Tag Archive | "us dollar"

Dollar Time Bomb


How can we survive the US Dollar Time bomb?

pricedingold.com

Image from pricedingold.com(1)

A recent recorded update at our Personal investment Course (Pi)  looked at the fact that US national debt is no big deal.  No one expects any government to repay all its debt.

The current cost and timely payment of US debt service is a big deal.  It’s bigger than big, call it a huge deal, one that’s the bedrock of the global economy’s foundation.

If the bedrock of US government interest payments slips, expect an economic earthquake of unprecedented proportions.

The Committee for a Responsible Federal Budget article  “The cost-rising-interest-rates” (2) says:  “Last year, the federal government spent $241 billion – roughly 1.3 percent of Gross Domestic Product (GDP) – on interest payments.  That’s among the lowest at any point since the 1970s, driven by historically low interest rates.

Yet recent market activity and expected Federal Reserve actions already suggest interest rates will rise; in fact, both the 3-month Treasury bill and 10-year Treasury note have increased by over 75 percent in the past 5 months.”

As savers, we hate low dollar interest rates.  But dollar investors are in a lose-lose position.  If dollar interest rates rise, Federal debt service risks undermining the strength of the US dollar.  If dollar interest rates remain low and other currency rates rise, this too undermines the strength of the US dollar.

The Wall Street Journal article “Obama’s Debt Interest Bomb” (3) helps explain the dilemma.

The article says:  “Rising interest payments are already showing up in the federal fisc.

“President Obama left his successor many time bombs—think chemical weapons in Syria and the collapsing Affordable Care Act.  But a burning fuse that gets less attention showed its first signs of the explosion to come in Friday’s Congressional Budget Office budget review for March: Rising net interest payments on the national debt.

“CBO reported that the federal budget deficit rose $63 billion in the first half of fiscal 2017 (October-March) to $522 billion from a year earlier. But here’s the especially bad omen: Net interest payments rose $7 billion, or 30%, in March from a year earlier.

“While Mr. Obama was doubling the national debt over eight years, the Fed’s monetary policies spared him from the fiscal consequences.

“This not-so-free Fed lunch is starting to end.  CBO estimates that $160 billion more spending will be required each year over the next decade if interest rates are merely one percentage point higher than in its current projections.”

What should we do to avoid this US dollar time bomb?

Obviously the answer is to invest in non dollar assets.  But which?  We cannot trust the economic news. The economic news even in the most reliable publications is little more than opinion and conjecture.  Plus if you read something in the New York Times or Wall Street Journal, it’s already old news.  The big investors will have already prepared to rip off  the millions of readers who act on the news.

For example, last week, the New York Times wrote:  “Emerging Markets Are Bouncing Back From a Six-Year Slowdown.  As Turkey hurtled toward one of the most politically divisive polls in its history, the country’s business leaders reacted in a curious manner.  They ramped up production.  Ignoring terrorism threats, the yo-yoing of the Turkish currency and a president quick to pick fights with Europe, Turkish manufacturers last month reported their most buoyant month of economic activity in three years.”

Yet on the same day the Wall Street Journal reported a totally different and opposite opinion.

The Wall Street Journal article was entitled “This Is a Dangerous Time to Own Emerging Markets”.

The article said “Some worry a recent buying spree has resulted in lofty valuations as geopolitical tensions rise.  A crack is forming in an emerging-market revival that channeled almost $60 billion into assets of developing economies during the first months of 2017.”

Invest in non dollar good value markets based on mathematically based financial news instead.

For example, the analysis we provide from Keppler Asset Management shows that emerging markets offer better value that developed markets.

This mathematical analysis is based on the real facts of value such as price to book, price to earnings and dividend yield.

keppler

Valuations shown in the latest Keppler Asset Management Emerging Market Analysis.

Emerging markets as a whole offer better price to book and price to earnings values than developed markets.  However, not all emerging markets offer good value at this time.

Keppler wrote:  After a strong performance last year, emerging markets equities have continued to perform well so far in 2017.  Even after the superior returns, the emerging markets equities asset class is still undervalued by 23 % compared with the MSCI World Index. Furthermore, our Emerging Markets Top Value Model Portfolio is undervalued by an additional 17 % versus the MSCI Emerging Markets Index and by a whopping 37 % versus the MSCI World Index.

Eleven merging markets offer good value, and they offer much better fundamental price to book, price to earning and dividend yield values.

Keppler notes that “Due  to  liquidity issues  and  geopolitical  risks,  we  are  assigning  lower  than  equal  weights  to  smaller  markets  in  the portfolios we advise.”

Our Pi course recommends that a general policy of investing 20% to 30% of a good value portfolio in good value emerging markets, subject to each person’s investment position and needs.

The US dollar has risen near or over 30% versus the euro, the British pound and Japanese yen since 2008.  This strength is an economic time bomb.  We can take advantage of this distortion when we build our investment shelters out of value.

Gary

(1) Dollar chart pricedingold.com

(2) www.crfb.org/papers/cost-rising-interest-rates

(3) Wall Street Journal: Obamas debt interest bomb

The Huge 2019 Risk

Here is a huge risk that could explode in 2019.

I hope I am wrong… but the numbers are clear.

According to Treasurydirect.com, (1) as of December 27, 2018 the cost of interest on the total US public debt of $21,845,329,154,412.01.  Tht’s 23 trillion and 845 billion dollars.

This is not a theoretical problem for the future.  This is not something that our children and grandchildren will have to deal with.  This is a problem in the here and now for you and me.

Rising interest rates create a massive problem for every American.

US debt

The good news is I sent a note like this last year ad I was wrong.

Last year when I sent that note the debt was $20,467,375,664,755.32 (20 trillion+).  The debt has increased almost 1.4 trillion dollars in 2018.

This is good news and bad… the rock and the hard spot.  The bad news is that the rock (US federal debt) is getting bigger….harder to miss.  The Congressional Budget Office (CBO) projected in 2010 (the debt then was a bit over 14 trillion then) that, under law at that time, debt held by the public would exceed $16 trillion by 2020, reaching nearly 70 percent of GDP.

The $5 Trillion Error.

They sure goofed on that.  Here we are… only in 2019 and debt has shot past 21 trillion.

How could the CBO be so wrong? 

