What to Own When the Dollar Collapses

  • Updated May 12, 2023

In this guide, we will look at ways to protect your investments in a falling US dollar scenario. This is the current situation, in which the US is experiencing high inflation and the dollar is weakening as the world’s reserve currency. 

Keep reading to better understand investments you might consider to protect your hard earned money.

We will consider options such as gold, silver, other metals, foreign markets. cryptocurrency, real estate investment trusts (REITS), stock and bond exchange-traded funds (ETF), and US depositary receipts (DR).

We’ll also take a closer look at fiat currencies and why they’re vulnerable during an economic crisis. We’ll investigate the influence of interest rates on stock markets and buying power, in addition to how greater inflation affects investors’ portfolios.

By the end of this article you’ll have a better understanding of how best to safeguard yourself financially against any possible downturns caused by currency collapses or other unforeseen events.

What to Own When the Dollar Collapses

Below are the top investments to own when the dollar collapses.

Gold, Silver, and Other Precious Metals

Benefits of Investing in Precious Metals:

Investing in precious metals such as gold, silver, and platinum can provide a safe haven for investors during turbulent times. 

You can purchase physical metals directly from reputable sellers, or you can also invest in precious metal IRAs, which allow you to purchase metals without needing to physically control them.

Gold is often seen as the most reliable asset to hold when economic uncertainty strikes. Its price usually increases when other markets are struggling and is less volatile than stocks or bonds.

Silver has also been historically known to be a valuable store of wealth and its price tends to increase with inflation. 

Platinum is another metal that can provide stability due to its industrial applications, which makes it more resistant to market volatility than gold or silver.

Types of Precious Metal Investments:

Investors have several options when investing in precious metals, including physical coins and bars, ETFs (exchange-traded funds), futures contracts, mining stocks, bullion certificates, and even digital tokens backed by physical assets like gold or silver. 

  • Physical coins and bars are tangible investments that you can take possession of. However, they may require safeguarding costs (a good safe) if you keep them at home, or storage costs if you choose to not keep them at home.
  • ETFs track the prices of different types of precious metals without having any actual ownership over them. This allows investors access into the market without taking on additional risks associated with physically storing these items.
  • Futures contracts allow traders to speculate on future prices without actually owning the underlying asset.
  • Mining stocks give exposure directly into companies involved in producing these commodities from mines around the world.
  • Bullion certificates offer an alternative way for individuals who want direct ownership over their investment but don’t want the hassle associated with keeping it secure themselves – instead they purchase paper certificates representing their holdings stored safely offsite by a third party custodian institution like an approved bank vault.
  • Digital tokens such as NFTs backed by physical assets like gold or silver are another option for those looking for more modern solutions within this space allowing quick liquidity through cryptocurrency exchanges plus the stability of a precious metal investment.

Considerations When Investing In Precious Metals:

When investing in precious metals there are certain factors you should consider before making any decisions.

  • Will you invest long-term or short-term depending on what type of returns you’re expecting? 
  • What size weight denomination would best suit your needs
  • How much risk tolerance do you have? 
  • Understand potential tax implications related to buying, selling, and owning certain types of metal investments.

Make sure you consult your financial advisor first before diving headfirst into anything too quickly. 

Additionally, research various dealerships and brokers offering services within this industry thoroughly. Check if they’re registered properly with relevant governing bodies.

You can read our review on the best precious metals IRA companies to get insight.

Finding the right investment opportunities can be a daunting task, but there are plenty of resources out there to make it easier and more lucrative. 

Many online brokers offer research tools specifically tailored for international trading, some even providing access to real-time data from global exchanges so investors can keep tabs on their portfolios without leaving home. 

Additionally, websites like Bloomberg Global Markets Intelligence or Reuters World Markets Live provide insights into overseas markets that allow investors to capitalize on market movements before they become widely known by other traders.

Foreign Stocks

Benefits of Investing in Foreign Stocks:

Investing in foreign stocks can be a great way to diversify your portfolio and reduce risk while potentially increasing returns. The global economy is much more interconnected than it was even just a few years ago, so investing in companies outside of your home country may provide access to new opportunities that would otherwise be unavailable. 

