In your opinion, what is the safest currency to maintain one’s cash portion of their investment portfolio. Certainly, the greenback has been a standard cash unit of many people’s portfolio for years.
I have recently read in numerous places, however, that the US dollar could be headed for a significant devaluation - whether this is true or not; I am not educated in this to offer an opinion.
However, I am wondering if anyone has an opinion on what currency may be stable in the event of an extended world economic downturn and a devaluation of the US dollar? I have been investigating the Swiss Franc, and understand that the franc is backed by differerent instruments than the US $.
Any help or ideas along these lines would be appreciated. Thank you.
As far as I know, no one still bases a currency on precious metal bullion anymore, so I think this question really comes down to the political priorities of the people running the monetary policy for each currency. IMHO, the Euro zone is paranoid of inflation and views control of inflation as a priority above growth, so if you’re really concerned about your currency, the Euro might not be a bad way to go.
That said, the US certainly isn’t aiming to permit hyperinflation and our central bankers are probably smart enough to avoid it. Changes in currency valuations aren’t something anyone is capable of reliably predicting and you’re probably fine keeping most all of your portfolio in dollars. If you’re simply trying your best to ensure that you aren’t wiped out by inflation in any given currency (not that I’m necessarily agreeing that’s a rational or important fear), consider hedging your portfolio between two to three major currencies.
There seems to be a rush towards Swiss Franc, indeed, from what I’ve read. But I’ve zero qualifications or personal knowledge that would allow me to give any advice on this question.