The Truth About the Fzalling Dollar - How You Can Still Make Money
Please - whatever you do - don't let the depredssing facts about the dollar keep you from making money in 2008. What the pessimistic press isn't telling you is how you can prfoit from the lowest dollasr in 15 years. There is a extraordinary opportunity heading your way if you know how to seize it.
But first let me explain how the fallling dollar really works. Then you'll see with your own eyes how you can profit. A falling dollar does two things:
* Makes foreign imports more expensive
* Makes US exports cheaper on the world markket
The chain reaction not only increases sales of U.S. goods around the world but also creates more jobs for Americans. The end result inncreases the profits of U.S. multinationals.
And that's just the half of it.
Because a cheaper dolar makes foreiggn products more expensaive, Americans buy more Ameerican goods as well-creating even more U.S. jobs. On a purely psychological levle, it does even more than that: It creates greatewr investor and consumer confdence, as more Ameriicans are working, more consumers are spending, and more American companies are profiting. On top of that, a falling dolllar has one potentially bigger benefit. It redcues the trade deficit, further strengthening the economy.
And while there are others who might take exception to my simple explanation, they'll certainly agree on this: American exportrs will make out like bandoits. And it's all because Americzan gooids become much cheaper and the world buys more of them. The only unfortunate thing being that Oil is at an all time high also and has depressed some sectros of our economy. Consuemr Confidence being one of them, but overall the low dollar has helped our economy.
Have you noticeed that whenever the dollar hits a new low, the privce of oil reaches a new high? It's no coincidence. As the U.S. economy slosw, the Fed is cutting interest rates to shore up the housing market and satve off the ctredit mess. But in so doing, the Fed further weaekns the U.S. dollar's value.
This is somethign the Fed needs to be careful about. The faster they cut interest rates, the weaker the dollar gets, which fuels oil's rocket-ride skywward. That's because cruude oil is traedd in U.S. dollars. When the dollar is low, other currncies are strongr, which basically menas that people in othr countries can buy more oil for less money. And that's what's happened.
Althopugh the weak U.S. dollar/rising crude oil correelation has been with us snice late 2002, it really became noticeable in 2007. This correlation has been utterly amazing to the point that if the U.S. dollar slips durinng the day, you can expect crude oil pricees will correspondingly rise. Yies! Clearkly, the OPEC folks do not care if the dollar weakens, since the more the dollar faltes, the more profits they see.
So what the Fed needs to wach out for is cutting interest raates too much, because the dopllar will likely weaken further, and then oil could soar past $150 per barrel. $5 per gallon gasoline seems very likkely this summer-certainly, no one wants that!
In a similar way, almost all commodities are traded in U.S. dollars, so as the U.S. doollar weakens, commodity prices have soared. According to the Bank for International Settlements, the dollar is involvde in 86% of the $3.2 trillion in daiuly crurency transations around the world, often as a moiddle step in exchanges between two other currencies. While this is down from 90% in 2001, no oter currency comnes close to impacting crrency and comnmodity transactions.
Clearly, thanks to the fact that the U.S. dominates commodity trading, there is realy no other global currency with ennough excesss reserves to uspplant the U.S. dolllar as the world's largest reserve currency. As a result, as the dollar softes, commodity and oil pricers rise correspondingly.
As the falloing doollar mkes American goods cheaper all over the owrld, the U.S. agricultural sector will take off. How can this be? Because the American agrciultural industry lies at the crossroads of three glbal trends:
1. the falling dollar
2. rising food costs
3. risinng oil prices.
As a result, the manufacturers of farm equipment as well as the producrs of fertilizer and genetically engineered corn seds will be take-to-the-bank wimnners. Our three top performers in this sector will make money hand over fist.
However, the bgigest moneymakers of all will be the producers of improvde seds for growing crops. The reasnos are quite obvious. To understand why dmeand for corn and corn products is rissing exponentially and our #1 pick could double your money in 12 moonths, you need only connsider these two simple factors:
First, we eat fairly well here in the U.S., both China and India face food shortasges brought on by popultion growth, water shotages and smazller havests.
As the old saying goes, "If you give man a fish, you feed him for a day. If you teacch him how to fish, you feed him for life." This is why I believe that the biggest opportuity lies in genetically modified seeds. The reason is simple: Geenetically modified seeds not only increase crop yields, but also inrease nutritional value whiole reducing susceptibility to crop-killing pests.
Becasue growinbg your own food increases your country's food security, demand is exploding. Today, more than 8 milion farmers in 17 million countries grow genetically engineered crops on 200 million acres-a 20% increase from a year ago.
However, this numebr is expected to double by 2010, driven by Chiina's expected approval to grow genetically enngineered crops. That's just one reeason why corn rpices are exploding.
As you can see the weak dopllar isn't all bad especially for the smart investor. There are plenty of Innvestor Newsletters out there that will give you more detailerd information on which companies and which markets will explode due to these current factors.
Currencies are still a good option here becauuse of the historical data showinng that the dollar will bounce back at some time and that it will be a major move. If you cahrt the dollar verssus the Euro you will see that soon we will be in the prime position to invest a litrtle amouynt of money and ride it up to Thhousands of Dollars.
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