Tag Archive | "Israel"

New International Investing Era


A new international investing era could be created by a destructive scientific fundamental that is now so powerful it could overwhelm all other factors determining our wealth. This danger has such power that it could destroy most investors and much worse… end civilization as we know it.

electromagnetic-pulse

Photo from Wikepedia report on Electromagnetic pulse weapons.

The most frightening part is that this force could unleash its destruction on us… now… at any time!

I want to share what, why and when this disaster could happen.

Then, I want to share how you can be protected rather than ruined.  We’ll even see how this, with luck, could be the creator of untold wealth which you, I, and a handful of cautious, insightful investors could share.

Before I explain how to safeguard your family from this possible upcoming disaster, let me explain that I first began to understand the magnitude of the risk after reading the New York Times best selling novel “One Second After” written by bestselling author, William R. Forstchen.

The story had extra meaning for me because it shows life in a small North Carolina town (similar to where Merri and I live during the summer) after an electro magnetic pulse is detonated by terrorists over the United States.

In the story the electrical grid and anything using a computer stopped working due to an Electromagnetic Pulse (EMP) created by just three small nuclear devices, launched from container ships and detonated high above the USA.

Without central communication and distribution, mass devastation and chaos ensued immediately.   The agony was terrible and life almost unfathomably complicated.

What made this fiction meaningful is that the book really documents and details the West’s dangerous reliance on technological systems which are so extensive that no one even recognizes them any more.

Adding to the terror of this book is a forward by Newt Gingrich and and afterword by Captain Bil Sanders (USN) one of the foremost experts on EMP. His comment  on how an EMP exploded over the US would create the Compton effect and how it would have “devastating consequences on our country” should be examined and understood.

It was Captain Sanders’ deep understanding of EMPs that made the warning in this book so powerful.

In a moment we’ll share ways to protect against this disaster… that could happen to all of us… suddenly… at any time.

First here are three facts that you should know.

EMP Fact #1: Many countries, including the US have EMP weapons that have nothing to do with a nuclear bomb and are quite small. They essentially put out a high energy very sharp spike of energy – high frequency and very short wavelength, short duration pulse.

However it is the nuclear EMP device that creates the greatest risk.  These are nuclear bombs that DO NOT CREATE DAMAGE FROM THEIR BLAST, HEAT OR NUCLEAR FALLOUT.   Instead the weapons create an electrical wave that fries just about anything with a computer.  A survey of open sources over the past decade finds that knowledge about EMP and EMP attack is evidenced in at least Britain, France, Germany, Israel, Egypt, Taiwan, Sweden, Cuba, India, Pakistan, Iraq under Saddam Hussein, Iran, North Korea, China and Russia.

Russian and Chinese military scientists in open source writings have shown how to design nuclear weapons that generate an extra powerful EMP effect called Super-EMP that can destroy even the best protected military and civilian electronic facilities.

electromagnetic-pulse

EMP Fact #2:  This risk has grown to such an extent that America’s electrical grid is so vulnerable to terrorist attack that the Homeland Security Committee Chairman Bennie Thompson is pushing a bill to give the energy commission broad authority for “true emergency situations.”

This is explained in a recent USA Today article entitled “Electrical grid vulnerable to terrorist attack”  by Thomas Frank.  Here are excerpts from that article: It sounds like a science-fiction disaster: A nuclear weapon is detonated miles above the Earth’s atmosphere and knocks out power from New York City to Chicago for weeks, maybe months.

electromagnetic-pulse

This graphic is from the USA Today article linked below.

Experts and lawmakers are increasingly warning that terrorists or enemy states could wage that exact type of attack, idling electricity grids and disrupting everything from communications networks to military defenses.

An expert panel that Congress created to study such an attack says it would halt banking, transportation, food, water and emergency services and “might result in defeat of our military forces.”

“The consequences would be catastrophic,” said Joseph McClelland, director of the energy commission’s Office of Electric Reliability. Full recovery could take up to 10 years, he said.

The scenario involves a phenomenon called an “electromagnetic pulse,” or EMP, which is essentially a huge energy wave strong enough to knock out systems that control electricity flow across the country.

The immediate effect would resemble a blackout. Although blackouts can be restored quickly, an EMP could damage or destroy power systems, leaving them inoperable for months or longer.

House Homeland Security Committee Chairman Bennie Thompson, D-Miss., is pushing a bill to give the energy commission broad authority.

At a committee hearing in July, Steve Naumann of energy giant Exelon said the authority should be limited to “true emergency situations.”

The commission studying the threat says the U.S. is ill-prepared to prevent or recover from an EMP, a vulnerability could invite an attack.

“We are not well-protected at all,” said Michael Frankel, who was executive director of the commission.

EMP Fact #3:  If an EMP event takes place, the Western World could quickly run out of food. Here is an excerpt of a transcript of a speech given by Professor Sir John Beddington, chief scientific adviser to the British government, at the GovNet SDUK09 event.  This has become know as “The Perfect Storm” speech.

I spoke here last year at about the same time about the issue of the food crisis and the burgeoning increases in food prices that were being driven by population growth, use of biofuels and so on.

The first problem here is that we really have a major issue. This graph takes a little bit of explanation; it is the ratio of our reserves to our consumption. What it is showing is that last year is the lowest level of reserves that we have had as a proportion of our consumption in years, since 1970 and actually since records were taken of this sort.

electromagnetic-pulse

That means that we’ve got somewhere like reserves of around 14% of our consumption, that implies, give or take, 38 or 39 days of food reserves if we don’t grow any more.

As you can see, it’s the lowest level that we’ve actually had.  Is that a problem?  Well the answer is yes it is going to be a problem.  We saw the food spike last year; prices going up by something in the order of 300%, rice went up by 400%, we saw food riots, we saw major issues for the poorest in the world, in the sense that the organisations like the World Food Programme did not have sufficient money to buy food on the open market and actually use it to feed the poorest of the poor.

But this is England, not North America.  Right?

Beddingdon’s note shows that North America might not be able to rely on Europe for much food assistance and…

America’s food reserves are even worse as explained in this excerpt from last year’s article “The US has no grain reserves” published in the Tri State Observer, Milford, PA. The excerpt says:  Larry Matlack, President of the American Agriculture Movement (AAM), has raised concerns over the issue of U.S. grain reserves after it was announced that the sale of 18.37 million bushels of wheat from USDA’s Commodity Credit Corporation (CCC) Bill Emerson Humanitarian Trust.

“According to the May 1, 2008 CCC inventory report there are only 24.1 million bushels of wheat in inventory, so after this sale there will be only 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief.

Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The only thing left in the entire CCC inventory will be 2.7 million bushels of wheat which is about enough wheat to make 1⁄2 of a loaf of bread for each of the 300 million people in America.” (MY BOLD)

The CCC is a federal government-owned and operated entity that was created to stabilize, support, and protect farm income and prices. CCC is also supposed to maintain balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.

“This lack of emergency preparedness is the fault of the 1996 farm bill which eliminated the government’s grain reserves as well as the Farmer Owned Reserve (FOR),” explained Matlack.

This is backed up by a Scienceblog article that says: “The US Government Has Zero Grain Reserves.”

In 1996, the Federal Agriculture Improvement and Reform Act of 1996 (“Freedom to Farm Act”) called for elimination of government stockpiles of grain.  I’m sure someone thought it made sense, at the time.

