Tag Archive | "Egypt"

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.

international-investments-seminar

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.

international-investing

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.

Ecuador Shamans & Essential Oil


Ecuador shamans use essential oils in their healing ceremonies and in many other ways.  

While living in Ecuador with the shamans, Merri, I and our friend Candace Newman learned many additions to existing healing techniques with essential oils.

Here is Candace with a Taita Yatchak, our daughter Francesca and friends at Machu Pichu.

Ecuador-shamans

Essential oils offer many health balancing features and can be delivered though breath, the skin, the soles of our feet and the palms of our hands.

Ecuador shamanic healing wisdom, uses essential oils and the palms of our hands because our hearts extend to others through our palms.

Ecuador shamans hold the hands in high regard as the instruments for giving and receiving….which they view as a scared act. In Ecuadorian agriculture for example the elders are given the sacred honor of planting the seeds. Special bags (shigras) are woven from the threads of the Cabuya  (Agave or Century Plant).

Here I am with an Ecuador shaman next to a Cabuya.

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These long leaves are then scrapped by a master.

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Until the pulp is removed and all that is left are fibers.

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This is the raw material of the shigra.

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This fiber is then hand died and woven into these colorful bags.

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The bags are worn over the heart in the seed spreading ceremony… not around the waist where it would seem easiest to cast the seeds.  The seed must be given from the heart and the hands.  Shigras have been part of women’s daily life since Pre-Columbian times. Archeologists have found similar bags that are 1000 years old! Why have they withstood the test of time?  Because they are part of the sacred giving of life.

In and out. This is life… the law of action and reaction.  We cannot have one without the other and most of this process takes place through the hands…. and this means giving and taking from the heart.

Once a Taita Yatcak (the highest of shamans) in Ecuador explained that banks were places of great energy.  When we receive money, he told us, we should always receive it with the left hand… the hand of receiving.  When we give money… always with the right…. subtle but powerful energy!  From the subtle, we are formed.

Candace writes about the palms of our hands:

Healing Palms with Essential Oils in Ecuador

In developing our Touch With Oils® work over the last 17 years of private appointments, retreat work and Hospice, I noticed that the most comfortable and familiar place for one to be touched is the hands. Feet and face can be uncomfortable and invasive for some people. Shaking hands is an acceptable way to greet people, and a way of extending a welcome. So we are already used to touching with our hands. They are also easy to get to!

The palms of our hands, like the soles of our feet, are a highly absorptive part of our body. These are excellent pathways for the benefits of essential oils to enter our systems. The two most common places for reflexology are hands and feet. We reach into the core of our body through our palms, just like the soles of our feet. The fingers have reflex points for head, sinus, and face tension. An overall gentle hand massage can balance the autonomic nervous system and change the way we feel in minutes. It’s also a wonderful tool to have for helping others.

One day during my month’s stay at Rosaspamba, the Ecuador Shaman said one of his apprentices was in bed with a stomach ache and would I help him…..so out come the palms of my hands to the rescue.  I made a little puddle of Jojoba oil in my palm and added 2 drops of pure Peppermint essential oil.  I applied a little to his nose first to get the “Peppermint Medicine” into his system (through the biochemistry of the nose-brain connection)…and then did a slow gentle belly rub.

Later as I sat on the steps of the little “cabin”,  looking out over the tops of the Andes mountain range,

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Candace at our hacienda, Rosaspamba.

I noticed  a place in the mountains that looks just like the palm of a hand open towards the sky. Just an awesome sight, as if the mountains were making an offering to us as we rest in their sanctuary of nature. I have always said “God’s grandest cathedral is Nature….in all her majestic garb”.

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Candace’s view.

There was another time in the hotel in Quito where a Palm Blend of Jojoba and a drop of Peppermint helped another person in the group with belly rubs due to an upset stomach. Then after a long day in the van visiting areas outside Quito, another traveler was feeling queasy and a little hypoglycemic due to lack of food. This time I put 1 drop of pure Peppermint straight in her palm, had her rub her palms together, cup her nose, close her eyes and breathe deeply.  Essential oils are so strong,  the effects from this palm cupping is immediate.

All we need to do is show up with the palms of our hands….and a little bit of oil.  Peppermint is a necessary for traveling.

