Tag Archive | "Alan Greenspan"

Ecuador Income Potential


One of the most common queries sent to me is about Ecuador income potential. Readers want to know how they can earn income in Ecuador.

ecuador-earning-potential

A job as an Ecuadorian policeman looks good… but not the pay.

One wonderful  part of living in Ecuador is the low cost of living.   However, this also means that Ecuador wage levels are low.   Most Americans and Canadians I know, who have moved to Ecuador, have a higher standard of living than most Ecuadorians.

In short… most North Americans probably will not want to be an employee in Ecuador…also the government tends to like Ecuadorians rather than other nationalities to be employed.

ecuador-earning-potential

Ecuador is a land of small businesses.

This is especially true of those collecting Social Security. Employment abroad can reduce the income a US recipient is entitled to.  If you plan to work or have a business abroad… consult with a tax US attorney. See more about this at Ecuador & Social Security.

ecuador-earning-potential

You do not want to depend on Ecuador Social Security.

This leaves North Americans with three ways to expand income potential in Ecuador… or actually anywhere they live.

The first way to have more income in Ecuador or anywhere is to earn more from your investments.

The world is currently in the grasp of a major global bear stock market.

During bull markets and recoveries, stock markets almost everywhere can provide incredible returns. For example I work with Denmark ’s second largest bank. They are global equity experts and one of the portfolios (the Green Environment Portfolio) we created together rose 266.3% in one year. Another (The Emerging Market Portfolio) rose 114.2% in 2006 and 122.6% in 2007.

Yet in each case these portfolios also encountered gut wretching drops during the 2008 bear market. That Green Portfolio for example dropped 103.22% in one month.

Markets everywhere are depressed and are likely to see another big and sudden drop in the next few months.  Since March, stock markets have been rising without reason.

This is good to know because if a recovery comes, history suggests it will be sudden and dramatic and strong.

The next stock market dive will create opportunity for  some investors to make fortunes.

Here is a simple idea that can help you become a good global investor, a whiz at international investing. The idea is that these three simple facts can help you spot distortions in equity markets.

The first fact was confirmed by Alan Greenspan in his excellent book, “Age of Turbulence”.

“A major aspect of human nature-the level of human intelligence-has a great deal to do with how successful we are in gaining the sustenance for survival. As I point out at the end of this book, in economies with cutting-edge technologies, people, on average, seem unable to increase their output per hour at better than 3% percent a year over a protracted period. That is apparently the maximum rate at which human innovation can move standards of living forward. We are apparently not smarter to do better.”

That’s a huge fact. Overall we should expect the global economy to grow at about 3%.

This gives us a baseline for how much an investment should grow.

If an economy rises faster than 3%, it is distorted. During early stages of excessive growth, investors will be attracted. Shares will rise faster.

If the economy remains robust, shares become overbought. Then watch out! A correction will come.

This leads us to the next fact which is “all investments have risk”.

Rather than wasting time trying to avoid risk…which cannot be done, investors should look at three risk elements instead.

#1: How much risk is there in any particular investment?

#2: What perceptions doe the market have of the risk?

#3: What risk premium is due?

Bank accounts and government bonds, for example, are perceived as the safest investments (especially if government guaranteed). A look at their long term history shows that they pay about 3%. So if a bank account or government bond pays less…in the long term it’s bad. If it pays more…that’s better. Yet the idea is that bank accounts will not really make money. They will just keep up with growth…at 3%.

To get real growth requires taking risk. If an investment appears to be less safe it will pay more than 3%. This is called a risk premium.

Bonds pay more than bank accounts because they are perceived to be less safe. Stocks pay more than bonds because they are perceived even riskier. Emerging market stocks pay more than major market stocks. Emerging market bonds pay more than major markets bonds.

Over the long run, bonds issued in countries and currencies perceived to be stable pay 5% to 7%.

Stocks in major countries should pay 7% to 10% annual return in the stock market as a function of global growth, long term earnings growth plus risk premium (above bank accounts and bonds).

To attain higher growth than 7 to 10% investors must either increase risk, trust luck or spot distortions.

