Tag Archive | "Swiss franc"

Are We 52 Days From Disaster?


Are most investors 52 days from disaster?

Fed charts

The peak in this chart… shows a risk that could come this year… by March 20, 2012… 52 days from now.

This chart shows how in May 2009 global banking liquidity provisions rose to such a high level that they created an unintended consequence that has the potential to wipe out many investors while it enriches just a few.  The next time of great risk will be October 2012. See why below.

This note explains why this chart represents a financial overhang that like a rock trap will ravage the finances of millions who are caught when it falls… but it will also also be a bellwether of fortunes for investors in the know.

That chart by the way is totally accurate…  pulled directly and unaltered from an article entitled “International Liquidity Provision During the Financial Crisis: A View from Switzerland” in the recently issued December 2011 Federal Reserve Review.  This is the Fed’s warning of potential upcoming economic disaster.  This is a warning which is hidden in plain sight.

There is a link below so you can read the entire Fed’s report yourself… but you may find the Federalese daunting and obscured in obtuse language (I spent two days studying just two pages to try and unravel all the implications), so let me outline here why these liquidity provisions could rip the guts out of many safe investment portfolios who follow tradition.

This outline will also unveil why huge returns will come to just the contrarians who see the risk and bet again the norm.

The fact that this danger is openly outlined is unusual but the extra quirk is that this chart was published by the US Federal Reserve Bank yet shows liquidity provisions provided not by the Fed, but by the Swiss National Bank in Swiss Francs!

To understand how this creates a problem and the investing risks that may affect us all,  let’s look first to the past.

Then we’ll see where and how the future hides the risk.

In a small way I was partly responsible for starting the problem… clear back in 1986.  Having spotted how my bankers in Europe would lend me one currency at a low rate so I could deposit it in another currency at a higher rate, we published our first version of our report “Borrow Low – Deposit High”.  The report mainly featured how to borrow low interest rate Swiss francs and Japanese yen to invest in high yielding currencies like the US dollar, British pound. French franc (this was pre-euro) Mexican peso, Brazilian real.

Before this time there were certainly big banks and institutional investors already using the tactic… later called the “Carry Trade.”   I did not invent it, not even close… but I spotted its potential early on and our reports were among the first to reach tens of thousands of investors and open this idea for the little guy… smaller, individual investors  like myself.

Investors caught on and this trend of borrowing Swiss francs to invest in higher yielding deals grew so much so that in June 1999 a mechanism was created called the Swiss Repo Market to expand the ability for banks to borrow Swiss francs so they could lend them on.

The Federal Reserve acknowledges this fact in the report “International Liquidity Provision During the Financial Crisis: A View from Switzerland” and points to the problem when it says:  The authors document the provision of liquidity in Swiss francs (CHF) by the Swiss National Bank (SNB) to banks located outside Switzerland during the recent financial crisis. What makes the Swiss case special is the size of this liquidity provision—at times, 80 percent of all short-term CHF liquidity provided by the SNB—and the measures adopted to distribute this liquidity.

In the years leading up to 2007, banks across the globe dramatically increased their balance sheet exposure to foreign currencies. This led to increased trading between banks with a need to refinance in the foreign currency and domestic banks with deposits and consequently sufficient funds to lend in that currency (i.e., extensive cross-border trading).

This idea described in the report worked well for almost a decade. Investors would come to their bank and borrow Swiss Francs.  The bank would lend the low interest francs… even if it did not have them to lend… knowing that it could cover its loan in the Swiss Repo Market.

Then came the crunch.  The Fed describes it in its report like this: With the onset of the financial crisis and the successive drying-up of the repurchase agreement (repo) market and especially the unsecured interbank money market, the private sector no longer provided this liquidity, thus requiring a coordinated action by the world’s major central banks.

This was the easy part… describing the problem.  This demand to get Swiss francs to cover loan positions was a huge financial crack that made all the other complicated economic issues worse as financial systems structures and banks crashed around the world.

The Feds report: CHF-denominated loans obtained by non – banks outside Switzerland are typically granted by non-Swiss banks that, in turn, finance themselves by borrowing from financial institutions in Switzerland.  As in all bank business, these non- Swiss banks provide long-term loans yet finance themselves on a short-term basis. Their ability to roll over maturing CHF positions became stressed when the interbank money market progressively dried up following the onset of the financial crisis in August 2007, particularly after the collapse of Lehman Brothers in September 2008.  The CHF-specific spike in the cost of obtaining unsecured funds was caused by a combination of the need by banks outside Switzerland to continuously roll over maturing interbank loans and the shrinking supply for these funds. Most Swiss banks and a considerable number of non-Swiss banks have access to the Swiss repo system—the prevailing secured money market in Swiss francs. In a calm market environment, these banks would  have immediately exploited this profit opportunity and provided unsecured funds to banks without access to the Swiss repo system.

A key ingredient of the crunch was that… most borrowers borrowed short and invested long… exactly the opposite of what they should have done.  Now they had to repay Swiss francs and the non franc assets they held were crashing.  Losses were enormous and growing.

