U.S. foreign policy plays a big role in the investment world. It may not seem so, at least directly, but there is more to war and occupation than the lost and broken lives. The cost of war and the cost of running an empire around the world places a heavy burden on the debt and the dollar.
Richard Maybury, who writes the Early Warning Report, is the best I've seen at tying foreign policy and investments together. He has a great understanding of the world around him and the effects that it has. Paraphrasing him, it is usually a safe bet that governments will be corrupt and incompetent and continue to do the wrong things.
The occupations and wars of Afghanistan and Iraq will play a big role in destroying the dollar. In turn, the economic troubles will eventually cause these wars and occupations to end. How soon, will depend on how long the Fed can keep things from collapsing.
We can safely bet that the U.S. empire will continue until the money runs out. When the dollar is severely weakened and the Fed has to raise rates to save the dollar, the economy will come crashing down. When congress is forced to cut spending, the American people will choose Social Security and domestic programs over war. The politicians in DC will finally be forced to support a withdrawal of troops.
In the meantime, defense stocks could easily outperform the broader stock market. If you are going to speculate in stocks, this might be a sector worth looking at. In addition, the massive expenditures overseas will continue to take their toll on the American economy. You can count on the dollar to continue its weakening, but I don't know that I'd place a big bet on any other fiat currencies either. Commodities will do well, just as they did in the 1970's.
Investments in real assets will be the winners. Investments in dollars, bonds, and other fiat currencies will eventually be the losers. Unless the wars and occupations come to an unexpected end, you can count on a weak currency in the future.