This is good because the market is almost always wrong. Most investors always try to avoid risk. Most investors dump their wealth into investments that are perceived to be safe. This creates excessive demand and lowers value and actually makes the perception wrong.

Knowing this helps wise investors spot trends created by distortions.

Finally we come to the third fact. Periods of high performance are followed by times of poor performance… and vice versa.

In times of global panic as we have recently seen, all markets tend to drop.

Understanding these three facts leads us to know that a portfolio of global shares.

Understanding the 3% solution and what markets have done shows a distortion. Blue chips may be a good way to invest now for higher than normal returns… in the long term.

Global investing has proven itself to be more profitable. Why not? Modern communications and transport coupled with a vast pool of low cost labor almost guarantees this fact. Knowing three more facts based on the 3% solution can give you an edge when it comes to taking advantage of the ups and downs in this global trend.

Equities now provide potential for decent prospective returns from current
levels over the next 5 or 10 years.

Many investors are now putting risk back on the table.

In the US Money Market Funds now have more cash than all the equities in equity funds.  This is something that markets  have never seen before!

The current bear market bull was created when billions of dollars of this liquidity began flowing back into stock markets.

The pent-up liquidity is earning really low returns and as inflation increases its bite, this cash has to go somewhere.   Equities are one of the logical choices.

For protection against future inflation, real estate and shares are the norm, plus
index-linked and gold royalty investments make sense.

Franco Nevada for example has 1% dividend yield plus growth from the reinvestment of the cash flows. FrancoNevada Corporation (TSX:FNV) is a gold focused royalty company with additional interests in platinum metals, oil & gas and other assets.

My portfolio adviser recently sent me this note:

Gary,  I have been keen on thematic investing globally.

The sectors/themes that I favor for the continued recovery in markets
are Food, Telecoms, Power Generation, New Energy, Healthcare, Gold &
Silver, Water and Infrastructure.  A sample of some of the
companies/Funds that might be used to put into place such a strategy
are:-

Unilever
Cadbury
Vodafone
Nokia
Iberdrola
AstraZeneca
Novo Nordisk
India Pharma Fund
Franco Nevada
GoldCorp
Centamin Egypt
Yamana
Silver Wheaton
First Solar
Vestas Wind
Kurita Water
Water ETF
Black Rock New Energy Trust
Geiger Counter Fund
Kotak Indian Infrastructure Fund

Building this type of global, diversified portfolio makes sense when the market stumbles again… as it is likely to do soon.

Buying into this proposition increases risk… that history suggests will be well rewarded.

We’ll share the next two ways to increase income potential in Ecuador or anywhere in our next two messages.

ecuador-earning-potential

One way to earn in Ecuador is to export its…

Ecuador-earning-potential

many colorful crafts, textiles and products.

Gary

Join Merri, me, Thomas Fischer of Jyske Global Asset Management and our webmaster for our July 24 to 26, North Carolina International Business & Investing Made Easy seminar.   Save up to $299 by enrolling now.

Half the curse looks at global investing and half how to have an international  internet business.

Enroll in the July seminar now and get one of our two internet courses on how to invest globally or have an international internet business. Save up to $299.

See more details on the North Carolina seminar here.

Multi Currency Investing Primer Chpt. 1


Multi  currency investing  and diversification are vital now as a recent message about the potential 2011 economic crisis points out.

Global economic problems have led to many rumors about Ecuador’s financial health.

Regretfully these econmic woes go way beyond Ecuador.  The financial crisis and fundamental financial problems are global.

The 2008 multi currency downturn changed everything.

A 2011 crisis will make events even worse which is why I am updating a course on multi currency investing for my multi currency portfolio subscribers.

Here is an excerpt from lesson one that was sent to multi curre3cny subscribers  today.

* WHAT TO DO NOW: Be a multi currency Investor. This course updates through the year 2012 why all of us are multi currency spenders and should be multi currency investors now. See below.

* MULTI CURRENCY INVESTING SAFETY: Learn who can really protect your wealth. This primer explains important lesson about politics and currencies.

* EZ PROFIT: Increase Earnings Through Leverage.  Diversify in the right currencies first for safety. When you do, your money can gain extra growth.  At times it makes sense to leverage your potential when you borrow low and deposit high.  See why here.

