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By www.forexconspiracyreport.com Inflation and Currency Trading

Inflation and Currency Trading

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http://www.forexconspiracyreport.com/inflation-and-currency-trading/ Inflation and Currency Trading The basic relationship between inflation and currency trading is that all currencies tend to inflate and devalue over time. It is a basic fact of governance that a little bit of inflation makes people happy as it seems to make their property more valuable with time. A lot of inflation gets noticed and tends to cause havoc in a nation’s economy. A high level of inflation affects how people plan their economic lives, make purchases, and save for the future. The basic relationship of inflation and currency trading in foreign currency rates in that the nations that best manage their economies end up with more valuable currencies over time. The basic fact for foreign currency traders in dealing with inflation and currency trading is that betting against a steadily inflating currency is often profitable. National Policy and Currency Management Despite the fact that most nations would just as soon not see their currency inflate and devalue, economic and political realities often dominate. If a nation’s balance of trade is constantly negative it leads to a devaluation of their currency versus other currencies. This is seen in the home nation as inflation as more of the local currency is needed to buy a house, car, or loaf of bread. When nations seek to remedy their balance of payments such an action often requires reducing the government’s budget and this means less money in circulation. People often get angry and vote for the opposing party in the next election. This is a simple concept but one that traders must keep in mind when dealing with inflation and currency trading. Foreign currency exchange rates between the United States and Japan moved steadily in favor of Japan for years and years as the USA struggled unsuccessfully to manage its ever mounting budget deficit and balance of payments deficit. Keeping an eye on politics and trade figures is useful in trading one currency versus the other.

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Page 1: Inflation and Currency Trading

By www.forexconspiracyreport.com

Inflation and Currency Trading

Page 2: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

The basic relationship between inflation and

currency trading is that all currencies tend to inflate and devalue over time.

Page 3: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

It is a basic fact of governance that a little bit of inflation

makes people happy as it seems to make their property more valuable with time.

Page 4: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

A lot of inflation gets noticed and tends to

cause havoc in a nation’s economy.

Page 5: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

A high level of inflation affects how

people plan their economic lives, make purchases, and save

for the future.

Page 6: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

The basic relationship of inflation and currency

trading in foreign currency rates in that the nations that best manage their economies

end up with more valuable currencies over

time.

Page 7: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

The basic fact for foreign currency traders in

dealing with inflation and currency trading is that

betting against a steadily inflating currency is often

profitable.

Page 8: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

National Policy and Currency

Management

Page 9: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

Despite the fact that most nations would just as

soon not see their currency inflate and

devalue, economic and political realities often

dominate.

Page 10: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

If a nation’s balance of trade is constantly negative it leads to a devaluation of their

currency versus other currencies.

Page 11: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

This is seen in the home nation as

inflation as more of the local currency is

needed to buy a house, car, or loaf of

bread.

Page 12: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

When nations seek to remedy their balance of payments such an action often requires reducing

the government’s budget and this means less money in circulation.

Page 13: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

People often get angry and vote for

the opposing party in the next election.

Page 14: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

This is a simple concept but one that traders must keep in mind when dealing with inflation and currency trading.

Page 15: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

Foreign currency exchange rates between the United States and Japan moved steadily in favor of Japan for years and years as the USA struggled unsuccessfully to

manage its ever mounting budget deficit and balance of

payments deficit.

Page 16: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

Keeping an eye on politics and trade figures is useful in

trading one currency versus the other.

Page 17: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

A Rising, or Falling, Tide Affects Nearly

All Ships

Page 18: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

When we consider the US dollar and the

Yen we commonly concern ourselves with the balance of payment between the two nations.

Page 19: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

We also concern ourselves with

monetary policy, especially that of

Japan.

Page 20: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

Japan has purchased US dollars for years in an

attempt to keep the Yen from getting too strong as an

overly expensive Yen would make Japanese imports into

the USA too expensive.

Page 21: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

However, there are outside factors that

drive both currencies and relate to inflation and currency trading.

Page 22: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

And, these factors do not always affect

both nations equally. When the price of oil rises it affects Japan

and the Yen more strongly.

Page 23: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

Japan imports all of its oil and imports

even more not that it is shutting down

nuclear reactors in the wake to the recent tsunami.

Page 24: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

The USA is a major oil producer and, with

the advent of fracking technology, may indeed become energy self-sufficient in a decade or so.

Page 25: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

This will serve to drive down inflation

in the USA.

Page 26: Inflation and Currency Trading

http://www.forexconspiracyreport.com/inflation-and-currency-trading/

The inflation and currency trading

equation could move strongly in the favor of the USA over time.