The Easy Way to Track Currencies

Political, environmental, financial and, well, all kinds of events affect currencies, and currencies in turn affect commodity prices. It's a well-known fact that the exchange rate of the USD against other world currencies often has an inverse correlation to the price of gold (and sometimes oil, gas and other commodities). I mean, it's not the only factor, but it shows up in just about every article I read in the mainstream newspapers. So that theory is solidly propagated through the mass media.

To know about commodities and their futures, you need to know what's shaping the world's economic growth and you need to learn how currency rates work in general, so you can figure out how to form your investment strategy. This is especially true if you are an ex-pat or you live in some other country besides the U.S. There are so many companies that report, and royalties from are paid, in USD, that buying corporations that earn income in USD can be detrimental depending on the current currency exchange ratio. Or they can be a benefit if you think your country's currency may devalue against the dollar. Also, if you live in a country whose currency suddenly appreciates, you may have to think about how that affects the exports of the country and check out more specifically how that affects your actual investment in particular businesses.

I can't, therefore, stress how important it is to understand how different world events affect currencies and the price of commodities. The USD, especially with inflation, recession or stagflation on the horizon, needs to be tracked against world currencies regularly. When things go bad for the U.S., you have to start finding your bear market niches and looking more critically at alternative investments.

As I have a real job that doesn't involve world economics, where I have little time to pay attention to what's going on outside my job each day, I really don't have the time to read the dozens of sources that would give me all the information I need to know about currencies. So I stick with one main source each day that gives me the Reader's Digest version of what I think I need to know: Chuck Butler's The Daily Pfennig. Chuck is a down-to-earth kind of guy, and he distills a massive amount of global political, economic and social information into an easy-to-read newsletter that he publishes each weekday morning. The other cool thing about Chuck's newsletter is that he will e-mail it to you for free each morning so you don't have to worry so much about browsing on company time. When you take your work break you can learn about world finance without guilt. One note though, Chuck's newsletter digests everything that happened the previous day (and sometimes what's coming up to look for in the current day).

So depending on the kind of trading you're doing and how volatile your stock picks are, you may have to keep an eye on world developments overnight or during the day all by your lonesome. But for investing, where you don't have to worry so much about the day-to-day movements of your commodity stocks, Chuck's next day summary of what's going on in the world is awesome. Plus, he seems to be a really decent guy who loves his wife and adores his grandkids, and takes pleasure in the finer things (like college sports and classic rock). He's a real person, even in this cold medium, and that makes me trust him for the daily world economics lowdown. He's like my wise uncle who gives me the scoop each morning over breakfast. And I've grown to think about him each day after I read his column, and I hope his health improves, because he's someone you want in your life even if it's just to get a mass e-mail in your inbox each day. He's a real stand-up guy, and the Daily Pfennig is a must read for anyone making their own investment decisions or trading in commodity stocks.