The U.S. dollar has been one of the world's strongest currencies in the first part of 2010, posting double-digit gains through the end of May.
And little wonder. The Greek debt crisis continues to threaten Europe's overall health, and could unleash an entirely new contagion on the rest of the global economy. Then there's China, - the engine of world growth during much of the financial crisis - which now appears to face the near-term triple threat of slowing growth, accelerating inflation and workplace unrest. Add in concerns about commodity prices and global debt levels and it's easy to see why currency investors have sought the safe haven of the U.S. dollar.
In short, it appears that "everybody" knows the greenback is the best choice for safety, quality and security.
But is that really the case? To me, the dollar is looking more and more like a colossal short that could wind up being one of the biggest moneymakers of the year for traders gutsy enough to take a stand.
To see why the dollar could roll over - and to see how to play it - please read on ...
Is the Plunge in Commodities a Bear Market Signal for Stocks?
The biggest slump in commodity prices since 2008 is undermining confidence on Wall Street and fueling speculation that a new bear market has been born.
Despite forecasts for accelerating economic growth and higher prices, commodities, with the notable exception of gold, are taking a big hit.
The Journal of Commerce (JOC) Commodity Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57% in May, the most since October 2008 - something that gave analysts a sense of déjŕ vu.
These Five Inflation Plays Will Provide Protection and Profits
Inflation hawks have been warning since 2008 that the spurt of U.S. money creation that began at the end of that year would spark a surge in consumer-price inflation.
And yet the consumer price index (CPI) statistics remain quiet - not giving ammunition to the deflationary camp, but making "inflationists" look silly, as well. Now, however, it is becoming obvious that inflation will soon arrive. But this time it is sneaking in through the back door - courtesy of our emerging-market trading partners.
Fortunately, there are some very clear steps that investors can take to protect themselves from this expected inflationary surge.
To learn about five investments that can battle inflation even as they fatten your portfolio, please read on...
The Case for $5,000 Gold: And How to Profit
The gold bug is unstoppable. Prices are up four-fold since 2001... and they're not stopping anytime soon. Could $5,000 per ounce be in our future? Read this report to find out why gold is being pushed through the roof - and four ways to profit from gold's rise.
Money Morning Mailbag: Investors Show Growing Concerns Over Deflation
The threat of deflation has been making its rounds as inflationary measures like the consumer price index (CPI) fell for the first time in 13 months in April, dropping 0.1%. Core CPI - which excludes food and energy prices - rose only 0.9%, its smallest gain since 1966. The producer price index (PPI) also dipped 0.1%.
"The recent trend in inflation has been swiftly to the downside," Eric Green, chief U.S. rates strategist at TD Securities, told Reuters. "All measures of inflation are decelerating."
Investment behavior has shown an anxious but mixed sentiment of hedging against both inflation and deflation: Demand for gold metal is outstripping supply by more than 1% per year and has pushed gold prices to record highs, while others have sought out both corporate bonds and U.S. Treasuries for safety.
With Economic Turmoil and Inflation on the Horizon, Higher Gold Prices Lie Ahead
The gold bull is unstoppable.
Gold prices are up fourfold since 2001 and hit a new record high near $1,250 an ounce on May 14. But they're still nowhere close to finished.
In fact, another four-fold increase could be in the cards.
"It sounds like a gold bug's dream," Money Morning Contributing Editor, Martin O. Hutchinson said in a May 13 Reuters BreakingViews column. "But looking back to the last inflation-adjusted peak price in 1980, it's far from impossible that the gold price could soon go above $5,000."
Dodge a Possible Debt Debacle With These Two Stimulus-Plan Safety Plays
U.S. President Barack Obama's $862 billion stimulus plan, passed in great haste after his inauguration, has now revealed its true costs and benefits. It didn't revive the U.S. economy - that bottomed about May 2009, before a dollar of it had been spent. Further, combined with the mad wave of similar "stimulus" outlays across the planet, it has destabilized global bond markets - which may end up being very expensive indeed.
For details of the two stimulus-plan safety plays, read on...
How to Play Gold – So it Doesn't Play You
The Greek bailout has turned gold into a "must have" investment. But the new gold rally will be different from gold rallies of the past. This time around, gold isn't serving as protection from inflation... it's become more speculative. Read this report to find out exactly how to play gold now.
Gold Prices Surge and Will Keep Climbing as Investors Protect Against European Debt Crisis
Gold prices yesterday (Wednesday) broke through to a record high, as investors feared the Eurozone bailout plan would debase the euro and escalate inflation.
Gold for June delivery continued its record-breaking Tuesday climb to hit $1,243.10 an ounce Wednesday. The contract reached an intraday high of $1,249.20 an ounce. Spot gold prices hit $1,244.45 an ounce, up almost 20% in the past three months.
Gold's reputation as a "safe haven" investment causes the metal's price to move inversely to investor confidence, which has been rattled by the Greece debt crisis and last week's 1000-point plunge in the Dow Jones Industrial Average.
How the Greece Bailout Turned Gold Into a 'Must-Have' Investment
With so much uncertainty in the U.S. stock market - not to mention the debt-contagion concerns emanating from Greece and other European Union (EU) countries - it's more important than ever for investors to hold "hard assets," such as gold and other commodities.
In my view, what's happening in Europe is particularly important for investors to be aware of and understand. The so-called " shock-and-awe" bailout strategy undertaken by the EU and the International Monetary Fund (IMF) - which establishes a $1 trillion rescue package for member-countries facing financial crisis - will not be the answer.
To see how gold and other hard assets are becoming "must-have" investments, please read on...