Easy and immediate things to do: (1) For inhalation and a quick response, put 2 drops of pure essential oil in one palm, rub palms together, cup nose, close eyes, and breathe deeply. Use Lavender to help with stress, anxiety, panic. It works like smelling salts, with the added benefit of a lovely aroma.

Rub your palms together and apply the blend to the nose, temples and back of neck.  This is enough to affect the way your feel right away. You can also do this in the bath or for a massage.

PEPPERMINT, the oil of digestion is a general tonic, refreshing and invigorating, calm, vitality, traditional medicine in British Herbal
Pharmacopoeiais antibacterial, antispasmodic, antiviral.

Common uses:  Use Peppermint for nausea, motion sickness and sinus-headaches. Stomachaches – blend 1 drop with base oil in palm, apply to nose and massage abdomen clockwise.  Headaches – inhale from bottle, blend with base oil and massage neck, head and shoulders. Sinus, cold, flu – inhale from bottle, steam tent, bath, blend with base oil and massage nose, neck and chest. Eucalyptus and Tea Tree can be added. Motion sickness – inhale from bottle. General fatigue – inhale from bottle, combine with base oil for bath and massage.

Order PEPPERMINT essential oil from Candace here.

LAVENDER, the balancer, is the most versatile and useful essential oil creates a general state of well being from the Latin word “lavare” which means  “to wash.”

Lavender is antibacterial, anti-inflammatory, analgesic, calmative, sedative,  regulates nervous system, helps high blood pressure and blood sugar levels relieves stress, fatigue, and depression

Common uses:  Burns, cuts, bites – apply one drop straight as pain demands.
Headaches, stress, anxiety, fatigue, insomnia – inhale, bath, massage. Aches and pains – compress, bath, massage.  Motion sickness – inhale, apply to nose with base oil, can add Peppermint too.  Palm blend for massage – pour base oil in palm, add 1 drop Lavender. Apply to nose first, then body.

Order Lavender essential oil from Candace here.

Tea Tree Oil, the #1 first aid oil, is the traditional medicine in Australia and is warming and stimulating.

Tea Tree Oil is antibacterial, antiviral, antifungal anti-inflammatory and analgesic.

Common uses:  Cuts, stings, bites, cold sores – 1 drop straight as pain demands. Acne – 1 drop straight, use sparingly and cautiously. Athletes foot, nail bed fungus – 1 drop straight, or add to foot bath, or massage by adding 1 drop to base oil in palm. Colds, flu – inhale, bath, massage, steam tent – for extra strength add Eucalyptus and Peppermint. Palm blend for massage and chest rub – pour base oil in palm, add 1 drop Tea Tree. Apply to nose first, then body.

Order Tea Tree essential oil from Candace here.

EUCALYPTUS, the oil of respiration, is warming and stimulating,
helping to move the rivers of the body invigorating and strengthening

Eucalyptus is antibacterial, antiviral stimulates fluid circulation, expectorant, mucolytic.

Common uses: Colds, flu, bronchitis – inhale from bottle, steam tent, baths, for massage add 1 drop to base oil in palm and apply to nose and use as chest rub. Before bed put 1 drop straight Eucalyptus on soles of each foot and put on socks. Sinus infection – inhale from bottle, steam tent, combine with base oil and apply to and in nose, massage head and sinus areas. Add Peppermint too. Joint aches and pains – combine with base oil and rub areas. Can add Lavender too.

Order EUCALYPTUS essential oil from Candace here.

ORANGE, the natural tranquilizer promotes a feeling of well being
sweet and warming, makes one smile.  Always combine with base oil
before applying to skin

Orange is antiseptic, antidepressant, anti-anxiety and harmonizing to the body and mind.

Common uses:  Anxiety, depression, nervous conditions – inhale from the bottle, combine 1 drop in base oil in palm and apply to nose and massage neck, abdomen, low back.  Children (wonderfully calming at bedtime, also combined with Lavender) – pour base oil into palm of hand, add 1 drop Orange (or 1 drop Orange and 1 drop Lavender), apply a little to nose and massage abdomen, feet, hands, or back.

Order ORANGE  essential oil from Candace here.

