If you want to take advantage of being out of the dollar and in other foreign currencies you can in several ETFs. FXY, FXB, FXE etc. They pay a dividend based off of the interest rate of their central banks.
As far as where to put your money I would recommend asking yourself some questions, doing some research, then base your investments off of that so you can sleep at night.
1. What do you see for the future of the US economy? If you are on this board I assume you are negative on the housing market. How do you think this will impact the US consumer? They are 66% of US GDP.
2. How do you think Helicopter Ben will react to a slowing US economy? How do you think this will impact the dollar?
3. If you look at and research emerging markets do you think their near vertical rises are sustainable? Most of the graphs look like vertical lines.
4. Where do you see the US stock market headed? Take a look at the drop in foreign investment in our market and what impact do you think that will have.
5. Commercial Paper markets backed by loans are in free fall. Without the free flow of easy credit and cash what effect do you think this will have on asset values in the future?
As you can tell by my name I am very negative on many of these things. I like the Yen because it has been so undervalued for a long time by the BOJ. I don’t think they will be able to keep their current interest rate forever and will be forced to raise rates as china exports inflation to the world. The other event that will help the Yen is the unwinding of the Yen carry trade. If you watched the Yen when the market took its 10% shave the yen got dramatically stronger. This will happen again when our market drops.
I could talk for hours on my investment philosophy and why I am doing what I am doing. However, I am just one voice in the crowd. I do much of my own research and also subscribe to a variety of investment letters to help get other perspectives on the investments I am doing. The bottom line is you need to invest in such a way that allows you to sleep at night. Right now getting a 4% return on the Euro is much better then a 5% return from the dollar along with a 35% drop against the Euro over the last 6 years. In just this year alone the dollar has lost 7+% against the Euro. Having just returned from Zurich, it is eye opening just how little the dollar buys in Europe. For the longest time this has been masked by China exporting every cheaper goods. Starting just this year the export prices in China are on the rise. Americans in the coming month are going to fully understand the impact of the falling dollar.
Just an FYI on commodities, China plans to spend a large percentage of their 200 billion SWF on commodities, infrastructure and private equity.
Good luck with your investments. I hope I was able to give you some positive feedback.