The CBO screwed up because they could never imagine that the Fed would push interest rates so low… and keep them there.  The interest rates are so low that the government has been able to borrow more than imagined and still afford the interest.

For example, US Federal government interest last year amounted to around $483 billion on the 20 trillion of debt.  Yet in 2008 on debt of only $9,229,172,659,218.31 (9 trillion +) the interest that year was $451,154,049,950.63 (451 billion +).

Interest payments in 2017 were 7% higher than they were in 2008.  Yet the debt is over 100% higher.  

Very low interest rates have helped the government borrow.  Low interest has also helped the US stocks reach all time high prices.

Now US dollar interest rates are rising.  In 2018 the interest costs were 8.2% higher than in 2017.   Yet the debt increase was only 6.7%.

The government will resist raising rates because it will ruin their budget, cause a collapse of the stock markets and destroy the US dollar.

Here is the very hard spot.  

Rising interest rates, will create an almost unimaginable debt crisis.  If government interest goes to 6% it is like the $20+ trillion national debt  rising to 40 trillion!  Unless there are some huge tax increase the interest payments are not sustainable.

A tax increase?  Last year’s tax act reduced, not increased, revenue.

Learn how to have more freedom and time, less stress, better health care, extra income, greater safety and profit in your savings despite America’s deficits, debt and currency risk.

Fortunately there are secrets that will allow a few to live much better, free of debt and worry despite the decline in the dollar’s purchasing power.   My wife, Merri and I, have traveled, lived, worked and invested around the world for nearly 50 years to gain this information.

Let me share the basics of this data and how we can be of help through 2018.

The first fact behind this secret is that things are really good in the western world.  Despite many problems, we are surrounded by more abundance and greater opportunity than almost anyone has ever enjoyed, anywhere, ever.   To enjoy a fair share of this wealth, all we have to do is understand human nature and learn how to invest in the new economy, as it changes and becomes new, again and again.

Merri and I have made seven huge transitions in the 50 years.  Each has allowed us to always stay ahead of losses that the majority of Americans suffer.  We are in another transition right now and want to share why and what to do so you can stay ahead and live a richer, independent life through 2019 and beyond.

A falling US dollar is one of the greatest risks we have to our independence, safety, health, and wealth, but also brings a window of huge profit as I explain below.   Though the greenback has been strong for a number of years, its strength is in serious jeopardy.  The growing federal deficits increase the national debt and this with rising interest rates propels a growing debt service.

While the Dow Jones Industrial Average passed 25,000, the U.S. national debt passed the $20 trillion mark.

The problem is that the Dow will come back down.  National debt will not fall.

The double shock of money fleeing Wall Street and US debt skyrocketing, will destroy the purchasing power of the greenback.

Go to the store even now.  Statistics say inflation is low, but buy some bread or, heaven forbid, some fresh vegetables like peppers or fruit.   Look at the cost of your prescription or hospital bills.  Do something simple like have your car serviced at an auto dealer.  Look at the dollars you spend and you’ll see what I mean.

The loss of the dollar’s purchasing power erodes our independence, our freedom and our savings and wealth as well. 

At the same time, low interest rates by big banks and higher health care costs soak up the ever diminishing income and savings we have left.  According to a Gallup poll, the most unpopular three institutions in America are big corporations & Wall Street banks, HMOs and Congress.

Yet there is little we can do because these institutions are in control.

Over the last 50 years the average income for 90 percent of the American population fell.  Our health system is restricted by a Kafka-esque maze of legislation and insurance regulations that delay, frustrate, and thwart attempts by patients and doctors from proper medical care.  Big banks and corporations restrict our freedom of choice.  The business customer relationships are no longer transactions between free equals.

Banks can trap us in indebtedness at every age from student loans to mortgages to health care costs.  They pay almost nothing on our savings.  They hide unexpected fees and payments in complex and unreadable documents.  Banks and big corporations routinely conceal vital information in small print and then cheat.  Weak regulations and lax enforcement leave consumers with few ways to fight back.  Many of these businesses ranging from cable TV to phone and internet service to health insurance have virtual monopolies that along with deceptive marketing destroys any form of free market.

These same companies control the credit-scoring agencies so if  we don’t pay unfair fees, our credit scores will plunge and we could lose the ability to borrow money, rent an apartment, even to get a job.  Many consumers are forced to accept “arbitration clauses” in lieu of  legal rights.  The alternative is to lose banking, power, and communication services.

Big business has also usurped our privacy.  Internet companies sell our personal data.  Personal information is pulled from WiFi and iPhones track and store our movements.  The government can access this information, sometimes without subpoenas.  There’s a lot that we don’t know, often withheld under the guise of “National Security.”

The glow on Western democratic capitalism has dimmed… or so it seems.  The US, leading the way, is still a superpower with economic, innovation and military might, but the institutions that should serve the people have become flawed or broken.

America’s infrastructure is in shambles.  The nation’s bridges are crumbling, many water systems are filled with toxins, yet instead of spending more to fix this, we build more prisons.  The 2.2 million people currently in  jail is a 500 percent increase over the past thirty years.  60% of the inmates belong to ethnic groups.  Not just non-white ethnic groups are suffering.  Annual death rates are falling for every group except for middle-aged white Americans.  Death rates are rising among this group driven by an epidemic of suicides and afflictions stemming from substance abuse, alcoholic liver disease and overdoses of heroin and prescription opioids.

America’s middle class is shrinking.  Nearly  half of America’s income goes to upper-income households now.  In 1970 only 29 percent went to this group.  How can we regain our freedom, our happiness and our well being in such a world?

What can we do?

Gain a better, freer life is to combine better health, higher income and greater savings for a happier, more resilient lifestyle. 

Merri and I will celebrate our 50th year of global living, working, investing and researching to find and share ideas on how to have simpler, low stress, healthier, more affluent lifestyles.  Our courses, reports and email messages look at ways to gain:

#1:  Global micro business income.

#2:  Low cost, natural health.

#3:  Safer, more profitable, investments that take little time or cost to buy and hold… so you can focus on earning more instead

Many readers use our services for just one of these three benefits.  They focus only on health or on earning more or on better, easier investing.

28 years ago Merri and I created the International Club as a way for readers to join us and be immersed in all three of these benefits.   The International Club is a year long learning program aimed at helping members earn worry free income, have better affordable good health and gain extra safety and profits with value investments.

