What does the potential Fed rate cut mean?
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The Federal Reserve is mulling a federal funds interest rate cut a move that will most likely result in devaluation of the dollar.
Offshore Investments
Lower interest rates weaken the dollar and cause inflation. This bodes well for our Iceland CD trade. If you get your CD now, and the dollar starts to depreciate you should get an added point or two from favorable currency exchange. Likewise if you are a foreigner and you had money invested in the U.S. you would most likely lose some return. It is a 0-sum game.
Gold
When U.S. inflation goes up it usually drives investment in metals. As such gold should appreciate. For investing in gold I recommend the gold etf – GLD or Monex.com for trading the metal directly.
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Carnival of Smart Money #1 said:
Dax Desai presents What does the potential Fed rate cut mean? posted at Dax Desai, saying, “Explains what the Federal Funds Rate cut could mean to your investments.”
August 28th, 2007 at 11:46 am -
Adventures In Money Making said:
here’s a good post on that same topic.
http://www.wealthbuildinglessons.com/2007/05/09/profiting-from-inflation-and-the-dollar-devaluation/
August 28th, 2007 at 1:03 pm
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