After the last crisis it was easy for many to look back and say all the signs were there to indicate an impending crisis. Super-low interest rates from the FED, no down-payment loans, interest-only loans, under qualified borrowers, flipping of properties, securitization of mortgages, over-leveraged banks, etc.

So what is the next crisis and what are the current events that we will look back on and say "all the signs were there"?

The US dollar (USD) crisis.

China announces trade deals with many countries to use the yuan and local currencies for settling trade and thus bypass the USD. Argentina, Indonesia, Belarus, South Korea, Malaysia, Hong Kong, and Brazil so far. If Australia or Canada get added to that list - look out.

  • China encourages its citizens to own gold. It was illegal to own gold in China up to 2002. Recently the Chinese government ran TV ads urging citizens to consider purchasing gold. Gold can be purchased at almost any bank in China.
  • The FED prints over $1.4 Trillion in new money to rescue banks. Printing money has consequences. Very serious consequences.
  • In 2009, the US government financed over 40% of its expenditures with debt. Most of the money was borrowed from abroad or purchased with newly printed money from the FED. The US government will need to borrow at least that much for its planned expenditures in 2010.
  • Iran stops accepting US dollars for oil. What country was the last country to stop accepting USDs for oil? Iraq in November 2000. Iraq now accept USDs for oil.

Nations now openly hostile to FED money printing. After the FED announced the printing of another $600 billion to purchase government debt, many nations openly criticized the move. Many nations are considering implementing capital controls so all those new dollars don't wreak havoc in their nation. These same nations may consider dumping their dollars as they see others implementing the same type of controls. If other nations don't accept the dollars where are all the dollars going to land? Back in the US.

What are ways to hedge against the dollar collapse?

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    Can you take the answer of out the question? :-)
    – C. Ross
    Commented Aug 19, 2010 at 13:09
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    I cannot really answer professionally, but I once read the following: in bad times, buy Government Bonds; in very bad times, buy precious metals; in "oh s**t" times, buy canned food, cigarettes, fuel and ammo. Commented Aug 19, 2010 at 13:17
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    Can I say that continually spelling government as "gubmint" doesn't do anything to increase the credibility of this question. Commented Jan 11, 2011 at 16:09
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    I edited the post and replaced "gubmint" with "government", it's distracting. Commented Sep 21, 2011 at 17:09
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    For all the doom and gloom here, nearly 3 years later and that collapse hasn't happened yet so how soon is this to come to a head? Do lessons from Japan play a role here?
    – JB King
    Commented May 23, 2013 at 17:24

10 Answers 10


There are two basic ways you can separate your investments from the dollar (or any other currency).

  • Invest in other currencies.
    • Keep money in foreign saving accounts or CDs.
    • Invest in foreign companies/stock exchanges that are traded in foreign currencies. This is tricky because a collapse of the dollar would likely have a negative effect on many of the world's large companies.
  • Invest in hard commodities.
    • Gold or other precious metals, but be careful because the price has already inflated.
    • Land and real estate. It's already lower than its high, but some believe it may go lower, but land always retains value.
    • Other real assets that don't devalue.
      1. Hard commodities such as mines, oil fields, etc.
      2. Luxuries that appreciate such as liquors, wines, and art.
  • @C. Ross - Opening a Canadian bank account requires a US citizen to travel to Canada. I've done some initial research and it looks like other countries are similar. Is there another way?
    – Muro
    Commented Aug 19, 2010 at 17:50
  • @Muro I believe their are companies that facilitate that through the web, I'll try to find an example.
    – C. Ross
    Commented Aug 20, 2010 at 17:32
  • @C. Ross - It looks like EverBank gives customers the ability to open CDs in foreign currencies. everbank.com/001CurrencyCDSingle.aspx
    – Muro
    Commented Aug 22, 2010 at 2:31
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    @Muro - I think you do it by travelling to Canada: apparently it's anti-terrorist / anti-money-laundering legislation.
    – ChrisW
    Commented Apr 24, 2011 at 1:09

I am not preparing for a sudden, major, catastrophic collapse in the US dollar.

I am, however, preparing for a significant but gradual erosion of its value through inflation over the space of several years to a decade. To that end, I've invested most of my assets in the stock market (roughly 80%) through major world index funds, and limited my bond exposure (maintaining a small stake in commodity ETFs: gold, silver, platinum and palladium) due to both inflation risk and the inevitability of rising interest rates. I don't think most companies mind overmuch if the dollar falls gradually, as the bulk of their value is in their continuing income stream, not in a dollar-denominated bank account.

