The Economy, the Dollar, and you.

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I’m evaluating the Fed Cuts, the state of the economy and it plays like a broken record. So I dug up some older posts and checked to see if I still believe them. Here are 2 posts that I looked at.

I mentioned that the Fed would cut interest rates down to 3% perhaps even 2.5% further weakening the dollar.

What happened: The Fed has cut interest rates down to 3.5% and if they cut again to 3% on Wednesday we’ll be at my target.

Verdict: Almost there. Fed cuts will continue to weaken the dollar and “stimulate” the economy to flat growth.

(11/26/07): In 8 Reason Why the Dollar will Continue to Fall

I gave my reasons why I believe the dollar will continue to fall.

What Happened: The chart speaks for itself. The dollar has fallen 33% from $69.42 to $46.72 in a short 2 months.

Verdict: Dollar is still weak and monetary actions won’t help. The U.S. will see flat growth over the next 6 months at best.

And this week . . .

I will be basing my trades on the below assumptions:

• Dollar will continue to fall.
• Commodities will continue to see high prices.
• Growth will continue to be outside the U.S. in 2008.

This week I will be seeking out plays against the dollar and look at commodity plays. A few like Barracks and Rio Tinto come to mind. Also I will be assessing which international markets appear to be positioned for growth in 2008 and the ETF’s/Funds to invest in them.

If you have any trade ideas along these lines, please feel free to comment.