The Fed report continues (bolds are mine): In international currency markets, any bank can potentially obtain financing in any foreign currency either by going directly to the interbank money market or by obtaining funds from its central bank and swapping the received funds into the desired foreign currency. In principle, these two methods should ensure the rate at which a currency is funded is the same.  

During the recent financial crisis, however, interbank money markets temporarily faltered.

Without access to the Swiss repo system, even banks with ample collateral could not obtain secured funding from the SNB or the secured interbank market.

There you have the crux of the problem.  The system that gave access to Swiss francs melted down. This created huge additional potential losses that could have destroyed the already weakened European (with threads back to the USA) banking system. This could have added to the downwards crush in the global economy.

Here is the Fed’s explanation in the report: The lower cross-border trading could have posed a substantial danger to the stability of the financial sector at large.  If banks across the euro zone and CEE were unable to obtain CHF in the money market, then non-Swiss banks, in turn, could try to reduce their exposure by liquidating CHF loans they had made to their clients.  Given the banking tensions at the time, this move would have driven many debtors into default and could have started a disorderly winding-down of CHF loans, with increasing default rates implying the need for additional loan-loss provisions, thereby increasing pressure to liquidate CHF exposure.  This vicious cycle could have had dire consequences for the banking system and the real economy.

The Fed and other central banks had to find a stopgap for this problem which was a bigger problem for every country because of the Swiss Franc angle.  This is also explained in the Federal Reserve report:  The drying-up of liquidity distribution in foreign currency posed a problem more challenging than the breakdown of the domestic interbank money market: No central bank, on its own, can provide a large amount of liquidity in a foreign currency in a timely manner.

So what could the central banks do?

They hung it all on the Swiss.

Here is how the Fed describes the resolution in its report:  To overcome this market friction, the SNB jointly announced with the ECB and subsequently with the Narodowy Bank Polski (the National Bank of Poland) and the Magyar Nemzeti Bank (the central bank of the Republic of Hungary) that all these central banks would directly distribute CHF-denominated funds to their counterparties.

That is what the chart above and this chart (also take unaltered from the Fed report) explain.

Fed charts

In essence the world let the Swiss National Bank become a second central bank for the European Central Bank (ECB),  National Bank of Poland (NBP),  as well as the Central Bank of the Republic of Hungary (MNB).

This worked for that moment but created a huge financial rift for the times ahead.

So let’s speed ahead into the future… now and onto May 2012.  May I first add the fact that if we get past May… we might breathe a little sigh of relief but the problem will not end there.  The next large window of risk will come in October 2012.

Anything can happen at any time but now until May is when the risks are the highest until October 2012 when risk will rise again.

This future problem is described also in the Fed’s report which says: While the exchange rate interventions were part of the SNB’s unconventional measures to avert deflation risks in Switzerland, an unintended side effect of the interventions was the resolution of the international CHF liquidity shortage:

The supply of the additional CHF 150 billion is available to the banking system on a permanent basis and, consequently, the majority of banks are awash with CHF liquidity.

Our excerpts here of this Fed report ends with: The size of the exposure has raised many concerns about the financial stability of the banking sector, given the possibility of continued CHF strength or even appreciation.

There you have it.  The problem in 2009 was the banks did not have any Swiss francs. When they lent the Swiss Francs which they did not have, this created a potential liability if the Swiss Franc rose…which it did.  The problem now is that non Swiss banks are awash with 150 billion Swiss francs and no place to invest them.

This creates an overhang that could crush traditional investors like a rock trap who follow the investing norm and pull the stick.

rock

This is why I have just created a report “The Swiss Trap” for my Multi Currency subscribers and would like to offer this report to you.

The Swiss Trap describes the problem above… includes the total Federal Reserve Report and describes what could happen in the next euro crunch…. most likely to start around March 20, (54 days from now) when Greece defaults on the 18.5 billion dollars it owes bondholders that day.

Bloomberg Businessweek described the problem in a recent report “A Greek Default: You Can Mark It on Your Calendar” that says:  Negotiations over how to shrink the Greece’s unaffordable government debt make the brinkmanship over the U.S. debt last summer look simple.

A Bloomberg report also says: ‘Disorderly Default’.   Talks between Greece’s Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos and Charles Dallara, the managing director of the Institute of International Finance, which represents private creditors, will resume Jan. 18, according to a Greek Finance Ministry official who declined to be identified.

Greece’s creditor banks last week broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds.

“We remain concerned that Greece may suffer a disorderly default in March,” Mansoor Mohi-uddin, chief foreign-exchange strategist at UBS AG in Singapore, wrote in a Jan. 14 note. “A Greek default would have a major impact on the euro as it would spread contagion to other bond markets in the euro zone.”

Contagion is the euro zone is the problem.  Greece’s default is a forgone conclusion but the worry is how far has the rot spread?  Will Portugal and then Spain also falter… perhaps even Italy and now France’s debt has been downgraded!   All these concerns could cause the euro to fall.

The Trap is Set

The falling euro will set the trap which is described in our report,  “The Swiss Trap”. This report descibes why the problem exists… the trap and  how it can destroy the savings, investment and speculations of millions of investors.