I also try to keep what I can in tax-deferred accounts: If, after several years, your stocks were up 100% but inflation reduced the dollar's value by 50%, you're still stuck paying taxes on the entire gain, even though it was meaningless. I'm also anticipating tax hikes at some point (though not as a result of the dollar falling).

It helps that I'm young and can stand a lot of investment risk.


Depends what kind of expenses you intend to use this money for. If you plan to buy housing in the future (eg you're saving a deposit), then you need to ensure that the value doesn't deteriorate relative to the value of the housing you are likely to buy - so you could buy a Residential REIT, or buy some investment property. If you expect to use this money for food, then you should buy suitable assets (eg Wheat futures, etc). Link the current asset to the future expense, and you will be fine. If you buy Gold, then you are making a bet that Gold will retain its value compared to the thing you want to purchase in future. It doesn't matter what the price of Gold does in $US.

  • I like the idea of using my current dollars to purchase things I think will be of value or at least hold their value in the future. Grain futures are appealing. I'm actually considering DBA which is an agriculture ETF.
    – Muro
    Commented Aug 19, 2010 at 17:38

I've thought of the following ways to hedge against a collapsing dollar:

  1. Open a Canadian bank account. The Canadian real estate market did not experience the bust the US market experienced. As a result, Canadian defaults and foreclosures have not increased much in the last couple of years. Their banks did not need to be bailed out. This would also allow me to have some money outside the US. When the dollar collapses the government will lock down bank accounts in an effort to stop the run on the dollar. People will not be able to withdraw their money from the bank. Having money in a Canadian bank account will give me access to some funds outside the US.
  2. Alcohol. Alcohol is always desired by people. It also has the nice features of being non-perishable and easy to store. Having $5-10K worth of some popular bourbons, scothes, and whiskeys seems like a low risk hedge. Besides, if I'm wrong, I have my lifetime supply of alcohol.
  3. Gold and silver. Not the ETFs. I'm talking about having gold and silver bullion in your possession.

I recently finished reading a book that you may be interested in based on your question, The Ultimate Suburban Survivalist Guide.

The author begins with a discussion of why he thinks the US economy and currency could collapse. It gets a little scary. Then he goes into great detail on commodities, specifically gold. The rest of the book is about what you can be doing to prepare yourself and your family to be more self sufficient.

To answer your question, I do anticipate problems with US currency in the future and plan to put some money in gold if the price dips.

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    I like owning some gold. It's easy to store and no maintenance. I use to wait for the price go down but it never did much so I finally jumped in.
    – Muro
    Commented Aug 19, 2010 at 17:47
  • Another related book is How to Survive the End of the World as We Know it, though this focuses more on social and self-defense aspects and less on financials. One thing he stresses is the importance of how you store your gold (or alcohol, or ammo, or whatever) -- i.e. don't make it too easy to steal.
    – bstpierre
    Commented Aug 20, 2010 at 2:55
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    but one of the prime reasons Gold (measured against the USD) is so high is because the USD has dropped relative to other currencies around the world (and some of them have dropped too)
    – warren
    Commented Nov 9, 2010 at 13:35
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    @bstpierre If you are in an apocalyptic scenario where self-defense and stockpiled ammo are important then gold isn't going to help you. Or any kind of financial advice. Commented Jan 11, 2011 at 16:12
  • If the USD is slowly collapsing then the price of gold won't dip. Commented Nov 16, 2020 at 19:37

Invest in other currencies and assets that have "real" value.

And personally I don't count gold as something of real value. Of course its used in the industry but besides that its a pretty useless metal and only worth something because everybody else thinks that everybody thinks its worth something.

So I would buy land, houses, stocks, ...