Imagine the room-walnut paneled with carpeting that is deep blue, rich and plush. The table of polished oak is heavy and important, as are the men that sit around it. Tension hangs, thick. A soft hum, steady and calm, perhaps from a heating fan, goes unnoticed in the deathly silence. These men are powerful, but now they are afraid. The fear shows. They fidget, squirm, their faces tight with the tension. Many of them go pale when the man at the head of the table finally speaks. “Gentlemen, the nation is closer to a monetary collapse than we would like to believe.”

This scene sounds like one we would see in a tense melodrama at the movies. Even worse we could imagine that this was real.

Regretfully the statement came from a melodrama that was (and remains) all too real. This scene is not based on fiction but actually took place in the United States of America at the headquarters of one of the most powerful financial institutions in the world, The Federal Reserve Bank. The man speaking was the chairman of the Federal Reserve, Alan Greenspan. The statement that the United States is closer to a monetary collapse than we would like to believe, is his and regretfully was then and is still now very, very real.

To make matters most unfortunate, this meeting did not just happen. The statement was made by Mr. Greenspan just after Black Friday, October 1987 when the U.S. stock market crashed.

At that time, Federal Reserve policy makers met and grimly speculated that a run on the dollar might trigger renewed chaos or that consumer confidence might cause a recession. Despite their reassuring public pronouncements, they confessed privately to an inability to foresee the economy’s future with any certainty. Greenspan underscored the seriousness of the situation saying at one point, “The nation is closer to a monetary collapse than we would like to believe.” So great was his concern that the meeting was kept secret, and this information was only revealed more than a decade later.

What is worse, that secret meeting was instrumental in starting a wave of global government interference in financial markets that has continued to this day. This interference dammed the normal waves of world currency and stock market.  This interference created, like a huge dam, a lake of apparent economic calm that masked the turmoil of true currents beneath the placid surface.

The interference has continued and grown into an international  affair, holding back corrections, again and again, until finally in 2008 the dam of global government interference burst.

That secret meeting and the economic rupture 20 years later can be good news for you!  This course explains why the rapids of global economic and currency correction that we are navigating now can help you enhance your wealth.

If you use the 1987 meeting and the 2008 global economic correction as warnings about the enormous currency dangers that exist right now, then that 1987 meeting will have been of great benefit to you. That warning and the lessons in this course can bring you increased safety and immense financial rewards.

My name is Gary Scott. I have been  investing and doing business and  writing about it  for nearly 41 years (I began May 1968).

Since 1971, I have known about and taken advantage of the currency risks created by the public servants who handle government finances.  As was the case with that meeting in 1987, the public is often intentionally misled and kept in the dark for fear that truth will create a negative political consequence.  This course tries to shed as much light on that darkness as it can.

Reading about that secret 1987 meeting had a profound impact on me. We, as investors all over the world, were misled about dangers that could dramatically affect our wealth! This gave me  two realizations that led to two important and urgent facts of investing.

The first realization was that my belief that the U.S. dollar and U.S. monetary system were at extreme risk and had been for nearly a decade was absolutely correct. The global currency system was being held together with little more than a confidence trick. It was clear to see that this system would eventually crash.

The second fact I learned was that we, as investors, will not be forewarned by the government or the large financial institutions. We are on our own.  We must look beyond what our political and major financial institutions tell us. The political system, big banks and brokers have too much at stake. They all fear that the truth about the world’s currency system will create a self-prophesy of doom….as it did in 2008…bringing down some of the largest financial institutions in the world.

The two realizations  led me to create this course nearly 15 years ago. The 2008 crash has led to this update.

Our currency problem is global. The dollar, though under incredible pressure, remains the reserve currency of the world. What will happen when the dollar collapses further?  What will happen to other currencies when the reserves (in dollars) of thousands of non U.S. governments/banks collapse?

This led me to see the urgent importance that exists for global currency diversification and this course will look at ways to diversify now.

Knowledge You Can Use

This course will give you an indepth understanding of currencies, but also will give you many contacts that can further your knowledge. Contacts that you can easily use!

