The word “credit” is derived from the Latin verb credere, meaning "to believe." Indeed, a $100 bill has no more intrinsic value than a $1 bill — or a piece of scrap paper for that matter. The strength of a currency is contingent on a society's belief that it will hold value.

And more than any other asset class, we own dollars. We earn and spend dollars. We hold them in our wallets, checking and savings accounts. We live, think and breathe in dollars. So regardless of who you voted for, the fact is as a nation, we're "long" on U.S. dollars in a big way.

And it's not just Americans who've put the majority of our earned assets into the greenback — according to the IMF, 66.3% of all official foreign-exchange reserves are held in U.S. dollars, with 24.8% in the euro, 3.4% in the Japanese yen, and 4.0% in the British pound.

That might not always be the case. After all, the strongest currency can always be found in the most capitalist economies. But based on both their words and actions, it's painfully obvious that neither political party promotes free market capitalism as an integral component of their platform.

The Democrats, whether it is their advocacy for a minimum wage, universal health care or protectionist trade policies, are seemingly devoid of any free-market or laissez-faire ideals. To his credit, Bush attempted to address the Social Security time bomb, but has also increased nondefense spending at a historic rate. He also presided over the draconian Sarbanes-Oxley laws, which are literally draining life from the capital markets on a daily basis. As a capitalist, Bush talks the talk — but has hardly walked the walk.

You can debate whether higher taxes and a minimum wage or entitlements such as Social Security or universal health care are worthy goals, but one thing is certain: they aren't free. Yet, the government is able to promise these things, essentially by spending money it doesn't have.

Writer and philosopher Ayn Rand describes it as a process in which "the government borrows money today, which is to be repaid with money it will borrow from you tomorrow, which is to be repaid with money it will borrow from you the day after tomorrow ... and so on."

The net effect of this approach is a decline in the value of a nation’s (and the purchasing power of people's) hard-earned savings. And as the anti-capitalist welfare state expands under both parties, it's my belief that the value of the dollar will continue to fall.

I'm not an alarmist, just a student of history. Entire civilizations have been toppled as the values of their currencies evaporated, and the current political environment has prompted me to increase my allocation to foreign exchange beyond the good 'ole greenback. For individual investors, it’s painfully simple when you use FX ETFs such as those found at Currencyshares.com. Buying the Mexican Peso (FXM) is as easy as buying GE.

With neither political party representing the interests of honest, profit-seeking capitalists, it's clear that ominous economic winds are beginning to blow. I love this country to the core, but unfortunately it seems as if dumping the dollar might be precisely the trade that provides shelter from the gathering storm.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC and markets editor for Smartmoney.com. He is a Fox Business News contributor and regular guest on the “Cashin’ In” program.

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