Flooding Our World With Fiat Currency [PowerShares DB US Dollar Index Bullish, PowerShares DB US Dollar Index Bearish]

The people hurt are you and me. We’re the ones forced to play in markets that central bank actions manipulate either directly or indirectly. We must take on more risk, though without necessarily earning larger reward, as it traditionally would be.

We have no place to go for income anymore, except the stock market and risky corners of the bond market.

And the worst part of it all … the solution doesn’t rest with the central bankers, despite all their efforts. The solution rests with the market, as it always has throughout history. And the market’s solution, at some point, will be a financial crisis centered on currency — most likely our dollar or Japan’s yen.

Success Favors the Prepared

Our solution as investors is simple: Be diversified! Broadly and deeply.

Own exposure to multiple countries and multiple currencies. Own exposure to multiple sources of income, from highly stable stocks and corporate bonds to Master Limited Partnerships. And own exposure to multiple asset classes, including alternative assets such as gold and silver coins and other collectibles.

While the future is unknowable, probability leans toward a crisis. Overly indebted societies that have ballooned their money supply typically face a major and painful reckoning to right the imbalances. Success in that future favors the prepared.

So, prepare.

This article is brought to you courtesy of Jeff D. Opdyke.

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