Tag Archive | "finance"

Ecuador Comparisons & Weather-Weathering Weather


We are on the road making Ecuador comparisons, weathering the weather and wishing for Ecuador weather.

In other words Merri and I have extended our Florida meanderings so we do not arrive back at our North Carolina farm in a snow storm.

We have been looking at Ecuador income potential and so let’s view this hotel for sale on Ecuador’s beach.

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Ecuador weather looked pretty grey on the day I took these shots… but we never have to worry about snow!

Readers  often write asking about the weather in the Andes. If you look up Quito weather for example it says “Rain” almost every day.  This is a puzzle as it is not true. Here is a great history of Quito weather from the Washington Post at http://www.washingtonpost.com/wp-srv/weather/longterm/historical/data/quito_ecuador.htm.

Here are the average temps.

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The highs and lows.

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The rain.

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We have been traveling though Florida getting a feel… wondering what has led us here.  Innocently wandering around… looking… checking…. waiting.

Of course the weather is great… though a bit sticky at times…. plus too dry right now. This is Florida’s third worst drought in history.

We can’t help but make comparisons with Ecuador.

Three things I noticed in the last two nights spent at Holiday Inns were:

First, when hotels here quote room rates…. they do not let you know of the tax.

In Ecuador we always provide this warning so guests know what the entire cost will be.

Secondly, hotels do not seem to have noticed the economic downturn.   Prices seem pretty high $119 for a Holiday Inn express and $129 for a Holiday Inn… plus the unmentioned taxes… for the typical box.This is double what our hotel costs at $59 (plus 22% tax).

Third, comes the free breakfast… overcooked buffets… terrible bakery pastries and everything served on foam plates and cups… with plastic knives and forks… without much (or really any service)… including the “wonderful” Smuckers jam.

I think of our hotel’s great cooked when you arrive, full breakfast… juice….fresh fruit made into an art form… hand made butter and hand made marmalade… plus choice of eggs in numerous ways… bacon or ham.  Though I have to be honest, I do not like the bread our hotel serves… next thing on my list to fix.

This is not a complaint… just a comparison.  Remember we are looking to buy in Florida because we also love it here.

Merri and  are having a great time. We are enjoying Florida’s warmth… seeing a lot of territory… ranging from Naples to Lakeland… Winter Haven… up to Clermont…. Mt Dora…  Tavares… Leesburg… Deland…  St Augustine… Palakta… Zeypher Hills plus some really out of the way (our favorite) places like Ridge Manor…  Crows Bluff…  Lady Lake… Fruitland Park.

This note is written from outside of Gainesville and today we inspect the Suwanee River.

The best place we have seen so far was remote… on the Withlacoochee River. We would have purchased this on the spot… except… it should be renamed…  Withlacoochee  Puddle!   We were very sad to see numerous lakes and rivers that are pretty much gone… during the terrible drought we are seeing here.

Multi Currency Thought

This reminds me of an important multi currency fact. The global economic downturn has driven the price of many shares down.. but has not stopped basic essential needs… like our need for water.

Shares of companies denominated in strong currencies that provide excellent needs can offer special value.

Take the water share we have followed for years… Hyflux.

Hyflux Ltd is company listed on the Singapore Stock Exchange that has a proprietary water filtering system that does business  in China, India, the Middle East and North Africa (MENA) region as well as Singapore and Southeast Asia.

These shares have fallen from a high of $4.88 to $1.72 as you can see in the chart below from uk.finance.yahoo.com

Ecuador comparisons

I’ll be sending a full report on the Hyflux shares to my Multi Currency subscribers shortly. You can enroll and study this report here.

Back to the Ecuador beach hotel for sale.

ecuador-comparisons

The owners is asking $600,000 and claims income of $180,000 a year with a net profit of $50,000.  If these figures are accurate… this is not a bad value spot to start negotiations.  Here is the beach nearby…

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the ocean side pool…

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the area where the hotel is located. ecuador-comparisons

Though this day was grey… there is a reward that comes with the clouds. The moisture creates some spectacular sunsets… like this one shot a bit north of this hotel at Palmazul.

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We viewed this hotel on a recent real estate tour and I am sending a full report to my Ecuador Living subscribers next week.   If you are not a subscriber and would like this report, you can learn how to subscribe to Ecuador Living here.

There are legal, asset protection and tax benefits that an overseas business can bring, but be sure to always have an attorney who is experienced in using overseas structures. The laws are complicated.  For specific information about using overseas structures correctly, you can learn more about Joe Cox here.  Contact  Joe Cox at jcox@coxnici.com

Regards,

Gary

Join us in Ecuador.

Delegates stay on this beach on our Ecuador mid coastal real estate tour.

ecuador-canadian-connection

Join our January Ecuador tours.

Jan.   8-11     Ecuador Export Tour
Jan. 13-14     Imbabura Real Estate Tour
Jan. 15-18     Coastal Real Estate Tour
Jan. 19-20    Quito-Mindo Real Estate Tour
Jan. 21-23    Cuenca Real Estate Tour

See the best Ecuador property for you.  Find the best real estate offers.  Know more of Ecuador. To help you experience a bigger adventure in this wonderful nation, to broaden your horizons, to expand your awareness of all Ecuador offers, we are providing deep discounts in 2010 for those who sign up for multiple tours.

We just added four South coast Ecuador tours that can help you gain extra savings with a multi tour pack.

Two Pack… 2 seminar courses & tours $998 Couple  $1,349 Save $149 on couple

Three Pack… 3 seminar courses & tours   $1399 Couple  $1,899 Save $98 single or $348 on a couple or more

Four Pack… 4 seminar courses & tours   $1,699 Couple $2,299 Save $98 single or $697 on a couple or more

Five Pack… 5 seminar courses & tours  $1,999 Couple $2,699 Save $496 single or $1,046 on a couple or more

Six Pack… 6 seminars courses & tours  $2,199 Couple $3,099 Save $795 single or $1,395 on a couple or more

If you plan to attend six or more seminars or tours in 2010 an International Club membership which allows you and a guest to attend as many of the 56 courses and tours we’ll sponsor and conduct in 2010  (fees would be $40,947 for all these courses individually) for only $2,999.

The International club fee rises to $3,500 this month  so enroll in the International Club now at the original fee of $2,999. Save $501.

International Club 2010

Attend our 56 investment, business, Spanish, real estate and export, courses and tours in 2010 with one small enrollment fee.

International Club 2010 Membership Enroll here

Here are the 56 courses and tours you can attend free. Plus there is even one more savings you will see below.

Jan.   8-11     Ecuador Export Tour
Jan. 13-14     Imbabura Real Estate Tour
Jan. 15-18     Coastal Real Estate Tour
Jan. 19-20    Quito-Mindo Real Estate Tour
Jan. 21-23    Cuenca Real Estate Tour

Join us in February or March.

Feb. 11-14   Quantum Wealth Florida -International Investing & Internet Business, Mt. Dora, Fl.

