Dear Reader,

Investors are bouncing around like so many pinballs in a race to find safe-haven investments against the threat of a United States government default.

Gold… emerging markets… even the Swiss franc. The list goes on.

But what if they’re all looking in the wrong direction?

Bucking conventional wisdom, I propose that in this high-stakes financial game, your best bet might just be the most familiar player – the U.S. dollar.

Why? Well, if we owe in dollars and suddenly there’s a shortage, people are going to scramble for cash.

Let’s take a trip down memory lane. We’ll make two stops: 2020 and further back to the 2008 Lehman Bros. debacle. Remember how those froze up the global credit system? Yet, amidst all the chaos, the dollar saw a surge in value. Interesting, isn’t it?

Our last big financial crisis didn’t come with soaring inflation, so interest rates didn’t budge. But in a government default, rates are likely to spike and boost the dollar’s worth. And to those screaming that the dollar’s value could be halved overnight-I don’t buy it. Conjuring up an extra $32 trillion out of thin air? Not gonna happen.

So here’s my bet: the dollar will hold its own for now. And if it suddenly jumps while other assets tumble, it’s a rare chance to scoop up bargains. You could snap up undervalued assets like oil while the rest of the world is panicking about the debt situation.

Let’s face it – there’s no other global asset ready to take the dollar’s place. Maybe the euro could step up, but let’s not forget Europe’s debt situation is a mess, too. The Chinese yuan? It’s not exactly the world’s favorite currency.

Despite all the drama, the dollar still has the crown. This could speed up the process of de-dollarization but don’t expect that to happen overnight. A sudden flood of Chinese yuan isn’t on the horizon.

Trying to guess how the rest of the world will react is like trying to solve a Rubik’s cube blindfolded. Especially when our interest rates are likely to skyrocket, sending bond prices on a wild ride.

I don’t have a crystal ball, but one thing’s certain: having cash on hand is never a bad move, especially when that cash is likely to be increasingly valuable.

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— Garrett Baldwin

Source: Money Morning