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A Special Message From Christopher Ruddy Beat the Dollar with these Four Foreign Currency Plays
Dear Investor, Oddly enough, as the U.S. dollar has lost upwards of 30% of its value in the recent past against other foreign currencies, Americans havent been the big losers...yet. But the greenback is on a slippery slope, and as it descends, it could stoke inflation in the U.S. and smother global economies. Thus far, you might even use benign to describe the impact of a weakening dollar at home. After all, a falling dollar means that everything priced in dollars is falling in value. On paper, if the dollar drops 30%, your $50,000 annual salary will slip by $15,000, and your $100,000 portfolio will decline by $30,000. The fact that youre paid in dollars, pay your bills in dollars and
invest in dollar-denominated stocks makes this erosion pretty painless.
But, ignoring reality and not taking precautions in your portfolio could
be disastrous. For example, for China, holders of $1 trillion U.S. dollars in its reserves, the drop equals a very painful $300 billion loss. Late in 2006, China decided to implement an aggressive sell-off of U.S. dollars before the rest of the world does so and reportedly told the U.S. delegation, We are the largest holder of U.S. currency, and if the rest of the world unloads theirs before we unload ours, we will lose our shirts. Just last week, the Treasury Department announced that exporters from OPEC countries including Indonesia, Saudi Arabia, and Venezuela sold 9.4% or $10.1 billion, of their U.S. government debt securities in the three months ended in November 2006, reversing a 17-month buying spree. Should this shift by the OPEC nations be repeated, it could easily cause the dollar dominoes to fall, with China next in line to do the dumping. On top of that, with no plans whatsoever by the U.S. to reduce deficit spending or its ability to pay down any of its existing debt (estimated over $1 trillion in 2007 or 7.6% of GDP) without printing money, the largest foreign holders of U.S. Treasuries have already voiced discontent and concern. If the estimates of debt are on target, it would mean that this years deficit would exceed the value of exported goods and usher in a significant second wave of downward revisions against all non-dollar-pegged currencies. The result will likely be a pure, unadulterated collapse of the U.S. dollar and the impact stealth inflation at home and global economic depression will be very visible and painful to Americans. That will be terrible news for the value of many of your dollar-denominated assets particularly your checking and savings accounts, and even many stocks. However, it will mean an incredible bonanza if you invest in assets that go up as the dollar goes down such as gold and strong foreign currencies. You can think of todays currency shifting from dollars to euros, British pounds and Japanese yen as the calm before the storm. Were writing to you today to warn you about what might be headed your way, how to protect what you own and how to turn disaster into opportunity and profit. At Financial Intelligence Report, were experts in the currency arena, particularly foreign currencies in some of the strongest nations. To find out how to invest safely and profitably, click here. Four Currency Plays To Boost Your WealthAvoiding U.S. dollars eliminates the certain downward risk of the American currency, but when you live and breathe the dollar its just not possible. We cant think elimination, but we can diversify away from the greenback, keeping more of our assets safe and growing. At FIR, were currently recommending four, pure currency plays. We believe (like Warren Buffett and Bill Gates) that the five-year downtrend just took a breather last year. Between 1971 and the end of 2003, the dollar declined in value by over 70%. The truth is that without gold or some other form of backing, there is nothing to prevent the dollar from falling much, much further - and indeed, we think that is precisely what will happen in the next five years. How, though, do you protect and profit from the inevitable slide? There are four main ways to invest in foreign currencies:
But, there are financial dangers involved with all of the above if you dont know where to buy, when to sell, or just how much to allocate to each. FIRs newest special report, gives recommendations and guidelines for profiting from foreign currencies in Cash in as the Dollar Crashes and Burns. Click here to get yours today! Its free! Focusing On Strong, Stable Countries Is Key To ProfitingWe still like smaller more stable currencies, particularly in nations with great natural resources that will do well during the commodity bull market. And, one of the major reasons you'd buy a currency is for yield. For example, yield on the British pound matches that of the U.S. at 5.25%. Australia yields 6.25%, while New Zealand yields 7.25%. You're essentially being paid for selling short the dollar and buying these two currencies and