Feb. 15-16   Travel to and visit Quito
Feb  17         Travel to Manta
Feb. 18-19   Coastal Real Estate Tour
Feb. 20        Travel to Cotacachi
Feb. 21-22   Imbabura Real Estate Tour
Feb. 23-24  Quito-Mindo Real Estate Tour
Feb. 26-27  Cuenca Real Estate Tour

Mar. 11-14     Super Thinking + Spanish Course, Mt. Dora, Fl.
Mar. 15-16    Travel to Quito and Andes
Mar. 17-18     Imbabura Real Estate Tour
Mar. 19-20    Cotacachi Shamanic tour
Mar. 22-23    Coastal Real Estate Tour
Mar. 25-26    Cuenca Real Estate Tour
Mar. 28-29   South Coast Real Estate Tour

Apr. 12-15   Ecuador Export Tour ($499 or couple $749)
Apr. 17-18   Imbabura Real Estate Tour ($499 or couple $749)
Apr. 20-21  Coastal Real Estate Tour ($499 or couple $749)
Apr. 23-24  Quito-Mindo Real Estate Tour ($499 or couple $749)
Apr. 26-27  Cuenca Real Estate Tour ($499 or couple $749)

May  13-14     Ecuador Shamanic Minga  ($499 or couple $749)
May  16-17    Imbabura Real Estate Tour  ($499 or couple $749)
May  19-20    Coastal Real Estate Tour ($499 or couple $749)
May  22-23    Quito-Mindo Real Estate Tour  ($499 or couple $749)
May  25-26    Cuenca Real Estate Tour  ($499 or couple $749)
May  28-29    South Coast real Estate Tour ($499 or couple $749)

June 24         Quantum Wealth North Carolina
June 25-27    International Investing and Business North Carolina  ( $749 or couple $999)
June 28-29   Travel to Ecuador and Andes
June 30-Jy 1 Imbabura Real Estate Tour  ($499 or couple $749)
July 3-4          Coastal Real Estate Tour   ($499 or couple $749)
July 6-7          Quito-Mindo Real Estate Tour    ($499 or couple $749)
July 9-10        Cuenca Real Estate Tour   ($499 or couple $749)

Sept.   3-6      Ecuador Export Tour  ($499 or couple $749)
Sept.   8-9      Imbabura Real Estate Tour  ($499 or couple $749)
Sept. 11-12     Coastal Real Estate Tour   ($499 or couple $749)
Sept. 14-15     Cuenca Real Estate Tour    ($499 or couple $749)
Sept. 17-18     Ecuador Shamanic Minga  ($499 or couple $749)
Sept 20-21      South Coast Real Estate tour ($499 or couple $749)

Oct.    7          Quantum Wealth North Carolina
Oct.   8-10     International Investing & Business North Carolina ($749 or couple $999)
Oct.   11-12    Travel to Quito and Andes
Oct.  13-14     Imbabura Real Estate Tour ($499 or couple $749)
Oct.  16-17     Coastal Real Estate Tour ($499 or couple $749)
Oct.  19-20    Quito-Mindo Real Estate Tour ($499 or couple $749)
Oct. 22-23     Cuenca Real Estate Tour ($499 or couple $749)

Nov.    4-7        Super Thinking + Spanish Course Florida ($749 or couple $999)
Nov.    8-9       Travel to Quito and Andes
Nov. 10-11       Imbabura Real Estate Tour ($499 or couple $749)
Nov. 13-14      Coastal Real Estate Tour ($499 or couple $749)
Nov. 16-17      Quito-Mindo Real Estate  ($499 or couple $749)
Nov. 19-20     Cuenca Real Estate Tour ($499 or couple $749)
Nov  22-23      South Coast Real Estate Tour (($499 or couple $749)

Dec.   3-5       Ecuador Shamanic Mingo  ($499 or couple $749)
Dec.   7-8       Imbabura Real Estate Tour ($499 or couple $749)
Dec.  10-11    Coastal Real Estate Tour ($499 or couple $749)
Dec. 13-14     Quito-Mindo Real Estate Tour ($499 or couple $749)
Dec. 16-17      Cuenca Real Estate Tour ($499 or couple $749)

If you join the International Club, the entrance fee for 2010 is $2,999 (until January 2010).  Your attendance fees at all courses will be waived. You and your guest can attend courses worth $40,947.

You can calculate the savings as our schedule of all 2010 courses is shown below.

Arrival dates are always one or two days earlier. Please double check with us before booking flights.

I invite you to be a member of the International Club which allows you and your guest of your choice to attend all of these courses which are valued at $40,947!

International Club 2010 Membership Enroll here

You may well wonder why I would make such an offer and ask why the cost is so low? Let me answer this question frankly and from the heart.

First, it helps us do a better job for you. We feel greatly enriched when we can really help our clients improve their lives. We have learned through years of experience the best way to do this is to meet with you regularly. We can best help you learn how to improve your health and wealth through continual expansion of knowledge.

Second, we gain enormous fulfillment from the many friendships we form through the years. Our friends have enriched our lives tremendously. Let me explain this in more detail.

As a member, you will be part of our international family that meets intensively over the next year to examine ways we can make our lives better. Our goal is beyond just having money. Our goal is to have quantum wealth… good health… wealth and fulfillment through service.

Though I give all course delegates my very best, I cannot help but to do a better job for those who come again and again. As we meet often; your particular wants, needs and desires become clear, and it is easier for me to point you in the right direction.

Another phenomenon is that repeat delegates help each other! They get to know one another, help each other learn, share their insights, make contacts and gain more wealth.

Out associates in Ecuador, are experienced business people who live or work and conduct our real estate and export courses.  They can also act as your local backup for the business.

Lifestyle for Two. There is more! I have learned at my courses that many repeat delegates were couples.

We want couples! As a member of the program, you are entitled to bring another person to every single course or tour. The cost for that extra person will be ZERO!  You can bring whomever you wish. Bring your spouse, a friend, son or daughter, partner, accountant, adviser. You can bring the same person each time or a different person, whomever you choose to accompany you. (Accommodations and air fares relating to the courses are not included for members, delegates or their guests.)

Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year? We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!

Gary

International Club 2010 Membership  Enroll here

Ecuador Bond Default


Today, December 15, 2009, we’ll know for sure if Ecuador has defaulted on some of its bonds. Ecuador’s President Rafael Correa threatened to do this once before…and did not.

This time I believe he will.

This will be good…for many…because despite the default, Ecuador’s sun will not go away.

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Nor will the beauty of Ecuador’s mountains like this one we climbed.

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Nor will it stop the smiles of Ecuador’s happy people like these potato farmers we met on the hike.

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Nor will the hard working energy of the crafts people in town like Otavalo (shown here) cease.

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Nor the richness of the land like this Intag forest go away.

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Nor will the wonder of the longevity valleys like this Intag plain end.Ecuador-bond-default

Ecuador’s bond default may create profits in two ways….one in the global bond market. The other gain will be in Ecuador.

