At 2 p.m. ET today, the Federal Reserve is due to release its new policy regarding interest rate hikes.
In fact, I went live on FOX Business yesterday afternoon to address this exact development.
Nomi Prins during her live FOX Business appearance on January 31
During my appearance, I discussed the permanent distortion that’s happening in the markets and how money is fabricated by the Fed, inflating stocks and financial assets without helping the real economy.
I also talked about the Fed’s three-stage pivot. Right now, the Fed is in Stage One, where it’s beginning to reduce the pace of rate hikes. That’s what I think the Fed will do today.
During Stage Two, the Fed will pause rate hikes and reach a stage of neutrality. And in the third stage, when it becomes blatantly obvious that its aggressive policies are killing the economy, the Fed will cut rates.
But what I didn’t say in my appearance yesterday is that I believe Stage Three will take place between the last Fed meeting of 2023 (on December 13) and the second meeting of 2024.
What’s more, I didn’t get a chance to express that the Fed is at war with the middle and working class.
Right now, workers are making less money per things they need to buy than before the pandemic. U.S. labor income has not kept with inflation, and growth is slowing down.
This means that we could see more weakness in the retail and hospitality sectors, creating another wave of distortion between the markets and the real economy.
To offset the volatility in the stock market due to the Fed’s policies, I’m handing the reins to my colleague and trading veteran Imre Gams.
Within the trading world, Imre is known for his specialized expertise in technical analysis. He has given lectures and talks around the world.
To date, he’s worked with over 3,000 traders in one-on-one and group settings.
And today, he’ll tell you about one area in the market that offers moneymaking opportunities no matter what the Fed does…
Editor, Inside Wall Street with Nomi Prins
A Type of Trading That Works in Every Type of Market
By Imre Gams, analyst, Market Minute
What’s the world’s largest market?
If you answered stocks or bonds, you’re not alone.
The truth is, most folks have never heard of it… let alone considered trading it.
But the answer is the currency market.
Also known as the foreign-exchange – or forex – market, it has daily trading volumes of about $7.4 trillion.
That’s 32 times larger than the U.S. stock market.
It’s no wonder some of the biggest trades of all time have taken place in forex.
These are trades that have netted hundreds of millions of dollars in profit.
One famous currency trade even hauled in more than $1 billion. (More on that below…)
And there’s something interesting about these forex trading wins that you should know about.
Some of these trades took place when stocks were in a bear market, like they are today.
That’s because the currency market and the stock market tend to move independently from each other.
As you’ll see today, it’s why forex trading is the perfect “escape hatch” for folks sick of losing money in stocks.
$300 Million in a Crippling Bear Market
The first forex trade I want to bring to your attention involves a friend and mentor of mine.
In 1987, he made millions for the firm he worked for, Bankers Trust, on a single currency trade.
And he took in this haul in one of the worst environments ever for stock market investors.
As you may recall, on Monday, October 19, 1987, the Dow crashed 22.6%. To this day, it’s the biggest one-day crash for the Dow in percentage terms.
The press dubbed it Black Monday.
This caused investors to flee the U.S. dollar and seek refuge in alternative currencies such as the New Zealand dollar – aka the kiwi.
At the time, the kiwi carried a relatively high yield. So investors kept piling in. And it kept going up versus the U.S. dollar.
But my mentor could see a boom-bust scenario developing. He said to himself, “This is a stupid situation. I don’t believe the kiwi should be this strong.”
So he placed a monumental trade against it. His sell orders are rumored to have exceeded the entire money supply of New Zealand.
And it paid off…
He bet so heavily against it, the kiwi fell 10% in a day. That’s a huge move for a currency.
And he hauled in $300 million for Bankers Trust – an unheard-of win at the time – right around the time that stock market investors were losing their shirts.
But even that gain paled in comparison to the one George Soros earned by betting on a falling British pound five years later…
In 1979, what’s now the European Union introduced a new currency system.
At the time, European currencies floated freely against each other. But to encourage trade, the future E.U. created a managed system to reduce exchange-rate volatility.
This meant the British central bank had to artificially prop up the value of the pound to keep up with the strongest currency in Europe, Germany’s deutsche mark.
This meant raising interest rates to attract capital into the pound. Soros saw this was causing too much pain for the British economy.
And in 1992, he pounced.
He bet heavily against the British pound, taking on the Bank of England in the process.
He figured the pound would tumble against the German currency if he applied enough pressure.
That’s what happened. Following what’s known in Britain as Black Wednesday, the pound fell as much as 30%.
Soros banked more than $1 billion on this trade.
Each of these trades happened in completely different conditions.
Stocks crashed in epic fashion in 1987. By contrast, 1992 was a relatively good year for stock market investors.
And none of it mattered to currency traders. The currency moves they traded didn’t depend on what stocks were doing.
That’s why forex is my favorite market to trade. No matter what’s going on with the stock market, there’s always going to be an opportunity in forex.
And with everything the world’s central banks are doing right now, it also means this is the best time to trade forex in 15 years…
Central banks around the world are desperately fighting inflation. The key element in this fight involves raising interest rates.
And because capital rushes into currencies with higher rates… and out of currencies with lower rates… this is causing dramatic swings in currency values.
Since 2008, when central banks all dropped rates to zero at once, not much happened in the forex market. Sure, there were still trading opportunities… and you could still make money regardless of what happened to stocks…
But because all central banks were doing the same thing, there were few opportunities to make big game-changing trades.
But that’s changed. With central banks jacking up rates, and each economy facing its own problems with inflation and economic growth, the forex market is showing again that it’s a great market to trade.
And the best thing is (from a trader’s perspective), that fight won’t end soon. So, the opportunities to profit in forex trading are here to stay.
If you’d like to learn how to profit in forex, there’s no better time than now.
That’s why I’m hosting an urgent breakout session with master trader Jeff Clark on February 9 at 8 p.m. ET.
We’ve put our decades of experience together to develop a unique strategy to capitalize on this opportunity.
The results so far have been spectacular. So far, out of the 21 currency trades I’ve recommended, 20 of them have been winners.
That’s translated into thousands of dollars in profits for my readers.
To find out how the strategy works… and how you can use it to profit…sign up right here for free to join our breakout session.
Keep in mind, this can work for all traders… regardless of skill level, experience, or even account size. So, if you want to see how trading forex can work for you, check it out right here.
Analyst, Market Minute
P.S. Jeff has agreed to give away exclusive bonuses totaling $4,000 to those who join us on the first night, Thursday, February 9 at 8 p.m.
These bonuses are only available to folks who join our breakout session. So, make sure you’re there on February 9 for your chance to claim them.