Your whole portfolio, investment strategy, your whole life is denominated in USD. Mine too. I am (like you, probably) predominantly invested in US equities/bonds. The value of those investments is not only threatened from a lack-of-future-returns standpoint, it's now also threatened in terms of ***losing*** **its buying power over time**.
Enough politics! It's getting tiring reading all of the doom and gloom, *without also talking* about what to do about it. Let's discuss what to do if the USD continues to weaken.
Here are some hedges I can think of. Feel free to add your own.
1. Precious metals ETFs: GLD, SLV, etc.
2. Physical gold/silver/etc.
3. TIPS
4. Foreign ILBs; inflation-linked bonds (TIPS but in other currencies, e.g. Canadian Real Return Bonds)
5. Foreign currencies (GBP, JPY, CHF, EUR, etc.)
6. Commodities ETFs
7. REITs
8. Actual real estate
9. US Equities that can pass through their cost increases, e.g. Energy/Staples ETFs
10. Foreign equities sans US, e.g. VXUS
11. Derivative plays, e.g. Long LEAP PUTs on SPX if bearish
12. BTC
13. Non-fiat stablecoins (not foreign currencies, which is #4)
14. Physical assets that you speculate will gain in value (fine art, Legos, but not #2 above.)
Now, what to do in certain hypothetical scenarios? Posts should take the form "if X happens, Y will be a good investment." No future-predicting, such as "X will definitely happen; we're doomed." Those kinds of posts are all over this subreddit - read another thread for that. I'll go first:
**If the US experiences stagflation...** good investments would be TIPS (#3), foreign ILBs (#4), Energy/staples ETFs (#9), and Commodities (#6). Why? In the case of TIPS/ILBs, they are indexed to inflation. In a stagflation scenario, we don't have hyperinflation, just stagnant growth and rising prices; this gives time for the CPI to be updated slowly enough for TIPS to be effective. Commodities and Energy companies can pass through or directly benefit from cost increases. Derivative plays protect in the case of a stock market crash, but don't do anything to protect your purchasing power of the money you keep, or gain, in the crash. And if you're long long-dated PUTs, theta will erode your position, so you'd better be right in the short term (and it's improbable to time a crash).
**If the US experiences hyperinflation...** good investments would be precious metals, whether ETFS (#1) or physical bars (#2), and Commodities (#6). In a hyperinflation scenario, the CPI might not track actual inflation fast enough for TIPS or ILBs to keep up (prices may double in a mere week!), making them less valuable here than in a stagflation scenario. Gold and Commodities can be priced in real-time to react to surging prices. Notice, here, that there is no universal best investment idea right now. Hyperinflation and stagflation are different.
**If the US defaults on its debt...** good investments would be foreign currencies (#5), ILBs (#4), gold (#1, #2) and commodities (#6). US-centric investments are in last place if we see a capital flight from the US, so TIPs and Energy/Staples ETFs no longer work here. Capital would flood to safe haven foreign investments, like foreign money markets, foreign ILBs and foreign currencies. Beyond foreign investments, gold is a zero-counterparty collateral, meaning that it will hold value no matter which system fails (USA or otherwise). Same with commodities: they'll be traded and in-demand regardless of what happens to the USD; other countries and currencies will still buy them.
Feel free to critique or add your own scenario. How 'bout global hyperinflation (not just USD)? What if we don't have hyperinflation but the US dollar loses reserve currency status (which I posted in the FIRE subreddit [here](https://old.reddit.com/r/financialindependence/comments/1jykgok/save_haven_investments_if_usd_loses_its_reserve/))?
No politics please. Let's talk about money and hedges.