Many readers have sent me a link to last week’s Bloomberg December 12, 2009 article by Stephan Kueffner which says:

Correa Defaults on Ecuador Bonds, Seeks Restructuring.  Ecuadorean President Rafael Correa halted payment on foreign bonds he calls “illegal” and “illegitimate,” putting the South American country in default for a second time in a decade.

The government won’t make a $30.6 million interest payment by Dec. 15, when a month long grace period expires, Correa told reporters in his office in Guayaquil. The $510 million bonds due in 2012 plunged to 23 cents on the dollar from 31 yesterday and 97.5 cents three months ago.

“I have given the order that interest payments not be made,” Correa said. “The country is in default.”

Though Ecuador is a small country, the size of France, with about 11 million people, its bond default may slow the recovery of the bond market during this global economic downturn.

Latin Bonds already have strong yields.  Look at the high yields on medium term denominated in US euro and US dollars!

Currency   Bond                Country             Yield

EUR     8.5  24/09/2012     BRAZIL             7.49%

EUR     7.375 03/02/2015   BRAZIL            8.38%

EUR     11.5   31/05/2011   COLOMBIA      8.17%

EUR     5.375 10/06/2013   MEXICO           7.28%

EUR         7.5  14/10/2014  PERU               9.02%

USD        10.25 17/06/2013 BRAZIL           6.24%

USD     8.25 22/12/2014      COLOMBIA     7.42%

USD     9.875  06/02/2015    PERU             7.57%

Ecuador owes about $10 billion to bondholders, multilateral lenders and other countries…not a lot by global standards…but  Ecuador’s bond default could cause a ripple down in Latin bonds and create even higher yields.  If so, I’ll buy some today.

The bonds and yields above are from Jyske Bank’s bond list of last Friday. These are indications not recommendations.    You can get up-to-date bond information from:

US investors at Jyske Global Asset Management.  Contact Thomas Fischer at fischer@jgam.com

Non US Investors at Jyske Bank. Contact  Rene Mathys at mathys@jbpb.dk

The next opportunity is in Ecuador. Many readers have asked questions like:

Ecuador is defaulting on its bonds. Any problems because of this? Is this good or bad?

This is a question much like, “Is the US federal $800 billion bail out, good or bad?”

The answer is yes and no.

First, remember that Ecuador defaulted on bonds once before in 1999.   Everything fell apart. Bank’s shut down. The country ran out of gas.  Times were terrible.

The country remained a great place to live. The cost of living collapsed. Help was easy to get. You could buy real estate for a song. So the answer to “Is this good or bad?” depends on who you are, how much money you have and where it is invested.

The Bloomberg article points out that Correa says of the default:

“I couldn’t allow the continued payment of a debt that by all measures is immoral and illegitimate,” Correa said. “It is now time to bring in justice and dignity.”

A debt commission Correa formed last year said in a 172 page report in November that the global bonds due in 2012 and 2030 “show serious signs of illegality,” including issuance without proper government authorization. Correa invoked the 30- day grace period on the interest payment last month, saying he wanted to analyze the commission’s findings.

Correa, 45, said the government will present a restructuring proposal in coming days. “We want creditors to recoup part of their money,” he said.

Personally I think this is true, but is the wrong approach.  I have long been a defender of Correa.  He is much like Barrack Obama, young, smart, energetic, from a poor background, who worked his way to the top with a mandate made possible by minorities….based on promises that probably cannot be kept.

He is trying to make improvements..but can he?

Obama cannot change the previous American debt and some of that US debt, in my opinion, is as immoral and illegitimate as can be.  If previous Ecuadorian politicians broke the law and created incorrect loans…Correa and the people of Ecuador should punish them.  They should recoup what they can from those people…but to punish lenders will simply stop lenders from lending to Ecuador.   This will hurt the nation, long term, as a whole.

The Bloomberg article goes on to say:

“Ecuador is moving further into isolation,” said Vicente Albornoz, head of the Cordes research institute in Quito. “The hardliners in the government won.”

“Ecuador is a serial defaulter,” said Arturo Porzecanski, an international finance professor at American University in Washington. “They defaulted in the 1980s, 1990s and this decade. A lot of other countries have had one or two defaults, but Ecuador tops them all.”

Correa, who holds a doctorate in economics from the University of Illinois at Urbana-Champaign, has said he will not sacrifice spending on health and education to pay the debt. Ecuador’s foreign obligations are equal to 21 percent of its $44 billion gross domestic product. Argentina’s debt, by comparison, was equivalent to 150 percent of its GDP when it defaulted in 2001, according to Goldman Sachs Group Inc.

Oil, which has plunged 67 percent since July amid the global financial crisis, accounts for about 60 percent of Ecuador’s exports. Finance Minister, Maria Elsa Viteri, said on Nov. 18 the country’s fiscal accounts remain “strong and healthy.” Ecuador had $5.65 billion in cash reserves as of Dec. 5, according to the Central Bank.

The default was triggered by the combination of the decline in oil with “a ridiculous ideology,” said Claudio Loser, the former director of the International Monetary fund’s Western Hemisphere department, who now is a scholar at the Inter- American Dialogue. “The financial need wasn’t so great that it was forced to declare a default,” Loser said.

The South American country has defaulted six times since it separated from Gran Colombia in 1830, according to “Debt Defaults and Lessons from a Decade of Crises,” a book published in 2007 by Federico Sturzenegger and Jeromin Zettelmeyer.

“It’s a final blow to external investors, and particularly any energy investors that may have retained interest or had future plans to attempt an investment in Ecuador,” said Enrique Alvarez, head of Latin America fixed-income research at IDEAglobal Inc. in New York.

I believe this default will hurt Ecuador’s overall economy…and help expats who live and invest there in small ways. When economic conditions drop, prices become lower. Labor is easier to find. Everyone is more willing to serve and work hard…if you have money.

Merri and I were living in Ecuador when the sucre collapsed falling from 3,000 sucres per dollar to 24,000 sucres per dollar. This roller coaster reduced the cost of food, clothing, shelter, staff, everything local. Wages were down. Bargains were everywhere!

Merri and I were loved because we stayed. We spent. We provided jobs.

Life can actually be better in hard times…especially if you have your income and investments OUT of the depressed country.

There is a caveat. If conditions deteriorate too far, law and order can break down.  Short term this will make Ecuador’s life better. They won’t have the loan to repay…but long term, as they become more isolated from the global economy, this will hurt.

Ecuadorians are basically friendly, non violent people so I do not have any great concern about this. This is based on experience. I have lived in places where people were not quite as easy going, like Hong Kong in the 1960s when there were riots and bombing in the streets.

My belief if that Ecuador will remain a great place to be…especially for now.

Gary

Join us at a course in Cotacachi or on Ecuador’s coast this winter.

Here is our latest group inspecting the hotel,which is one block from the Ecuador’s Pacific.

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We’ll view this hotel if it has not sold. It has a huge front porch.

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Large second floor veranda with ocean views.

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Beautiful flowered front yard.

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The building is really rough and needs work…but over 8,000 square feet of building. The asking price is $60,000.