FRANKINCENSE , the oil of protection, is strengthening, protecting, slows and deepens the breathing process, a traditional medicine in Egypt, India, China.

Frankincense is antiseptic, anti-inflammatory, expectorant, sedative, tonic.

Common use:   Skin care, immune system, anxiety, nervous tension and mental concentration. Inhale straight from bottle, put 1-2 drops on cotton ball or
use in diffuser. Mix in base oil to apply to skin.  Apply blend to nose, temples and back of neck.

Order FRANKINCENSE essential oil from Candace here.

GERANIUM, the Yin Balancing Oil  soothes nervous tension and nerve pain nourishes mature, congested or bruised skin, nurtures entire system.

Geranium is antiseptic, anti-inflammatory, antifungal, analgesic, astringent, tonic, supports adrenal cortex.

Common Use: Use for nervous tension, neuralgia, shingles, stress, anxiety, menopausal imbalances, and circulation. Inhale straight from bottle, put 1-2
drops on cotton ball or use in diffuser. Mix in base oil to apply to skin. Apply blend to nose, temples and back of neck.

Order GERANIUM essential oil from Candace here.

JASMINE,  a Sensual Oil promotes feeling of optimism, confidence, euphoria and is native to China, India and West Asia.

Jasmine is an antiseptic, antidepressant, aprodisiac, sedative and tonic

Common uses:  Lift the spirits, for stress, apathy, lethary, depression,
nervous exhaustion, frigidity, overwhelm. Inhale straight from bottle, put 1-2 drops on cotton ball or a dab on the wrists. Mix with base oil for massage.
Apply blend to nose, temples, back of neck.

Order JASMINE essential oil from Candace here.

LEMON, the Good Morning Oil is energizing, refreshing, awakening
uplifting to mental and physical state.

Lemon is antiseptic, vasoconstrictor, tonic, anti-rheumatic do not apply directly on skin, sensitive to sun exposure

Common Uses: Use for fatigue, concentration and immune system. Helpful with coffee/cigarette withdrawal. Good in diffuser to cleanse air. Inhale straight from bottle, put 1-2 drops on cotton ball or use in diffuser. Mix in base oil to apply to skin. Apply blend to nose, temples and back of neck.

Order LEMON essential oil from Candace here.

ROSE OTTO, oil of the heart is  nurturing, calming, cooling, regulating promotes an overall sense of well being and peace

Rose otto is antiseptic, antispasmodic, aphrodisiac, antidepressant, anti-inflammatory, sedative and tonic.

Common uses:  For the sheer joy that true Rose oil brings to your heart and spirit. Good for nervous tension, stress, grief, overwhelm, impotence and skin care.  Inhale straight from bottle, put 1-2 drops on cotton ball, or dab on wrists. Mix in base oil to use for massage. Apply the blend to nose, temples, back  of neck and heart.

Order ROSE OTTO essential oil from Candace here.

SANDALWOOD, the yang balancing oil, warms, soothes frazzled nerves antidepressant, sedative traditional medicine in India.

Sandalwood is antiseptic (urinary & pulmonary), antispasmodic, helps tighten connective tissue.

Common uses:  For nervous tension, depression, stress, insomnia, dry skin, and urinary or respiratory infections. Inhale straight from bottle, put 1-2  drops on cotton ball or use in diffuser. Mix in base oil to apply to skin. Apply blend to nose, temples and back of neck.

Order SANDALWOOD essential oil from Candace here.

This can be done with any essential oil that is right for the moment. Some oils like citrus can be irritating when applied directly to the skin. If in doubt, use one drop. Less can be more in this case. (2) For skin application, make a Palm Blend which is written up in The Good Medicine Tin® Guide Booklet: add 10-15 drops of Organic Golden Jojoba to your palm and add 1-2 drops of essential oil. .(3) Another option for skin application and massage is to use a blend already made up like our OLA Seven Massage Blends and Self Care Blends.

SPECIAL NOTES:

Using pure high-grade essential oils can prevent allergic reactions while the medicinal properties help  protect your health.

Several oils can irritate the skin if applied full strength-peppermint, orange, lemon especially.  Always combine with base oil before applying to skin.

Until next message, may everything essential good be coming to you.