Now, the United States government has no reserves of butter, cheese, dry milk, barley, corn, oats, sorghum, soybeans, wheat, rice, sugar, honey, peanuts, canola seed, crambe, flaxseed, mustard seed, rapeseed, safflower seed, sunflower seed, peas, lentils, chickpeas, and cotton.  [Source: US Farm Service Agency, Current CCC Inventory (PDF file)]

The book, “One Second After”, clearly and very dramatically (but I am not sure how accurately) drives home the point that unless a person takes a unique financial stance that his finances, and maybe even his or her life, could be wiped out.   Many military and scientific studies support this monumental economic, social and life threatening risk.

Yet you do not have to ruined by EMP.  You may even find that this potential weapon will create extra ordinary wealth that a few investors will share.  Here is how and why.

First, there is no proof that an EMP event as described above would create quite the havoc mentioned above.

Here is how one scientist whom I have known for years and trust completely, explains this.

“I’m not sure how large an effect the nuclear device would have above the atmosphere — the pulse might dissipate somewhat along the earth’s electromagnetic field.  It would probably take out a lot of communications and military satellites.

“Electronic devices that are not attached to any power source and that do not have an antenna when the EMP pulse hits could survive – even better with some shielding material.”

EMPs could be the driving force for the next investing era.

Just like the nuclear threat in the Cold War…  an EMP attack may never happen.   Yet because it could… the perception of risk… has created a huge rush by many governments to develop new weapons and forms of protection… just as during the Cold War.

This site and our multi currency site have repeated many times how stock market bulls and bears are based on cycles of human interaction, war, technology and productivity.

These cycles are intricately connected with the new waves of productivity that grow from the great human platform of combat. The cycle goes like this.

An economic downturn enhances a war or threat of war. Struggles for survival in the war (like the Civil War, WWI, WWII and the Cold War (WWIII), super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.

Each new invention helped win a war.  Shifting the technology to domestic use… after the war… created a boom.

Each boom leads to excess.

Each excess led to a correction.  The correction creates an economic downturn.

The economic downturn enhances a war or threat of war.

Here we are… in the correction again… at the correct time when we should expect that another war (or threat of war such as the Cold War) should begin to build!   This latest downturn started almost exactly (1998), 16 years after the last boom began (1982)…which began after the last great human struggle called the Cold War.

If the cycle repeats, the struggle should build now due to the poor economy.

The key for spotting the greatest investment opportunities is to spot the next big invention… the technology that will spin out of WWIV.

The key is that a problem must have such severe consequences (such as losing the war and being destroyed) that all stops… all logics of return on investment are ignored.  Technology and research are pushed full steam ahead regardless of cost. The threat must be real and serious… like EMP.

There are seven steps you can take to assure that you are not destroyed by an EMP.

#1:  Move well away from the USA…. to an agriculturally based country.  This is one reason Merri and I have been active in Ecuador for nearly 15 years.

#2: Move to Small Town USA.  Our sites have been looking at the benefits of this for years and why we live on agricultural property.

#3:  Create your own source of food.

#4: Create a local source of hardened energy and communications.  This is one reason our newest real estate purchase is also agricultural property and already has a HAM radio tower installed.

#5: Keep some gold and or silver on hand.

#6: Know how to take care of your own health.

#7:  Hold some assets outside of North America.

Merri and I have already taken six of these seven steps… and are well on our way to completing the seventh step.  From this we learned one really important point.

You should not suffer in the process of  gaining this protection either.

Merri and I did not move to the country… buy our Blue Ridge farm… set up our own food supply… start our garden… buy agricultural land in Florida… get a ham radio tower… buy gold and silver… organize assets out of the US and become involved in taking care of our own health naturally because we were worried about EMPs.  We did so because we wanted to.

Chances are that an EMP attack will NOT take place.  During the Cold War nuclear bomb shelters were not required!

Yet can we take a chance?  Ignoring this risk and with no action is not the answer either.

Instead let’s share ways and lifestyle alterations that protect as they provide joy, satisfaction, better health and enhanced wealth.

You may not be able to (or want) to move your home abroad or to a rural area.   Yet gardening, even in urban areas,  can be healthy and fun.  Holding some precious metals is probably a good investment anyway.  We should be taking care of our health even when their is no threat of war.

When it comes to holding assets abroad… our multi currency course can help.

Since mankind began, every generation has endured some great threat or risk.  Yet here we are… still growing!  Only time will tell whether EMP will create havoc or the greatest new wave of wealth we have seen.  Whichever, Merri and I will be here to share the experience with you.

Gary

The greatest asset of all is the ability to earn wherever you live, which brings everlasting wealth.

This is why we offer our course Tangled Web… How to Have an Internet Business.

A clear mind and healthy body are also a vital assets… plus a second language is a powerful diversification tool.

This is why I am giving everyone who enrolls in our North Carolina or Ecuador International Business & Investing seminar in October or November our “Tangled Web… How to Have an Internet Business Course” (offered at $299) free.

Here are comments from a reader about the way we help:  Thank you for your inspiration and information outlining foreign banking and retirement.  Your comments and suggestions are welcome for planning the steps to evaluate the early stages of living abroad.

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Read the entire articles:

Electrical grid vulnerable to terrorist attack

The US has no grain reserves” published in the Tri State Observer, Milford, PA.

Investing Internationally


Investing internationally with thought about reflexivity can improve your wealth.

See three thoughts below that can help bring you everlasting wealth.

#1: George Soros’ thoughts on international investment reflexivity and how the power of thought affects investing and business internationally.

#2:  More on Ecuador’s government’s plan to take over a number of  TV and radio frequencies.

#3: An update on international emerging market values…

International Investments & Reflexivity

Investing internationally can bring everlasting wealth if your logic can adapt and focus in new and meaningful ways.  One way to focus your investing logic is by understanding reflexivity.

The term reflexivity was coined by George Soros.   His thinking on investment markets can help investors because the philosophy has proven success.

Part one of his book “The New Paradigm for Financial Markets” shows how we as investors and as a society need to think outside the box.  This section of the book makes seven points:

Point #1: Understanding world is inherently imperfect because we are part of the world.

Point #2: There are two functions in our thought… understanding the world … cognitive thought and having impact and taking advantage of the world… manipulative thought.

Point #3:  These two functions counteract one another. Manipulation requires intentions and predictions which are not fact.  So our beliefs and expectations can hinder our ability to see fact.

Soros writes in this book: “Take the stock market as an example People buy and sell stocks in anticipation of future stock prices, but those prices are contingent on the investors’ expectations. These expectations cannot qualify as knowledge.

Point #4:  Supply and demand are not independent of people’s expectations.  This means that the element of uncertainty cannot be be eliminated. Yet market theory that rules most investing and most government intervention in markets ignores this fact.

Point #5:  Social events have a different structure from natural phenomena.  Natural phenomena has a causal chain that connects one event directly to the next.  Human affairs include participant’s views. These views affect the causal effect and the participant’s views which creates self reinforcing loops.

Point #6: Natural events happen. Participants can affect what happens next with their decisions but cannot base their decisions on true knowledge because their decisions alter the truth.

Point #7:  At times reflexivity makes the abnormal normal.

Soros’ philosophy is supported by Heisenberg’s Uncertainty Principle that states that certain pairs of physical properties, like position and momentum, cannot both be known exactly.  The more precisely one property is known, the less precisely the other can be known. It is impossible to measure both position and velocity of a microscopic particle with any degree of accuracy or certainty. This is not only a statement about the limitations of a researcher’s ability to measure particular quantities of a system, it is a statement about the nature of the system itself… the fact that the act of measuring anything alters the very thing being measured.

This would make it seem that we cannot really gain an understanding of what will happen with any international investment or business.   This is true.

However there are ways we can come closer to understanding… because we are a part of nature, which by definition makes us part of and in touch with everything.