Avoid the Trap and Profit Instead

The report also describes how to avoid the Swiss Trap and earn profits with a little known investing vehicle called an ETP…not to be mistaken with the ETF.

ETPs are shares traded on the London Stock Exchange (LSE) available to all investors large and small.  Investors can invest millions or as little as $1,000.

ETPs are similar to ETFs.  The “Swiss Trap” describes the differences… and how these alternate features allow investors to profit from the 150 billion dollar Swiss Franc Overhang.  Plus this report names brokers in London and the US who can purchase these ETPs for you.

If you are a Multi Currency Portfolio subscriber, read the Swiss Trap at your password protected site here.

Not a Multi Currency Portfolio subscriber?

Subscribe to our multi currency portfolio service and get the password, Swiss Trap, free.

Gary

Here is one more way to read the Swiss Trap free now.

Enroll in our February 10-11-12, Super Thinking + Investing and Business seminars and I’ll enroll you as a Multi Currency Portfolio subscriber for a year FREE.

 

Swiss Franc Update


Here is a Swiss franc update.

swiss franc

Why we need to invest in strong currencies like the Swiss franc… 100% cotton…100% price increase.

Inflation is global.  This poses a great threat to our purchasing power…wherever we live. The global economy is now so interconnected that a tsunami makes the cost of used cars rise in Ecuador or the USA.  SLR camera prices skyrocketed all over the world.  A political struggle  in China can mean it costs more for air conditioners in Florida.  A flood in India can make your next cotton shirt or blouse cost much much more in your local store.

February 2011 Wall Street Journal article said: Cotton for March delivery touched $1.9445 a pound in InterContinental Exchange trading on ongoing concerns that demand will outpace supplies. Prices settled up 1.3%, or 2.39 cents, at $1.8997 a pound as some speculators locked in profits.

Clothing retailers, including Hanesbrands Inc., Jones Group Inc. and Polo Ralph Lauren Corp. are passing on the higher fiber costs with price increases for consumers this year.

Strong demand, particularly from China, and tight supplies have pushed cotton prices up 31% this year. The price has more than doubled over the past 12 months.

Heavy rains in India and flooding in Australia and Pakistan have pressured global supplies this harvest season, driving up prices. On Thursday, a panel recommended to the government of India, the world’s second-largest grower nation, to keep its export cap at the current 5.5 million bales, further fueling the rally.

Price tags may be marked even higher in the coming months since the cotton in garments on the racks now was harvested six months ago, when the fiber cost less than half the current price.

One way to combat rising prices is to hold investments in strong currencies like the Swiss franc.

Each month International Living publishes one of my short columns on international investing.

Here is part of an article that appeared last month in IL about the Swiss franc.

My first investing profit in the 1970s came when Swiss francs cost about 25 cents. The franc rose to 75 cents by 1980. This hooked me on investing in strong currencies.

Yet for 20 years I have advised against having too many Swiss francs. Swiss franc returns were lousy.  Other types of investments in other currencies were better.

Switzerland struggled transforming from a private domain in an increasingly unprivate world.  Plus the Swiss National Banks intervened any time the franc really strengthened.

The Swiss could not allow an overly strong franc. As a small nation without natural resources it must export to survive. The franc could not appreciate much versus the euro or Swiss exports would be slaughtered.

Now three events have diminished these barriers to Swiss franc appreciation.

First, German firms have created the most competitive industrial sector of any advanced economy. German exports jumped 18.5% in 2010, far higher than most of the developed world.

This German strength means there is a 50-50 chance the euro will split into the Euromark and the Eurosouth. The euromark would likely jump 20% to 30% against the eurosouth and rise 15% to 20% versus the US dollar.

The Swiss franc has needed to remain linked to the euro because such a large portion of Swiss European exports go to Germany. If the Euro splits, then the Swiss franc will be able to rise with the euromark.

Second, Switzerland’s export problems have become its strengths. Swiss exporters faced problems with the strengthening franc and a weakening of their most important market – the European Union. Many small and medium sized Swiss businesses were frightened that the European market would become closed to Switzerland.

Switzerland’s response was a steady diversification of exports away from the EU towards emerging economies in Asia and South America.

This export shift has paid off. 60 percent of Swiss exports still go to the EU but 2010 trade figures show the growth of goods and services to emerging economies outstripping those to Europe.

2010 exports to the EU grew 4.2 per cent, compared to an increase of 25 per cent to China, 46 per cent to Singapore, 26 per cent to Russia, 21 per cent to Brazil and 19 per cent to India.

A potentially new stronger euromark, the Chinese yuan, Brazilian real and Singapore dollar are all strong currencies. This export growth to these areas gives the franc room to soar without killing Switzerland’s ability to export.

The growing strength of China and Asian economies coupled with structural weaknesses in Europe have helped Switzerland gain a position of relative competitive strength over European firms.

Third, the Japanese earthquake and tsunami, like the global economic setbacks in 2007 and 2008, will be inflationary. Inflation is too much money for too few products and services.  Japan’s natural disaster destroyed a huge amount of capital. If Japan borrows and prints money to restore the loss, as the world’s third largest economy, the amounts could be enough to expand inflation everywhere.