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    "real value"? There is no such thing. The only reason any object has value is because human beings desire it. If it is desired then it has value. This is why gold has had value for its entire existence - it has always been desired.
    – Muro
    Commented Aug 20, 2010 at 17:44
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    Of course there is something like real value. Land has real value because you can use it in a practical manner. You can grow food on it so you won't starve. Houses have real value. You and your family won't freeze to death . Stocks have real value. You own parts of companies which produce things and offer services. Gold is just a lump of metal which has no practical applications and no chance to produce revenue. So you can only hope, that tomorrow people still think its worth something. Commented Aug 20, 2010 at 18:10
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    Yes, but different from gold: Land and homes have also value if they are not desired by people. They might not have a price but they still have value. For example: In 2000 Gold had a price of about 280$ per ounce. Now it has a price of about 1100$ per ounce. So sure it was worth something in 2000 but it was worth a lot lot less. To think that the gold price will go up and up for ever should remind most people of something unpleasant in the near past. If the price of your house is going down you still have a house thats as nice as before. Commented Aug 20, 2010 at 18:32
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    I think there is a difference between value and price. Sure: Gold can go down in price, so can houses and land. But with houses and land you at least have something, even if you can't get much money for it. A wonderful villa has great value even when the price for it is just 10$ a ton of gold worth 10$ has only a value of 10$. But I guess thats just a kind of taste. I like to invest in things that are valuable not just because they have a high price. Because I think in the long run those are the things that will be most useful to me. Commented Aug 20, 2010 at 19:03
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    @Plankalkül - stocks only have "real value" so long as the company is in business
    – warren
    Commented Nov 9, 2010 at 13:34

I'd like to provide ideas other than gold, stocks, property, bonds on how to prepare for a severe crisis. My suggestions below may even make your life more happy now.

  • personal development and education: nobody can take that from you or tax it. It may even make you more happy now. Some of these skills will be very valuable in any crisis. For example, doctors are always needed. And even first aid may be valuable.
  • family, friends and relationships: they can support you in times of need and enrich your life here and now. The main investment here is usually time, not money, so you can still save enough money.
  • experience and enjoyment: it shapes you, and can make you a more interesting and open person. Nobody can ever take it from you. If you haven't done it you may not be able to do it in the future.
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    Welcome to Money.SE. This particular question is not what I'd consider a shining example of the great Q&A on this site, bu your answer is excellent, and at least distracts from the panic nature of the question. Commented Jun 15, 2014 at 13:32

Buying gold, silver, palladium, copper and platinum.

The first two I am thinking about new currencies. The last three for the perpetual need for the metals in industry.

I also have invested in Numismatic coins. They are small portable and easy to hide around the house. I only collect silver coins, so even if the world really blows up and numismatics goes out the window, I can depend on them forming a barter system through the content value of the silver.

The problem with collectable items is that they are easy to see. For example, a nice painting just shouts out "steal me!".

I don't buy large gold coins. As long as the coin is below 1/4 Oz gold I collect it.

If the dollar does finaly collapse, to be honest it will be so bad that I think weapons will be order of the day. Do I think it will collapse...nah never.


The collapse of the US economic system is one of the many things I am preparing for.

To answer the how, me personally I am doing some investing in gold and silver. However I am investing more in the tools, goods and gear that will help me be independent of the system around me. In short nothing will change for me if the US dollar goes belly up. A book I recommend is Possum Living (http://www.possumliving.net/).

Other than that I am investing in trade goods such as liquor, cigarettes, medical supplies.

  • How'd you survive the collapse?
    – RonJohn
    Commented Jan 7, 2020 at 8:39

I think it's apt to remind that there's no shortcuts, if someone thinks about doing FX

fx: - negative sum game (big spread or commissions) - chaos theory description is apt - hard to understand costs (options are insurance and for every trade there is equivalent option position - so unless you understand how those are priced, there's a good chance you're getting a "sh1tty deal" as that Goldman guy famously said) - averaging can help if timing is bad but you could be just getting deeper into the "deal" I just mentioned and giving a smarter counterparty your money could backfire as it's the "ammo" they can use to defend their position.

This doesn't apply to your small hedge/trade? Well that's what I thought not long ago too! That's why I mentioned chaos theory. If you can find a party to hedge with that is not hedging with someone who eventually ends up hedging with JPM/Goldman/name any "0 losing days a year" "bank".. Then you may have a point.

And contrary to what many may still think, all of the above applies to everything you can think of that has to do with money. All the billions with 0-losing days need to come from somewhere and it's definitely not coming just from couple FX punters.

  • Welcome to Money.SE. This answer seems only tangentially related to the question - could you rework it to more directly address the actual question asked? Commented Apr 22, 2015 at 21:40

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