Additionally, many foreign markets have higher yields than U.S.-based investments, making them attractive for investors looking for income-generating investments with potential capital appreciation over time.

Understanding Currency Exchange Rates:

When investing abroad, understanding how currencies fluctuate relative to each other is essential as it affects both the return on investment and overall profitability of an investment opportunity. 

For example, if you buy a bond denominated in euros when the euro is strong against the US dollar but then convert back into dollars at maturity when the euro has weakened against USD, you could end up with less money than you initially invested due to currency exchange losses incurred along the way—even if the bond itself performs well. 

This highlights why it’s important to pay attention not only to individual stock prices but also currency fluctuations before deciding which foreign stocks or bonds are best suited for your portfolio objectives and risk tolerance level.

Finding the Right Investment Opportunities:

With so many different countries and exchanges available today, finding good international investment opportunities can seem tough at first glance—but there are plenty of resources out there that make this process easier (and more profitable). 

Many online brokers offer research tools specifically designed for international trading. Some even provide access to real-time data from various global exchanges so investors can stay abreast of news and events impacting their portfolios around-the-clock without having to leave their desktops or laptops behind. 

Additionally, there are numerous websites dedicated to providing insights into overseas markets such as Business Insider Global Indices and Reuters Global Markets.

Bitcoin and Other Cryptocurrency

Benefits of Investing in Cryptocurrency:

Crypto is becoming increasingly popular due to its decentralized nature, making it a plausible way to diversify investments and reduce risk associated with traditional financial markets. 

Bitcoin, Ethereum, and other cryptos offer investors an opportunity to make returns that are often much higher than those offered by stocks or bonds. 

Additionally, crypto is highly liquid, meaning that investors can quickly convert their holdings into cash if needed without incurring significant fees or taxes. 

Cryptocurrency transactions can be secure and private. Often no personal information needs to be shared when buying or selling coins on the open market.

One crypto investment strategy can be to look at the top crypto categories and invest in crypto projects you think will grow in value.

A new and interesting strategy that doesn’t involve investing your money is to participate in airdrops, which is a marketing strategy used by blockchain projects where they give away some of their available tokens or coins to encourage their use and promote the project. 

It doesn’t hurt to receive free tokens, and if those tokens increase in value, you could make some money.

Risks Involved with Cryptocurrency Investments:

Investors should be aware of the risks associated with investing in cryptocurrency before taking the plunge into this emerging asset class. 

The price of cryptocurrencies can be extremely volatile; one day you could have made a huge return on your investment only for it all disappear within days as prices plummet again just as quickly as they rose. 

Additionally, there is always a risk that hackers will attempt to steal funds from exchanges where coins are stored. Keep your investments safe through extra vigilance and security measures such as the below:

  • Two-factor authentication (2FA)
  • Guarding your private keys
  • Possibly investing in a much more secure cold wallet. 

A looming fear is that governments may choose to crack down on cryptocurrencies at any time – resulting in potential losses for those who invested heavily during boom times but didn’t sell off soon enough when regulations hit hard.

Tips for Successful Crypto Investment Strategies:

Investing in crypto assets such as Bitcoin or Ethereum requires a thorough understanding of how these digital currencies and their underlying technologies such as blockchain work before investing in them – hence, research is paramount. 

Setting up stop loss orders can help guard against sudden price drops while also allowing traders to capitalize on high volatility by placing buy orders slightly above current market prices.

This can all be automated to create an ‘averaging out’ effect which aids in reducing overall exposure risk. This enables smart investors to not have too much capital tied up at once waiting for profits from trades that were executed earlier during periods of extreme volatility. 

Besides being knowledgeable about technical analysis tools like chart patterns and indicators, perusing news sources related exclusively to cryptocurrencies may provide invaluable insight into upcoming events and developments which could affect prices either positively or negatively. 

This can assist with decisions regarding when it’s most advantageous to enter or exit positions based on sound fundamental analysis rather than basing moves solely upon speculation.

Here are some top crypto news sources:

Mutual Funds

What are Mutual Funds?

Mutual funds are professionally managed investments that pool together money from multiple investors and invest it into a variety of securities, such as stocks, bonds, and other assets. 

