Two Smart Moves to Capitalize on the Inflated Dollar

By Steve Emerick

Our U.S. dollar (USD) is a currency which goes up and down in value just as any other currency. To 95% of the world, the USD is a foreign currency. Today, the dollar is strong and remains the world’s reserve currency. There are smart ways to take advantage of the current strong dollar… now, while the situation lasts.

Make no mistake; there is nothing fundamentally healthy about the dollar. It is just the best looking pig in the pig pen (no offense to pigs).

The National Debt is now over $18 trillion. In 2014, more businesses closed their doors than were created. In January 2015, the way the unemployment rate was calculated and ‘revised’ to make it look lower than it is.

Despite all this, the U.S. Federal Reserve (FED) and the mainstream media are talking up the U.S. economy and giving the USD a free ride.

The possibility of an interest rate hike in June is what has really gotten the attention of the Market and the media. Until we get the final word, the USD will remain strong. Gold should be more affected by the FED rate hike outcome than any other precious metal.

Let’s turn our attention to two smart strategies: Silver and Rare Investment Grade Stamps.

Silver is nearly $30/ounce less than it was 4 years ago. That means silver would need to almost triple in value to get back to those levels. Imagine buying silver now at $17/ounce and seeing it rise to over $50/ounce in the next few years.

We have seen rapid price increases before. On February 17, 2011, silver was $30 an ounce. Six weeks later, on April 28th, it moved to $48.

At around $17/ounce, silver is simply a bargain.

In 2013, the demand for silver exceeded supply. Although official figures are not out yet, this happened again in 2014. Last year, 1 billion ounces of silver were available for use - 80% from mining and 20% from recycling. Some are even saying industrial silver usage, due to high-tech product development, is anticipated to increase 380 million ounces by 2018.

If correct, that means total silver usage will continue to outstrip supply every year and possibly hit a deficit of almost 500 million ounces (nearly half of the world’s current annual supply) by 2018.

This shortage does not account for those buy-and-hold investors, like us, who take silver off the market altogether.

Even if only some of these predictions prove true, basic supply and demand principles should cause silver prices to rise.

Along with mine shut downs and the demand for silver in industry, increased hospital construction in China is slated to further increase demand for silver for medical equipment and sterilization.

Right now, you can take advantage of the strong USD by allocating more of your portfolio into physical silver. Currently, I believe 5-ounce and 10-ounce silver bars are a great value. Contact us to talk to a representative about how you can add silver to your portfolio.

Another smart currency play is the Great Britain Pound (GBP). While the GBP is a solid international currency, the USD is currently strong against the GBP - nearing its five year high against the pound. The GBP is around the $1.50 mark, meaning it currently takes $1.50 USD to equal £1 GBP. In the past decade, the GBP has been valued over $2.10 USD (Nov/2007). Simply put, right now, using USD to allocate into a GBP asset means you are getting more for your money.

Here’s a unique currency strategy to take advantage of the strength of the dollar against the pound. Our Rare Stamp Program allows you to buy rare investment grade stamps denominated in the GBP. Rare stamps have yielded average annual returns of 10% for the past 40 years.

What’s more, rare stamps are uncorrelated to any market and provide balance to protect your portfolio from market volatility.

Our program is offered in conjunction with Stanley Gibbons Ltd., the world’s leading stamp dealer. There is no commission, storage or management fee with our program. You pay a small percentage of your earnings if and when you sell. Call your ASI Preferred Client Relations representative for details.