Join us for all of 2019 NOW.

The three disciplines, earning, health and investing, work best when coordinated together.  Regretfully the attacks on our freedom are realities of life.  There is little we can do to change this big picture.  However we can change how we care for our health, how we earn and how we save so that we are among the few who live better despite the dollar’s fall.

We start with better lower cost health care.

Club membership begins by sharing ways to be free of the “Secret Hospital Charge Master”.   Just as governments hide truth behind “National Security”, big health care businesses hide medical truths behind “Charge masters”.  Most hospital charge masters are secret because big business does not want us to know how much hospital costs have risen.  Motivations beyond our good health, like corporate greed, want to keep us in the dark about health care cost.

Despite rising health care costs, a report from the Centers for Disease Control & Prevention shows that hospitals are the last place we want to be for good health.  One report shows that hospital-acquired infections alone kills 57% more Americans every year than all car accidents and falls put together.

Often, what patients catch in the hospital can be worse than what sent them there.  Governments and health care agencies agree  – antibiotic resistance is a “nightmare.”  An antibiotic-resistant bacteria may be spreading in more hospitals than patients know.  About one in every 25 hospitalized patients gets an infection and a report from the Journal of Patient Safety showed that medical errors are the third-leading cause of death in the country.

Along with the risk of hospital acquired illness and medical errors, the second huge threat to our well being… is health care costs, especially at hospitals.  This is why charge masters are so often secret.  There are few risks to our wealth that are greater than a hospital stay.

I have created three natural health reports are about:

#1: Nutrition

#2: Purification

#3: Exercise

Each report is available for $19.95.  However you’ll receive this free as club member and save $59.85.

Club members also receive seven workshops and courses on how earn everywhere with at home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ”
  • “Self Fulfilled – How to Write to Sell”
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”

This program is offered at $299, but is available to you as a club member free.  You save $299 more.

Next, club members participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value investments that increase safety and profit.  Learn Slow, Worry Free, Good Value Investing.

Stress, worry and fear are three of an investor’s worst enemies.  These destroyers of wealth can create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.  Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

There are seven layers of tactics in the Pi strategy.

Pi Tactic #1: Determine purpose and good value.

Pi Tactic #2: Diversify 70% to 80% of portfolio equally in good value developed markets.

Pi Tactic #3: Invest 20% to 30% equally in good value emerging markets.

Pi Tactic  #4:  Use trending algorithms to buy sell or hold these markets.

Pi Tactic  #5:  Add spice speculating with ideal conditions.

Pi Tactic  #6: Add spice speculating with leverage.

Pi Tactic  #7:  Add spice speculating with forex potential.

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout the next year with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $99 per annum but as a club member you receive Pi at no charge and save an additional $99.

Profit from the US dollar’s fall.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Club members receive a report about opportunity in the  current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you become a club member you receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Platinum Dip 2019” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

Now there is a new distortion ready to ripen in the year ahead.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Platinum Dip 2019”.   The report explains the exact conditions you need to make leveraged precious metal speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Platinum Dip 2018” offers enormous profit potential in 2018.

The report “Platinum Dip 2019” sells for $39.95 but club members receive it free as well.

The $39.95 new “Live Anywhere – Earn Everywhere Report” is also free.

There is an incredible new economy that’s opening for those who know what to do.  There are great new opportunities and many of them offer enormous income potential but also work well in disaster scenarios.

There are are specific places where you can reduce your living expenses and easily increase your income.  Scientific research has shown that being in such places actually make you smarter and healthier.  Top this off with the fact that they provide tax benefits as well and you have to ask, “Where are these places?”.

Learn about these specific places.  More important learn what makes them special.  Discover seven freedom producing steps that you can use to find other similar places of opportunity.

The report includes a tax and career plan broken into four age groups, before you finish school, from age 25 to 50 – age 50-to 65 and what to do when you reach the age where tradition wants you to re-tire.  (Another clue-you do not need to retire and probably should not!)

The report is very specific because it describes what Merri and I, our children and even my sister and thousands of our readers have done and are doing, right now.

Live Anywhere – Earn Everywhere focuses on a system that takes advantage of living in Smalltown USA, but earning locally and globally.

This report is available online for $39.99 but International Club members receive it free.

Save $418.78… “plus more” when you become a club member.

Join the International Club and receive:

#1: The $99 Personal investing Course (Pi).   Free.

#2: The $299 “Live Well and Free Anywhere Program”. Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”. Free.

#4: The $39.99 report “Platinum Dip 2018”. Free

#5: The three $19.99 reports “Shamanic Natural Health”.  All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report. Free.

#7: A year’s follow up subscription to the Purposeful investing course… Plus more.

These reports, courses and programs would cost $527.92 so the 2018 membership saves $117.92.

Join the International Club for $349 and receive all the above online now, plus all reports, course updates and Pi lessons 2019 at no additional fee.

Click here to become a member at the discounted rate of $349

Gary 

(1) www.treasurydirect.gov/NP/debt/current

 

Enjoy the Good “New” Days


Gain value in health, income and investing over the next year.

Many people yearn for a return to the good old days.  This is a mistake.  Those days are gone and will never return.  Honestly they really weren’t that good.  We would be sorry if they returned.

The future is better and for a special few, the days, months and years ahead will be much better than the past.  We plan to be among these few and invite you to join us in an easier, freer, richer, safer world.

Merri and I are in our 48th year of living, working, investing and researching to find and share ideas on how to have simpler, low stress, healthier, more affluent lifestyles.  Our courses, reports and email messages look at ways to gain:

#1:  Low cost natural health.

#2:  Global micro business income so we can live anywhere but earn everywhere.

#3:  Safer, more profitable, easy to make value investments.

Many readers use our services for just one of these three benefits.  They focus only on health or on earning more or on investing better.

27 years ago Merri and I created the International Club as a way for readers to join us and be immersed in all three of these benefits  The International Club is a year long learning program aimed at helping members earn worry free income, have better affordable good health and gain extra safety and profits with value investments.

The three disciplines, health, earning and investing, work best when coordinated together.  Regretfully the attacks on our health, pur finances and our freedom are realities of life.  There is little we can do to change this big picture.  However we can change how we care for our health, how we earn and how we save so that we are among the few who live better despite the dollar’s fall.