This type of investment is designed to provide diversification and reduce risk by spreading the investor’s capital across many different types of investments. 

Investors can purchase shares in mutual funds through brokerages or financial advisors at relatively low costs compared to buying individual stocks or bonds on their own.

Benefits of Investing in Mutual Funds

Investing in mutual funds has several advantages over investing directly in individual stocks or bonds. 

First, because they spread your money out among different assets, mutual funds offer greater diversification than if you were to buy each asset separately—reducing your risk while potentially increasing returns over time. 

Additionally, most mutual fund managers have extensive knowledge about the markets they invest in which can help maximize returns while minimizing losses due to bad investments or market downturns. 

Finally, with lower transaction fees than buying individual securities directly from a brokerage firm makes investing more affordable for smaller investors who may not be able to afford higher commission fees associated with purchasing single securities on their own.

Types of Mutual Funds

Investors have a wide variety of mutual fund options available to them depending on their investment goals and objectives. 

Index funds track a specific market index, such as the S&P 500. 

This allows investors to get exposure to all 500 companies in that index without having to purchase each stock individually.

In turn, this reduces cost while also providing some degree of diversification against any one company underperforming relative to others within the same sector or industry group making up that particular index fund’s portfolio holdings.

Bond funds invest primarily in government issued debt instruments.

This investment often offers stability during times when equity markets tend towards volatility while international equity funds give access into foreign equities allowing further portfolio diversification outside domestic US based equities and industries sectors – something especially important given today’s global economy where what happens overseas often affects US-based companies’ performance too. 

Lastly, sector specific ETFs allow an investor focus solely on certain industry groups such as technology (e-commerce), health care (biotech), energy, etc.

This enables investors to capitalize on those areas expected to outperform general market averages over longer periods of time versus shorter holding periods.

Collectibles

Types of Collectibles:

There are many types of collectibles that investors can choose from, such as art, coins, stamps, toys, and more recently NFTs (Non-Fungible Tokens). 

Art is a popular choice for collectors due to its aesthetic appeal and potential for appreciation over time. 

Coins have been collected since ancient times because they represent the history and culture of their country or region. 

Stamps are another potential option to invest in. They often feature intricate designs which make them attractive to collectors who appreciate the craftsmanship involved in creating them. 

Collectible Toys, such as LEGO toys often have a very good return on investment. In a study on LEGO sets sold in secondary marketplaces, the prices of retired Lego sets grew by at least 11% annually. 

Amazingly, this increase in legacy LEGO set value is higher than the average returns for gold, large stocks, bonds, and many other types of investments.

You will need to stay on top of market trends, know which sets and types of LEGO give good returns, find and purchase those sets, and hold them until you can sell for an increased price.

Finally, NFTs (non-fungible tokens) offer unique digital tokens that cannot be replicated or counterfeited – making them an increasingly sought-after asset class by digital investors.

Benefits of Investing in Collectibles:

The main benefit associated with investing in collectibles is the potential for long-term growth while protecting your portfolio against inflationary pressures caused by economic downturns. 

This makes it an ideal investment strategy during periods when traditional assets like stocks may not perform as well due to market volatility or recessionary forces at play within the global economy. 

Additionally, collecting items you love can bring joy and satisfaction into your life – whether it’s admiring a beautiful painting on your wall or trading rare coins with other enthusiasts online.

Non-Fungible Tokens (NFTs):

Non-fungible tokens (NFT) provide a way for people to own unique digital assets that cannot be replicated or counterfeited – making them highly valuable amongst crypto traders and collectors alike. 

They can take various forms including artwork created using blockchain technology, virtual real estate deeds stored on Ethereum smart contracts, and even portions of physical real estate or shares in companies listed on specialized stock exchanges built specifically for this purpose. 

With new platforms popping up all over the internet offering these services – now is definitely an exciting time to get involved with this burgeoning industry.

Food Storages

Benefits of Food Storage:

Having food storage can provide a great sense of security and peace of mind during uncertain times, like when the economy is in turmoil or inflation is on the rise. 

Not only does it give you access to essential supplies should an emergency arise, but it also helps protect your wealth by hedging against inflation.

