Currency Investing: It is make or break time
Today's Financial News - Posted May 29, 2009
May was a big month for several reasons. But nothing was as important or eye-catching as the moves made in the currency markets. This is a make-or-break situation for investors.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The month of May is in the history books, at least for investors. I could pick several themes that have been prevalent throughout the last month, but not has been more eye-catching and important than the moves made in the world of currencies, specifically the dollar.
In a market where a 1% change in valuations shuffles hundreds of billions in wealth, revenue and profit potential, May’s 6% decline in the Dollar Index marks a monumental movement. The month’s action is the strongest in 24 years.
Not since the turbulent currency and interest-rate markets of Reagan have we seen such powerful moves.
For the average American, the decline in the dollar is barely noticeable. The $5.50 you pay the cashier for a pack of smokes hits your wallet almost identically to what it did last month. But give that cash to foreign convenient-store worker and tell him to convert it to euros or yuan and he is going to give you a dirty look.
Our money is now worth drastically less than what it was thirty days ago. According to today’s action, it is only going to get worse.
Of course, some of the movement has come thanks to shell-shocked investors climbing out of their trenches and investing once again. But there is no doubt a large portion of the dollar’s decline comes on the heels of incredible borrowing in Washington.
America wanted change… but not pocket change
As an investor, there are two ways to deal with the situation. Sit back and watch your spending power erode, or get aggressive and profit from the situation.
You know where I stand…
In fact, I just happened to tell TFN Strategic Trader subscribers to prepare for the sudden bump in currency valuations at just about the perfect time. My recent trade recommendation (check it out here), is currently up by over 150%.
This trade is the perfect way to take advantage of China’s unease with American debt, inflation fears and a surge in commodity prices.
Looking forward through June, the threats may change, but the effects will be the same. Look at the global situation. Korea is acting up. Israel is putting on the boxing gloves. Iran says bring it on. And Obama is in Vegas passing a hat for some Democrat buddies.
The dollar is going to continue to weaken. The American economy is not going to slingshot back. And China and the rest of our lenders are going to find better solutions.
If there was ever a time to increase your portfolio’s international exposure, it is now.
You can sit back and say, “Ah heck, America will always be strong. “ Or you can take action and win no matter what.
You know where my money is at.
Next Article: Top Oil Stock Update: Lock in Gains on KAZ and TRGL
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