisis like the dollar does. Its scarcity, and the growing recognition of its worth, explain why the value of the bitcoin has shot from a mere $1,127 per coin in 2013 to around $4,203 per coin by the end of 2018.
- The bitcoin has no geographical limits, it can be digitally moved anywhere in the world.
- The bitcoin is highly divisible, a sign that it has value.
- The bitcoin serves as an investment and as a medium for the purchase of goods and services. A growing number of significant global companies recognize it as a mode of payment.
- The bitcoin is free of censorship and will not be blocked if, for any reason, a bank blocks or closes your dollar account.
Considering the current unpredictability on the future of the bitcoin, it is important to consider that investing on the cryptocurrency is doing so with both hands open; one for the high risks and the other for the high rewards. But as they say, no reward comes without risks.
Day Z can come in all shapes and sizes. So if you’re scoffing at the value of bitcoin in a post-apocalyptic world, you need to brush up on your cyberpunk. Not all zombie scenarios mean an end to the digital age.
Hopefully, you have made your decision on what to own when the dollar collapses. If not, be consoled by the expert’s word that this is not happening tomorrow. Put your brain in motion, however, because remaining in the indecisive situation is equivalent to having your hands tied when doom finally strikes.
The bottom line is: you need to protect yourself against the steady decline of the dollar.