Access to this infinite knowledge is via our more subtle brain waves.

Access to these waves can come in many forms.

Soros claims to have many ways to access this greater knowledge but in his book his son wrote:  My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, at least half of this is bullshit. I mean you know the reason he changes his position in the market is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s his early warning sign.

Some would call it intuition, instinct, gut feeling and perhaps these are just ways of describing getting in touch with a deeper, non linear, infinite field of intelligence that all receive but few tune in.

We cannot define infinity and logical thought by definition must be linear.

Final decisions should be rational and should come from our logic… but logic by its nature must be focused on a very narrow path.  This means we need a way to let our intuition tell us when we need to shift the focus of our logic on a new path outside the box.

One way the yatchaks (means to know) of the Andes and wise people everywhere is to look for signs of nature.

One term used for these signs is totems.  For example, my totem is the Heron.

So let’s ask what in the heck do Herons have to do with international investments?

The answer is nothing and yet everything…

international-investment-thought

Here is an explanation about totems from Speaker for the Animals:

Heron – Aggressive – Self-Reliance – Self Determination  Heron links two worlds: the waters of life—the Unconscious, and the air—the realm of the conscious mind. He feeds on fishes, which symbolize the treasures of the Unconscious mind: spiritual nourishment for the Seeker. Yet he is also a creature of the Earth, so he is a grounding influence for people who spend too much time in their minds and who are called to ‘fish’ in the waters of the unconscious.

The legs of Heron are long to “stand” the deep waters of the Unconscious: the Waters of Lethe bring sleepiness and unconsciousness if one is not awake, aware and wary. Heron is a solitary fisher; if you call upon Heron to be your own totem, you must be able to stand alone as you seek, for there is no one to call on should you step into too-deep waters.

Heron’s strength for those of us who spend too much time ‘in our minds’ is that he brings one down to Earth. With Heron as your guide, he will bring you to ground to explore life here in the physical instead of just daydreaming or losing oneself in one’s imagination or dreams.

We’re unconventional, hearing our own inner drummer. We don’t worry about ‘keeping up with the Jones’s, doing what others do, believing what others believe, valuing what others value. If there is a weakness, it is that Heron works too hard at its fishing because he is a superb ‘stalker.’ He spends long hours standing and watching for a movement in the water, and needs sometimes to ‘loosen up’ and spend more time playing, courting lady herons or just snoozing in the Sun.

Most people, as Ted Andrews says in his book Animal Speak, would never choose to live this way: “It is not a structured way, and does not have a stability or security to it. It is though, just a matter of perspective. There is security in heron medicine, for it gives the ability to do a variety of tasks. If one way doesn’t work, then another will.”

Solitary in nature, Heron people follow their own path. They learn self-reliance. This is a valuable character trait in these times of conformity and homogenization of values. Heron people can stand alone, listen to their own inner wisdom, and go their own way when everyone else is conforming to society’s commands. In this way, they build their own ways to be as well as choose their own way of doing. They are individuals first.

Herons are active in my life and I have painted one (inspired by Audobon’s Heron) that hangs in the entrance to our house.

international-investent-thought

So when the Great Blue Heron that lives on Little Horse Creek flew from our high mountain bog right over this morning, I dug out my copy of Animal Speak.

international-investent-thought

I rethought my business and investments in contrast to the symbolism of the heron.  This never happens without my coming up with some worthy thought.  Today it related to a partnership I was looking into.  I reread Solitary in nature, Heron people follow their own path. They learn self-reliance.

This started me rethinking if Merri and I really want a partner. This started me looking at the business in a very different way.

Ecuador shamans and yatchaks use this process extensively and call it shape shifting. They place themselves in the spirit of their totem and this forces them to think about whatever subject they are concerned with in a different way… thinking like a heron or eagle or condor definitely puts you out of the box!

I did not come to any conclusions about my business decisions because I saw a heron.  The fact I saw a heron caused me to sit down and use my logic to rethink my plans in a different way.

Learn more about how to improve your thought process here.

Ecuador Radio and TV

On the subject of Ecuador, a previous message shared news about the Ecuadorian government’s plan to seize a number of radio and TV stations and promised to stay tuned to what happens.  I have asked many of my trusted sources in Ecuador for their opinions which we’ll share in various messages.  Here are two from businessmen in Ecuador.

The first contributor was quite negative when he wrote:  The first thing to take into account is that he is actually proposing control over the press not only within the countries but at a international
level. What he is saying is that countries like Venezuela, Bolivia, Ecuador and others, should create an international committee that will oversee what the media is saying about the governments.

Ecuador is following the Venezuelan model, so if you see that Chávez is pushing for a new legislation that control the media and whatever content they have that may “threaten” the nation security, Ecuador will follow that soon. Below is what Venezuela is doing, they actually want to sensor the information that the media exposes meaning that if who oversees the media thinks that this or that information is “bad” for the country, the media or the anchor will actually face justice and may even go to jail for at least four years. They closed 32 radio stations and 2 tv stations.

Rafael Correa, the President, said that his team was about to revoke some radio frequencies depending on the outcome of a report that his government is finishing. This will mean that whatever happens will be done in the next weeks. Critics claim that this was not done on a technical level but on a political one, opening the door for the government to possibly revoke the frequencies of radio stations or TV stations that oppose the government.   On this matter nothing is sure yet, but Conartel, which oversees the media, actually punished a TV station, Teleamazonas, that opposes the government.  The fines were applied to that TV station one time, by law the second time they must close for about 90 days and the third time they must close forever. They censored the Simpsons also from that TV station and there was a public outcry because Conartel and the government threaten to punish them.  We figure that since he started a new period, things will start to happen in the coming weeks, so far nothing is concrete yet.

He was not totally negative though and added: One thing although is that the government is not talking about taking over TV stations or radio stations, but revoking the frequencies. But take this into account, the government actually took over some private TV stations, they got them as part of a debt that Filanbanco, a bank, had with the government back in the crisis of 1999. This appears to be a separate thing. On the same takeover they got two TV stations plus a newspaper El Telégrafo.

The second contributor feels good about this new and wrote:  Hi Gary,  I have lived here full time for over 9 years and have seen the corruption and I believe that Correa’s intentions are more good than bad. I believe that many things that he does for a good reason while he is working on removing corruption are turned into bad press by the opposition. The same opposition that stole from the people of Ecuador throughout history, and want to regain control and steal from them again. I think that the Wall Street Journal article you wrote about says a lot. It says to me that he is going through the licenses one by one to find out if the licenses were granted illegally through corruption and payoffs. If they were granted legally, no problem…..and if they weren’t we are going to suspend the license and you will have a chance to prove that you obtained it legally.  A year or so ago, two television stations were taken over, with the same uproar in the press. But the truth is that they were taken over because the owners of those two stations were the owners of one of the banks that went under when they took all of the depositors money and went to Miami to live happily ever after. Well, Correa went after their assets ( a first for a president to go after someone like this) and some of those assets were the two tv stations. So we need to look past what the press says as many of them are owned by this type of opposition. I see Correa in a similar boat that President Vicente Fox of Mexico was in a few years ago, when His party was elected after over 100 years of severe corruption by the ruling party and he wanted to remove that corruption. He was also fought along the way by the opposition that wanted the power back to again steal from the people. It is a very difficult job that Correa has ahead of him, and I hope that he can succeed and become possibly the best president that Ecuador has ever had.  Regards.

We’ll be providing a full report on the radio and TV position to our Ecuador Living subscribers

Emerging Markets Update

We’ll share more comments about international investments in Ecuador in upcoming messages… but let’s use our logic here to look some more at international investments in all emerging markets.