We have sent our Ecuador Living paid subscribers more details on this building on this Ecuador hotel for sale. If you subscribe, you can have this report. See how to subscribe to Ecuador Living here.

Join us for our next Spanish course ad real estate tours.

Join us at a course in Cotacachi or on Ecuador’s coast this winter.

Jan. 16-21 Ecuador Spanish Course
Jan. 22-23 Imbabura Real Estate Tour
Jan. 24-27 Coastal Real Estate Tour

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 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 and how to attend as many of them as you like FREE.

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 Warning


The rising US dollar and Japanese yen remind me of a 1970s multi currency warning.

Last Friday, the New York Times said: “Fear that the financial crisis is infecting once-healthy economies created another white-knuckle day for investors Friday, causing stocks to tumble from Tokyo to New York.

Uncertainty also roiled currency markets as investors continued to turn to the security of the United States dollar and the Japanese yen and drove down currencies of developing countries like Brazil, Ukraine and South Korea and even of developed countries like Britain.”

This article misses an important point. The dollar and yen are not rising just because they are viewed as secure currencies. They are not in my opinion secure multi currency investments now. Japan and the US are two of the largest debtors in the world. Their currencies must be suspect.

Over the past twenty years, more and more investors have been borrowing low and depositing high. I wrote one of the early books about this multi currency investing tactic in the 1980s. Subscribers to my multi currency course still study an updated version of this text.

Investors and institutions everywhere borrowed the US dollar, Japanese yen and Swiss francs…billions in loans at low interest rates. They then converted the loans and invested into currencies with high yields like the Brazilian real, Ukraine hryvnia, South Korea won and even the British pound.

Now as the high yield investments are tumbling, due to global economic panic, these investors have to sell their investments and convert the Brazilian real, Ukraine hryvnia, South Korea won, British pound and other currencies to buy dollars, yen and Swiss francs so they can pay off their loans.

A clue that reinforces this thought is seen in this chart from finance.yahoo. See how the pound has fallen verses Swiss franc.

Pound Chf chart

In theory the the Swiss franc should be linked to the euro and the euro to the pound.

Yet a year ago a Swiss franc bought 42 British pence. Now it buys 53 pence.

Even more telling is how the Swiss franc has risen sharply versus the euro itself. The strong Swiss franc puts Swiss industry at a distinct disadvantage at exactly the wrong time. The Swiss will not like this strong franc but I suspect they cannot stop it because the franc purchases are being made to pay off swiss franc loans…not to deposit in francs.

euro SFR chart

This buying of the dollar yen and franc is a forced and panicked move that may be like a crowded, dark theater. Someone yells, “FIRE.” Everyone stampedes for the door. The crowd gets there all at the same time and realizes they have run to the wrong door!

A reverse rush could create a chaos you should avoid….so be careful if you choose to bet on the greenback, yen or franc.

Rethink selling if you are holding emerging currencies without loans or have loans but do not have to pay them off.

An economic downside correction is unfolding yes. The end of the world…no. The end of commerce as we know it…no. The end of fundamentals as we know them…no.

Here are seven fundamentals that our multi currency studies over the past years have found are worth investing in again and again. I doubt that they have flown the coop.

Economic fundamental #1: Globalization is good for everyone and is here to stay. Bet against any globalization block. Bet for globalization.

Economic fundamental #2: Government involvement in global economics and business may dampen the sharper acceleration of the natural financial rhythm but eventually makes the corrections worse.

Economic fundamental #3: Mature economies cannot grow much faster than 3% per annum.

Economic fundamental #4: Emerging economies grow much faster than 3% per annum.

Economic fundamental #5: Emerging stock markets fall faster and further than major markets during times of panic.

Economic fundamental #6: Emerging stock markets rise sooner, faster and further than major markets after times of panic.

Economic Fundamental #7: The most guaranteed way to lose purchasing power in the long term is hold long term, low yielding…supposedly safe… government bonds.

If these fundamentals are still correct, than the current rush to the dollar and yen create a monumental opportunity! There will be a time to invest in the very currencies that are tumbling now. One way to do this will be in emerging bonds. This site recently examined some ideas about multi currency seasoned bonds.

Emerging equities also will make sense as will emerging currency certificates of deposit, major market equities and some discounted major market bonds.

Now, however, is probably not the time to act…yet.

I have been looking at seasoned bonds with my investment advisor at Jyske Global Asset Management.

He wrote: “Dear Gary, I recommend that we hold back before investing anything. The market spreads are simply too high right now. If we buy bonds today you will be down 10-20% when the trade is settled, as the bid-offer spread currently are at 10-15 points on bonds trading in the 40-50 area. So hold back until we see where this ends. I hope that you agree!!!!!!! Kind regards”

I did agree and had come to the same conclusion to hold off buying for now. I remember in the 1970s, when gold was selling at $860 an ounce and silver $48 an ounce. The spread on silver was $10 an ounce! You could buy for $48 but only sell for $38.

High spreads like this mean that even the pros are totally uncertain. My account exec is right. The cost of buying is way too high. If the traders are this uncertain, then I have no business trying to outsmart such chaos.

However the worse this confusion is now…the better it will be shortly. Be ready to see some real multi currency bargains.

You can get information about multi currency accounts from Jyske Bank and

Jyske Global Asset managers

US investors contact Thomas Fischer at fischer@jgam.com

Non US investors contact Rene Mathys at mathys@jbpb.dk

Until next message good global investing!

Gar

Join us at a course in Cotacachi this winter.

Jan. 16-21 Ecuador Spanish Course
Jan. 22-23 Imbabura Real Estate Tour
Jan. 24-27 Coastal Real Estate Tour

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

Ecuadorians love music.

Ecuador-music

They love flowers and beauty.

Ecuador-flowers

They are friendly.

international-club

They are very religious. Here is the cathedral next to our hotel.

multi-currency-Ecuador-cotacachi-dawn

Cotacachi-Statue

Here are Merri and me with our Ecuador family and Godson, “Quinti Ananki” (King of the Hummingbirds).

ecuador-family

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

Beware the Dead Cat Bounce


Could the sudden recovery on Wall Street and elsewhere be a dead cat bounce creating that creates an environment for a long tail shock? There are a number of reasons why global equity markets may recover (shared in our multi currency course) but here is the news about two important phrases and risks you should know.

The first is the “Dead-Cat Bounce”. This is a temporary recovery from a prolonged decline or bear market, after which the market continues to fall. If you drop a dead cat from a high roof it will bounce but this does not mean it still is alive.

The recent best day for European stocks and the biggest rebound for US markets since the 1929 Great Cash must be kept in context. After the 1929 crash, the Dow Jones industrial average gained 18.8% in the next two days. The Dow’s bounce earlier this week was 19.2%.

The second phrase is “Fat Tail Shock.” This phrase is all about predictive ability.

In finance, most investment markets are affected by normal bell shaped curves ending in a thin tail. The rise, leveling and falls of most markets are predictable.

