In the world of Forex trading, volatility equals big profits. Forex, (which is shorthand for Foreign Exchange) is the largest market in the world. With 3 Trillion dollars in money exchanging hands every day, a trader only has to catch a tiny percentage of that to parlay a small nest egg into significant profits.
John Crooks says currencies dependent on commodities are in for a very tough 2009. He says weak global demand and a marked slowdown in China will keep commodity prices low. And that’s bad news for resource-rich Australia. John says a looming recession, widening trade deficit and interest rate cuts will send the Aussie dollar plummeting this year.
When things got ugly, the US dollar returned as king of the global currency market. J. Cristoph Amberger says dollar bears forgot that most other economies are in a worse state than the US.
The battle between inflation and deflation is the most important thing for investors to watch right now, says Adam Lass. Fears of falling prices are rife in Washington today. But the inflation cycle will come around again soon, especially with all the new money being pumped into the economy by the Fed. Adam says that’s why investors should buy the PowerShares DB US Dollar Index Bearish ETF (NYSE:UDN).
James Dale Davidson provides some essential tips for your investment strategy during this credit crisis. The government had admitted that we face trillion-dollar deficits for years to come. And who knows how much bigger the budget hole could grow with companies like GM lapping up Uncle Sam’s bailouts. But there are always way to protect your wealth… and even make a profit.
Too many companies are losing huge sums of money on mindless financial risk taking, says Chris Mayer. Even when it has nothing to do with their core business. Chris says this should underline the importance of understanding exactly what you are investing in.
It seems everyone is turning against US Treasuries now. But Justice Litle says it might not be the best move. After a vicious fall at the start of the year, investors could flock back to Treasuries as the recent rally in stocks subsides. Justice says the arguments for shorting the dollar are far more convincing right now.
The US dollar surprised many by breaking out of its six-year downtrend in 2008. Currency expert Jack Crooks says the global economy will get a lot worse before it gets better. And the euro will come under severe pressure as individual members of the union crumble. Jack says this all poins to further greenback strength in 2009.
The government is spending like crazy. And the Fed is cranking up the printing presses to keep the money flowing. As the greenback crumbles and inflation returns, Louis Basenese says interest rates will have to rise again. He says the best way for an investor to profit from this trend is to short US Treasury bonds, which are in an unsustainable bubble of their own.
The Fed and Treasury are doing untold damage to the US economy and the dollar with their unprecedented bailout spending, says Martin Hutchinson. That’s why there will soon be a stampede to the exits from the Treasury bond market. Martin gives four ways for investors to prepare for the coming crash.