One problem many investors have when using non linear approaches to international investments is that they forget the final logical step…. which is to come back and end in the logical mode.

Thinking outside the box does not mean we should just ignore what is in the box. We want to use our logic to reflect on “in-the-box-stuff” in different ways.  If we do not know what’s in the box then we won’t know when we are out of the box.   Boxes exist for a reason.  At times the box.. assuming the box is the norm… but Soros says “is abnormal.”    We need to conclude if the box is normal or abnormal which dictates that we do examine what’s in the box.

Thinking outside the box does not mean we should abandon logic.

So I may sit down and rethink everything… or something I am doing when I see a heron… but I add that to my traditional logical thought.

This is one reason why we regularly review Michael Keppler’s major and emerging market value analysis.  Kepler is a statistical genius and guru…. very institutional… logical mathematical .

What I search for are strokes of intuition supported by such logic.

This morning for example their were three crows grazing our front yard.

Stock market investors sometimes refer to three crows as a pattern of successive declining stock prices over three days often identified by overlapping candlestick patterns. Three crows are often seen as a warning of a period of powerful selling pressure on the stock market.

This does not mean I rushed out and sold all my shares. It does mean I looked at logical data like Keppler’s value analysis to see if the logic supports the intuition.

Here is an excerpt from our last multi currency portfolios update that shows Keppler’s mathematical logic.

Emerging Markets equities recorded their highest ever quarterly return. In the second quarter 2009, the MSCI Emerging Markets Total Return Index gained 34.7 % in US dollars and 27.5 % in euros.

This brings the year-to-date total return of the global Emerging Markets benchmark to 36 % in US dollars and 34.8 % in euros.

All markets covered here were up last quarter. Hungary (+69.7 %), India (+59.8 %) and Turkey (+56.6 %) had the most impressive returns.

Peru (+11.2 %), Israel (+15.8 %) and Morocco (+19.6 %) came in at the bottom of the performance range with what would be very desirable double-digit returns under normal circumstances.

In the second quarter 2009, the Emerging Markets Top Value Model Portfolio, which invests according to the Top Value Strategy and assumes index returns for each national market included in the strategy, gained 45.5 % in US dollars and 37.7 % in euros, outperforming the benchmark by 10.8 percentage points in US dollars and by 10.2  percentage points in euros.

There were two changes in our performance ratings last quarter: Korea was downgraded to “Sell” from “Neutral” and Brazil was upgraded to “Buy” from “Sell”.

The Top Value Model Portfolio now contains the eight “buy” rated markets: Brazil, Egypt, Hungary, Poland, Russia, Taiwan, Thailand and Turkey at equal weights.

It is unusual for a market to rise all the way from sell to buy as Brazil did this quarter. This is in keeping with our thoughts on Brazil Distortion Thoughts published in  April and June.

You can see the password protected pages and full emerging markets update and a warning about these values as a Multi Currency Portfolio subscriber.

Whether you plan to have international investments, an international business or non at all, it will become increasingly  important to think outside the box as change accelerates and new social and economic paradigms are required.  Whether you use backaches, gut feel, hunches, totems or meditation and prayer… new ways to focus your logic an help you have everlasting wealth.

Gary

Combining good international investing with the greatest asset of all, the ability to earn wherever you live, brings everlasting wealth.

This is why we offer our course Tangled Web… How to Have an Internet Business.

A clear mind and healthy body are also a vital assets… plus a second language is a powerful diversification tool.

This is why I am willing to pay you $300 to attend either our Ecuador Super Thinking plus Spanish seminar in September or our North Carolina International Business & Investing seminar in October.  Sign up for either seminar and I will email you our Tangled Web… How to Have an Internet Business Course (offered at $299) free plus I’ll knock an extra dollar off your seminar fee…. to round up the $300 savings.

See details of the two seminar below.

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Thomas Fischer teaching at our IBEZ seminar.

Join Merri, Thomas Fischer of JGAM, our webmaster David Cross and me in North Carolina this October and enroll in our emailed course on how to have a web business free.  Save $300.

Learn more about global investing, how to have an international business and diversification in Ecuador at the seminar.

Oct. 9-11 IBEZ North Carolina

Here is an email for a recent seminar delegate: Hello Gary and Merri,  I have wanted to write to tell you how much we enjoyed your IBEZ seminar, and to thank you both for inviting us all into your lovely home for lunch last Sunday.  Merri, again, thank you for taking the time to prepare foods especially for me; they were delicious, and I appreciate your effort!  Thank you for a thoroughly enjoyable, very well done, stimulating seminar.  I came away not only with all the notes provided, but also with many ideas which I plan to begin working on now that we are back home.  Wishing you all the best,

Or join us in Ecuador and learn more about living and retiring in Ecuador.

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We take delegates on our Ecuador seminars to Otavalo markets.  Many buy enough goods to resell in North America to pay for their entire trip.  Ecuador tiles are one great product attract many international businesses.

Here are comments from one seminar delegate about the followup from our course: Thanks so much.  I have been following the advice in your Multi Currency Course/International Investing monthly and have added selected suggested funds from your lists which are available in my Fidelity IRA.  Even though my transactions are in SMALL amounts for stock and ETFs I am almost back up to the total invested amount prior to the stock market dive of last year.   Your emails have given incentive to keep diversified investments when I know other people are selling out.

Sept. 17-21 Ecuador Super Thinking + Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador Seminar
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador seminar or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

See the entire explanation of herons at speakerfortheanimals

International Investing Trick


Here is a global diversification trick that may do well in the likely global economic scenario ahead. Buy good value shares internationally as markets dive during the summer dip.

In a moment we’ll look at some Ecuador health ideas… first the investing trick.

Global equity markets have been in a bear market rally for six months but are now hitting the summer blues due to seasonality.

Share prices will probably drop now. Chances are there will be a strong global equity slump at least through October 2009.

This will create extra value in equity markets and provide good opportunity to pick up high value long term.

The bear market is likely to carry on until 2012-13, but good value shares acquired during dips are more likely to spike early and have extra potential after the bear ends.

Now through October 2009 could be a good time to invest in high value shares for long term appreciation.

But which shares… in which markets?

One way to approach this is to look for extra value created by inefficiencies in markets…to find markets where the values are best.

Statistically this is the best way to be absolutely sure of the best long term returns.

There are numerous investment managers who use very strict valuation criteria (usually based on dividend yields, cash flow, price earnings) to spot the best value markets.  They then try to apply similar criteria to select good value shares in the good value market.

The next goal is to decide how much should be weighted in major market and how much in emerging markets.

Here is a comparison of the Morgan Stanley Major Market versus Emerging Market indices.

The MSCI World Index is a market capitalization weighted index that measures the equity market performance of developed markets.  It includes 23 developed market country indices : Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

The MSCI Emerging Market Index includes Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

MSCI Indices performances.  Total per annum return over:

Major                            Emerging
15 years    4.10%                   5.41%
10 years  -3.85%                   9.11%
5 years    -2.77%                  11.16%
3 years   -10.81%              -00.17%
1 year      -20.81%             -27.53%
3 mos.      14.30%               27.53%

Regardless of the time frame observed,  the emerging equities almost always seriously outperformed major markets… but as a class they also dropped further in the 2008 downturn.

Here is a year-on-year comparison for the past five years.

Major                   Emerging
2003  10.74%           29.63%
2004    6.46%           16.51%
2005   26.17%           54.41%

2006     7.40%          18.23%

2007     -1.66%         25.71%
2008   -50.30%      -37.64%
2009      5.39%         34.79%  3 months

This history suggests that emerging markets deserve a substantial ranking.