Fat tails are considered undesirable because they introduce additional risk…because markets become less dependable. For example, an investment strategy may have an expected return. In normal times the likelihood of its failure (negative return) is less than one in a million. Normal distributions that emerge in finance generally do so because the factors influencing an asset’s value or price are mathematically “well-behaved.” In ther words markets are based on fundamental value. However, traumatic “real-world” events (such as an oil shock, a large corporate bankruptcy, or an abrupt change in a political situation) are usually not mathematically well-behaved. Human emotion dramatically outweighs fundamental logic. This causes investments to become less predictable.

This is where we are now…markets crashing, dashing, rising and even exploding/imploding. As markets move more and more dramatically so too does the daily news…Headlines become bolder… pictures more horrid and announcers increasingly grim.

All this is at the expense of our nervous systems.

Merri and I use a different method of news casting!

Here is the Merrily Farms morning news. You’ll find it a little different…and hopefully more refreshing…then CNN, NBC, CBS or ABC

Please walk with me around the farm. We have no TV at Merrily Farms so we take a walk North, East, West & South to get our morning news. First, we start by looking east from my office to see the first broadcast of the day.

multi-currency-news-sunrise

We’ll I’ll be darned. The sun has risen again! The sky isn’t falling after all.

Then I look south…

multi-currency-news

just because the view is pretty to see. This is not a bad thing to do…to see something of beauty first thing.

Then I amble out and open the goose pen.

multi-currency-news-watchdogs

This is really handy. They are the watch dogs here. The geese let me know if any real problem is coming. This means I can focus on the day without worry. Handy things…these watchdog geese.

Then we head out for a morning walk.

multi-currency-news-view

We break for an important announcement at this waning autumn view…

multi-currency-news

The view is very different from the same spot in the blooming spring.

multi-currency-news-spring

Yet both have beauty…and these seasons are required. We would really be in a fix if everything just kept growing.

multi-currency-news-dark-path

Somewhere along the way we head up a path where the going starts getting dark.

Sometimes the way becomes quite dark.

multi-currency-news-dark

Yet every dark path always seems to have a light at the end. Just when we begin to think it will never brighten, a meadow opens…

multi-currency-news-openings

with we see views that seem like they’ll never end.

multi-currency-news-clearing

Of course they do end because every meadow has a beginning and an end.

Every walk is filled with beauty.

That is the news. Every walk has it dark and bright moments…but there is beauty and necessity every step along the way. There is a reason for the open woodland…

multi-currency-news-friends

and the dark forest.

forest

The meadow.

multi-currency-news-blue-sky

Every day the news here is different…always wonderful and in some ways exactly the same.

Basically the news is really simple….saying that life is filled with wonder…

multi-currency-news-beauty

if you stop and take long enough to look for it.

You can find beauty in the quiet glens.

multi-currency-view

You can enjoy the long views.

multi-currency-long views

You can be patriotic or not.

multi-currency-patriotism

You can like where you are or not. You can stay put or follow a meandering stream.

multi-currency-pond

Whichever the news will be the same…the daily message is…keep walking…this incredible event we are undertaking is a journey and there will always be a new path that is perfect for you.

multi-currency-news-light

Tomorrow’s message looks at how this message of continual change has opened a new exciting opportunity for us to share with you.

Until then, thanks for sharing this little hike and the news from Merrily Farms.

Fade out…play the Merrily Farm theme song…

“Row Row Row your boat. Gently DOWN the stream.

Merrily Merrily Merrily. Life is but a Dream.

Gary

These shots show the glory of the Blue Ridge leaf change. They also hint rumors of colder days ahead…time to head south.

Won’t you join us…in the sun…for the Ecuador news?

Join Merri, me and Jyske Global Asset Management at one of our courses. We review economic conditions, Ecuador real estate, my entire portfolio and natural awakenings to health and wealth with investing and business ideas for the months ahead.

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

Stay on for the real estate tour Cotacachi and surrounding areas. We’ll see real estate for sale on this lake.

Ecuador-lake-sites

Plus we’ll see homes at San Miguel and Prima Vera II.

cotacachi-ecuador-san-miguel

Primavera II $46,000 condos.

multi-currency-Ecuador-condos

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

Then travel to the coast and enjoy this Pacific surf that in November is warm!

Ecuador real estate for sale .

Salt or fresh water

Ecuador real estate for sale

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

Ecuador Interesting


Ecuador is interesting but what is below is more interesting than most messages about Ecuador. You will see why below.

You may have read in the news about the problems of Ecuador in recent days and wondered why I am investing in Ecuador. One of our goals is to help our readers get Ecuador news beneath the news.  The problem today with popular media is that it has to cater to the lowest links for the sake of volume. Sex, scandal, death and destruction sell and in the mad scramble to fill every issue with as much attention grabbing horror as possible, most media make over small bits of the most horrifying events of the day and little more.

Our goal is to dig deeper. In this case I turned to several Ecuadorian friends for their views. One is a powerful Guayaquil businessman connected at the highest political levels. The second is an attorney from Quito. I chose these two because one problem in Ecuador is the continual struggle between the populations in the cities of Quito and Guayaquil. As one Guayaquileno once put it, we make the money here in Guayaquil and they (the politicians) spend it in Quito. The cities have existed for centuries in a state of mutual distrust.

The third is a foreign businessman who has lived in Ecuador for many years and has a very successful business, the fourth an indigenous leader.

The first reply is from my friend from Guayaquil. For reasons that will be obvious he remains unnamed. He is connected at the highest levels of business and government in Ecuador.

My friend writes:

“Ecuador is still under the spell of gloom that befell about two years ago. I saw it one year before that, but I did not know what to do about it, and I did not want to believe it either.

“Now the opposite has happened. There is a small light showing at the end of the tunnel. It is small, but steady. God bless it. We must not talk about it – too much. It is called Manta.
“Manta did not exist in colonial times. The pirates and sea robbers made it unthinkable to have a port facing the ocean. The nearest port had to be thirty miles in, at least.

“I was in Manta, I had not been there for ten years at least, it has improved a lot in that time. There is so much that can be done. Manta is like a little baby. In Manta, the help can come in little ways, totally invisible to the public that is not “in”. Hospital, schools, Univ., urban development, you name it.  As I said, all this is very small right now, but it is moving ahead in the right direction.

“This is all very complicated, I hope it works for the best. Unfortunately, it brings us close to our President, and that is not what we want, we want to keep him away.

“There has been an Indian rising. They have gained attention but unfortunately they do not have a plan, or people, or anything. It was just a rising of “down with everything”. Down with the President. Down with Congress. Down with the Judicial. This is a typical rising of communal soul formation, or soul development, it is basically downs versus ups.

“They are however much better organized and have clearer objectives, and words than they had, say fifteen years ago. Of course they still need another time to be at par as an ethnic group. It will come if you give them time, fortunately.

“The unfortunate part is that it is all taking place at a moment when their negativity can cause a lot of damage, they also say down with dollarization.

“The new President? He is my personal friend, a great guy, but not the right man for the crisis, as he is too flat footed. Everything the previous man has done is wrong.”

