Hedge U.S. Dollar with (C), (GM), (ADM)

With the endless printing of money by the Federal Reserve, the U.S. dollar continues to fall in value, and investors do need to protect themselves against that, with some suggesting blue chip stocks like Citigroup (NYSE:C), General Motors (NYSE:GM) and Archer Daniels Midland (NYSE:AMD) maybe being good hedges against the plunge of the greenback.

In times of crisis, such as is occurring in the Middle East and North Africa, the dollar has tended to strengthen (gold and silver are much better ) as investors take a "flight to quality." This time around, the dollar has failed to rally. The dollar is slowly losing its safe-haven status, and speculation has begun to build that a wide number of international transactions that have historically been conducted in dollars may soon be conducted in local currencies. That means the euro, the Chinese yuan, the yen and other currencies will increasingly be used to settle trades. And as fewer dollars are required to settle trades, demand for the greenback will drop yet further.

For U.S. companies, a weaker dollar is largely positive. Exports become more attractively priced abroad in local currency terms, while foreign importers are less able to beat their U.S. rivals on price in the United States.

General Motors and Archer Daniels Midland exports and the move by Citigroup to invest in emerging markets are the impetus behind the reason for suggesting the three stocks as potential hedges.

Archer Daniels Midland closed at $36.74, falling $0.21, or 0.57 percent. General Motors closed at $31.70, down $0.69, or 2.13 percent. Citigroup closed at $4.52, down $0.02, or 0.44 percent.




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