However before becoming too aggressive in over weighting emerging markets, we have to keep in mind two thoughts.

First economic thought. The last 15 years has been a catch-up era when the investing world caught on to the idea that emerging markets offered great opportunity.

Second economic thought. A great deal of emerging growth came from debt financed exports to the developed world. This leaves emerging economies holding huge amounts of debt for customers who may not be able to repay the debt nor continue to buy the same volume of goods as before.

The easiest way for investors to invest in good value during dips is via a value mutual fund.

You can select a value major market fund, a value emerging market fund or a value diversified fund.

The benefit of a value diversified fund is that the professional manager decides how much to weight in emerging and major markets.

For example I just sent a lesson to our multi currency subscribers that showed a US traded international diversified value fund that has risen 36.08% in the past quarter ending June 30, 2009.  This fund is 86% in major markets and 14% in emerging markets.

Learn how to read about this fund as a multi currency subscriber.

The most valuable asset we can have in tough economic times is good health. This is why we studied Ecuador health ideas at our June tour.

Cotacachi is considered sacred by the shamans… a place of wonderful mountains that ring the valley.  This is Mt. Cotacachi to the west.

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Mt. Imbabura to the east.

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The valley is surrounded by mountains like these twin peaks…

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creating wonderful, mystic  sunrises.

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The first afternoon of the tour we visited La Mirage Spa and the Shamana Estella.

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She began a theme that the many shamans we visited confirmed.   She said that the three keys to better health, increased longevity, more energy and fulfillment are good nutrition, proper exercise and good sleep.

The purpose of the Ecuador shamanic tour is to learn ways to unlock this healthy  combination in a natural low cost way!

The second day we joined Clemencia, the Shamana of Zuleta and drove 15 minutes from our hotel Meson de las Flores to Otavalo market where we visited the local food market…

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filled with fruits…

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vegetables…

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flowers and …

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herbs.

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Here is the shamana speaking to the group with Merri and Mauricio translating.

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We learned the importance of the herbs to make good teas that hydrate the body are cedron, chamomile and lemon verbena.

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We learned how other herbs relax such as chamomile and valerian root. Plus we were told to boil lettuce in milk as a prebedtime drink for better sleep.

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On the other hand, tea from cinnamon, paprika, cloves and ginger help reduce sluggishness in digestion and to speed the system when we need to be fired up.

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You can read this entire report as an Ecuador Living subscriber.

Gary

We hope you’ll join us and enjoy Ecuador’s or North Carolina’s beauty soon.

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Sunrise from Meson de las Flores.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

International Investing & Business Index


Making international investing and business decisions based around an index of happiness can add depth to your international investment and business decisions.

Understanding what will happen globally is important to everyone’s decision making process on where to do business… where to invest and where to live.

We’ll see below that Ecuador is high on NEF’s (New Economics Foundation) Happiness Index (more on the index in a moment)… but this index is about much more than Ecuador.

This index is about the world… the future…. prosperity and poverty… life and death.  We should know it… especially because it is quite hard to believe.

You’ll see below why:

* Seemingly poor countries may have an advantage in the years ahead.

* The richest countries may not be the best places to invest or start a business.

* How to use new techniques to see what the future may bring socially and economically.

NEF is an independent think-and-do tank that tries to analyze real economic well-being.  NEF’s aim is to improve the world’s quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environmental and social issues.

NEF says:  NEF’s report, the Happy Planet Index: An index of human well-being and environmental impact, published in association with Friends of the Earth, moves beyond crude ratings of nations according to national income, measured by Gross Domestic Product (GDP) to produce a more accurate picture of the progress of nations based on the amount of the Earth’s resources they use, and the length and happiness of people’s lives.

The Happy Planet Index (HPI) strips the view of the economy back to its absolute basics: what we put in (resources), and what comes out (human lives of different length and happiness). The resulting Index of the 178 nations for which data is available, reveals that the world as a whole has a long way to go.  In terms of delivering long and meaningful lives within the Earth’s environmental limits – all nations could do better.  No country achieves an overall ‘high’ score on the Index, and no country does well on all three indicators.

This index is important because everyone is increasingly faced with complicated problems, parts of which are unknown or unreachable.

This index is worth sharing because as I read it,  my first thought was “nonsense.”

Who would have placed the nations of Guyana, Bosnia, Georgia  and Romania above the UK for happiness?  Yet  Guyana is 63rd in the index. the UK 74th.

Here is 63 to 74 on the happiness index.

63. Guyana
64. Belgium
65. Bosnia and Herzegovina
66. Slovenia
67. Israel
68. Korea
69. Italy
70. Romania
71. France
72. Georgia
73. Slovakia
74. United Kingdom

Guyana happier than France and the UK?

I wanted to reject it.

Then it made me begin to realize… the somewhat disturbing fact that as far as potential for happiness goes, Americans are almost at the bottom of this international index… along with the British and most Europeans.

Reading this index made me realize that we cannot use old standards of the past to analyze what will happen in the future.

About the time of this thought, a page from an old John Sanford novel, “The Hanged Man’s Song” came to light.

The prime person in this fiction is a computer hacker… a very logical, scientific thinking person… but who also from time to time uses a totally unscientific way to process information… tarot cards.

The story says:

So I got the cards out, my tarot cards.  I’m not exactly a scientist – I was trained as an engineer-but I have studied the philosophy of science and I’m a true believer.  The tarot as a predictive system is superstitious nonsense. The deck is useful as a gaming device, though and that’s how I use it.

Like this: we are forced to deal with complicated problems, when some facets of the problem are unknown or unreachable, we deal with them in terms of our past experience. That’s almost inescapable. But approaches that are useful with some problems don’t work with others. The tarot deck, when used as a gaming system, pushes you outside past experience and encourages you to think of new ways to deal with it.

Say for example, you are involved in a complicated business transaction and that the group you were involved in a complicated business transaction and that the group you were dealing with, the opposition,consisted of five men and a women. You begin doing the tarot spreads and see a number of indications of female influence.

This does not mean that the deck correctly predicts female influence in the transaction, but suggests that you should sit back and think about the woman on the other side, who might otherwise seem to be just another functionary. Why is she there? What specific influences does she have? Is there a way to approach her that would help the deal?

This has nothing to do with supernatural-it’s simply a human way, and a fairly subtle way to game a problem.

This started me looking at the index more.

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Sustainability and cost of happiness are a part of the index. This is why we grow some of our own crops at our farm… like the lettuce we harvest around our backyard pool.

The Happiness Index pushes us beyond our past experience.  This international index does challenge mainstream thinking.

Imagine Haiti is 41st on the list.  Denmark 105th.

99. Uruguay
100. Ghana
101. Latvia
102. Australia
103. New Zealand
104. Belarus
105. Denmark

That started me thinking for sure.

NEF is composed of some very intelligent people so their approach does have  logic. NEF calls it a new global measure of progress, the ‘Happy Planet Index’.

The NEF logic factors in the short and long term cost of happiness.

Mainstream thinking uses measurements like growth of GDP… but ignores the relativity involved. If GDP rises 10% this is considered good.  Traditional thinkers do not ask what is the cost of this growth to our environment. How much will we, our children and grandchildren have to pay in the future for this current growth?

Nor does the mainstream paradigm compare the happiness efficiency of a nation.

The NEF Happiness Index takes into account whether a culture is using more than its fair share of the Earth’s resources.

This creates a new international ranking of environmental impact and well-being and reveals a very different picture of the wealth, and poverty of nations.