We start with better lower cost health care.

Club membership begins by sharing ways to be free of the “Secret Hospital Charge Master”.   Just as governments hide truth behind “National Security”, big health care businesses hide medical truths behind “Charge masters”.  Most hospital charge masters are secret because big business does not want us to know how much hospital costs have risen.  Motivations beyond our good health, like corporate greed, want to keep us in the dark about health care cost.

Despite rising health care costs, a report from the Centers for Disease Control & Prevention shows that hospitals are the last place we want to be for good health.  One report shows that hospital-acquired infections alone kills 57% more Americans every year than all car accidents and falls put together.

Often, what patients catch in the hospital can be worse than what sent them there.  Governments and health care agencies agree  – antibiotic resistance is a “nightmare.”  An antibiotic-resistant bacteria may be spreading in more hospitals than patients know.  About one in every 25 hospitalized patients gets an infection and a 2013 report from the Journal of Patient Safety showed that medical errors are the third-leading cause of death in the country.

Along with the risk of hospital acquired illness and medical errors, the second huge threat to our well being… is health care costs, especially at hospitals.  This is why charge masters are so often secret.  There are few risks to our wealth that are greater than a hospital stay.

I have created three shamanic health reports are about:

#1: Nutrition

#2: Purification

#3: Exercise

Each report is available for $19.95.  However club members receive these three reports worth $59.85 free.

Club members also receive seven workshops and courses on how earn everywhere with at home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ”
  • “Self Fulfilled – How to Write to Sell”
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”

This program is offered at $299, but is available to club members free. They save $299 more.

Next, club members participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value investments that increase safety and profit.  Learn Slow, Worry Free, Good Value Investing.

Stress, worry and fear are three of an investor’s worst enemies.  These destroyers of wealth can create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.  Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

There are seven layers of tactics in the Pi strategy.

Pi Tactic #1: Determine purpose and good value.

Pi Tactic #2: Diversify 70% to 80% of portfolio equally in good value developed markets.

Pi Tactic #3: Invest 20% to 30% equally in good value emerging markets.

Pi Tactic  #4:  Use trending algorithms to buy sell or hold these markets.

Pi Tactic  #5:  Add spice speculating with ideal conditions.

Pi Tactic  #6: Add spice speculating with leverage.

Pi Tactic  #7:  Add spice speculating with forex potential.

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout the next year with you.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $299 per annum but club member receive Pi at no charge and save an additional $299.

Plus get the $39.99 report, “The Silver Dip 2017” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2015” and updated this in 2017.   The report explains the exact conditions you need to make leveraged silver & gold speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2017.

The report “Silver Dip 2017” sells for $39.95 but club members receive it free as well.

The $39.95 new “Live Anywhere – Earn Everywhere Report” is also free.

There is an incredible new economy that’s opening for those who know what to do.  There are great new opportunities and many of them offer enormous income potential but also work well in disaster scenarios.

There are are specific places where you can reduce your living expenses and easily increase your income.  Scientific research has shown that being in such places actually make you smarter and healthier.  Top this off with the fact that they provide tax benefits as well and you have to ask, “Where are these places?”.

Learn about these specific places.  More important learn what makes them special.  Discover seven freedom producing steps that you can use to find other similar places of opportunity.

The report includes a tax and career plan broken into four age groups, before you finish school, from age 25 to 50 – age 50-to 65 and what to do when you reach the age where tradition wants you to re-tire.  (Another clue-you do not need to retire and probably should not!)

The report is very specific because it describes what Merri and I, our children and even my sister and thousands of our readers have done and are doing, right now.

Live Anywhere – Earn Everywhere focuses on a system that takes advantage of living in Smalltown USA, but earning locally and globally.

This report is available online for $39.99 but International Club members receive it free.

Profit from the US dollar’s fall.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Club members receive a report about opportunity in the  current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you become a club member you receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

You save $418.78… “plus more” when you become a club member.   The ind=formation you receive is urgent now because any day now you may be reading… again, about how instability in the US dollar threatens our lifestyles.  The dollar, once the world’s reserve currency is burdened with debt and deficits that threaten economic and social order almost everywhere.  This is nothing new.  In fact, deterioration in the greenback is one reason for a seven decade downward spiral in your and my freedom.  When we work hard and save carefully, but get less and less in return, we become boxed in.  It’s a never ending rat race.  This is a trap, a downwards spiral where the more dollars we get the less we can buy.

Belonging to the International Club helps you learn how to have more freedom and time, less stress, better health care, extra income, greater safety and profit in your savings despite America’s deficits, debt and currency risk.

downwards spiral

A downward spiral of the US dollar began the downward spiral of our freedom.

Fortunately the reports and courses you receive  contain secrets that will allow a few to live much better, free of debt and worry despite the decline in the dollar’s purchasing power.   My wife Merri and I have traveled, lived, worked and invested around the world for nearly 50 years to gain this information.  Let me share the basics of this data and how it can help you.

The first fact behind this secret is that things are really good in the western world.  Despite the many problems, we are surrounded by more abundance and greater opportunity than almost anyone has ever enjoyed, anywhere, ever.   To enjoy a fair share of this wealth, all we have to do is understand human nature and learn how to invest in the new economy, as it changes and becomes new, again and again.  Merri and I have made seven huge transitions in the 50 years.  Each has allowed us to always stay ahead of losses that the majority of Americans suffer.  We are in another transition right now and want to share why and what to do so all of us can stay ahead and live a richer, independent life, too.

The concept of democracy, as we learned it, has weakened, but we still have free will and do not have to let poor government, wars, economic and social injustice blur our well-being.  We can still be free and responsible for our health, our income and our wealth.  The majority of people blame on government and big business for economic failure.  They want them to fix the problems, step back from the change and rebuild from what they perceive as ruin.

The few who succeed see change as a gift instead.   No change is a guarantee that nothing gets better.  Evolution brings destructive innovation but such change is not ruin. It is opportunity.

The change in the purchasing power of the US dollar is one of the greatest risks we have to our independence, safety, health, and wealth, but is also a chance for huge profit as you can see below.   Though the greenback has been strong for a number of years, its strength is in serious jeopardy.  The growing federal deficits increase the national debt and this with rising interest rates propels a growing debt service.

