Rebalance investment portfolio with majority liquid in the United States Dollar. Sell assets for profits now. Do not wait. Assets including stocks are tanking and you must be liquid with United States dollar! Sell bonds, forex, stocks, real estate, and commodities. I would diversify with great assets and be majority liquid in United States Dollars (30% at least).
During the Recession, the United States Dollar is king
Many assets decrease during the recession since people must sell, but banks are tight on lending. The United States dollar will be king during the recession to buy heavily discounted assets.
Image 1: DXY index graph by Trading Economics.
DXY is the index of the value of the United States dollar relative to a basket of foreign currencies. When DXY goes up, the strength of the dollar goes up. In the 2008 recession, the DXY decreased since many believe the dollar would crash. In the 2001 recession and 1981 recessions, the DXY increased since many believe the dollar would still hold up. The United States dollar will still be in power and hold up during the next recession. Even with an inflation of 6%, the U.S dollar is worth having since asset prices will fall heavy (40%+). For past recessions, the inflation rate typically is around -2% to 4%.
Image 2: United States inflation graph by Trading Economics.
The United States Dollar controls the Foreign Exchange Reserve
Other countries believe in the United States Dollar over their own currency. How many countries would trust the Russian Ruble or Chinese Yuan over the United States Dollar? Only China could possibly compete economically wise, but who would trust China’s government over the United States government? Over the last 20 years, the United States Dollar position was held firmly and will not disappear any time soon!
Image 3: By the International Monetary Fund, The United States Dollar is 61.73% in 2019 Q3. The United States dollar has a dominant share of the Foreign Currency Exchange reserves. Many countries still rely on the United States dollar.
Image 4: By the International Monetary Fund, The United States Share of Foreign Exchange Reserves continues to stay above 60% of the Foreign Currency Exchange reserves.
Image 5: By the International Monetary Fund, The United States Dollar has greatly increased in the number of total currency amount compared to many other currencies.
The United States Economy and Population will continue to grow
With the economy of the United States backing up the United States dollar, no country can compete. The United States economy will continue to grow and be a dominant force in the world. As the #1 economy based on GDP, that status is not going anywhere for another 5+ years.
Image 6: Total GDP of the top 6 economies by the World Bank.
Gross domestic product is a monetary measure of the market value of all the final goods and services produced in a specific time period. Out of the top 6 countries for GDP, only the United States and China were able to increase their GDP. Many countries are predicted to start losing their population including China and India in the future. Many countries in the EU are currently losing the population now. Out of all the economies in the world, the United States economy is most likely to continue growing.
Image 7: Population projections by the United Nations and Our World In Data consisting of India, China, Europe, Nigeria, and the United States.
The United States of America is projected to grow for the next 80 years from 329 million to 433 million. That’s a 32% percent increase over 80 years, which equals .4% population growth per year. The United States of America grew from 1950 to 2019 for the last 69 years from 158.8 million to 329.06 million. That’s a 107% percent increase over 69 years, which equals 1.55% population growth per year.