Investment opportunity in 2011 report : How to protect you from a dollar collapse

Investment opportunity in 2011 report : How to protect you from a dollar collapse

The FED is printing money to get the United States out of the crisis. The only problem with that strategy is that whenever you're printing a currency a lot it loses its value. As a mater of fact, that kind of policy can create hyperinflation.

Hyperinflation is a very dangerous process. If we look at history, countries like Zimbabwe were destructed because of that. With this kind of out of control inflation the currency loses all his value. People's savings are reduced to zero overnight. Think about it, you may have 300,000 dollars on your bank account today, but what if the dollars loses 90% of this value?

That's why people who say that China needs the United States to be strong are too optimistic. China holds more than 1.5 trillions of US treasuries right now. Chinese politicians are considering those treasuries as assets. And they don't want those assets to lose value.

However, that's exactly what's going to happen if the FED keeps printing money. What are China politicians going to do if they see their assets are losing value? They will sell them before it's too late. Sure, they want to sell their products to the United States but they don't want to be too dependant on the dollar.

And if China sells the US treasuries they're holding, it would mean that the dollar and the entire American economy will collapse.

China politicians know about the bill passed in Utah. They know the dollar is weakening every day. If the Fed doesn't raise the interest rates there will be massive inflation in the following months and China will react accordingly.

How can you protect your porfolio from that? Buying precious metals will always protect you from inflation. Buying silver and gold seems a good investment in 2011.

An other solution is Etfs. Etfs can replicate the performances of hedge funds. All my friends who know finance invested a lot in commodities and hedge fund Etfs. That's because, with inflation,commodities will rise. Hedge fund are also known to be able to perform well on every market conditions. Make sure to have a diversified portfolio to hedge inflation's risks.

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