Not many average people are noticing but the start of a major new trend has already begun. On January 15, 2015, Switzerland decoupled it’s currency from the Euro and rattled the global financial markets overnight. China is currently cutting rates and Russia is also managing it’s interest rate aggressively. This is in direct competition to something that happened at the Bretton Woods Conference in 1944 which was the agreement by every other country in the world to move to the US dollar as the world reserve currency. The world is quickly getting fed up with the United States foreign policy including many countries like China and Russia who are trying to form a new reserve currency and are even starting to trade some commodities like oil and gas in Russian Rubles and Chinese Yuan instead of US Dollars. This is something that hasn’t been done to this scale until now.
All of this sovereign fighting is good for investors who are smart and ready to make fortunes while the global financial system dukes it out. The problem is connecting all of this news to investable opportunities. If you think about it for a second though, it becomes obvious that the best way to profit from this is by trading the currencies themselves. Many people think this is done by going to the currency exchange at an airport, etc. but there is a better way and it is very accessible to everyone. It’s called the Forex market.
The Forex market is the most traded and liquid market in the world. For this reason, it is very difficult for any one individual or bank to manipulate. In addition, this is THE place to trade based on speculation of how currency pairs will fluctuate. As the US Dollar continues to lose credibility, it’s reserve status and possibly ignites other severe currency price swings, investors could stand to make fortunes by trading currency pairs. Anyone familiar with Forex trading also knows that you’re able to take advantage of high leverage that you aren’t able to utilize with bond or stock trading. It’s not uncommon to be able to buy 20, 50 or 100 times more than the amount you have in your account.
The Unthinkable is Happening
Right now is the calm before the storm. The US Dollar is strengthening even though the US continues to print money and zero interest rate policies. Eventually this will reverse and then a lot of money will be made trading other currency pairs but for now we can also ride the strong dollar and make money that way too. For example the Eurodollar (EUR/USD) was a recent fatality in the stronger dollar. It has fallen from 1.39 to 1.12 today. Investors who shorted this pair betting on the rising Dollar made a killing. Keep an eye on every currency pair that includes the USD, these will be the ones that will make fortunes for smart investors.
Author Bio: Jamie has an MBA from Rutgers University and a Professional Certificate in Real Estate Finance, Investment and Development from NYU. He’s traded stocks since he was 13 and bought his first property within a year of graduating college. He also flipped properties but got out before the 2008 mortgage meltdown because he was able to see the market turning before it happened. He’s started two companies and has experience in investing in antiques, collectibles, gold, silver, trading options and Forex. Jamie currently runs a website dedicated to helping people achieve financial freedom.