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Originally Posted by billet370
yea I opened a fake account yesterday, 50grand. Its something thats interesting because you could particular invest in the Yen right now. Take dollar to yen...what for dollar to go back up and trade back for higher dollar earnings....Do I have somewhat of the correct aspect on this?
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yea, thats basically how it works. except for the fact that the dollar isn't gaining any value. Quantitative easing just brings its value down further. Truthfully, i woudln't really mess with forex right now, especially when so many world powers are artificially controlling the value of their currency. When you look at how many political factors affect exchange rates and currency values, its really so scary. for example: Inflation is a natural phenomenon in economics, and we live under this notion that its supposed to be somewhere around 3%. However, deflation is also natural, but monetary policy is so heavily controlled, and the powers that be have determined that, no, deflation is not natural, so economic cycles aren't allowed to run their natural course, resulting in this seemingly 'normal' rate of inflation
couple all that with these stupid bailouts, and basically you come to the conclusion that almost nothing out there is valued at what it should be. Political forces have such a strong influence on the price of currency.
However, if you somehow know the next european/scandinavian country to get totally f
ucked financially, then by all means, short their currency. Oh and let me know which one, i'll happily join you. Oh, but then the IMF will bail them out so then what? basically, even the most LOGICAL play, doesn't make sense with all this political interference.