US dollar hedging

[jeremy]

Given that the US government has taken on so much of the banking debt, inflationary, and that there is much public debt still out there, deflationary, where are models showing the direction of the US dollar for the next couple of months, next couple of years? What is the best way to hedge against a possible decline. If it is fast moving a "put" on a US dollar Future would be good, but to speculative. So is the best just forward Future contracts on the dollar, on margin? Or is real estate the best direction to hedge against the dollar? Given that banks have so many houses that still need to go into foreclosure, I am not sure that one is worth while right now or for a number of years.
????
Thanks

 

[const451]

I have recently seen an article dissecting this topic but I cannot remember where : (

 

[GoIllini]

I think the best way to hedge against a possible decline depends on where you plan on spending the money.

If you plan on spending it in the US and don't think the federal government will default, one good way to hedge it is with TIPS. The consequences of a USD decline will play out as inflation in the US, and TIPS would scale with inflation.

If you want to speculate on a USD decline and the federal government otherwise staying strong, call options on hotel REITs might be an interesting approach. A weak dollar will make it easier for foreign tourists to come to the US and stay at US hotels.