This will increase Japan’s debt so the yen, like the US dollar will be weakened versus currencies of countries like Switzerland which have lower national debt.

Investors are especially looking for strong currencies just as Switzerland is enjoying comparatively strong economic growth and low unemployment rates. This along with the franc’s reputation will enhance the franc’s strength.

However, just holding francs still does not make sense. Interest rates are essentially zero. This is not enough… even with currency appreciation.  Swiss shares offer greater inflation protection and have shown great strength over the past five years.

We know that the euro has been a strong currency compared to the US dollar. The chart below from www.finance.yahoo.com shows how the dollar has risen and fallen versus the euro over the past five years.  Though there have been moments of strength, the dollar is now near an all time low versus the euro.

swiss franc

Despite the dollar’s fall versus the euro, the euro has fallen steadily against the Swiss franc for a half decade also. Here is a chart of the euro’s fall from finance.yahoo.com.

swiss franc

Here you can see the greenback’s five year drop versus the Swiss franc in clearer detail.

swiss franc

Inflation is with us and remains so for at least awhile. Inflation could become serious.  Choosing to invest in currencies that maintain purchasing power makes sense. The Swiss franc has been and remains likely to be a strong currency for some time ahead.

See two Swiss franc equities and how to get updates on our portfolio decisions for the next year FREE. This is a $79 value, but you’ll be put you on a special list to receive all my personal portfolio updates for the next 12 months at no extra cost.  When I buy or sell something in my portfolio, you’ll immediately know about it… plus get exclusive access to telephone conferences with global investing experts.  For details Click here.

Gary

Learn more about investing in the Swiss franc and other strong currencies at our June 24 to 26  International Investing & Business Seminar in West Jefferson, North Carolina.  For seminar details, click here.

See how to attend this seminar FREE plus save $300 below.

Prosper From Forces of Inflation

Join Merri and me as we look at ways to prosper from the forces of inflation.

International Club 2011-12 Membership special until May 7, 2011 $1,499. Enroll here.

Inflation is here and the US dollar will fall. This fact is conformed in an April 12, 2011 Wall Street Journal article by Cynthia Lin “Inflation Concerns Weigh on Treasurys”. Here is an excerpt:  Worries that the central bank may be falling behind the curve on inflation weighed on U.S. Treasurys on Monday, even after a senior Federal Reserve official signaled that interest rates could stay low for longer.

The prospect of $66 billion of note and bond auctions also dragged prices lower, strategists said.

“The bottom line is that the current perception has subtly shifted toward the view that global central banks are in monetary tightening mode,” said Andrew Wilkinson, senior market analyst at Interactive Brokers. “Even though the Fed appears to be nowhere near that point, U.S. yields have been dragged higher by surrounding fears of inflation.”

Highlighting those fears, the 10-year breakeven rate—which measures the difference between 10-year Treasurys Inflation Protected Securities, or TIPs, and nominal rates—hit 2.655% on Monday, the highest since May 2006. That signals the market’s annual inflation expectation over the next decade.

As other central banks begin to tighten—including the European Central Bank, which raised rates by 0.25 percentage point Thursday—the fear that U.S. officials may be lowering their guard against global inflation has been a headache for bondholders. It has been especially  troubling for investors holding 30-year bonds, those most vulnerable to inflation eroding their value.

Government bonds were also under pressure from the prospect of supply.

The Treasury is scheduled to sell $66 billion in notes and bonds this week, comprising $32 billion in three-year notes, $21 billion in 10-year notes and $13 billion in 30-year bonds.

With a government shutdown averted, “the focus is back on how well these auctions will go and who will participate in the face of what appears to be future inflation,” said Kevin Giddis, president of fixed-income capital markets at Morgan Keegan.

Still, the policy debate underscores an increasing focus on inflation.

This means that while the US government continues to borrow to spend, other governments are cutting back… a sure sign of US inflation and a weakening greenback.

We consider this risk so high that we have taken the unusual step (the first time in our 43 years of business) of setting our 2012 Spring schedule.Then we created a new option so you can participate in all these seminars and course into 2012.

There are five ways to combat the destructive inflationary forces that will raise havoc with your purchasing power.

#1: Multi Currency Investing through US brokers and bankers abroad.

#2: Commodities.

#3:  Real estate.

#4:  Living in lower cost zones.

#5: Having your own micro business for extra earnings, freedom fulfillment and fun.

We have specialized for over four decades in helping our readers excel in these five inflation beating opportunities.

The big benefits of belonging to the International Club is the power of repetition, updates and international friendships.  As a club member you become friends with other members as you meet again and again.

international-club

International Club members are invited to our Florida home during the winter seminars.

Your first savings is $7,690 in 2011 and 2012 just on waived seminar fees.

As you will see below you can attend 11 Florida & North Carolina seminars that would otherwise cost $9,189.  The $1,499 membership saves you $7,690.

Join us and our International Club 2011 – Spring 2012 and enjoy this savings plus much more.

The International Club brings together experienced, like minded souls, who take a positive view and think outside the box..in a constructive…thoughtful way.