Gary

Join us in Cotacachi or the coast for our June shamanic tour.

June 12-14 Shamanic Mingo Tour
June 16-17 Imbabura Real Estate Tour
June 18-21 Ecuador Coastal Real Estate Tour

On the real estate tours you’ll see property available nowhere else because sellers come to us first since we charge no commissions.  Here is new building for sale in Cotacachi we’ll view. Two units, fully furnished…

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One units has this iew upstairs.

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The downstairs unit this patio.

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Asking price for both units furnished.. $62,500.

One our coastal tour we’ll learn about this land for sale… with a family of monkeys on 24 acres for $100,000 asking.

Ecuador-beach-property-for-sale

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

We have great social times n our tours as well.  Delegates love sharing with one another. Here is one of our groups dancing one night in the courtyard of Meson de las Flores.

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Future 2009 Ecuador courses:

Get our web based course FREE if you join us in Ecuador this March or June.

This new course entitled “Tangled Webs We Weave – How to Have Your Own Internet Business” is available at $299.

This is a bargain. Merri and I have been traveling and doing international business for 41 years. We have had a web based business for over ten years. You can share everything we have learned for just $299.

However if you sign up for any three of our in person courses below, you can have The Tangled Web course free.

Enroll here $299

July 3-6 Ecuador Import Export Expedition
July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour

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

Ecuador-holiday

Oct. 9-11 IBEZ North Carolina

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Oct. 21-24 Ecuador Import Export Expedition

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

Our Cotacachi courses are conducted at this Cotacachi Museum next to our hotel Meson de las Flores.

Ecuador-holiday

 

Multi Currency Strategy Emerging


Multi currency strategy emerging markets are worth review now. Recent multi currency messages entitled Multi Currency USA and Multi Currency Global looked at the importance of multi currency investments in Europe, Japan and the US.

We continue the multi currency review in this message looking at Jyske Bank’s multi currency strategic review of the biggest emerging market, China. Jyske says:

Seen in the light of a major slowdown in economic growth, Chinese exports will come under heavy fire in the coming months. Given a weaker export sector, and presumably also weaker investments in the private sector as well as slower activity in domestic property-related activities, we anticipate a moderate slowdown in economic growth. By Chinese standards, moderate still means economic growth above 8%, and for the rest of the year, the growth rate will presumably be around 9%, i.e. a growth rate just below 10% for 2008.

International investors have been concerned that the Chinese government would react too slowly to growth risks and that this would send up the risk of a serious setback (i.e. GDP growth rates much lower than 8%). Such fear seems to be out of place, based on the demand figures for July. Foreign trade, retail trade and fixed investments beat expectations although industrial activity is gearing down marginally.

The Chinese authorities have traditionally introduced macro-economic policies supporting economic growth, including an expansionary fiscal policy, monetary-policy easing etc. to avoid a hard landing. We also expect that this will happen this time if growth seems to be too slow. The authorities have recently raised the tax benefit on exports and eased up the tight management of corporate loans in the financial sector.

On the domestic front, the trend in consumer demand is still impressive: July’s 23.3% growth in retail sales was higher than expected. This happened although consumers are squeezed by higher food prices, the solid correction in the Chinese equity market and a slowdown in the real-estate market (although the impact from the two last-mentioned factors was reflected in lower sales figures for cars, furniture and building materials).

With prospects of a moderate slowdown in industrial activity in the coming quarters, the growth in Chinese demand for many important commodities will presumably slow down. Recent data indicate that this trend has already set in: for instance crude-oil imports dropped back by 2.1% m/m in July and by 8.7% in June whereas iron ore imports dropped by 4.2% and 3.5% in these two months.

This suggests that investors are more worried about China than they should be. Chinese growth looks dimmed, but by most financial measures even this dimmer light is bright compared to economics in most countries. The fundamental economic fact is that China is the most populated nation on earth racing into middle class capitalism.

Equity investors may have over reacted and oversold the Chinese market.

In August, the LA Times wrote:

SHANGHAI — Many Chinese investors had hoped the Olympics would give a boost to their nation’s sagging stock market. So far, just the opposite has happened. The benchmark Shanghai composite index tumbled 5.3% on Monday, falling for the sixth time in seven trading sessions. The index has plunged 15% since the Beijing Games opened Aug. 8, and it now stands at 2,320 — down 56% since the start of the year, making it one of the worst performers in the world.