When the Dow Jones Industrial Average recently passed 20,000, another milestone of “20” took place that has a much darker meaning to your and my spending power.  The U.S. national debt passed the $20 trillion mark.

The problem is that the Dow will come back down.  National debt will not fall.

In the past decade, US debt nearly doubled and the Congressional Budget Office estimates that the rate of  debt will continue to rise for at least ten more years.  That debt is all the debt issued by the US  Department of the Treasury since 1790.  In other words, in the ten years from 2006 to 2016 the US government added as much debt as it had accumulated in the previous 216 years!

That number does not include state and local debt.  That number doesn’t include so-called “agency debt (debt issued by federal agencies and government-sponsored enterprises) which is “guesstimated” to be another $8.6 trillion or so.  That  dreadful number does not include the so-called unfunded liabilities of entitlement programs like Social Security and Medicare.

Do you feel burdened by personal debt?  Well, add the Federal National Debt because per person it is over $60,000.  If one adds in all the other debt each and every American owes over $100,000!   For each family of four, our friendly Congress has added an extra $400,000 debt.

How can America pay this back?  The answer is they cannot.

However, there is good news.  Payback actually does not matter.  No one expects the US or any country to ever pay back all its debt.  Isn’t that nice? We all owe $100,000 but don’t have to pay it back?  Right?

Here is the bad news.  Everyone does expect every country to pay its national debt service.   This is why we know there will be a downward dollar spiral.  You see when debt service gets too high, governments always let the purchasing power of the currency fall.  It’s a dirty trick.  Someone owes you a bunch of dollars every month and they pay it.  The problem is those dollars buy less clothing, less food, less housing and energy and less everything.

Wait a minute isn’t that good for us?  If we each owe a $100,000 but get to pay it back in devalued dollars, don’t we reduce our debt?   Yes, but those are the same dollars we are paid with.  Those are the same dollars that pay for our food, our clothing and our shelter. Those are the same dollars in our savings account so the reduced purchasing power lowers our standards of living too!

Go to the store.  Buy some bread or, heaven forbid, some fresh vegetables like peppers or fruit.   Look at the cost of your prescription or hospital bills.   Do something simple like have your car serviced at an auto dealer.  Look at the dollars you spend and you’ll see what I mean.

A huge dollar conundrum looms from the rising national debt service as well.  During most of the last decade when the national debt was skyrocketing, interest rates were plunging and remained really low.  Now rates are starting to rise as will the US national debt service.  This chart from the Congressional Budget Office (CBO) shows that debt service is expected to more than triple in the next ten years.

dollar charts

Largely due to the Federal Reserve’s aggressive efforts to keep interest rates low, the U.S. government is paying historically low rates on its debt.

The CBO projects, unless the law changes, US national interest costs will more than double over the next 10 years, rising from $270 billion in 2017 to $712 billion in 2026 and totaling $4.8 trillion over the period.  Interest costs are expected to continue climbing beyond the next 10 years and are projected to be the third largest category in the federal budget by 2028 (after just Social Security and Medicare), the second largest category in 2046, and the single largest category in 2050.

These interest costs add up to trillions of dollars that won’t be spent on roads, on the military, on health care or the environment or schools.  That rising debt service creates a vicious cycle that can only lead to a devaluation of the US dollar so the debt can be paid, but in phony terms.

The loss of the dollar’s purchasing power erodes our independence, our freedom and our savings and wealth as well. 

At the same time, low interest rates by big banks and higher health care costs soak up the ever diminishing income and savings we have left.  According to a Gallup poll, the most unpopular three institutions in America are big corporations & Wall Street banks, HMOs and Congress.  Yet there is little we can do because these institutions are in control.

Over the last 50 years the average income for 90 percent of the American population fell.  Our health system is restricted by a Kafka-esque maze of legislation and insurance regulations that delay, frustrate, and thwart attempts by patients and doctors from proper medical care.  Big banks and corporations restrict our freedom of choice.  The business customer relationships are no longer transactions between free equals.

Banks can trap us in indebtedness at every age from student loans to mortgages to health care costs.  They pay almost nothing on our savings.  They hide unexpected fees and payments in complex and unreadable documents.  Banks and big corporations routinely conceal vital information in small print and then cheat.  Weak regulations and lax enforcement leave consumers with few ways to fight back.  Many of these businesses ranging from cable TV to phone and internet service to health insurance have virtual monopolies that along with deceptive marketing destroys any form of free market.

These same companies control the credit-scoring agencies so if  we don’t pay unfair fees, our credit scores will plunge and we could lose the ability to borrow money, rent an apartment, even to get a job.  Many consumers are forced to accept “arbitration clauses” in lieu of  legal rights.  The alternative is to lose banking, power, and communication services.

Big business has also usurped our privacy.  Internet companies sell our personal data.  Personal information is pulled from WiFi and iPhones track and store our movements.  The government can access this information, sometimes without subpoenas.  There’s a lot that we don’t know, often withheld under the guise of “National Security.”

The glow on Western democratic capitalism has dimmed… or so it seems.  The US, leading the way, is still a superpower with economic, innovation and military might, but the institutions that should serve the people have become flawed or broken.

America’s infrastructure is in shambles.  The nation’s bridges are crumbling, many water systems are filled with toxins, yet instead of spending more to fix this, we build more prisons.  The 2.2 million people currently in  jail is a 500 percent increase over the past thirty years.  60% of the inmates belong to ethnic groups.  Not just non-white ethnic groups are suffering.  Annual death rates are falling for every group except for middle-aged white Americans.  Death rates are rising among this group driven by an epidemic of suicides and afflictions stemming from substance abuse, alcoholic liver disease and overdoses of heroin and prescription opioids.

America’s middle class is shrinking.  Nearly  half of America’s income goes to upper-income households now.  In 1970 only 29 percent went to this group.  How can we regain our freedom, our happiness and our well being in such a world?  What can we do?

The answer to a better, freer life is to combine better health, higher income and greater savings for a happier, more resilient lifestyle. 

Join the International Club and receive:

#1: The $299 Personal investing Course (Pi).   Free.

#2: The $299 “Live Well and Free Anywhere Program”. Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”. Free.

#4: The $39.99 report “Silver Dip 2017”. Free

#5: The three $19.99 reports “Shamanic Natural Health”.  All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report. Free.

#7: Plus more.