holding the money on deposit. Currencies of New Zealand and Australia are also attractive because the countries that issue them are peaceful, free, prosperous, and stable. They also are not targeted by terrorists and have not experienced anything comparable to the U.S. corporate scandals and dot-com crash. We expect the U.S. economy to grow below trend into 2007 thanks to the weaker homebuilding sector. Meanwhile the growth prospects for the UK are pretty strong and the Bank of England may STILL raise rates further. Bottom line, which economy do you prefer under the current circumstances...the U.S. or U.K.? We fall in favor of pound sterling denominated Britain. We fully expect that uptrend in the euro will continue its march to a record high against the dollar at 1.36 and beyond. The British pound will remain a quality store of value as long as Britain does not fully engage the European Union and accept the euro as its single currency. We have a safe, surefire way to buy certificates of deposit in foreign currencies. Find out where FIR readers purchase their foreign CDs and what term we recommend by clicking here. A Whole New Crop of Market-Beating Currency FundsWhile we havent yet recommended buying the DB G10 Currency Harvest Fund (DBV), a newly introduced ETF from PowerShares, these types of funds/ETFs are certainly on our radar screen. We believe currencies are one of the most likely asset classes to provide safety and market-beating profits in 2007. This Deutsche Bank G10 Currency Future Harvest Index-tracking ETF protects against the volatility of month-to-month monetary fluctuations at home and abroad, allows you to capitalize from the strongest currencies and stay away from the weaker ones on a quarterly basis, and could potentially double your money in six years. Without getting too technical, it works something like this. DBV is limited to the major 10 currencies: U.S., Japanese, Canadian, Swiss, Australians, British, New Zealand, Swedish, Norwegian and euros. Once a quarter, PowerShares buys the top three currencies and sells the bottom three as determined by yield. Find out which other new currency ETFs weve got our eyes on in Cash in as the Dollar Crashes and Burns. Click here for your free copy. FIR: Success Year After YearSince launching FIR, we have had a remarkable record of success understanding trends and piggybacking our investment recommendations on them. The FIR portfolio has performed remarkably since its inception in Sept. 2003. Our stock recommendations made in 2004 have increased 58.4%, while those we advised readers to buy in 2005 are up 28%. The S&P 500, on the other hand, turned in 9% and 3.5% gains in 2005. In 2006 our stock selections outpaced the S&P 500 by 120% and closed with a gain of 15.3%. On average, our stock recommendations grew 33.9% while the S&P 500 index averaged 8.5% gain last year. In other words, FIRs advice performed an amazing four times better than the S&P 500 index. Our success has nothing to do with luck or a "crystal ball." We just believe in understanding trends, and riding the right ones at the right time avoiding the imposters along the way and then acting on our intelligence to know when it's time to step aside. But it's not that easy for the average investor to accomplish on his or her own. You need to have a source you can rely on. Unlike most other financial newsletters, with Financial Intelligence Report, there is no hype. There are no absurd claims. Its just thoroughly researched, accurate information, reasonable projections and excellent investment advice from some of the best financial minds in the country. In fact, Financial Intelligence Report is more like a white-paper report that major trust companies send to their billionaire clients. Most investment newsletters providing this type of incisive coverage typically cost $200 to $800 a year. Some cost well over $1,000. So how much does Financial Intelligence Report cost? Typically, FIR costs just $199 for a one-year subscription. But today we have an even better offer for you! No-Risk, Limited-Time OfferFor a limited time only you can sign up for a one-year trial subscription to FIR at the special introductory price of just $99 (12 monthly issues), save more than 50% off the regular price of $199 and get up to 5 special reports absolutely FREE! Your FIR subscription is completely risk-free. If for any reason you don't like the service, just let me know and you'll get the full, unused portion of your subscription returned to you! No questions asked. At just $99 a year, Financial Intelligence Report is a tremendous value. Just a single recommendation from one issue or any of the following valuable special reports could easily earn you 100 times the cost of the subscription.
And remember, you may cancel whenever you like with no risk or obligation. Whatever you decide, you can keep the bonus reports as a gift. It’s my way of saying “thank you” for giving FIR a try. So what are you waiting for? I look forward to personally welcoming you aboard. Join now! Sincerely
yours, |