Environmental Efficiency

NEF’s view is that Happiness Efficiency is a phrase and concept worth knowing and using in consideration of the overall (long and short term) success of a nation.

We all know the benefits of efficiency. Now we have a way to measure a really important long term efficiency.  We could call it the “cost per smile” or “laughter earning ratio”.

This really makes sense because it is the inherent nature of all living things to strive for happiness and satisfaction and avoid stress.  If the population of a nation needs to do and spend a lot to attain it… that nation is likely to have economic problems due to its lack of efficiency compared to other nations.

NEF’s index combines environmental impact with well-being to measure the environmental efficiency with which countries provide long and happy lives.

The results are surprising, even shocking.

The index shows a very different hierarchy of success than we normally assume.

For example, the US is a disappointing 114th in happiness ranking behind  countries like Mongolia, Malawi and Chad.

106. Mongolia
107. Malawi
108. Russia
109. Chad
110. Lebanon
111. Macedonia
112. Congo
113. Madagascar
114. United States of America

NEF’s report also says:

“It is clear that no single nation listed in the Happy Planet Index has got everything right. But the Index does reveal patterns that show how we might better achieve long and happy lives for all, whilst living within our environmental means. The challenge is – can we learn the lessons and apply them? Governments the world over have been concentrating on the targets for too long. If you have the wrong map, you are unlikely to reach your destination”, says Nic Marks, head of NWF’s Centre for well-being.

The HPI shows that high levels of resource consumption do not reliably produce high levels of well-being (life-satisfaction).  This suggests that it is possible to produce high levels of well-being without excessive consumption of the Earth’s resources.

The report also shows that a culture can have a long, happy life with a small environmental impact.   America and Germany have similar life satisfaction and life expectancy. Germany’s Ecological Ecological footprint is barely half that in America.   This means that Germany is twice as efficient as the USA at generating happy long lives based on the resources they consume.

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Sustainability is important for long term happiness which is why we bought a farm with lots of spring fed water, like this stream that flows in our backyard.

How can we use this index in business and investing?

I am not sure how accurate this index is or how important it will be.  Accuracy is not all that important though because, if nothing else, this index is a thought process put together by intelligent people that can help us see and think outside the box… something we always need to do.

We must always ask, what comes next?  This index might help us answer this question by adding one more small light that reflects of what might be in the days ahead.  Now we can see better how a country is doing now plus how the cost of the current success may affect the future.

Thinking outside the box is almost always a criteria for long term success. For those who believe this, NEF’s Happiness Index will help make them happy!

Ecuador is 25th on the index.  See the top 25 countries on the index and more about Ecuador’s Index here

Gary

Join us July 24-26 in the cool Blue Ridge during the hot summer and save $299.

We hope you’ll share our beautiful lifestyle in the cool Blue Ridge with us this summer. July 24-26 IBEZ North Carolina

Enjoy the farm and our pools.

internet-business-idea The Cabin pool.

Enroll in our July 24-26 seminar and I will enroll you in our course Tangled Webs – How to Have an Internet Business free. You save $299.

Merri and I love our life in the Blue Ridge… the rushing streams and..

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cool, green forest.

We invite delegates to the farm for lunch and we’ll take a walk through the woods with delegates who would like to…

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enjoy nature and the views.

We’ll have a wine tasting of Blue Ridge organic wines. Here are delegates at the tasting last year.

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I have just sent our multi currency email course subscribers a report on coffee related shares that now have a strong upward trend.

Enroll in our July 24-26 seminar and I will enroll you in our course Tangled Webs – How to Have an Internet Business free. You save $299.

July 24-26 IBEZ North Carolina

Read the NEF  report at www.neweconomics.org/gen/m1_i1_aboutushome.aspx

Ecuador Iran Excerpt


A number of readers have asked about Ecuador and Iran so here is an excerpt from our latest Ecuador Living report.

Some of the ideas apply to interaction between radicals in all of the Middle East and the West and how they can affect our wealth, business and investing.

The idea that Iran is a great enemy intent on attacking us is great for selling news, but a bad leader or two does not reflect the entire population.  Many of us in the US did not agree with some of the leaders our the last administration.

IF  Iran is to become more involved in the West and that’s a very big IF, I do not see it being any great deal. The only risk Iran poses is if many people give them a lot more concern then they deserve… as certain leaders in the West gave Saddam Hussein.

I do not claim in any way to be a great global military strategist but that thinking has some support from the thinking of other  who I do think are good at strategic global thought such as… Lee Kwan Yew.

I worked and spent a lot of time in Singapore during the late 1960s and early 1970s so I recall vividly the way Singapore used to be.

Lee Kwan Yew had a lot to do with Singapore emerging from a form of colonialism that included a lot of poverty to one of the wealthiest societies in the world.

This means it is fitting to read some of Lee Kwan Yew’s thinking that could apply to Ecuador and Iran now.

Lee Kuan Yew outlines the risks of relying on the local press succinctly in a 2007 interview with  UPI’s editor at large, Arnaud de Borchgrave.

Q: So what is your recommendation about Iran’s nuclear ambitions?

A: Is it now unstoppable. They are a very old civilization. Unlike the Arabs, apart from Mesopotamia valley, they rank with the Chinese, as history’s two principal civilizations worth talking about. And I think the mullahs and others want to go back to the days of empire.

Q: So should we be talking to them at the highest level, the way Henry Kissinger went to China?

A: (Chuckle) But you haven’t got a Kissinger or a Brzezinski to do that anymore. Where is the successor generation of geopoliticians?

Q: In fact, democracies don’t produce great statesmen anymore. Why?

A: You now have, and I don’t know how long this phase will last, mass media domination, owned by a group of media barons who want constant change for their balance sheets.

Q: So the power of mass media has made it impossible for a great statesman or woman to emerge and last any length of time?

A: I’m not sure. It depends on the nature of the crisis that must be faced. When a real crisis sets in, a matter of life and death, opinion formulators realize this is no time to be pontificating, but a time to stay the course with someone who understands what this is all about.   Short of that, the media help put a leader on the pedestal and then start chopping away at the pedestal until he/she falls in disgrace. That’s part of the cycle of constant change. Watch Sarkozy in France. They hoisted him up to prominence and now they’re already attempting to bring him down through his personal life.  Well, yes. But it’s also the enormous pressure of media competition and the giant appetite for advertising revenue, what television program gets what viewership, or eyeballs, or clicks online. Never mind the consequences. If you get the advertising, you win.

Q: When I last interviewed you in May 2001, I asked you what concerned you most about the next 10 years, and you replied, “an Islamist bomb, and mark my words, it will travel.” Four months later, we had Sept. 11. Secondly you said, “China and India’s challenge to the global status quo.” Do you still have the same concerns about the next 10 years?

A: Not quite. The Islamic bomb has traveled already (in Iran). I’m not sure how this will now play out. The U.S., the Europeans, even the Russians, will have to make up their minds whether to allow Iran to go nuclear. The Russians are playing a game, posing as the nice guys with Iran, supplying nuclear fuel, and making it look as if America is causing all this trouble. But if I were Russia today, I would be very worried about Iran acquiring the bomb, because Russia is more at risk than America. The risk Israel runs is another dimension. Russia is at risk because whether it’s the Chechens or Central Asian Muslim states that were former Soviet republics, none are friendly to Moscow. Next time there’s an explosion in Moscow, it may be a suicide bomber who isn’t wearing an explosive belt or jacket, but something a lot bigger. It would certainly be in Russia’s interest to say at some future point to Iran, “this far and no further.” It could also be that Russia no longer knows how to stop it, in which case the Russians will be opening the door to a very dangerous world of nuclear proliferation. You can be quite sure that if and when Iran gets the bomb, the Middle East will go nuclear.