These reports, courses and programs would cost 767.78 so membership saves $418.78, “plus more”.

What’s the “plus more”?

Join the International Club for $349 and receive all the courses and reports we offer, plus all the new online reports, online course updates and online programs we create for a year, throughout 2017 and into 2018, all at no additional fee. The club membership entitles you to everything we publish online.

The International Club membership is $499, but we want to encourage our first 100 members to join quickly so we are accepting discounted membership in three tranches.  This is the last offer of the first tranche at $349 and expires Friday March 31st 2017 . 

The next tranche will be offered at $399 before it rises to $449 and then the full fee.

Join the International Club for $349 and receive all the above online now, plus all reports, course updates and Pi lessons throughout 2017 at no additional fee.

Click here to become a member at the discounted rate of $349

Gary 

 

Economic Alarms Ringing


Three economic alarms were all ringing this week.   They’ll scare the heck out of most investors.  Value investors will see an amazing opportunity instead.

When warnings of economic shifts don’t materialize, one of two things have happened.  The theories that suggest the shift could be wrong.  More likely, though there is a distortion growing.  Some hang-up is delaying the correction from taking place.

These distortions can be likened to dams with no outlet.  They’ll stop a natural flow for awhile.  Eventually the pressure will cause them to let go.  The longer the dam holds, the bigger the release when it bursts.

When the pressure klaxons are blaring, even if the dam seems to be strong, don’t ignore the warning.  Get to high ground above the dam.  When dealing with delays of the natural economic order, believe me, the question is never “Will a correction come?”  The only question is “When” and in economics we never really know.

There have been three economic hang-ups increasing their pressure since the last recession.  Each has lasted longer than they should but now the warning sirens are wailing.

The first distortion has been a deflationary trend.  Artificially induced low interest rates should have created inflation but has not.  This is changing.  The evidence can be seen in last Wednesday’s Wall Street Journal article “Measures of Inflation Tick Up Around the Globe”.

The article said: Modest upward pressure on wages and prices in the U.S. has been leading the way.

This growing inflation, and politics is pressuring the next distortion, which has been a weakness in the price of gold.   The Wall Street Journal article “Gold Prices Up on Data, Politics” also said last Wednesday:

The second week of Donald Trump’s presidency rattles investors; gold’s best month since June.

Both these distortions are accompanied by signs that one of the biggest economic distortions of all, a strong US dollar, is correcting.

The Wall Street Journal article entitled “Dollar slides as US data and Politics weigh” also reported on the greenback last Wednesday.

U.S. dollar slid to its lowest level since November, Tuesday amid weak U.S. data and new indications that the Trump administration would prefer a weaker dollar.

Merri’s and my business has supported a good life for almost 50 years by spotting economic contrasts  and distortions.  The unleashing of these three stresses, all at one time magnifies a special opportunity.  These factors can push gold prices high, but the price of another precious metal can rise even faster, explosively so.

Check out these Wall Street Journal articles.  They provide warnings you should not ignore.   Then read below and see how to cash in when the corrections develop.

Gary

(1) www.wsj.com measures of inflation tick up around the globe

(2) www.wsj.com Gold prices up amid political turmoil

(3) www.wsj.com: Dollar slides as US data & politics weigh

Borrow Low – Invest High

A special value investing tactic makes high risk, high profit speculations safer and more profitable.

For example in 2015, a 10,000 pound loan (in British pounds at $1.52 per pound) was used to purchase 1,091 shares of the silver ETF SLV.  Those shares rose to be worth $20,421 by 2016, a 34.34% additional profit.

 

From July 2015 to July 2016, the price of the silver ETF  iShares Silver Trust (Symbol SLV) rose from $13.92 and ounce to $18.71.  You can see the rise in the finance.yahoo.com chart below.

yahoo

A 10,000 pound loan (the pound was $1.52 per pound) purchased 1,091 shares of the silver ETF SLV.   Those shares rose to be worth $20,421 by 2016,  a 34.34% additional profit.

The profit did not stop there!

From 2015 to 2016 the pound dropped from $1.52 dollars per pound to only $1.39 dollars.  The 10,000 pound loan that had worth $15,200 in 2015 only required $13,900 to pay it off in 2016.

yahoo pound chart

The falling pound had created an extra $1,300 profit.

Do the math: 

Silver worth $20,421

Loan payoff  $13,900

Profit             $6,521

Cash Required  Zero

All this profit was made on the 10,000 pound loan.  No cash was required on the investor’s part.

The entire $6,521 was pure… extra profit.

Some investors borrowed less… others borrowed much more so their profits were even higher.

This example came from our Purposeful investing Course (Pi) which studies three main layers of value investing tactics in real time.

Tactic #1: Diversify equally in good value developed and emerging stock markets.
Tactic #2:  Use trending algorithms to increase, reduce or hold positions in these markets.
Tactic #3:  Add spice to a portfolio speculating in precious metals, when their price is under “ideal conditions”, using leveraged, low value currency loans.

An “ideal condition” is a rare distortion in an economic fundamental that history has shown “almost always” corrects itself.

The words “almost always” indicates that there is risk.  There is risk that a basic fundamental has changed and the distortion will not correct in any targeted period of time.   Or a new fundamental has shifted dynamics to such an extent that the distortion never corrects.  There is always risk.

Profit is the reward for taking that risk, but there is always a chance of loss which is why the third layer speculation is to be used like a spice… sparingly.

Pi looks for several ideal conditions in precious metals using the price of gold based on over 40 years of speculation in precious metals.

The first condition is gold’s price to inflation.   Gold is the anchor of the strategy but its ricing is perhaps the most speculative since a meaningful inflation rate is hard to define.

Gaining a true perspective on gold’s value is difficult because the price of gold was fixed for many years.  The gold price was fixed at $35 an ounce at the end of WWII and this fixing did not take into account the huge inflation this conflict created.   This also impacts any accuracy in understanding what the real the price of gold should have been at the end of the war.

Statistics can be misleading.  In the report Platinum Dip 2018 there is an analysis of inflation.

These factors distort the accuracy of the picture.  How much is gold really worth now?  What is its real value?  This is truly THE golden question.

At this time the magic number we sue for gold is $1,225 an ounce.  If gold’s price is much higher than $1,225, than the Silver Dip or Platinum Dip are not in an ideal condition.

