I have become a two country resident. USA and Vietnam. It has changed my perspective of wealth creation but also wealth preservation. I love both countries but both have long term issues they need to deal with. I will not talk about VietNam because few if any of you will go there or build a network of relationships in Vietnam as I have.
Here in the USA we have a massive debt problem. Presently we are in a pause period where the increase in the debt growth is slowing. Note; I said the rate of growth in the debt is slowing not that debt is falling. At some time in the future we have to deal with (1) our demographics – an aging baby boomer population and the entitlements and related health care costs and (2) the artificially low interest rates on out national debt and the cost of that debt when interest rates “normalize”. These are massive problems and thank goodness our elected officials are talking about them.
Long-term what can you do to protect against a weak US Dollar and its related loss of purchasing power.
The easiest thing to do is diversify your money into another country’s currency. Canada is close and easy to do this with. eTrade lets you open an account in Canadian currency with ease. This might give you some protection against the U.S.$ loss of purchasing. It isn’t high risk in that most of your assets will still be in U.S.$ based investments. In addition you might invest long term into natural resources like timber, gold & silver and agricultural companies. If the USA has a falling dollar that falls moderately under control, inflation will rise here in the USA and Canada will benefit. If the U.S.$ falls too fast because of rapidly rising interest rates and we head into a depression or deflation environment then shifting from equity investment to sitting in Canadian dollars (Canadian cash).
Presently I believe one should be over-weight in U.S. equities. As you take profits you might consider taking some of this cash and deposit it in an eTrade Canadian account. I have no position in eTrade shares so this is an unbiased comment.
By the way, Booming gold and silver company Fortuna (FSM)* $3.62 is a Canadian company that could be purchased in your Canadian account.