Q: Which raises the question of the United States or Israel bombing Iran’s nuclear facilities.

A: (long silent pause) … I can express no views on that.

Q: As I travel in moderate Muslim states in North Africa, the Middle East and South Asia, I ask heads of state and government how many extremists, or would-be jihadis, they estimate live in their midst, also how many fundamentalists who support openly or secretly the jihadi cause. The answer is usually 1 percent and 10 percent. In a country like Pakistan, that translates to 1.6 million extremists and 16 million supporters. On a global scale, that comes out to roughly 14 million extremists and 140 million sympathizers.

A: Yes, but I do not see them winning, and by that I mean able to impose their extremist system. I can see them inducing fear and insecurity, and causing fear, but they don’t have the technology and the organization to overwhelm any government.

Q: So how do you assess the global threat since Sept. 11? What are we doing that’s right and also that’s wrong?

A: Even if we can’t win, we mustn’t lose or tire. We cannot allow them to believe they have a winning strategy, and that more suicide bombers and WMD will advance their cause and give them a chance to take over.

Q: Did Iraq have anything to do with al-Qaida?

A: Of course not, as became clear in the daily sessions the imprisoned Saddam spent with his Arabic-speaking FBI interrogator over several months before his execution. But U.S. authorities were convinced Saddam was secretly supporting al-Qaida with weapons and training and maybe even WMD. So therefore the imperative became the elimination of Saddam.

A: (Laughs for several seconds) We should learn to live with it for a long time. My fear is Pakistan may well get worse. What is the choice? (President) Musharraf is the only general I know who is totally secular in his approach. But he’s got to maneuver between his extremists who are sympathetic to Taliban and al-Qaida and moderate elements with a Western outlook. We forget that right after Sept. 11 he was given a stark choice by President Bush: either you abandon your support of the Taliban regime in Afghanistan or face the disintegration of Pakistan. There is an interesting study of Pakistan’s Inter-Services Intelligence agency that says 20 percent of the Pakistani army’s officer corps is fundamentalist.

A: There is very little, if anything, the U.S. can do to influence the course of events in Pakistan that wouldn’t make matters worse. Any U.S. interference in Pakistan would result in Pakistan’s four provinces becoming four failed states. And then what happens to Pakistan’s nuclear arsenal? It’s a horrendous festering problem. The Feb. 18 elections may bring a little clarity and hopefully democratic stability to Pakistan, but I am not holding my breath.

Q: So you do feel that NATO’s future is at stake in Afghanistan?

A: No doubt about it. But you should also realize Afghanistan cannot succeed as a democracy. You attempted too much. Let the warlords sort it out in such a way you don’t try to build a new state. The British tried it and failed. Just make clear if they commit aggression again and offer safe haven to Taliban, they will be punished.

Q: If NATO collapsed in the wake of a failed campaign in Afghanistan, would that be a major concern of yours in Singapore?

A: Not immediately, but overall the balance of power would be upset.

Q: In whose favor?

A: China and Russia. They would be faced with a much weakened West in the ongoing global contest. I can also see the danger if America loses heart and says to hell with it all because the Europeans are not helping and the Japanese are blocking this and that, and tokenism from all the others. Let’s not forget that what we’re all enjoying today is the result of Pax Britannica and Pax America over the past 100 years. So don’t give it up.

Q: But in the Gulf, if the U.S. and/or Israel bombed Iran’s nuclear facilities, Iran has formidable asymmetrical retaliatory capabilities?

A: But let me repeat, they cannot conquer you. Hezbollah cannot conquer Lebanon. They can create trouble for the non-Hezbollah Lebanese. So micro actors can cause a lot of trouble for your friends, but they can’t eradicate them.

You can read this entire report as an Ecuador Living subscriber and see why if there were to be a military concern in Latin America it would be over China…not Iran..

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Subscribe to Ecuador Living and learn in an upcoming report about this huge lot and house in Cotacachi for $30,000.

There were two articles readers have recently mentioned.

The first article began, QUITO – Iran will finance two new power plants in Ecuador and extend a 40-million-dollar loan for business development, officials from both countries said Thursday, three months after the first visit by an Ecuadoran president to Tehran.

The second:  Iran, Ecuador Eye Military Ties As U.S. Prepares to Withdraw from Airbase Friday, May 29, 2009, by Patrick Goodenough, (CNSNews.com) – As the United States military prepares to vacate an airbase in Ecuador in the fall, the leftist government responsible for its upcoming departure is looking to Iran as a future military partner.

While I do not feel that nuclear power or expanded military might are good things, I do believe completely in the global economy and in expanding the wealth of all.

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Subscribe to Ecuador Living and see an upcoming report on how to own this organic tomato farm with…

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trout pond.

One can argue about all the numerous conflicts in the world but if we boil it down to the few most important, one of the biggest tensions in today’s society is that there are a few very wealthy people and many, many poor.

For decades my premise for economic expansion has been based in part on the belief that most people, if given a choice, will spend their time doing positive things, like working at something they love for increased material wealth and great fulfillment rather than living a guerilla’s life.  A poor soldier’s living conditions are  generally not pleasant… the pay low… the risk extreme.  That life, however, is better than one of complete hopelessness and despair.

If Ecuador Iran cooperation can help make more poor Ecuadorians and Iranians rise out of poverty… I say…”go for it!”

There are many potential and huge benefits to be gained by bringing Iranian business to the West. Maybe Iran being closer to the West will help it integrate?  Current events in Iran suggest that many of the population would be happy to do so.

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Subscribe to Ecuador Living and learn about these 15 new houses on Cotacachi’s creek.

I have had an opportunity to observe Correa and the people of Ecuador react for a couple of years now.  At times I have been quite close… such as when I took this photo.

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Correa is in a strong political situation at this time. One thing that could destroy his popularity quickly would be the perception in this 90% Catholic country that he is introducing Islamic radicalism.  Therefore Correa may line up with Iran for some money… and to gain leverage in his dealings with the West… but a major integration would surprise me very much.   One bombing in an American hotel in Quito or Guayaquil and Correa’s popularity would be toast.

There have been worries about his friendship with Chavez. There are these worries of Correa with Iran. There have been worries about South America pulling away from the US dollar.

Yet so far none of these fears have affected life, happiness, opportunity, real estate values or  law and order in Ecuador.

In short anyone who never heard of or ignored all these fears and moved optimistically forward is better of than those who did not.

Most of the press are writing about the world sliding into recession. Many articles in the Western press make it sound like there’s little opportunity and great danger everywhere.

Good. Their doom and gloom creates positive global investing opportunity for those of us who can see through the illusion.

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Subscribe to Ecuador Living and learn about Primavera V condos.

Regards,

Gary

We hope you’ll join us to learn more business and investing opportunities globally as well as Ecuador.

July 4-8 Ecuador Export Tour

July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

July 24-26 IBEZ North Carolina

Sept. 17-21 Ecuador Spanish Course

Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 9-11 IBEZ North Carolina

Oct. 21-24 Ecuador Import Export Expedition

Nov. 6-8 IBEZ Ecuador

Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

Multi Currency Question – Recession


Here is a good multi currency question about the global recession.

Recessions create opportunity for multi currency investors, but not always in the short term. Good value oriented multi currency investors may even suffer more during downturns. Recessions improve value in multi currency portfolios but the profits from this value comes only when markets recover.

Value investors are not market timing investors. This is good because most market timers usually lose in the long term.