Merri and I are in our 43rd year of organizing courses, seminars and newsletters about international and quantum lifestyles. The importance of this sharing…by like minded souls…was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group. You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon. You made us all feel so welcome and cared about. You were so kind to make arrangements for a ride with the other delegates from the Charlotte airport. They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it. Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.

Thanks to you I now have new hope and a new direction to move forward in my life. Thanks to you I am so ready to move to Ecuador and begin a new life. I just have to figure out what I am going to do and how to do it.

I know by attending your classes and conferences that through education and due diligence I will make the right choices.

This delegate’s comments about “belonging and feeling like a brother” to the other delegates is a wonderful refrain we have heard from our readers, year after year.

21 years ago Merri and I created a way that readers can join us to be immersed in a year-long learning program through our International Club.

The ideas behind this program began all those years ago in Vienna, Austria while we were conducting a course there. One of our older delegates, had some sort of attack. The first fear was heart trouble. Several delegates took him to the hospital. Others stayed with him there. I don’t think that delegate was alone for a minute!

What impressed Merri and me was that no one asked the delegates to help this man.

The friendships of delegates sharing many courses had just grown so strong that it was a natural reaction, just as if a family member was ill. Fortunately, it was only travel fatigue and the delegate didn’t miss a session of the course!

When you join our International Club 2011- Spring 2012 you become part of a special family. The very first member to join the club all those years ago wrote, Thank you for the enjoyable and informative courses. I am pleased to be part of your international family and look forward to continuing my education at the next course.

His feeling struck a familiar chord. It has always been one of my greatest satisfactions to see how much fun delegates have getting together, sharing information and making friendships.

These courses somehow draw together like-minded souls. For this reason some delegates come back again and again. They come to learn, but also to be with their many friends made at the courses. When like-minded souls get together again and again to discuss a common purpose, magic happens! I can’t explain it in any other way-but it is true.

In a way our meetings are almost like family reunions. Perhaps it is getting together and reflecting on what has been said and what has been happening.

Learning with those who are also interested in the world creates thoughts that multiply the value of what we gain. This is hard to describe but results are most powerful and wonderful! This is to me is as important as the great financial benefit of attending many of our courses.

See our 2011 – Spring 2012 schedule below.

We started and have continued this program for 21 years because there are wonderful benefits from having repeat delegates at courses. Having repeat delegates makes the whole course somehow more exciting for all. Being a repeat delegate makes it easier to make and keep wealth and to lock in the knowledge you gain. It’s an exciting lifestyle. We have fun, gain adventure, discovery and friendships and share ways to improve our health and wealth!

Normally we only accept membership at the end of each year… but due to the unusual risk we see now, we added this new option to club membership that entitles you to all US courses in 2011 and the Spring of 2012…  in the cool Blue Ridge of North Carolina and  in Historic Old Florida.

The next saving is Seminars via MP3 (or disc) and one Ecuador tour fee is waived as well.

You’ll see a very busy 12 month schedule below.  Very few club members actually attend every course and tour…  but certainly some attend almost all of them!

If you attend even a few of the courses, you gain considerable savings… PLUS we record the investing and business seminars so you can have the course downloaded on your computer to listen on MP3 or on disc when you cannot attend in person.

This means that you stay in touch with all the business and investing ideas we develop at each of the investing and business seminars you cannot attend.

Here are the courses and tours where your seminar or tour fee is waived.  Then see more savings below.

May 7-8  Imbabura Real Estate Tour ($499 or couple $749)

May  9-10   Shamanic Mingo Tour  ($499 or couple $749)

May  12-13-14   Cuenca Real Estate Tour  ($499 or couple $749)

May 17-18-19   Coastal Real Estate Tour   ($499 or couple $749)

June 24-25, 2011  International Investing Made EZ,  Jefferson NC. ($499 or couple $749)

June 25-26, 2011   International Business Made EZ,  Jefferson NC. ($499 or couple $749)

international-club

International Club members are invited to our farm during June, September and October seminars in North Carolina.

June 16-17-18   Coastal Real Estate Tour   ($499 or couple $749)

July 4-5-6      Cuenca Real Estate Tour ($499 or couple $749)
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Aug 21-22-23   Coastal Real Estate Tour   ($499 or couple $749)
Aug  25-26-27 Cuenca Real Estate Tour ($499 or couple $749)
Aug. 31-Sept. 1-2-3-4  Ecuador Export Tour ($749 – $999)

Sept.  8-11 Learn Spanish in 4 Days, Seattle, Washington ($749 or couple $999)

Sept 15-16-17  Coastal Real Estate Tour   ($499 or couple $749)

Sept 19-20-21  Cuenca Real Estate Tour ($499 or couple $749) Oct 21 22 23 Coastal Real Estate Tour   ($499 or couple $749)

September 23-24-25, 2011  Investing & Business Beyond Logic, North Carolina with Blaine Watson ($499 or couple $699)

Multi-currency-courses

(Blaine Watson teaching delegates and International Club members at a previous seminar.)

