I get questions from time to time emailed to me and while most are inane (no, I'm not going to help any Nigerian heiresses get money out of the country), I got a good one last night and thought I'd share my response in case others have the same question.
I have a question for you. As you know, many people are worried about the value of the dollar falling. The response to that is, “Relative to what?” The euro and the yen have similar issues, and the yuan is pegged to the dollar. What’s your response to investors who are worried about the dollar falling?
Generally speaking, we've pointing folks towards a basket of emerging market and commodity market currency exposure (RMB, BRL, IDR, INR, CHP, ZAR, AUD, CAD). The theory behind this is that the dollar will weaken relative to emerging markets and relative to things that have stuff (you're right that the EUR and the JPY are both troubled as well). After all, since currencies only move relatively there have to be winners if the dollar is to fall.
But since these countries are also generally politically volatile (see: Canada...kidding!), we also think some commodity-based investments (miners, oil, etc.) are a smart move. This is because these commodities tend to be priced in dollars, but should hold their value on a relative basis (ie., increase in price) if the dollar devalues.
Obviously no one can escape the major currencies at present, but this is generally why we recommend much more emerging markets exposure that most frameworks for even conservative investors. Our theory is that its not Europe and Japan that will usurp the US position, but rather places like Brazil, Chile, India, Indonesia, and China will nibble away at it.
Avoid Russia though -- rampant, rampant corruption.