Another Viewpoint

The second insight on Ecuador was sent from Dr. Andres Cordova. Dr. Corova is the grandson of Ecaudor’s past President and his law firm provides legal counsel for many financial institutions. The firm works with foreign banks established in Ecuador and otherwise and is legal counsel for the Central Bank of Ecuador, the Superintendency of Banks.

Some of the members of the firm have participated in the making of some of Ecuador’s monetary and banking decisions and one of the senior partners has been Superintendent of Banks on two occasions.

Though the firm acts as counselors to many of Ecuador’s finance and banking entities, they advise on specific areas, upon request, and do not represent, in any way, the institution’s position on different subjects so they can offer us an unbiased view.

The firm has information and views from inside Ecuador’s finance and banking fields and great contacts so they can prepare reports, furnish helpful information, and answer inquiries promptly for any member who wishes to retain them for any specific project.

Dr. Cordova writes:

“We had quite a recent scare. During the past several months the people of Ecuador had become increasingly infuriated with the President’s conduct of governmental affairs.

“We had a situation where very little support was given either to President or to this military insurrects. A Constitutional solution had to be applied.

“As much as I believe the president to be corrupt and incompetent, I was deeply angered and saddened by the whole situation.

“The bottom line is that there was some sort of democratic solution to the crisis. The Country is calming down. There is this bitter feeling about the whole situation, but who knows, maybe it was for the best.

“What is going to happen? Well, first of all, most of the country sees this outcome as the proper one, given the circumstances. This is a good thing, for it somehow reestablishes the faith and tranquility we all need. Also, it brings stability, for all major players in this social and economic machinery are in favor of the outcome.

“The international community, represented by the different States, has manifested its approval of this Constitutional solution to the crisis, and is currently supporting Ecuador (at least rhetorically) in its struggle to shape up.

“The new President is regarded to be a good, honest man. He has changed most of the different Ministers and Secretaries of the Government and it is likely we are somehow facing a fresh start. Maybe it’s a little bit of wishful thinking on my part.

“These past days we have seen a very good attitude in most of the industrial sector. The have committed to lower some prices and to raise the wages. Somehow a feeling of responsibility and that we are all part of the solution is surfacing. I sure hope so.

“The crisis is very deep and we still have some rough years ahead. I would want to believe that we have nowhere else to go from here but up.

“I think after this episode the Country is going to try and move forward with more enthusiasm and drive. The new President is going to be in power for the next three years. This will help stabilize the country, for no one will be speculating on the elections, as if they were to be held in a few weeks or month’s time.

“This new President may do a much better job than the last one. Most of all because he does not come into power all tainted by strings-attached political supports and contributions that he needs to pay back. He can freely conduct the government without having to pay back all sorts of favors. Also, he is apparently an honest man.

“The Country is well aware of this and there is some sense of peace after all. It is still too early to tell how all of this will affect the country in the following months or even years, but it is safe to say that Ecuador still offers good and safe investment opportunities, provided they are well reviewed and screened.

“I understand many foreign investors may view Ecuador as an anarchic country which is falling apart by the day, where their investments are in no way safe. This is not true.

“In this crisis, many good investment opportunities exist. Real estate, for example, offers very nice investment opportunities. This kind of investments are, of course, better on the mid to long term.

“When the better times arrive, hopefully some two to three years from now, and then on and on. As exports grow and the economy improves, the new flows of cash and the economic recovery and good health will make it more difficult to find good deals on certain areas.

This may be a signal to buy now.” Andres

The Third Viewpoint

The third reply is from my friend, the European businessman who has lived in Ecuador full time for the last six years and has many business interests and real estate holdings:

“The last president seemed to be a better man but he had done too many dirty deals with the political and specially the financial sector to be trustworthy.  The current president seems to be a very honest man with no such connections and that may be what the country need now. 80% of the people still want to dissolve the congress, mainly because of the corruption.

“I do however believe that the president will face huge demonstrations again this summer when they will have to increase the prices of gas, propane, electricity, etc. The country is said to spend US$ 700 million on subsidies this year if they do not increase the prices. This country may be impossible to run.

The final rely may be the most important of all as it is the Indiginistas that (quite rightly) have been making the fuss.
“I appreciate dear friend that the international news are very alarming; but the reality is very different since here in Ecuador everything follows with tranquillity and in the direction of the improvement of abundance and peace.”

This is why I have already started taking investors to Manta, Ecuador, a major seaport (350,000 pop.). The flood of Americans will make the town boom. Timing to make money could not be better. Check www.garyascott.com for more details.

There you have it…an article that seems to explain why Ecuador makes sense as a place to invest.

So Ecuador is interesting.  Here is why this article is more interesting than most messages about Ecuador.   This article was written April 15, 2000, over eight years ago.  You can see the original message in our archives at https://www.garyascott.com/2000/04/15/1266.html

The daily news is sensational and incites worry.  Those who look beyond it have a definite investing edge. Had I let worries reported in the news stop me from seeing the true fundamentals of Ecuador’s potential a decade ago, I and hundreds of my readers would have missed fortunes.

Ecuador still offers good opportunity now.

See why Manta makes sense now

Until next message may your news be positive, true and good.

Gary

Join us October 3-5 for the Blue Ridge leaf change.
International Investing and Business Made EZ  North
Carolina

Or enjoy one of our courses or tours in Ecuador.

Manta Ecuador Coastal-Quito Real Estate Tour

Ecuador Super Thinking + Spanish Course

Ecuador Imbabura Real Estate Tour

Ecuador Import Export Course

International Investing and Business Made
EZ Ecuador

See discounts for attending more than
one course.

Ecuador Living Benefit


Ecuador living offers many benefits, one being that it stimulates the sluggish Ecuadorian economy. However, all of human existence is one of polarity.  Black must have white, positive needs negative and money always brings a rising price.

Ecuador-hotel-staff

Take Eduardo and Consuelo, who work at our Ecuador Hotel El Meson de las Flores. The hotel was in receivership and empty when our foundation Land of the Sun bought it to help stimulate the economy in this part of the Ecuador countryside.  By bringing people we have helped save their jobs.

A reader raised a good question about this though when he wrote:

“Gary, I’ve received your email newsletter for about six months now.  I have been interested in real estate in Ecuador for about a year.  I’ve been to Ecuador twice in the past year, and am going again July 1.  On the one hand I understand your enthusiasm for Ecuador, but on the other I wonder how pushing Ecuador real estate will impact the local population?  Obviously if you are a property holder, it’s a good thing; but if you’re not, but hope to be, outside money could push many locals out of the market.  Is this creating any kind of animosity toward outsiders?  I’d appreciate your insight on this.  I am an economist with a focus on international finance, so I enjoy all aspects of your writings.  Regards.”

This has been a never ending story since the beginning of time..everywhere, neighborhood to neighborhood, city to city, county to county and country to country.

So far the majority of Ecuadorians love us….as much or more as our neighbors here in North Carolina’s Blue Ridge mountains.

