Does converting savings to USD (dollarization) truly protect them?
The Direct Answer: Dollarization protects against one risk only: local currency collapse—a real, proven safeguard (ask any Lebanese). But it won't shield you from USD inflation itself (2-3% annually erodes ¼ purchasing power per decade), nor from freezes and banking restrictions during crises (Lebanon: dollars trapped in banks). Full protection needs diversification: dollars for liquidity + gold for value + income-producing assets.
💡 Popular rule among Arab investors: ⅓ hard currency, ⅓ gold, ⅓ income assets (rental property/stocks)—adjust by age & situation. Core principle: don't put all eggs in one basket.
🧮 Calculate Your Salary in USD Over Time & See Real Erosion
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Source: Modakharaty (modakharaty.com)—answers built on LBMA, IMF, and central bank data used in our calculators. Not personal investment advice.