For the past year, the prices producers pay for their goods have been skyrocketing. Yet even with the higher prices they pay, they’ve hesitated to pass along higher prices to consumers. Now they’re paying the price as they face the biggest margin squeeze since 1975.

“In a market like this, you need to look for companies that have cash,” says Charles Delvalle in Investor’s Daily Edge. Basically, what you’re looking for is a company with more cash than debt.

At the end of last month, Charles Delvalle at Investor’s Daily Edge said what we’re getting ready to see is not inflation at all… but deflation. That’s because in July the money supply grew under the rate of inflation. In real terms, that means the money supply shrank. Charles says data now suggests shrinking money supply is putting the brakes on inflation.

With some currency traders expecting the Fed to push rates higher to combat inflation, the dollar has seen recent strength. But will that strength last long enough to reverse the multi-year long dollar downtrend? It’s highly unlikely.

Since March, The U.S. Dollar Index (NYBOT: DX) has been consolidating between the 70 and 74 cent range. Since mid-July the dollar has mounted a strong rise to the top of this range. But with the continued risk of more foreclosures, multi-billion dollar losses in the financial sector, ballooning deficits and a sluggish economy, the dollar will have a hard time finding traction for a long-term move.

Strong rallies in the dollar should be seen as an opportunity to take a bearish position. Of course you can do that through ownership of gold and silver, precious metals ETFs and mining stocks.

You can also play the falling dollar in the FOREX markets, if you have the experience and risk tolerance to do so. But a safer and quicker way is to buy the Rydex Weakening Dollar 2x Strategy (RYWDX). This fund increases in value by 2 percent for every 1 percent decrease in the dollar index.

Source: More Dollar Doom?

It’s been another troubled week for the US markets. After a brief rally stocks tumbled. The Standard & Poor’s 500 Index had the worst weekly losses in four years. Oil hit new records. How can you profit under such volatile conditions? Charles Delvalle says there are six rules to follow for successful investing.