This caused the federal debt clock to add a 14th digit (by breaking the $10 trillion dollar mark).

We've also got an out-of-control trade deficit. For having a 40% share of the world's economy, we certainly don't produce that many goods.

Finally, we have a credit crisis that is causing many to worry that our lenders, like China and Japan, will turn off the tap.

With this nightmarish scenario we find ourselves in, it wouldn't surprise us if the US' credit rating fell. That would cause an immediate panic in the currency markets and send the buying power of the dollar into a tailspin.

I guess what we're saying is get out of the dollar as fast as possible!

There are a couple of ways to go about this:

Currency Protection Strategy No. 1: Sell the Dollar

The easiest way to get out of the dollar is to trade in the cash you don't need to live on for another currency. You might even be able to hold other currencies in your brokerage account.

Here at Lifetime Income Report, we don't recommend currencies directly. We're here to help you find income, not to pick currencies.

Exchanging currencies is one way to protect your wealth from a potential dollar disaster. But it's not the only way...

Currency Protection Strategy No. 2: Buy Precious Metals

There's probably no safer way to protect your wealth in the world than to own gold and silver. There are many Web sites and exchanges where you can do this, as well as coin dealers that can help you make this move.

While we personally think precious metals are going to continue increasing in value, you probably shouldn't just spend all your money on gold nuggets. There's a big difference between the spot prices and what you would pay. Gold coins, for instance, are trading at a hefty premium over spot.

Currency Protection Strategy No. 3: Buy US Companies With International Exposure

Again, this shouldn't be a surprise. We have many US companies in our portfolio. After all, we are here for income, not to be global traders. But you'll probably notice that most of our US companies have plenty of international exposure.

Currency Protection Strategy No. 4: Buy American Depositary Receipts

We saved the best for last. This is the theme we have been hitting the hardest in recent months. ADRs have been a cornerstone of this newsletter. From the very first issue, we had at least two ADRs in our portfolio. This month, we are adding another.

There's a huge reason why we buy ADRs instead of the currencies themselves. Instead of just the upside of foreign currency to US dollars, we also get the benefit of fast-growing emerging markets and mega income from international players.

You see, foreign markets, especially now, have huge dividend yields.

The US is near the bottom of the list of places for income investors to look. The smart money is in companies staying out of the dollar.

Regards,

Jim Nelson
for The Daily Reckoning Australia

• What Happens to Gold When High Inflation, Excess Cash, and Falling Dollar Jolts Economy?
• Gone Fishin’ Investment Strategy
• US Dollar Declining as China’s Currency Rises
• The Problem With a Well-Diversified Portfolio
• Citizens Easily Coerced into Using Government Currency

Take wind energy for instance...

The wind energy industry added 20 gigawatts of capacity last year. That's 31% more than the year before and 176% more than just five years ago. Europe already proved that this growth is steady, and both China and the U.S are finally jumping on board. Not even the NIMBY's can stop it.

(NIMBY - meaning "Not in My Backyard" - refers to those who reject projects around them even if it benefits them. NIMBY-ism is the main reason why certain proposals for wind farms are rejected.)

Solar power has also presented amazing opportunities. The sale of solar cells increased upwards of 40% last year alone. It's even made investors big money in the stock market. One of the biggest winners last year on the NASDAQ was a solar company named First Solar, Inc (NYSE: FSLR) If you would have sank just $1,000 into this company at the beginning of 2007, you would've walked away with $8,854.

There is only a certain amount of time during the day when windmills can produce energy - their "capacity factor." The average capacity factor for wind power is about 30%. The rest of the time, these windmills sit like giant statues waiting for the next gust of wind. During that period - the "energy time gap" - no new electricity is going onto the power grids.

The same goes for solar power...

The sun doesn't shine 100% of the time. Even in the vast deserts of Southwest U.S., in the peak of summer, the sun is only up about 14 hours a day. When it is up, there are problems with cloud coverage. The average capacity factor for solar power is around 25%.

So up until now, these renewable energies have been useless...

Without the ability to store the electricity that these renewables are producing, there's no reason to build new wind farms, solar-power plants or any other "green" electricity producers.

Until now, batteries were the only choice. Batteries offer great energy storage, but take too long to charge. It takes anywhere from one to ten hours to charge batteries. Unfortunately, with a capacity factor for renewables under 30%, we don't have that kind of time to wait for batteries to charge.

There is one solution for the energy problems of tomorrow By using a special type of device called a supercapacitor, we have the solution to the fatal "energy time gap."

Batteries are chemical devices that use mass transfers over a certain period of time. Supercapacitors store ions, which can be stored and released very quickly. It's like instant energy.

But, that's not to say that it has to be one or the other. In fact, the two work very well together. Supercapacitors bring fast storage and release of instant power - which is crucial - and batteries use this to advance their storage and long-lasting energy release capabilities.

Changing batteries every few years at wind farms and solar plants, let alone hundreds of other battery-powered locations, becomes quite expensive and time-consuming. These supercapacitors last between 1,000 and 10,000 times as long. In fact, there is a company already manufacturing and selling these products for use in windmills.

But, supercapacitors' advantages don't stop here...

When a car brakes, or a crane drops, energy is released. And until now, that energy isn't recaptured. It's wasted. Supercapacitors can actually capture that energy and use it again for other purposes. Using the crane example for a minute...

When a crane drops its massive arms to pick something up or unload something, there is a large amount of natural energy (gravity) released. Batteries cannot charge in the time that the crane is dropping, but supercapacitors can. That energy is then stored in the supercapacitor. When the crane needs raised up again, that stored energy is used. Hundreds of different industries can apply this principle to their own energy needs.

Take transportation for instance...

Supercapacitors can collect energy as a vehicle brakes, then release it when the vehicle accelerates, giving a nice boost of energy without any emissions. Every single time someone pulls up to a stop sign or red light the vehicle wastes energy. That energy can save massive amounts of gasoline every second of the day, all over the world. And, both countries and manufacturers are starting to pay attention...

China has an enormous pollution problem. With the 2008 Beijing Olympics coming up, the country is desperately trying to turn its public transportation "green."

Chinese hybrid bus makers recently signed two contracts for the use of supercapacitor technology. With the rush to have it done by the opening ceremony in August, we should see a rush to buy up as many of these as possible between now and then.

The U.S. Advanced Battery Consortium has already arranged deals for use of its patented supercapacitors, in combination with Lithium-Ion batteries, in next-generation Plug-in hybrid electric vehicles (PHEVs) in the United States.

In fact, news has already started to show up in this field. In January this year, it was announced that one of the leading automotive electronics suppliers has designed a was to use its supercapacitors in a major automaker's electrical system, and it will go into full-scale production in the second half of next year.

The role of supercapacitors in the transportation industry is limitless, let alone renewable energies and industrial applications. It's certainly something to keep on eye out for.

Sincerely,

Jim Nelson
for The Daily Reckoning Australia

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