Profit From A Falling US Dollar Without
Buying Currencies
The Dynamic Wealth Report
July 31, 2009
The Dollar Is Falling... How To Profit Without Buying Currencies
Can you profit from the falling US Dollar… without buying
currencies? This is a question I get asked a lot. As many of you know,
I’m the editor of the Currency Options Insider service. I’m always
looking for ways to profit from the currency market.
One of the biggest themes this year is the falling US Dollar. I’ll tell
you more about it in a moment.
Profiting from a trend like this isn’t difficult… if you know what
you’re doing. A lot of investors don’t want to put in the time or
effort. They don’t want to learn about the currency market. They don’t
want to study the economic trends or think about the implications. Let’s
be honest, some investors are just plain lazy… and they want everything
handed to them on a silver platter.
People like you and I are different. We’re willing to study and learn.
We’re willing to think things through in a calm, confident manner… and
that’s how I stumbled across today’s idea.
I was thinking about the currency markets, as I often do.
One of the most obvious trends I see is the falling US Dollar.
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Do a little research and you’ll see why. The Federal Reserve and
Congress are flooding the economy with greenbacks. Trillions in reckless
government spending. Another trillion for the financial industry. Billions for the auto industry.
Those numbers will scare anyone.
So many new dollars are flooding the economy, the government is worried
no one will buy them! An easy way the Fed creates new money is by
issuing bonds. Up till now, there’s never been a problem selling them
(China’s always been a big buyer).
But whispers are starting.
The demand for US government paper may be faltering… and that could be a
big problem.
Let’s get back to the key issue. What happens to all this “easy money”?
The easy money sloshes around our economy and creates inflation. We’re
not seeing it yet, but as the economy starts to recover, we’ll see it in
a big way.
It won’t happen all at once. Inflation will show up slowly. The economic
recovery will start. Growth in certain sectors will pick up. We’ll see a
decline in unemployment. Then CPI numbers will move higher… Commodity
prices will move higher…
Before long, prices across the board will be up.
And this will destroy the value of the US Dollar. Just look at this
chart. The dollar is in a steady down slope. And, I don’t see that
changing any time soon.

So, how can we profit from the falling US Dollar?
Placing a trade in the currency markets is easy. But what if you’re not
comfortable trading currencies? Don’t worry, you have other options.
The easiest way is by investing in overseas markets.
But that brings on another question… where should we invest? My simple
answer is… emerging markets.
China’s economy is growing more than 7% this year! India’s been growing
more than 5% a year for the last two decades. Brazil, Russia, Thailand…
the list goes on and on. Huge economic growth engines can be found
within these emerging markets.
I know what you’re thinking… investing internationally is great and all,
but what companies should I buy? How would I even learn how to research
international stocks?
I’m going to take the easy way out on that tough question. Instead of
researching and picking an international company or two, I found a
diversified emerging market ETF. It fits the bill perfectly.
WisdomTree Emerging Mkts Small Cap Dividend ETF (DGS) is an ETF holding
a number of emerging market stocks. The ETF is well diversified. No one
industry group accounts for more than 18% of their holdings. It offers
great exposure to a mixture of industries including financial services,
industrial metals, and consumer goods, just to name a few.
DGS is performing really well year to date. They’ve managed to rack up a
gain of more than 36%.
And here’s a great side note… the companies in the fund pay dividends.
Right now you can pick up a yield of just over 5%.
Take a look at DGS. It’s an easy way to profit from the falling US
Dollar. Plus, you get great exposure to high growth markets and a built in
5% return.
• OfficeMax (OMX) was upgraded by Citigroup this week. They now have a
"Buy" rating on the stock. A recovery in the economy will
help small businesses and Office Max is a big supplier to small
businesses.
• Las Vegas Sands (LVS) was downgraded to an “Underperform”
rating by Wedbush Morgan. They must still see weakness in the travel &
tourism industry.
• UBS started coverage on Yahoo! (YHOO) this week with a
"Neutral" rating. Big news on their partnership with Microsoft and
all they get is a neutral rating… who are they kidding?
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