The course format gives information to you in four different ways:

#1: Educational Text
#2: Case Studies
#3: Glossaries
#4: Contacts.

The Contact Section gives you a way to expand the knowledge you gain from the course and allows you to customize what you learn to meet your own particular needs.

In the Contact Section we introduce ways to actually invest in overseas currencies.

The investments and contacts provided in the contacts sections are not recommendations. These are shown for your review and investigation with your financial adviser.   Our goal in including them is to give you a variety of contacts so you can continue learning directly from contacts that may help you put your knowledge to use.

If you plan to do business with any of these contacts you should exercise normal care and caution.    Take the same precautions you would before choosing to do business with any firm. Check and make sure that any firm you do business with is reliable and can provide the services you need with fees that you find acceptable.

2008 taught us that there are no firms we can trust without careful investigation.

Where to Diversify and How Much

One of the main questions to answer when developing a multi currency portfolio for your needs is what percentage of the portfolio should be in cash, in bonds, in equities, in real estate and in commodities.

We’ll use Jyske Bank as our guide through this course so let’ see how they do it.

The three Jyske main portfolio breakdowns are:

Low Risk Multi Currency Portfolio: This s diverisifed Fixed Income 70%,  Equities 20%,  Alternatives 5%,  Cash 5%.

Medium Risk Multi Currency Portfolio: Fixed Income, 40%,  Equities 50%,  Alternatives 5%, Cash 5%.

High Risk Multi Currency Portfolio: Fixed Income  10%, Equities 80%,  Alternatives 5%,  Cash 5%.

So part of the difference between low and high risk is how much cash…stocks and bonds are held in a portfolio.  This is only one aspect of safety, but is an imporant one so here we begin by earnng more about how to hold multi currencies in cash.

In this first contacts section, we look at multi currency ETFs as a way to diversify in cash oriented multi currency investments. Multi currency ETFs  are among the easiest and safest ways to diversify in currencies abroad.

Multi currency ETFs  let investors choose which currencies to hold. They allow complete flexibility getting in and out. These shares also offer a high degree of safety.

In previous years the easiest way to hold cash was to simply open multi currency savings accounts in overseas banks or to invest in multi currency certificates of deposit.

Over the years, global banking regulations have become more complex and more expensive for banks to comply with.  This has forced banks to restrict accounts, raise fees and minimum accounts sizes…making this option difficult or impractical except for larger investors.

Currency ETFs have filled this void.

ETFs are exchange-traded funds. These mutual fund type stocks trade on stock exchanges like a normal stock.

An ETF holds assets such as stocks, bonds or currency deposits. ETFs Are meant to track, rather than beat, their Bellwether  so they trade at about the net asset value of the underlying assets held.

Some ETFs for example track a stock or bond index, such as the Dow Jones Industrial Average.  A Dow Industrial ETF will not try to do better than the Dow. The ETFs role is to equal the movement of the Dow.   A Dow ETF would hold essentially the same shares in the same weighting as the Dow Industrial Index.

The manager of a managed Dow fund would try to do better than the Dow. An ETF anager is simply trying to get the fund’s performance to emulate the Dow.

ETFs are attractive and easy to use as investments because they have low costs, tax efficiency, and stock-like features.

ETFs costs are the brokerage fee to buy and sell them and a management fee.

Each buy and sell is subject to a brokerage commission depending on the broker.

Large investments pay a lower percentage then small.  Investors should compare brokerage firms to see which has the best fee arrangement for the type of investing planned.

Most ETFs also have a low expense ratio. Most charge between 0.1% to 1%.
ETFs are considered no-load investments.

ETFs are also tax efficient.   Investors sell ETFs on the stock market, as they would a stock, so usually realize capital gains when they sell.

Currency exchange-traded funds (ETFs) are quite new and make it simpler to invest in multi currency cash.

Currency ETFs allow even small investors to diversify in multi currencies.

This is a great benefit.  The ETF stock-like feature means that investors can carry out the same types of trade on cash investments as they can with stock investments.   ETFs can be sold short, with limit or stop-loss orders,  bought on margin and invested with as much or as little money as desired.  There is no minimum investment.

