Forex Trading Tips | Stagflation = Death

Forex Trading Tips | Stagflation = Death

So, raise of hands, who has seen “The Perfect Storm”. The movie with the boat and ocean and waves n stuff. Well, if you haven’t I suggest you don’t, it’s a terrible movie. HOWEVER, what the Perfect Storm is based on can relate to what stagflation is and what one of this weeks forex trading tips is about. Basically in that movie, all the rare things that could go wrong all go wrong at the same time. Think of Godzilla attacking your city while there is an earthquake and it is hailing. Ya, it is that bad. So, one of this weeks forex trading tips is about stagflation.

What stagflation is, is when unemployment goes up, economic progress slows down, and inflation goes up. Now, alarm bells should be going off. But why? Well, as we have talked about in previous articles, currencies are directly linked to the economic conditions of the world. In some of our previous forex trading tips, we have talked about this concept, however it is very really rings true in talking about stagflation.

So for today’s forex trading tips, we will take an example of the US dollar, and what stagflation would do to the currency. Let’s say that our unemployment shoots up to 15%, inflation hits the dollar, and the economic is stagnant. Now, in the eyes of investors, how does this look? Terrible! So as a savvy investor, looking at economic factors is must! Look at all aspects of the economy. You want to leave as little to chance as possible.

Stagflation in any investment sense is bad news!

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