With the debt talks collapsing, it’s getting harder and harder to say for certain that the US won’t default.While some people aren’t convinced that this would be a disaster, there’s a real chance that this would lead to an economic catastrophe, crushing the dollar, Treasuries, the banking system, and so on.
So with the August 2 deadline fast approaching, here’s a look at some popular safe-haven investments.
Gold is basically at record highs but it is literally considered to be the 'gold standard' of safety investments.
A default by the US could shake the paper-based financial system to its core, leaving people hungry for an asset that's been used as a store of wealth for thousands of years.
Like gold, Swiss Francs are near all-time highs.
The country is fiscally sound, run by trustworthy politicians and bankers, and walled off from the European banking system. Bottom line: the country prizes its fiscal stability, and its banks have seen a huge rush of inflows from the rest of Europe because of it.
Perhaps even more so than the Swiss Franc, Norway is quite sheltered from the European debt crisis.
The country has a strong fiscal balance, and what's more, it's an oil country, so the currency has commodity value.
People think of Japan as facing similar debt woes to the US, but the market disagrees.
Both the yen and Japanese Government Bonds have been huge winners over time. The country runs a big trade surplus, it's banking system is not particularly exposed to the US, and the country's cohesive political system means you shouldn't expect leaders to do anything self-destructive like US leaders are capable of.
With Asian economies set to expand, the Singaporean dollar has become a 'must own currency'.
The country's economy is a bit Switzerland-esque, as it has established itself as a centre of private banking, with more and more wealthy putting some of their money there.
The ultimate crisis hedge...
Investors have been flocking to it, and if things got really horrible in the world (like, we're talking wars), then it would boom in value.
Silver is called poor man's gold, and it's had quite a rally (before finally coming off in May).
It is perhaps dicier than gold because it usually does better when the economy is strong due to its industrial applications.
The Canadian Dollar is a double-edged sword.
On the one hand, Canada's economy is closely integrated with the US economy, so a US collapse would be a disaster. On the other hand, the country has sound fiscal practices and sound banking, and it's also a country rich in commodities.