Is Your Money Safe in America?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Most of the world celebrated New Year's Eve with parties and festive occasions. Lawmakers spent the night fighting, and although they came together long enough to resolve the most pressing parts of the fiscal cliff, they punted most of the tough issues until later in the year. 

With all the drama in Washington, I'm wondering: Is my money really safe in America? With government bickering directly impacting the stock market and the economy, how can I make sure my money is safe? Read on for why you should be concerned, and three ways to secure your money.

Reason for concern: America's leadership is weak.
Unfortunately, this isn't the first time lawmakers have dropped the ball. The debt-ceiling crisis of 2011 was bad enough to help bring about an unprecedented downgrade of U.S. Treasury debt and set in motion a sequestration spending-cut system so heinous that lawmakers would have to work together to avoid it. Yet once again, we're on the cusp of another debt-ceiling crisis, and lawmakers still haven't agreed to a substitute to sequestration.

Reason for concern: America is fiscally irresponsible.
It doesn't take a genius to figure out that if you keep spending money you don't have, you're going to accumulate debt. Someday, that bill will come due.

But the government just doesn't get this simple point. The fiscal cliff deal extended a helping hand to middle- and lower-class families, but it also included $67.9 billion -- for 2013 alone, mind you -- in tax breaks to companies like NASCAR, and rum producers. That's right: Special interests groups got a handout. Sen. John McCain, R-Ariz., stated, "It's hard to think of anything that could feed the cynicism of the American people more than larding up must-pass emergency legislation with giveaways to special interests and campaign contributors."

Yes, the idea of a Santa Claus government that just gives, gives, gives, is great -- for those on the receiving end. But it's not realistic, and it's certainly not sustainable. There seems to be a disconnect between balancing the budget and wanting to spend, spend, spend -- and the fact that the fiscal cliff resolution avoided any meaningful spending cuts leads me to think Congress and the president aren't looking at reality. Take off the red suit, guys. Christmas is over.

So what can I do?
February is not far off, and there's no telling what Congress and the president will do. But there are things we as investors can do to make our money more secure:

1. Invest in companies with a strong overseas presence.
(NYSE: WMT  ) and Coca-Cola (NYSE: KO  ) are two of my favorites. International growth is a key objective for Wal-Mart, which opened 612 new international stores and grew its net sales (including currency and acquisitions) by 15.2% in 2012.  

Coke, along with having four of the five top nonalcoholic beverages, also has a strong, growing international presence. In its latest quarterly report, Coke reported that it increased unit case volume in all of its major markets compared to this same time last year. Plus, with 78% of its business coming from overseas case volume, Coke looks pretty stable. 

2. Invest in companies located in fiscally responsible countries.
Toronto-Dominion, Bank of Nova Scotia (NYSE: BNS  ) , and Royal Bank of Canada are three of the top banks in Canada. Along with having one of the safest economies according to the International Monetary Fund and the Organization for Economic Cooperation and Development, Canada has a banking system that for the past five years has been ranked as the most sound.In my eyes, that makes it a perfect place for long-term investing.

3. Invest in precious metals.
Barrick Gold, Goldcorp (NYSE: GG  ) , and IAMGOLD (NYSE: IAG  ) , along with being based in Canada, have some of the top after-tax profits in the industry. Even if the dollar takes a trip down the porcelain waterslide, gold may well hold its value in a currency crisis.

Lessons for the future
I have real concern about the safety of my money in America. As an investor, I can't help but compare the U.S. to a business, and what I see is a business in trouble. However, there are things we investors can do to make our money more secure. By having a diversified portfolio that includes international businesses, companies with a strong international presence, and precious metals companies, there's a greater chance you'll be able to survive our government's stupidity.

Worried about your money in America, and think you should invest in gold? Download The Motley Fool's special free report, "The Tiny Gold Stock Digging Up Massive Profits." Our analysts have uncovered a little-known gold miner they believe is poised for greatness; find out which company it is and why its future looks bright -- for free!

Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 09, 2013, at 12:59 PM, KENETICS wrote:

    It doesn't take a genius to figure out that if you keep spending money you don't have, you're going to accumulate debt. Someday, that bill will come due.

    Please point this out to Obuma and the Dumbacrats in his cabinet

  • Report this Comment On January 09, 2013, at 6:03 PM, xetn wrote:

    None of the spending would get approved without the Reps on board. There is virtually no difference between Dems and Repubs.

    It looks like the Fed may be forced to monetize all of the US's debt for 2013.

    That will further depreciate the USD with higher prices for most goods and services. We are already seeing it in the "same price for less quantity" strategies (not to mention real price increases in basic commodities.

  • Report this Comment On January 09, 2013, at 6:05 PM, xetn wrote:

    On the other hand, the EU, Japan, China, etc are all doing the same thing. It seems to be a coordinated campaign with the Fed.

  • Report this Comment On January 09, 2013, at 6:24 PM, matthewluke wrote:

    "The debt-ceiling crisis of 2011 was bad enough to help bring about an unprecedented downgrade of U.S. Treasury debt"

    I think we can all reasonable say that the downgrade was a huge joke (just like the ratings agencies themselves). Such a horribly flawed downgrade, with reasoning changed retroactively after a huge mistake in the S&P's methodology was discovered.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2187281, ~/Articles/ArticleHandler.aspx, 9/24/2016 10:14:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:02 PM
BNS $53.49 Down -0.95 -1.75%
The Bank of Nova S… CAPS Rating: ***
GG $16.66 Down -0.43 -2.52%
Goldcorp CAPS Rating: ***
IAG $4.12 Down -0.19 -4.41%
KO $42.74 Down -0.22 -0.51%
Coca-Cola CAPS Rating: ****
WMT $72.35 Up +0.08 +0.11%
Wal-Mart Stores CAPS Rating: ***
ABX $18.11 Down -0.42 -2.27%
Barrick Gold CAPS Rating: ***
RY $61.78 Down -0.86 -1.37%
Royal Bank of Cana… CAPS Rating: ***