Currency ETFs  allow investors to invest in euro, the British pound, the Canadian dollar, the Japanese yen, the Swiss franc, the Australian dollar and more as shown below.

You can receive the balance of this lesson plus much more as a multi currency investing course subscriber. See why here.

Gary

Join us at a course about multi currecny investing or Ecuador livng in Cotacachi or on Ecuador’s coast this winter.

Jan. 16-21 Ecuador Spanish Course

Jan. 22-23 Imbabura Real Estate Tour

See condos like this in Cotacachi for $46,500.

Ecuador-real-estate-advertising

Jan. 24-27 Coastal Real Estate Tour

See Manta condos like this one. Delegates are inspecting the 1,000+ square foot patio.

Manta-Condo

The patio has this view.

Feb. 9-11 Beyond Logic-Shamanic Mingo

Feb. 13-15 International Business & Investing Made EZ

Feb. 16-17 Imbabura Real Estate Tour

March 8-9 Imbabura Real Estate Tour

March 10-15 Ecuador Export Expedition

March 16-19 Coastal Real Estate Tour

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

Here is our Ecuador tour schedule for the balance of 2009.

Date                    Course                      Couples Fee

May 21-26  Ecuador Spanish Course         ($999)
May 27-28  Imbabura Real Estate Tour      ($749)

June 12-15  Shamanic Mingo Tour             ($999)
June 16-17  Imbabura Real Estate Tour      ($749)
June 18-21  Coastal Real Estate Tour         ($749)

July 2-7       Ecuador Import Export Expedition ($1,499)
July 8-9       Imbabura Real Estate Tour     ($749)
July 10-13   Coastal Real Estate Tour        ($749)

Sept. 17-22  Ecuador Spanish Course        ($999)
Sept. 23-24  Imbabura Real Estate Tour     ($749)
Sept. 25-28  Coastal Real Estate Tour        ($749)

Oct. 21-26   Ecuador Import Export Expedition ($1,499)

Nov. 6-8       International Investing and Business Made EZ Ecuador ($999)
Nov. 9-10     Imbabura Real Estate Tour          ($749)
Nov. 11-14   Coastal Real Estate Tour            ($749)

You should normally plan to arrive in Quito two
days before the course.  We will pick you up at the airport, help you
to your hotel in Quito and bring the group to Cotacachi by coach.

For coastal tours we travel as a group from Quito
to Manta by air, then tour the coast for two and a half days returning
to Quito on the evening of the third day.

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

Better still join us all year in Ecuador! See our entire schedule of 27 courses, tours, mingos and expeditions we’ll conduct in 2009.

The course fee includes meeting at Quito airport (day before the
course)…transportation (by group bus) to Cotacachi and back to Quito.
Course fee does not include air are. accommodations, food or individual transportation.

Multi Currency Ideas


Multi currency solutions to inflation are needed.

Inflation will certainly come from the current global economic bailout.

Every multi currency investor needs to mold a personal multi currency solution to meet their specific needs. Whatever individual tactic is used, it will normally work better if it includes multi currency diversification based on a search for multi currency value.

Yesterday’s message Multi Currency Warning looked at seven economic fundamentals that we can relay on during this downwards correction and stated:

The current rush to the US dollar and yen create a monumental opportunity! There will be a time to invest in the very currencies that are tumbling now.

Why am I sure of inflation?

One of the seven multi currency fundamentals (#2) is that: Government involvement in global economics and business may dampen the sharper acceleration of the natural financial rhythm but eventually makes the corrections worse.

A recent article in USA Today covering Alan Greenspan’s testimony to the US Congress said: that the “Former Federal Reserve chairman Alan Greenspan told angry lawmakers” about his shock.

I wonder? We these angry OR frightened lawmakers? I suspect that a few weeks from election day the better word would have been SCARED.

Fear destroys reason if one is not trained to deal with it. Most of Western society is not trained to deal with fear. William James aptly put it this way.

“In civilized life it has at last become possible for large numbers of people to pass from the cradle to the grave without ever having had a pang of genuine fear. Many of us need an attack of mental disease to teach us the meaning of the word.”

Since politicians are also human beings they too lose reason when they give way to fear. They seem to definitely get a mental disease!