Oct. 7-8, 2011  International Investing Made EZ,  Jefferson, NC. ($499 or couple $749)

Oct. 8-9, 2011  International Business Made EZ , Jefferson, NC. ($499 or couple $749)

Oct.  25-26-27  Cuenca Real Estate Tour ($499 or couple $749)

November 3-6, 2011   Learn Spanish in 4 Days, Mt. Dora, Florida  ($749 or couple $999)

Nov. 9-10-11    Imbabura Real Estate Tour ($499 or couple $749)
Nov. 14-15-16   Coastal Real Estate Tour ($499 or couple $749)
Nov. 18-19-20   Cuenca Real Estate Tour ($499 or couple $749)
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Dec. 12-13-14   Cuenca Real Estate Tour ($499 or couple $749)

January 12-15, 2012  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

Feb. 10-11, 2012  International Investing Made EZ.  Mt. Dora FL ($499 or couple $749)

Feb.11-12, 2012   International Business Made EZ,  Mt. Dora FL ($499 or couple $749)

March 8-11, 2012  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

Schedule subject to change. Always check final schedule at www.GaryAScott.com/catalog

International Club 2011 Membership $1,499. Enroll here

There is even a third saving:  $897 more!

When you join the club, I’ll email you our online course “International Business Made EZ”, a $299 value, plus four bonuses.  You receive the bonus course “Self Fulfilled – How to be a Self Publisher”. which also has a $299 value.

Plus I email you the bonus course “Tangled Web – How to Have Your Own Web Based Business” which also has a $299 value.  Because our self publishing business has become totally online, I am send you this extra course free as I think it will help you have greater success.

In addition you’ll receive the 52 lesson course on how to create your own website using sitesell and finally I include an internet video on how to set up a website presented by our webmaster David Cross.

These courses are valued at $897… in addition to all the US seminars you can attend.

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 we give all course delegates our very best, we 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 us to help you find 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, become friends and gain more wealth.

The fourth savings: Lifestyle for Two.

There is still more!

We have learned at our 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!

The fifth savings:   You gain Ecuador tour savings as a member of the International Club.

International Club members can benefit in Ecuador in the mountains or…

Meson de las flores

on the sea.  Delegates and International Club members on tour at Land of the Sun Inn.

ecuador sea view

View shot by an International Club member of real estate for sale on an Ecuador Pacific real estate tour.

The International Club offers this benefit… as a gift in Ecuador from the organizers of  Ecuador Discovery Tours.

The International Club fee is normally $1,799 yet during this Spring offer which ends May 7,  I have reduce membership to $1,499.  You save $300 more.

Take for example if you plan to attend our Super Thinking + Spanish, $999 for a couple and one International Investing and Business program, the normal cost would be $1,998.   International Club members attending just these two programs would already save… plus could attend all the other  Florida and North Carolina seminars plus receive $897 worth of emailed courses.

Our seminars and the Ecuador tour schedule is shown above.  You can attend all the Florida and North Carolina seminars and choose to accept an Ecuador’s savings.  Morya Ecuador Discovery SA has agreed to let International Club members attend one Ecuador tour in the schedule above for just $40 per person per day internal transportation cost.

This is a savings of up to $599.

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 and tours.

Savings #6:  YOU SAVE EVEN MORE if you take a Galapagos Cruise.

We work closely with Haugan Travel which have expanded their fleet so club members can enjoy a Galapagos cruise for as little as $509 per person.

Galapagos-savings

Haugan Cruises has added three new vessels so they have a  broader range of cruises to suit all budgets. They now have 5 vessels and are offering several special introductory tours.  This creates special savings up to $1,000 for all our readers and provides club members an extra savings of up to $554 more…. a total of $1,554 saved.

Savings #7: Membership is normally $1,799 – save $300 more. International Club 2011-12  Membership $1,499 until May 7.

Add all the savings together!

You can calculate the savings as our schedule of all 2011 courses.

Florida & North Carolina seminars you can attend or receive in an MP3 file worth $9,189.

emailed courses sent to you worth $897.

Ecuador Tour Savings up to $599.

$300 membership discount until May 7, 2011.

Total Savings from your $1,499 club membership fee.

You Gain $10,985 of benefit for just $1,499.

Plus more if you take a Galapagos Cruise.

Lock in savings!

Here is one final benefit. When you enroll… we automatically lock in this low fee for next year so your savings are automatically renewed in 2012 and 2013 at $1,499. Of course if you choose not to renew, just simply cancel membership at no cost.

Let’s beat inflation.  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 2011-12 Membership $1,499. Enroll here.

Swiss Multicurrency Sandwich


Here is an update on the Swiss MultiCurrency Sandwich.

Currencies are being devalued around the world.  This means we have to work harder to maintain purchasing power of our wealth . The MultiCurrency Sandwich is one way to enhance earnings.

I am updating my report Borrow Low – Deposit High and noticed in my research that the Swiss Franc now looks overvalued… and its loan rate is very low.

Last March 18 a message at this site suggested to borrow Swiss francs and Japanese yen to invest in currencies with higher yields.

Since then both the yen and Swiss franc have weakened which has locked in some forex profits. Here you can see how the yen peaked in late February and has dropped versus the euro.

currency chart

Here we’ll review the Swiss Franc opportunity as the Swiss franc has strengthened but may be taking a turn as it recently dropped back from 1.43 francs per euro to 1.44.

currency chart

The ideal MultiCurrency Sandwich position is when we spot a combination of events:

#1:  A very strong currency

#2:  The strong currency has weak fundamentals.