Additionally, having a stockpile can help save money over time since you’ll be able to buy items in bulk at discounted prices and store them until needed.

Types of Food to Store:

There are many different types of food that can be stored long-term without losing its nutritional value or taste. 

Some examples include:

  • grains such as wheat, rice, oats; 
  • legumes like beans and lentils; 
  • dried fruits and vegetables; 
  • nuts and seeds; 
  • canned meats- anything including meats and fish; 
  • powdered milk; 
  • cooking oils; 
  • honey or maple syrup; 
  • bouillon cubes or powders for flavoring 
  • soups, stews, sauces; 
  • herbs & spices (dried); 
  • instant coffee
  • tea

Tips for Storing Food:

To ensure your food stays fresh for longer periods of time there are some key tips you should keep in mind when setting up your storage system – make sure the area where you plan on storing is cool & dry with no direct sunlight coming through windows (ideally below 70°F). 

Use airtight containers that seal out moisture from entering the container so that mold doesn’t form inside your stored foods (glass jars work best). 

Make sure all containers are labeled clearly with expiration dates so you know what needs to be used first before it goes bad. 

And lastly rotate through older stock regularly so nothing goes unused past its expiration date – this will help prevent wastefulness while keeping everything organized.

Income Producing Real Estate

Benefits of Investing in Real Estate:

Real estate has historically had a high risk-adjusted rate of return compared to stocks and bonds, making it an attractive investment option during times of economic uncertainty.

In addition, real estate investments can provide steady income through rental payments and potential appreciation over time as the value increases due to inflation or other factors. 

This makes investing in real estate an excellent way to diversify your portfolio and hedge against market volatility while still generating passive income from rental properties.

How to Get Started with Real Estate Investing:

Here are some basic steps for real estate investing:

  1. Type of Investment: The first step is researching different types of real estate investments such as single family homes, multi-family dwellings, commercial buildings, land parcels, etc., that are available in an area or region that you may be interested in.
  2. ROI: You will also want to consider desired return on investment (ROI) and timeframe before committing any capital.
  3. Financing: Once you have identified some viable options, the next step is finding financing either through purchase with your own funds, a traditional bank loan, or private investor funds depending on your credit score and financial situation at the time. 

Get pre-approved for financing prior to shopping around for properties to help streamline the process significantly since lenders typically require detailed information about prospective buyers before approving loans applications.

Tips for Successful Real Estate Investing:

When it comes down to successful real estate investing there are few key tips worth remembering:

  1. Always research all aspects related to any given property including:
    1. Its condition (structural integrity), 
    2. Zoning laws and regulations applicable within its jurisdiction (ease or difficulty obtaining permits & approvals), 
    3. Local market trends affecting supply and demand dynamics influencing pricing & rentability prospects (neighborhood stability & growth potential).
  2. Make sure all contracts signed between parties involved include provisions allowing termination without penalty under certain conditions.
  3. Never underestimate the importance of having professional legal counsel review all documents.
  4. Maintain positive relationships with tenants (if renting out units).
  5. Stay up-to-date regarding changes within the industry, such as national and local regulations changes.
  6. Factor taxes, fees, and all costs into the your profitability calculations so you have an accurate picture of your potential investment.

Land and Agricultural Commodities

Benefits of Land and Agricultural Commodities

When the U.S. dollar takes a dip in value, land and agricultural commodities become more attractive investments as they are denominated in U.S. dollars—making them an ideal way to hedge against inflation and safeguard your wealth from market fluctuations. 

Investing in land is a significant investment on its own; however, it can also be used for growing crops that you can store or sell at a later date when prices increase due to inflationary pressures.

Tax Benefits of Investing in Land and Agricultural Commodities

Investors often benefit from tax breaks when investing in land or agricultural commodities due to government subsidies available for farmers who grow certain crops such as corn or soybeans which help reduce their overall tax burden while still allowing them to reap profits from their investment decisions over time. 

Additionally some states offer special tax incentives for investors who purchase large tracts of land which further reduces their overall cost basis making these investments even more appealing than traditional stocks or bonds during times of economic uncertainty and high inflation rates.

Technology such as blockchain now enables you to purchase fractions of land and real estate through the use of NFTs.