For example what is the cause of today’s economic crisis? Too much debt.

Yet yesterday’s BBC article entitled “Brown defending higher borrowing” says:

“Gordon Brown is defending his plans to increase government borrowing in order to tackle the economic downturn in a speech in London.

The prime minister is telling business leaders it is the right time to boost demand with government spending.

Opposition parties have attacked the current levels of debt, saying Britain is inadequately prepared for recession.

Leading economists have also criticised the government over its spending plans and called for tax cuts instead.

In a letter to a Sunday newspaper, a number of economists warned against an expansion of government spending as a way of stimulating the economy.

They described a focus on public works projects and higher spending as “misguided and discredited”.

The latest quarterly public debt figures hit a record £37.6 billion – higher than the whole of the previous year. Yet Brown said: The responsible course is to borrow now to maintain growth and output.”

I have little doubt that England’s debt will grow…as will America’s, and Europe’s and Japan’s because of…fear.

The borrowed money will be spent by government’s to, as Brown says, “kick start the economy”. The economy will recover but if the fundamental about government inefficiency remans true, it will not recover as it could and should.

The price of this borrowing will be inflation…the loss of purchasing power.

Now here is where frightened politics and politicians get involved.

The same BBC article also said:

“Over the weekend, Mr Brown paid a brief visit to Glenrothes in Scotland as part of a by-election campaign and made predictions food and fuel bills would begin to come down next year.

He also hinted falling oil prices could lead to further co-ordinated interest rate cuts.

“Now inflation is actually coming down over the next few months and that will mean that it gives scope to all the monetary authorities, including the Bank of England, round the world to make a decision about interest rates,” he told the BBC.”

Brown is probably wrong. Inflation will not come down…which is okay for those who know what to do.

Do not be misled. Chances are that Western governments will borrow more than they should. Inflation will follow.

If this belief is correct then the best investments will be shares, commodities and real estate in a diversified basket of strong currencies.

What will make a currency strong?

Fundamentals of currency value (purchasing power potential) include:

A: Interest rate.
B: Inflation rate a three levels – labor – wholesale and consumer prices.
C: Trade balance.
D: Current account.
E: Debt as % of GDP.
F: Debt as % of government income and spending.
G: Amount and velocity of direction in government deficit.

Ideally we want to invest in currencies of countries that offer an interest rate above the local inflation rate, that have a positive trade balance, current account, falling government debt and deficit versus government income.

This combination of qualities in a currency are as rare as hen’s teeth and will become even harder to find during and after this downturn.

As the Western economies stall, their imports will slow. This will slow growth in emerging economies. Governments everywhere will be pressed. Fear will grow. Reason will diminish and government borrowing will increase everywhere.

Inflation will grow. Multi currency investing will become increasingly a relative process….looking for the currencies that are least bad.

I hope to help you fight this inflation with multi currency investing!

Gary

We are studying three multi currency solutions to inflation in our multi currency course. You can subscribe to gain access to these ideas here.

Join us at one of our next to International investing courses in Cotacachi Ecuador this winter.

Learn more about economic safety this November. Join Merri, me, Steve, Kjetil Haugan or Thor Anderson of Vistazul and Peter Conradsen of Jyske Global Asset Management in Cotacachi Ecuador. We’ll review economic conditions, Ecuador real estate, my entire portfolio and investing and business ideas for the months ahead.

Nov 7-9 2008 International Investing and Business Made EZ Ecuador
https://www.garyascott.com/catalog/international-business-made-ez-ecuador

Feb. 13-15 International Business & Investing Made EZ

See the wonderful balconies in the Primavera condos at for sale at $46,000 in Cotacachi.

multi-currency-Ecuador-condo-interior

Nov 10-11 Imbabura Real Estate tour
https://www.garyascott.com/catalog/ecuador-real-estat

Feb. 16-17 Imbabura Real Estate Tour

Then travel to the coast. Enjoy the Vistazul swimming pool on Ecuador’s Pacific.

Picture 9

November 12-15, 2008 Ecuador Coastal Real Estate Tour; Quito Real Estate Tour
https://www.garyascott.com/catalog/ecuador-coastal-real-estate-tour

See discounts for two or more of these courses and tours

Enjoy Ecuador’s music.