#3: This strong currency has risen so high it is overvalued.

#4:  This strong currency has a very low interest rate.

#5:  Another currency that has fallen so much (versus the strong currency) that it is undervalued.

#6:  This weak currency has strong fundamentals.

#7:   This weak currency has a high interest rate.

The Swiss franc has appreciated versus the euro significantly in the last year.

You can see the franc’s surge against the euro in this chart (all charts here are from www.finance.yahoo.com).

swiss-franc-chart

This creates opportunity for a linked currency situation or a more speculative investment in emerging bonds..

Here is an excerpt from the Borrow Low update to show a linked currency MulitCurrency Sandwich.

For example as this report is being updated you can borrow Swiss francs at an interest rate of between 2.375% and 1.625% (depending on the amount borrowed).  You can invest in AAA British Treasury bonds that pay in the 4% range.

The dollar at this update (April 2010) is worth 1.06 Swiss francs and the British pound 1.64 Swiss francs.

Assume for this example that you have $100,000 invested in a US dollar Treasury Bond paying you 4%. This $100,0000 bring in $4,000 a year income.

You can use that bond as collateral to make a SFR424,000 Swiss Franc loan at  2.375% range.

The Swiss Franc loan could have then been converted to £258,536, which could be invested in the  AAA rated 4.5 % British TREASURY 07-03-2019  bond that was yielding appx 3.9% in April 2010.

You earn  GPB10,082 per annum interest which is worth  SFR16,534 less loan interest of  SFR10,070 which means you enhance  your income  by just over $6,000 a year.

In other words, your $100,000 now earns $10,000 a year rather than  $4,000. .. a 150% increase in income.

The tactic is not quite this simple. We’ll look at the complexities in a moment, but this is the idea.

The entire instruction to make the loan in Swiss francs, convert the francs to pounds and invest the pounds could have been given in one simple letter, fax, phone call or email.

This example showed how to invest in a very safe bond in linked currencies . The pound is linked to the euro and the euro is linked to the Swiss franc.   Later we’ll see how because the pound was weak in April 2010 and the Swiss franc at an almost all time high… there was some interesting forex potential also.

Many currencies are linked either by government choice or through tradition and regional economic circumstances. Take the Swiss franc British pound link as an example.  The pound is linked to the euro and the Swiss franc is linked to the euro by economic necessity.

currency chart

Here you can see how the Swiss franc strengthened versus the pound until the end of March.

Many investors make the mistake of thinking that the Swiss franc can be a super strong currency.  I have warned about this error for well over a decade. However, the mistakes of other investors can make opportunity for you.

Years ago in a different world, Switzerland was isolated and fiercely independent.  Its mountainous terrain and well organized citizen’s army gave them the strength to claim and enforce neutrality.

The small population (about 6 million) believed in personal privacy and hence banking privacy. The people were incredibly conservative and highly efficient. They did not believe in government debt and demanded that their national bank keep a large amount of gold as a reserve for their currency. This made Switzerland an ideal banking center in those days plus made Switzerland a refuge in times of turmoil. Swiss francs in a Swiss bank account were one of the ultimate forms of financial safety at that time.

This all changed. The computer, new tactics in war and the global economic community turned everything upside down. The computer was like the Colt .45, a great equalizer, making bankers in England, Italy or Spain etc. as efficient as the Swiss. New instruments of war, intercontinental and cruise missiles, nuclear weapons, etc. dramatically reduced Switzerland’s natural defenses.

Most of all, the global economic community forced Swiss banks to deal in US dollars, British pounds, Japanese yen and German marks. Swiss banks
had to open centers abroad and hence became vulnerable to other countries’ laws. They lost some of their independence!

Today Swiss banks are affected by what happens in the US and other countries (they have a huge investments globally. More importantly the Swiss franc is no longer the reserve currency of last resort.

Switzerland is a tiny country poor in terms of natural resources lacking oil, minerals and the ability to feed itself. Switzerland’s wealth is in its industrious, precise people. It is a trading nation and must maintain a currency at parity with the nations where it exports goods.  Switzerland must export to survive. Half of its exports go to Germany. When the Swiss franc becomes too strong, especially against the euro, the Swiss must act to force its parity down.

The last time the Swiss franc was too strong, the Swiss imposed a 12% per quarter negative tax on Swiss franc accounts held by overseas investors.

Switzerland is a good banking center, yes. The Swiss franc is a strong, stable currency, yes. Yet the Swiss cannot afford to let the franc rise too high.

I have shared this information for at least fifteen years warning not to invest too much in Swiss francs when it is strong.  In fact you should borrow Swiss francs and invest in euros and other related currencies, as shown above, when Swiss franc interest rates are down (as they are now).  This creates a double distortion that creates two opportunities.  You gain the positive carry on euro rates over the Swiss franc loans.  You also gain an extra chance for a foreign exchange profit.

Currencies globally are losing their purchasing power. To maintain the value of our wealth we need to do more than just save. The multi currency sandwich is one way to enhance the earnings of your capital.