Most Ecuadorians cannot afford property because the locals were pushed out of the market by the Spanish about 500 years ago…just as American natives in the US were pushed out by the English, Germans, Irish, Scots, Italians, Chinese and others who arrived here.

Our arrival in Ecuador creates jobs, hope and a chance that many more Ecuadorians will be able to own their own land.

However the problem goes beyond just a few investors arriving from the US, Canada, Span, Italy and many from Colombia and Peru.   This is a time of transition for Ecuador with the final phase of the colonial hierarchal system near its end.  Whether the locals in Ecuador like it or not…just as people in many other countries do not like it, we all live in a global economy.   Many Americans did not like selling so much property to the Japanese in the 1980s.  They will gripe now as Europeans buy big chunks of Florida.  The Floridians will gripe. Yet they will sell, take the money and move to North Carolina…where the North Carolinians will gripe about the inflow of Floridians.

Prices will equalize anywhere there is a distortion, locally…nationally or globally.

Water gushes down. Air rushes into vacuums.  Money flows towards good value.

We see this in the United States with gas prices rising to $4 a gallon.  This is not as bad as in Europe where gas runs $7 or $8 a gallon….but it is still a shock to those of us who can remember…(yes it’s true) gas at 19.9 cents a gallon.

Gas is a global commodity. Americans have to pay the going rate.

Ecuador property is a global commodity…in an ever growing global economy.

I am a full blooded American…born and raised in the USA…as you can get.

Today, I am wearing all American clothes beginning with my American Converse tennis shoes (made in China), my American Wrangler jeans (made in Mexico), my American Fruit of the Loom underwear (made in El Salvador) and my American Van Heusen shirt (made in Bangladesh).  So even if I stayed in America, unless I plan on running around shoeless and naked, I will encroach on people in other countries…pushing up property prices for factories…that create jobs…help feed families…and create pollution. Positive…negative…positive…this never ends.

My first book “Passport to International Profit” was published in the early 1970s and included a chapter on “border blindness.”  This chapter looked at how political borders are illusions that support hidden agendas for the few who encourage them.  Borders  are transcended by almost all human emotions. Get a pretty Italian and handsome Irishman together and they will fall in love. Put a Mexican with a cheaper tomato next to a hungry Canadian and the Canadian will get out his loonies and buy the tomato. Put an Englishman and Frenchman in a sinking ship and they will both bail water.

The market place of humanity tramples borders. The deepest nature of our existence supports free trade and free movement of all to anywhere in the world.

Since that book was written…modern communications and transportation have made all of this even more true.   For example at Cotacachi communications see how broadband has changed the way we can live in Cotacachi.

We are, at the deepest level of our being, all citizens of the world.  It is logical and correct that we trade with those who serve us best…whether they bring products to us (like the tomatoes, shirts, shoes, pants and even underwear) or we go to the product (real estate abroad).

I have found that if one treats people with fairness and respect, these courtesies will be returned.  This was as true when we moved from Florida to Ashe County, North Carolina…where Floridians are called “Floridiots” by many locals…because they pay too much for the land and drive prices beyond the local abilities.

I know we are loved by our friends and staff in Ecuador.   Cotacachi Ecuador Hospitality shows how they treated Merri on Mother’s Day.

We are loved up here in North Carolina as well…not because we are Americans or Floridians or because we are red, white or black, Christians, Muslims or Jews, but because of how we act with our friends, neighbors and business associates.

When you treat people right…you become known as a friend not a nationality.

We are loved because we try to treat people with care, respect and fairness.  We bring in money and bring them work.

Few economies, local or national can isolate themselves from the global economy and enjoy a high material standard of living.

Ask the people of Mynmar if you do not believe this.

What a grand experiment (though I do not see it happening) would be for
mankind to eliminate all borders, customs, immigrations and nationalities for a decade.  My bet is we would never go back.

In Ecuador I do not see a resentment problem…but let’s allow the people of Ecuador have ther say. A leaflet has been posted on buildings and telephone poles all around San Clemente, the small village where Merri and I have bought our beach condos.  This was not put up by us..nor by the developer of the condo where we are buying.  This was written by locals in San Clemente.

I asked John Papski, our man on Ecuador’s beach, to translate it.   Here is what the Ecuadorians are saying about our arrival in their small fishing village with a five star spa hotel and a 61 unit luxury condo development  that will change the village’s life forever.

TRANSLATION

“Ecuador has a population of 13 million (2008 )and 3 million that live abroad (23% ).  Parents have immigrated leaving their children; people left for lack of work, pessimistic views of the future without opportunities, corruption, globalization and neo-liberalist practices have contributed to a disappearance of opportunity for individual, family and social development.

“San Clemente has an approximate population of 4500. There is a need for 600 new jobs per year for the youth but nature and the sea does not allow sufficient funds for welfare, health and studies.

“However, tourism is one of the few chances left for Ecuador and its youth.

“The marvelous beaches of San Clemente attract people that travel many hours, save and borrow money so they and their families can spend on food, lodging, water, beer, sun lotions, repellents, handcrafts and return home broke but content knowing that health, welfare, lust for life, relaxed has prepared them to continue the hard fight in the city.They have integrated with nature with the immense help of the sea and its marvelous sounds and movements, with the wonder of the beach and hills that surround, wonder of tranquil people, amiable and service orientated to all visitors with humanity, smiles,assistance and hospitality.

“Our visitors dream during their happy stay of a swift return to our beach or perhaps remain here forever. The beach tourists do not come to Rocafuerte or Charapoto (nearby towns ). They come to San Clemente.

“Bahia apartment owners come to us because they know our beach is a great treasure with fantastic potential of nature, not enclosed in sad cement but green, blue, orange living nature. Look after nature as we care for ourselves and defend the future of our youth.”

There you have it, a local view of what they think of us.

So far I believe we are more than welcome.  I hope that Merri and I and all we bring along have the wisdom to be with the wonderful people of Ecuador in a way so they are not just happy that we come…but that they also want us to stay.

I invite you to join us in the wonderful adventure and as human beings who are citizens of the world!

Gary

See dates for our other Ecuador courses and tours:

Coastal Real Estate Tour

Pool, tennis court and beach at Palmazul where we stay on our coastal tours.

Ecuador-beach-hotel

Beach at Palmazul.

Ecuador-beach-property

Super Thinking + Spanish Course

Courtyard at Ecuador hotel El Meson de las Flores where we conduct our Spanish Courses, Imbabura Real Estate Tours, Shamanic Mingos and Import Export  tours.

Ecuador-hotel-courtyard

Imbabura Real Estate Tour

Ecuador Shaman Mingo Tour

Ecuador Import Export Course

See discounts for attending more than one course.

Multi Currency Inflation


Multi Currency Inflation

Multi currency inflation is with us. Merri and I are conducting our International Investing and Business course this week.  When we do these courses at the farm we provide al the meals. Merri is a great cook and everyone enjoys her home cooking, and she enjoys it also.

We do all the shopping for these meals and just being back from Ecuador…wow…sticker shock!