Well diversified multi currency portfolios reduce volatility but do not eradicate it totally as is explained in the answer to this good multi currency question.

Here is the multi currency question:

“HI Gary, First let me send my love to you and Merri from Israel and thank you for your sharing of info. The question I have is: With the credit problems and banks going under and reduced credit globally shouldn’t this bring down global valuations on stocks? Wouldn’t it be a risky time time to be invested in most stock markets? I read that it is the credit that is propping up the share value. I also read that it is possible for 150 banks to go under, that seems like it would be a huge ripple effect. It seems that it is not isolated to just the states, last week I read about the Danish bank in serious problems. I remember you recommending property, commodities and shares to fight inflation. Do you think the shares rewards outweigh the risk in times like these? Thanks for any insight without panic.”

Here is a reply about multi currency investing that you may find worth study.

Thanks for your question.

First, we are not advocates of market timing. Remember rule number seven of the Seven Rules of Global Investing. “Value is reflected long term. Equity markets are efficient in the long run but are not effective short term due to human behavior”.

Having said this, we do realign the weighting of our investing activity based on our beliefs of where the 30 year market cycle stands. To learn more about the thirty year cycle.

Longer term subscribers know that we began warning about equity markets in August 2007 (the 17th to be exact) when we wrote: “Such historical measures are so inexact that we cannot predict just from them what will happen in the short term. The numbers are close enough that we could be entering the fourth sub cycle down (similar to 1976 to 1978). If so expect a sustained drop in markets for two to three years.” See the entire warning here.

Our September 21, 2007, message said: “Equity markets dropped again violently last month. Now these markets have recovered again. Yet this may be a last gasp party. This drop of interest rates at a time when inflation is beginning to soar could lead to a rapidly falling US dollar. We can see from the chart here that the dollar has done almost nothing but drop for 40 years (that chart is below). Yet much more dollar dropping could be in store.”

The October 14, 2007 message stated: “Periods of high performance are followed by times of low returns. We never know for sure when an upwards cycle will stall. Fundamentals look good for a bright 2008 in emerging and equity markets, but this can change quickly so to give our readers a better perspective, this year we are reducing leverage and adding a sixth portfolio with no leverage to study”.

Oct. 15, 2007 we wrote: “Okay, it’s time to turn the burner down.”

We offered a “leverage dwindling” warning on Oct. 26 where I explained to readers that I had eliminated even my modest leverage and wrote: “There is a final reason I liquidated my leverage now…to lead by example. Too many readers are thinking that the dollar short or dollar neutral Portfolios are only up 38% or 48% for the year. When one thinks that way they could be headed for trouble, so I hope investors will follow my lead and take greater care with their leverage.”

The November 8, 2007 Black Friday interim message warned about all the points above and more. At that time I let readers know that I had reduced the equity portion of my personal portfolio to 6%.

My published portfolio at that time was.

Real Estate 43.0%
Euro 10.5%
Emerging markets 10.0%
Danish kroner 9.9%
US$ 8.2%
British pound 6.0%
Swedish kroner 4.0%
NZ$ 3.7%
Aust. $ 1.0%
Canadian $ 1.0%

The liquid portion of my portfolio was

Cash 9.7%
Equities 6.0%
Bonds 31.7%
Emerging Equities 1.5%
Emerging Bonds 8.5%

There is a chance that equities will fall further. Yesterday’s Multi Currency Portfolio update focused on why value investments tend to drop more in downturns than the norm.

However, this is the best way to make long term multi currency profits…buy good value shares on the downside. One can never predict when the market will turn and when it does turn most market timers get in too late.

I lean towards real estate rather than shares because this is fun for me.

The way each person should position the multi currency portfolio should be based on what they love, enjoy and know best…real estate, commodities or shares. All three asset classes offer more potential than any one person can capture in a lifetime. Why not go with what brings the greatest joy in your life?

Regards,

Gary

P.S. Don’t miss our offer that expires the end of July 2008 for Fresh Ecuador Roses 50 FREE

Learn how to be a better multi currency investor.

Join us and stay at our farm for Susan Rotman’s business intuition course.

Dine with Merri’s excellent home cooking served outdoors in the cool mountain air.

outdoor-cooking

See dates for our Autumn courses and tours:

Visit the San Clemente condos and real estate from Manta north and south. Here are the condos going up.

ecuador-coastal-condos

Ecuador Coastal-Quito Real Estate Tour

Ecuador Super Thinking + Spanish Course

Enjoy learning at our Cotacachi hotel

open-air-learning

Ecuador Imbabura Real Estate Tour

International Investing and Business Made EZ North Carolina

Ecuador Ecuador Import Export Course

International Investing and Business Made EZ Ecuador

See discounts for attending more than one course.

International Investing and Business Made EZ & Fun Part II


International investing and business have proven themselves over the past 40 years to be profitable. And even more than the profits are the broadened horizons, fulfillment and fun!

Yesterday’s message International Investing and Business Made EZ & Fun looked at why International investing and business should be a fun filled process…not a dull boring set of numbers.

One reason for this is that those who live a fulfilled, involved fun existence are likely to be healthier…with less need for expensive pharmaceuticals and medical treatment.

This makes life better plus can save huge amounts of cash.

This is likely to become even more important in the years ahead for those who live in much of the Western world.   Existing medical systems are already filled with problems.  Inflation and aging populations will make the problems even worse.

At the turn of the decade, The World Health Organization analyzed the world’s health systems. The WHO used five performance indicators to measure health systems in 191 member states.

The five performance indicators were:

* Fairness of financial contribution.  While private health expenses in industrial countries now average only some 25 percent because of universal health coverage (except in the United States, where it is 56%), in India, families typically pay 80 percent of their health care costs as “out-of- pocket” expenses when they receive health care.

* Overall Level of Health.

* Distribution of Health in the Populations:  the average level – goodness – and the smallest feasible differences among individuals and groups – fairness.

* Responsiveness: respect for persons including dignity, confidentiality and autonomy of individuals and families to decide about their own health as well as prompt attention and access to social support networks during care, quality of basic amenities and choice of provider.

* Distribution of Financing.

The study revealed that U. S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries.  The United Kingdom, which spends just six percent of gross domestic product (GDP) on health services, ranks 18th.  Several small countries – San Marino, Andorra, Malta and Singapore are rated close behind second- placed Italy.

Here is the WHO ranking.

1         France
2         Italy
3         San Marino
4         Andorra
5         Malta
6         Singapore
7         Spain
8         Oman
9         Austria
10       Japan
11       Norway
12       Portugal
13       Monaco
14       Greece
15       Iceland
16       Luxembourg
17       Netherlands
18       United  Kingdom
19       Ireland
20       Switzerland
21       Belgium
22       Colombia
23       Sweden
24       Cyprus
25       Germany
26       Saudi Arabia
27       United  Arab  Emirates
28       Israel
29       Morocco
30       Canada
31       Finland
32       Australia
33       Chile
34       Denmark
35       Dominica
36       Costa Rica
37       United  States  of  America
38       Slovenia
39       Cuba

Most of the readership of this site live in countries where the medical system is not even in the top 15 countries!

This means that many of us, (especially us boomers now in our 60s), may want to rely on a good lifestyle to keep our health…not the medical system.

The cost of this medical system is another reason we want to have independence
rather than reliance on government funded programs.  We’ll see why next message.

Until then, may your international investing and business be good…and fun!

Gary

Learn about our next International Investing and Business Course in North Carolina

Ecuador Ecuador Import Export Course

International Investing and Business Made EZ Ecuador