When gold is priced ideally, then there are several ratios that can alert us to an ideal condition.

The first ratio is the gold to silver ratio.  When the gold silver ratio reaches 80 we consider speculation in silver to be ideal (if gold is ideally priced).

This value indicator is simple because the gold silver ratio is rarely as high as 80, only three times in 36 years as the chart below shows.

gold silver spread

Chart from www.goldprice.org/gold-silver-ratio.html#36_year_gold_price

The spread was over 80 when we issued the original Silver Dip in the 1980s.  30 years later ideal conditions coincided again. The chart above shows how the spread was shooting towards 80 when we issued the Silver Dip 2015 report.

The spread hit 80 in 2015 and again in March 2016, but we can see from the chart above that a drop in the spread was on its way. The trend was for a continued lowering of the spread as silver’s price rise was much stronger than gold’s throughout 2016.

This chart below from infomine.com shows the trend clearly.

silver

http://www.infomine.com/investment/price-ratios/gold-silver/10-year/

Another ratio we watch is the gold to platinum ratio.   When the price of gold rises above the price of platinum, platinum’s price is at an ideal condition.

Platinum is a good value when it sells for less than gold and gold is close to our below its fair price ($1,225).   As the chart below shows, platinum costs more than gold more often than not.  The fundamental reasons for platinum’s high price, including platinum’s supply scarcity support this.

The chart below from Kitco.com shows the gold-platinum ratio.  The ratio is the red line and right axis.  The price of gold is the yellow line, left axis.  The price of platinum is the blue line, left axis, from 1975 to May 13, 2016.

gold

http://www.kitco.com/commentaries/2016-06-27/Gold-to-Platinum-Ratio.html

Notice how each time the gold-platinum ratio (red) has spiked, 1975, 1982, 1985, 2002, 2009, shortly after the price of platinum (blue line) has skyrocketed shortly after.

The gold-platinum ratio was at an almost  historical low when this report was written and the “Silver Dip 2017” recommended a shift from speculating  in silver to speculating in platinum. The 2017 report recommended leveraging the platinum ETF “ETFS Physical Platinum Shares” (Symbol) PPLT.

The spice.  This type of speculating is not done on its own, but as an adjunct that enhances an existing equity portfolio.  The portfolio is used as collateral for a loan that is invested in the metal with an “ideal condition price”.

Let’s examine how a speculation in silver (based on a gold silver ratio’s ideal condition) increased the profits of a portfolio of good value developed and emerging market equity ETFs.

This study looks at the $100,000 invested in a portfolio we began tracking in our Pi course.  The portfolios were started September 2015 (591 days before this study or 17 months ago).  70% was invested in ten good value developed market ETFs and 30% in 10 good value emerging market ETFs.

This is a list of the shares in the Developed Market Portfolio.

Screen Shot 2017-02-19 at 12.30.18 PM

This is a list of the shares in the Emerging Market Portfolio.

Screen Shot 2017-02-19 at 12.30.55 PM

The good value portfolio was up 4.64% (a gain of $3,248) since inception and the emerging market portfolio is up 6.72% (a gain of $2,016).

A portfolio of these shares with an original investment of $100,000 invested 70%-30% after 591 days (February 2017) was worth $105,267, a 5.26% gain.

In this study we examine the change in performance when an additional $10,000 was risked on the iShares Silver ETF (Symbol SLV) beginning March 2016 when the gold silver ratio broached 80.

Image from www.macrotrends.net/1441/gold-to-silver-ratio

The price of SLV was $14.01 in March 2016 and is currently $17.06.

Screen Shot 2017-02-19 at 12.50.25 PM

Image from https://finance.yahoo.com/chart/slv?

Let’s examine profits under three different exit strategies.

Exit strategy #1:  No exit.  The $10,000 was worth $12,163 at the time of this study (February 2017).

Exit Strategy #2: Exit when Tradestops issued a Stop Loss signal November 2016 at a price of $16.07 per share.  The $10,000 was worth $11,457.

Exit Strategy #3: Exit when the Gold silver ratio dropped below 70 on January 2017.  The $10,000 was worth $11,365.

The overall portfolio performance was improved in each situation.

Exit strategy #1:  Profits increased from $5,267 to $7,430.  A 10% increase in the portfolio added a 41% increase in profit.

Exit Strategy #2: Profits increased from $5,267 to $6,724.  A 10% increase in the portfolio added a 27% increase in profit.

Exit Strategy #3: Profits increased from $5,267 to $6,632.  A 10% increase in the portfolio added a 26% increase in profit.

All of these additional profits were gained without a penny of extra investment.  All the profits came from loans that were invested in silver.

The other benefit beyond profit is safety from time.

When leveraging investments, time is most important.  Because leverage is secured by the entire portfolio rather than just the additional investment, the odds of a margin call are almost nil so the investor gets to determine how long the investment will have to mature.

Let’s take an example of the good value Pifolio above.

In this study the loan was $10,000.

The collateral is not the $10,000 investment in silver, but the entire portfolio which is now $115,267 ($105,267 plus the $10,000 in silver).

This means (if the rules of the lender requires a two to one loan ratio) that the portfolio would have to drop around 75% before there would be a margin call.  Such a loss is highly unlikely.

This margin has as much time as is needed to let fundamental forces work through the market.

Any profit gained comes without adding a penny to the portfolio.

The most important elements of making good investments are price and time.  There is always something about investments we won’t know, but the one thing we can trust is that investments purchased at the right price, and given time, have the highest odds that profits will flow.

Silver is falling. 

slv

Chart from finance.yahoo.com/chart/SLV?

Recently the silver ETF iShares Silver Trust (symbol SLV)  was priced 18.62% below the highest close of $19.60 from last August.   The mathematical system we track created a stop loss price of $16.18, showing that this precious metal moved into selling territory.  Now the share price is in the $15 per ounce range.

We Use Math to Spot Value. 

Whether one likes to trade or invest and hold, math based financial information works better than the spin, rumor and conjecture of the daily economic news.   Mathematical based investing can put us on a solid path to everlasting wealth that is not easily diverted by the daily drama that seems to be unfolding in the modern world.

For example, our Purposeful investing Course teaches three mathematically based routines that have been proven to out perform the market over time .