I am updating Borrow Low-Deposit High now. When the new update is complete, it will be offered at $79.

This report will include ideas on were to invest in China and Russia with Japanese yen or Swiss franc loans (or both) now.

You do not have to wait and miss this yen opportunity, buy our report “Borrow Low-Deposit High” for $49.  I will email it to you immediately… plus when the new update is complete, I’ll email that to you also… FREE.

The report helps you see why and where to invest and learn why and how currencies and interest rates rise and or fall.

Finally, as always you are protected by our 30 day completely satisfied or your money back guarantee.

Borrow Low Deposit High – How to Use the Multi Currency Investment Sandwich… click here to get this emailed report for only $49.

This is also why we maintain close contact with Jyske Bank, Denmark’s second largest bank. Denmark is rated by Standard & Poor’s as the safest country in the world to bank in. Jyske Bank is the only bank we know that specializes in the Borrow Low-Deposit High strategy. Jyske Bank is also one of the leading currency traders in the world. Unlike most banks (that trade only eight hours a day) Jyske maintains a 24 hour trading service. They have been our bank for over twenty years and help us stay informed about global equity markets, plus global currency parity and interest rate trends so we can learn from portfolios that are real time. What you learn from is actually happening as our service unfolds.

More importantly, Jyske Bank  has created an entire subsidiary that provides a stable and safe institution for US investors  who wish to invest globally including a Borrow Low-Deposit High strategy.

Gary

Save $100 more. There is another important benefit you gain when you order my emailed report “Borrow Low-Deposit High”.  You can save $100 at the next Jyske seminar where I review the new H.I.R.E. overseas banking regulations.

Share strategies with me in California and Save.

I speak at the Jyske Global Asset Management’s April 30 – May 2 Foreign Exchange Investment Seminar in Laguna Beach, California.

The normal seminar fee is$499 or $750 for two.

However Jyske is providing the same discount to our premium subscribers (including those who order Borrow Low – Deposit High) as to their clients… $399 single and $599 for a couple.  You save $100…even though the emailed report “Borrow Low Deposit High” is only $49.

Order “Borrow Low-Deposit High – How to Use the Multi Currency Investment Sandwich”… click here to get this emailed report for only $49. Save $100 on JGAM’s California seminar.

See more on the JGAM California seminar here.

If you have questions about Jyske’s seminars contact Thomas Fischer of JGAM at fischer@jgam.com

Learn more about the IRS and Mother’s Day roses in Ecuador.

ecuador-mother's-day-Roses

Join us in North Carolina this June to learn more about how to bank abroad. June 24-27 International Investing and Business North Carolina

Gary

See an idea on Ecuador retirement here.

Our Ecuador exports tour is filled but you can still learn about Ecuador real estate.

Apr. 17-18   Imbabura Real Estate Tour ($499 or couple $749)
Apr. 20-21  Coastal Mid Coast Real Estate Tour ($499 or couple $749)
Apr. 23-24  Quito & Mindo Real Estate Tour ($499 or couple $749)

April 26-27 Cuenca Real Estate Tour

May 9-12       Super Thinking + Spanish Course, Cotacachi Ecuador

May  13-14    Ecuador Shamanic Minga

May  16-17    Imbabura Real Estate Tour

May  19-20    Coastal Real Estate Tour

May  22-23    Quito Real Estate Tour

May  25-26    Cuenca Real Estate Tour

You enjoy discounts by attending multiple seminars and tours.

Here are our multi tour adventure discounts.

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

Here is the balance of our 2010 schedule.

June 24-27 International Investing and Business North Carolina

June 28-29    Ecuador Travel & Andes

June 30-Jul 1 Imbabura Real Estate Tour

July 3-4      Coastal Real Estate Tour

July 6-7      Quito Real Estate Tour
July 9-10     Cuenca Real Estate Tour

Sept.   3-6   Ecuador Export Tour
Sept.   8-9   Imbabura Real Estate Tour
Sept. 11-12   Coastal Real Estate Tour
Sept. 14-15   Cuenca Real Estate Tour
Sept. 17-18   Ecuador Shamanic Mingo

Oct.    7     Quantum Wealth North Carolina
Oct.   8-10   International Investing & Business North Carolina
Oct.   11-12  Travel to Quito and Andean Tour
Oct.  13-14   Imbabura Real Estate Tour
Oct.  16-17   Coastal Real Estate Tour
Oct.  19-20   Quito Real Estate Tour
Oct. 22-23    Cuenca Real Estate Tour

Nov.    4-7   Super Thinking + Spanish Course Florida
Nov.    8-9   Travel to Quito and Andean Tour
Nov. 10-11    Imbabura Real Estate Tour
Nov. 13-14    Coastal Real Estate Tour
Nov. 16-17    Quito Real Estate
Nov. 19-20    Cuenca Real Estate Tour

Dec.   3-5    Ecuador Shamanic Mingo
Dec.   7-8    Imbabura Real Estate Tour
Dec.  10-11   Coastal Real Estate Tour
Dec. 13-14    Quito Real Estate Tour
Dec. 16-17    Cuenca Real Estate Tour