Since then the market has not rallied.

The Guardian wrote yesterday (Sept. 8, 2008): The main Shanghai index <.SSEC> shed 2 percent on Monday, touching a fresh 20-month low, despite a rally elsewhere in Asia triggered by the takeover of the two firms.

The U.S. Treasury’s takeover of Fannie Mae and Freddie Mac is good news in the short term for China, the biggest holder of the giant mortgage lenders’ debt, but Beijing’s huge U.S. exposure still poses a serious risk, a prominent government researcher said on Monday.

The Shanghai stock market is down 67% in less than a year. Yet as Jyske noted above, foreign trade, retail trade and fixed investments are beating expectations.

This is the type of multi currency distortion we look for as value investors.

This does not mean we should jump headlong into Chinese shares.

China according to the analysis of Michael Keppler remains one of the low value markets. Keppler’s sell candidates are China , Egypt , India , Indonesia, Jordan, Morocco.

Market timing rarely works. Value investing is far more effective and based on value alone, it apears to be too soon to jump in the Chinese market in a broad way.

However we can start reviewing Chinese opportunities looking for specific values.

One share to check is Hyflux Water. Hyflux is a Singapote company that provides water services in China. Keppler ranks Singapore as a low value major market along with Austria , Canada, Denmark, Hong Kong, Singapore, Switzerland and the U.S.A, but Hyflux may offer good value now.

I first wrote about Hyflux in 2004.

We invested $51,000 in our Model Green Portfolio last November. This investment has dropped to $40,193.

We are reviewing Hyflux now in our Multi Currency Portfolio Course.

Gary

Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.

International Investing and Business Made EZ North Carolina

We’ll have lunch at the farm and enjoy the leaf change.

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Thomas Fisher speaking to our  delegates at the farm.

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orange-roses

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Delegates enjoying a private conversation with Thomas Fischer during a coffee break at the farm.

This is the most beautiful time of the year on the Blue Ridge.

multi-currency-meeting-in-autumn

Legends & Success With Nutrition


Anceint lesson can help us have success with nutrition.

While in Finland, Merri and I were introduced to Kalevala, an epic of Finland. The root of the Kalevala is mainly old folk poetry collected over decades by the celebrated scholar, Dr. Elias Lonnrot.

He took many trips in the mid 1800s from Helsinki to isolated villages in the north of Finland and Russia to record by dictation the ancient rune singers and masters of folk incantations and lyrical poems. From these mystic tales, lyric folk poems, wedding poems and incantations, he organized this epic which first appeared in 1835.

The Kalevala tells of a great wise man Vainamoinen, who was a rune singer and leader of his tribe and his friend Ilmarenen a blacksmith who forged the vault of heaven. There was also Lemminkainen, a lady-killer and reckless adventurer, Joukahainene, a Lapp wizard’s apprentice, Kullervo,the son of a slave and strong woman such as Louhi. Part of the story isbuilt on a wonderful singing duel between Joukahainene and Vainamoinen(which becomes a cause for revenge).

If you read this epic you’ll see some remarkable similarities to other ancient scripts.
For example Aino, the virgin of the air, is a divine being who gives birth to Vainamoinen. There is a resurrection in the story when Lemminkainen’s mother brings him back to life with her love.

Reading passages from the Kalevala helped me connect some dots about how to succeed in business as well as other aspects of life.

What were these poems intended to do? Imagine what it meant to be a wiseman five thousand years ago. These ancestors had enormous wisdom but lacked the technology of printing. Sites ranging from the great pyramids in Egypt, Stonehenge in England, the Mayan astronomical sites to Ingapirca in the Andes show that ancients knew the movements of planets and stars to the second. The monuments they built attest to their amazing engineering acumen.

They also understood the quantum science of fractals, (as above, so below). They observed and predicted with great accuracy laws of quantum physics without the aid of microscopes, particle accelerators andsuch. Yet how could they pass this knowledge along?

Mostly the sages wrapped their universal truths in legend, songs and runes.The ancients were wise enough to understand the nature of man. They knew that tunes and rhymes have amazing bonds in our memory!