Ecuador-music

Enjoy flowers and beauty.

Ecuador-flowers

Enjoy the friendly staff at our hotel.

international-club

Better still join us all year in Ecuador! See our schedule of 26 courses, tours, mingos and expeditions we’ll conduct in 2009.

International Investing and Business Made EZ Part III


International investing and business have proven themselves over the past 40 years to be profitable. More important than the profits that have been made are the broadened horizons, fulfillment and fun! Yesterday’s message looked at one reason for this. Fun is healthy and healthy needs to spend less on pharmaceuticals and expensive medical treatment. The Western medical model has many flaws, and they are about to get worse. Take the US medical system…especially Medicare and Medicaid as an example. Alan Greenspan wrote in his book, “The Age of Turbulence” that his biggest concern is the retirement of the baby boomers and the impending fiscal problems caused by the draws on Social Security and Medicare. He considers it an urgent problem that needs to be addressed soon. He said in the TV show Meet the Press: “Social Security is not a big crisis. We’re approximately 2 percentage points of payroll short over the very long run. It’s a significant closing of the gap, but it’s doable, and doable in any number of ways. “Medicare is a wholly different issue because, remember, right now, with the current entitlement, we can afford Medicare. It’s easily refunded. We’re going to double the size of the retired population. And by all of the analysis I go through in the book, it’s very evident to me that we are not able to actually deliver on the Medicare we are promising, and I think that is marginally unethical to immoral because we are promising to people who have not yet retired a fairly significant Medicare package which, if they knew they weren’t going to fully get, they would take actions now—maybe retire later, do different things—and I think everybody has been avoiding this issue. “We avoided it in the Social Security Commission in 1983, and everyone’s done—been doing it since. Then it was more than 20 years before. We’re now right at the point where if we don’t act we’re going to be in very serious problem—trouble.” The demographics and math support Greenspan’s assumptions unless the prophesies written in the political satire written by Christopher Buckley “Boomsday” become true. The book looks at the point when boomers become eligible for Social Security — and are ready to demolish the federal budget. A prophetic heroine in her 20s starts a revolution by urging “Stop paying taxes and create financial incentives for boomers to commit suicide.” This is a tale slightly reminiscent of the truly terrible 1970’s movie “Soylent Green” with Charlton Heston, Vivian Leigh and Chuck Conners. This was a tale of Earth in despair in 2022. Natural food like fruits, vegetables, and meat among others are now extinct. Earth is overpopulated and New York City has 40 million starving, poverty stricken people. The only way they survive is with water rations and eating a mysterious food called Soylent. The greenhouse effect has risen the temperature into nearly unbearable regions, and the people are kept in the cities by law. The rich live in separated luxury apartments (with women as part of the rented furniture) but also experience the lack of natural food. Strawberries are at $150 for a glass of them. Elderly people are paid to commit suicide and a detective investigates the murder of the president of the Soylent company. The truth he uncovers is more disturbing than the Earth in turmoil when he learns the secret ingredient of Soylent Green….the elderly! The book may be satire….the film science fiction but how far off base are the numbers? At current inflationary rates by 2022 a glass of strawberries will not cost $150. Last year I wrote how a cream tea (albeit a very fine cream tea) at Bettys in Yorkshire was $20 per person. If food prices continue to grow at 5% per annum you can easily expect to pay $35 for a bowl of strawberries by 2022. The book and the movie are caricatures of what our future could bring. Yet caricatures are exaggerations that show a point. The point here is that the social economic mathematics of the current social – retirement – medical system do not work. We will need another way. One that makes sense to me is that older people continue to have international investments and business. I think this is better than a federal incentive to commit suicide! People will not retire as before…and this offers a triple benefit if what they are doing to earn money helps them stay healthier and enjoy life more because their service is their passion…exciting…fulfilling and fun. Until next message, I hope you feel and enjoy and feel a passion every day. Gary Learn International Business Made EZ on line Learn about our next International Investing and Business Course in North Carolina Ecuador Ecuador Import Export Course International Investing and Business Made EZ Ecuador