Below are some companies that offer ways to invest in land and real estate from your computer:

What is the Effect of the Dollar Price?

What Is The Dollar Price?

The dollar price is the value of the U.S. dollar in relation to other currencies around the world, and it’s often used as a benchmark for economic performance. 

The value of the dollar can be determined by comparing its exchange rate with other currencies, or by looking at its purchasing power against goods and services that are priced in dollars.

How Does It Affect The Stock Market?

When the dollar weakens, stock prices tend to go up because foreign investors will buy more American stocks since they’re cheaper when converted into their own currency. 

This influx of capital boosts demand for U.S.-based companies’ shares, which increases their stock prices on domestic exchanges like Nasdaq or NYSE. 

On the flip side, when the dollar strengthens, stock prices tend to fall due to reduced foreign investment from countries whose currency has weakened relative to ours – resulting in fewer buyers for our stocks and lower share values overall.

What Are Some Other Effects Of A Falling Dollar?

A falling dollar can have far-reaching effects beyond just influencing stock market activity.

  • It also affects global trade flows and international financial markets as well as consumer spending habits in the US. 
  • Imports become more expensive so people may opt instead to buy domestically produced goods
  • Exports become cheaper so overseas customers may purchase more American products
  • Businesses must adjust pricing strategies accordingly

These reactions can lead to inflationary pressure, and policy makers and central banks often try to manipulate monetary policy to compensate.

Personal Preparedness Measures

As the economic landscape becomes increasingly uncertain, personal preparedness measures are essential for entrepreneurs looking to protect their assets and secure their future. 

Stocking up on essential goods including non-perishables is a great way to ensure that one has the necessary supplies in times of uncertainty. 

Having a stockpile of vital items, such as canned foodstuffs, water containers, medical supplies, batteries and lamps can be beneficial in times of crisis. 

Growing one’s own food using available resources is also a great option for those who want to be self-sufficient when it comes to basic needs like food and water supply. 

This could mean planting vegetables or fruit trees in your backyard or even starting an urban garden with help from local community groups or organizations. 

Creating emergency plans for yourself and family should be part of any entrepreneur’s personal preparedness plan. 

FAQs in Relation to What to Own When the Dollar Collapses

How do you hedge against U.S. dollar devaluation?

To hedge against U.S. dollar devaluation, investors can diversify their portfolios with investments in foreign currencies and commodities such as gold or oil. Investors may also consider investing in stocks of companies that do business internationally and have exposure to multiple currencies. 

Investing in currency-hedged ETFs or mutual funds is a way to safeguard against changes in the worth of the U.S dollar compared to other currencies around the world. Finally, investors can use currency futures and options to manage their risk exposure.

How much will gold be worth if the dollar collapses?

It is not feasible to foretell precisely what would be the worth of gold in case of a dollar crash. However, it is likely that gold would become more valuable due to its status as a safe-haven asset and hedge against inflation. 

In times of currency turmoil, gold is often sought as a refuge by investors seeking to safeguard their wealth. 

As demand increases and supply remains relatively constant, prices tend to rise significantly during these periods.

Who benefits from a weak dollar?

Those who benefit from a weak dollar are those who export goods and services. 

A weakened currency can make exports more attractive in the international market, resulting in potential growth of sales and profits. 

Companies that import raw materials or components may find these items cheaper when purchased with a weakened currency, resulting in increased margins on finished products. 

Investors can take advantage of an environment where foreign investments become more attractive due to the exchange rate differential between two currencies.

What to do with money if economy collapses?

If the economy collapses, it is important to prioritize saving and protecting your money. 

Exploring options such as gold or treasury bonds to safeguard one’s funds from the impacts of inflation can be a wise choice. 

Diversifying investments across different asset classes and countries can help reduce risk. 

Investing in yourself through education or business ventures could provide long term financial stability if done correctly.

Conclusion

As a business owner, it is important to be aware of the potential for a dollar collapse and how it could affect your operations and personal life.

It is a good idea to start investing part of your earnings in assets that are minimally affected by inflation or a falling dollar, and we hope this article has given you a solid foundation for starting.

What is going to be your strategy for protecting your investments?