What better way to pass important information down!

But in what language? Language, context and meaning change as generations pass.

With this thinking, I read this phrase from the Kalevala translated to English.

“Then she spoke the words which follow, And expressed herself in this wise: “O thou bee, thou bird aerial, Fly thou forth again the third time, Fly thou up aloft to heaven, And through the nine heavens fly thou swiftly.”

Many ancient traditions mention the trinity and suggest we are comprised of three elements, air, water and fire.

Here the phrase says, O thou bee aerial. Could this mean you are air. Everything begins with gas or air. For example two gases, (Hydrogen and Oxygen) H2O make water and our solid physical form is mostly water.

The bio electric-magnetic system (fire) that kindles transformation (food to energy, energy to bones, muscle and motion etc.) completes the trinity.

So could the message in the Kalevala be that we should begin everything (including our health regimen) by looking at its lightest, air aspect? This is where all the indigenous life sciences begin, looking at the essence of motion or air in our bodies.

In Ayurveda, the Indian science of life, for example this air element is called Vata and the belief is that all illness begins with an air imbalance.
Ayurved’s main tactic is to keep the gaseous content in our bodies down so we are less likely to become ill. The main way to do this is to eat properly.

The Andeans are fanatical about good digestion also.
Their entire diet is aimed at making digestion easier by avoiding fermentation in the stomach, which creates gas (or too much air).

The philosophy is that such imbalances (if uncorrected) lead to digestive problems. If still uncorrected, digestive problems lead to kidney and liver stress (due to excess toxins created by the poor digestion). The theory goes that if still left unbalanced skin problems follow, as the body tries to evacuate excess toxins through the skin.

If still unchecked, these toxins finally lodge in the body and create real illness. If the toxins lodge in the joints, arthritis and joint type problems can follow. Toxins lodged in the blood vessels, artery and heart ailments can begin. In other places the toxins create cancer and varies other illnesses. In the brain, Alzheimer’s, etc.

There are a variety of easy ways to stop such problems before they start.  Here is a list of easy things to do to improve health.

#1: Eat slowly and in good humor. This is the first line aid to digestion.

#2: Eat natural foods in season. Processed foods, especially those loaded with preservatives, are harder to digest. There are  three growing seasons in each year, spring, summer and fall-winter.  We should have three diets that vary through the year, low calorie-low fat in spring, high carbohydrate in summer and high protein-high-fat in fall-winter. This creates a food supply that fits the body’s requirements as it shifts to adapt to each of these seasons.

The idea is to switch our eating routines naturally.  At the beginning of the switch it’s a good idea to do a bit of internal cleansing at the change of each eating season.

#3: Eat your largest meal at lunch. Eat a light early dinner. Our digestive fires burn brightest between 10 and 2, am and pm. Noon is the best time to digest food. If you eat lightly in the evening, the body’s second digestive period can burn up toxins accumulated from the stress of the day rather than just using this period to digest a big dinner.

#4: Watch the combination of foods eaten. Do not mix two types of fat in a meal. We have all heard of not mixing milk and meat for example. In the Andes Locro (a thick potato soup) is a popular common food. Most people there have it with cheese and avocados, but not the shamans. Mixing these two fats make each harder to digest.

Andeans also avoid mixing sugar and salt. Each meal there is a sweet meal or savory meal. Food is broken into three categories, sweet, neutral and salt. Neutral foods (eggs, unsalted cheese, vegetables, and grains) go with either sweet or salt, but not sweet and salt in the same meal. Several foods should always be eaten alone, bananas, pineapple and melon.

#5: Avoid cold drinks and ice. Cold restricts the blood vessels in the stomach and hinders digestion. Sip warm water instead. This calms air and stimulates digestion.

#6: Take a short leisurely walk after each meal. This stimulates bloodflow and aids digestion.

#7: Reduce caffeine and alcohol. These elements interfere with blood sugar levels and upset the digestive process.

These seven simple steps can dramatically improve your energy, well-being and longevity. They are easy to attain and are balanced steps that can bring more balance in our lives.

Gary

Join Merri me and Thomas Fischer of JGAM and our webmaster David Cross in North Carolina this October.

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