Being a multi currency investor, my portfolio is up…but it needs to be with rising prices. My heart goes out to anyone trying to preserve purchasing power with investments just in US dollars.

Quality has suffered here as well.  We feel deprived in US super markets after shopping in Ecuador’s markets where the food is fresh, the fruit and vegetables ripe…as well as costs a fourth or less of the US.

This is what we are used to in Ecuador with food prices so low it makes us want to give the people more than they ask.

Ecuador-food-market
But inflation is everywhere. This is why I am buying Ecuador real estate as fast as I can. I believe prices will rise for two reasons.

The first is because of commodity hikes.

In February, I wrote an Ecuador Beach Condos Introduction.

This introduction revealed a number of brand new beach view condos available for $79,000. The developer reported that these condos literally sold out in a week. However he also offered all the buyers a 60 day cooling off period.  Several have dropped out so a few of these $79,000 units are on the market again.

My feeling is that these $79,000 units will not last long based on the reply that the developer Kjetil Haugan sent when I asked if these units were still available at this price.

“Gary, thanks..it is ok for me to offer the apartments at $79k with the $5,000 club fee waived.  The problem I am facing now is that building material prices are going up every month..steel has gone up 65% since January and the total construction cost is about 40% more than it was in November 2007..it looks like we will be able to do the infrastructure a bit less expensive so I am okay with this price but we want to build most of the blocks as soon as possible before prices will be even bigger problem!  We have started with two blocks now and will start with the upper blocks where you bought next week.”

The second reason I believe prices will rise in Ecuador is that the Italians and Spaniards have caught on!

Our friend, Anne Williamson, is a veteran journalist, who has written for the Wall Street Journal and the New York Times. She authored a definitive and eye-opening analysis of the nation’s banking system for WorldNet and discussed this issue on national televion and radio programs, including “The O’Reilly Factor.” .  She is an authority on Russia and international finance and testified before the House Banking Committee.

Having spent months with us in Ecuador she has caught on quickly and sent this note to us.

“Hello Gary, I spotted the above in an email from idealista.com (a weekly investing review of Spanish and Italian real estate trends), and thought you might find the information useful.  All the best,  Anne

“A dwelling in Quito or Guayaquil, the same price as a garage in Madrid
Negocio, Monday 12, May 08.

“A three-bedroom dwelling measuring 800 square feet  in a luxury complex in Ecuador can be bought for €36,000, which is equivalent to what, with luck, a well-situated garage costs in Madrid.  These low prices have made Ecuador a destination to be taken into consideration by Spanish investors as the same dwelling would cost €126,000 in areas such as Mexico or the Dominican Republic the market in Ecuador is expected to offer 7% returns in the coming years.”

This will make it tough for Americans and diminished dollars to compete with the Europeans and their euro which has double in strength against the greenback in the past few years.

You can learn more about the $79,000 beach condos from Kjetil Haugan at kjetil@haugancruises.com

Inflation is everywhere but multi currency investing in real estate, commodities and shares can maintain and increase our purchasing power.  This is what I am doing and look forward to sharing my experiences with you.

Gary

See dates for our other Ecuador courses and tours:

Coastal Real Estate Tour

Here is a house on the beach we saw on our last coastal tour.

Ecuador-beach-property-for-sale

Super Thinking + Spanish Course

Imbabura Real Estate Tour

Here is a house in Quito we’ll see on our next tour.

quito-property-for-sale
Ecuador Shaman Tour

Ecuador Import Export Course


See discounts for attending more than one course.

How to Raise Money Abroad


Financial security can come from raising money and finding clients abroad.  This message introduces our report on how to raise money abroad.

The best way to build a small business and gain financial security is by financing through cash flow.  This has always been Merri’s and my approach to financial security, but in early days I found myself raising extra capital abroad several times. I have also helped numerous businesses raise money to get started.  This report shares several experiences to give a thumbnail sketch of how to raise money abroad.

There are two benefits from knowing how to raise money independently. First it gives you access to capital if you need it. Second the process of raising capital is similar to getting customers so this report can help you gain clients as well as seed money from around the world.

Financing a London House

This first lesson reviews the importance of flexible thinking in your efforts to raise start up cash. I learned this importance in my attempt to finance a house purchase in London.  My business plan was to create a small office – apartment complex and the process of getting started taught me the importance of being creative.

I stumbled when I started asking for the money to buy this house but with luck and flexibility I was able to get the deal done. The search for cash began at a friendly bank who had lent to me before.

While there I learned how policy-oriented such institutions are. Whatever drops from the corporate headquarters above, is! The deal I had put together was aimed at helping overseas businesses people have an office and a place to stay when they were in London. The deal was set up as a club something like a timeshare. Not quite a timeshare but close enough.

My track record with the bank was good and I had always repaid loans. Yet the policy at that bank was “timeshares are no-nos”. I could almost see the glaze come over my bank manager’s eyes as I explained the project. It was the look that said “No matter what you say, the answer will be NO”. Once a manager thinks that what you want is against company policy, it is better to do something realistic like climb Mount Everest on a lunch break.

After making the necessary polite motions [I figured I might want to borrow for something else later] and letting him do likewise, I thanked him for his time and was preparing to leave. I wasn’t even going to ask him to officially write and say NO. I knew he was going to say “No” before I left his office.

But as I started to leave he said, “By the way let me show you our new American Express Gold Card plan”. The bank had just started to offer credit cards and they came with a 7,500 pound unsecured overdraft.

Overdrafts are a peculiarly British line of credit that allows you to borrow up to the limit of the overdraft without any regular payment plan. The banker sort of expects to see the amount borrowed rise and fall. The borrower just pays interest on whatever amount is owed and on occasion the bank reviews the overdraft with you.

At that time one pound equaled about 2.2 dollars so this meant that everyone who obtained this credit card received a $16,500 dollar unsecured line of credit. $15,000 was the amount I was charging each member who joined my London office-apartment club!

I wanted 50 members at $15,000 each which was double the $375,000 I needed to buy and develop the property.

My head was spinning as I left the bank. The bank would not give me a $375,000 loan secured by property. Yet they would lend my buyers the full price of membership on an unsecured basis! All I needed was get half my buyers right now on a nothing down pre-purchase deal. This is exactly what I did.

I hustled out, called my customers and offered them this deal they could not refuse. “Join our club now and you get an American Express gold card, plus the bank will lend you the money unsecured for your club membership. Pay it back when you can.”

This was much better deal for me than borrowing the money to start. The original 25 sales were financed by the bank but my customers had the credit risk and had to pay the money back, not me.

From that time forward whenever I think finance, I look far beyond just making a loan. There are numerous ways to skin the “start-up capital” cat and whenever you can do it through easy sales, you are better off. You may be able to obtain credit from suppliers or let your buyers use their credit to get you what you want.

This is one of many ways I have helped readers raise money abroad.   There are so many examples I have created a report entitled “How to Fund a Micro Business” which sharers ideas on how we have helped raise money abroad.

Order “How to Fund a Micro Business” $9.99

Gary

Multi Currency Value Investing Seminar

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (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.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report