The first routine in the course is the quarterly examination by Keppler Asset Management of 43 equity markets and analysis of their value.  This makes it possible to create a base portfolio of Country ETFs based on basic value.  This passive approach to investing in ETFs is simply to invest in Country ETFs of good value equity markets.

For example, Keppler’s analysis in 2017 shows that the “Good Value Developed Market” Portfolio is twice the value of a US market index fund and a much better value than any of the other indices shown.  These are based on the cornerstones of value, price to book, price to earnings and dividend yield (except the European dividend yield).

The Good Value Developed Market Portfolio offers even better value than the Morgan Stanley Capital Index  Emerging Market Index.

keppler

History shows, that over the long run, math and value drive the price of markets.

Using math makes it simple, easy and inexpensive to diversify in the predictability of good value.

The second tool Pi provides is a way to actively monitor and shift the good value markets using trending and volatility algorithms.  These algorithms allow us to trade good value markets through downtrends and upticks to increase profits in a diversified even more.

These trending algorithms use the math that spotted the current condition of silver.

Use math to spot distortions that create ideal conditions for speculation.

Pi teaches the strategy of speculating in metals when speculative conditions are absolutely ideal.  The Silver Dip relies on a really simple theory… gold should rise about the same rate as other basic goods and the rise and fall of silver’s and platinum’s price should maintain a parity with gold.

Our math based study has created an ideal price for gold and though its trending up it has passed the good value level we use.  Gold is still okay, but not a bargain any more.  Value investors only seek bargains.

When “Silver Dip 2017” was written profits on silver had been taken.

Platinum conditions are ideal for 2018.

Since 2014 the price of platinum has fallen below the price of gold and at the beginning of this year reached a historical low.  The distorted gold platinum spread suggests that platinum is a very good value so we are updating our dip report, and it will be the “Platinum Dip 2018”.

The report explains how to speculate in platinum plus outlines the following:

  • How to use theDip strategy in platinum without adding a penny of cash if you already have investments.
  • How to invest as little as a thousand dollars in platinum if you do not have a current investment portfolio.
  • Why this is a speculation, not an investment and who should and should not speculate and how to limit losses and take profits.
  • Three reasons conditions are better for a Platinum Dip now.
  • Three different ways to invest and speculate in gold, silver or platinum in the US or abroad.
  • How to buy gold and silver or platinum with or without dollar leverage margin accounts.

The “Platinum Dip 2018” also contains four matrices that calculate profits and losses so investors can determine cut off positions in advance to protect profits and/or losses.  The report also looks at how to switch time horizons for greater safety.

The first way the Dip adds extra performance is with leverage.

The second way to enhance performance is to maintain the leverage in poor value currencies.   Choosing which currencies to borrow is almost as important as choosing which metal to invest in.  The examples in this report have shown loans made in British pounds.  Other times it has been better to borrow Japanese yen, Swiss francs, once Mexican pesos.

Currently the best currency to borrow is US dollars.

The Platinum Dip 2018 report reviews each currency and which is best to borrow now and what to watch for.  Sometimes it is best to borrow a second currency and pay off the initial loan in mid stream.

Rising interest rates make the US stock market highly dangerous in the short term. “The Platinum Dip 2017” shows how to create a safe, diversified good value stock portfolio and use it to generate much higher returns with a little controlled speculation in platinum.

Learn how to get platinum loans for as low as 1.58%.  See why to beware of  certain brokers and trading platforms, how to choose a good bank or broker and how platinum profits are taxed.

The report includes a complex comparison of gold and silver with other costs of living from 1942 to today to help determine the real value of gold, silver and platinum.

Finally, learn why and how to use advisers to manage profits from the gold and silver dips.

Current circumstances could cause the price of platinum to rise rapidly at any time.  Do not delay reading this report.

The Silver Dip sold for $79 in 1986.  Due to savings created by online publishing (we eliminated the cost of paper and postage), we are able to offer this report for $39.95.

Order now by clicking here.  Silver Dip 2017  $39.95

Get the Silver Dip 2017 FREE when you subscribe to the Purposeful investing Course.  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.  You also receive the $39.95 report “Silver Dip 2017” FREE.

Triple Guarantee

Enroll in Pi.  Get the first monthly issue of Pi and the three reports 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 purposeful 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 three reports 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 a Pi annual subscription for $197 and your initial 160 page online introduction and the regular bi weekly emailed updates for a year.

Gary

How to Make Money from the Deficits of the Deficit


Imbalance is bad.   Nature hates a vacuum or any one directional acceleration.  The longer such imbalances last, the greater the corrections.  Eat too much, run too long, drink too deeply, rise too high, go too fast, get too deeply in debt and there will be a price to pay.   Newtonian physics makes this a fact.

rubber bank

Image from Linkedin article “Is Elastic Leadership Equal to Rubber Spine?” (1)

When the majority ignores this fundamental law, the agreement and repetition of the error does not make the faulty thinking correct.  Nature waits:  patient, omnipresent, powerful, stretching until enough is enough.  Then snap!

When a government borrows more than it can repay, its currency will lose purchasing power.

There is so much polarity and rhetoric in the U.S. presidential campaign, regrettably all based on dislike of candidates, rather than arguments over issues for leading America into the future.  The hate has become so intense that it’s easy to overlook the obvious so we can see even a sliver of silver in these really dark clouds.

A ground swell of scholarly opinion that opposes nature is why the New York Times article  “Clinton? Trump? Either Way, Count on Deficit Spending to Rise” (2) is worthy a read and ponder.

One main element in the article is that, either candidate, upon becoming President, is likely to pump the US government borrowing machine.

An even more important theme is that influential economists, are changing their opinion about debt.  Because interest rates are so low, many Washington economic experts, who would normally advise a reduction in US debt and the budget gap, are now saying, that more borrowing could be healthy for the economy.

“If the very low level of interest rates persists for years to come, as many experts and analysts think is likely, that’s a sea change for budget policy.”  Douglas W. Elmendorf, director of the Congressional Budget Office from 2009 to 2015 and now Dean of the Kennedy School at Harvard.

Quotes in the article from influential people are:

“Deficits aren’t good or bad in and of themselves”.

“It’s far more important whether the spending is worthwhile”.

“It’s called priming the pump.  Sometimes you have to do that a little bit to get things going. We have no choice — otherwise, we are going to die on the vine”.

“If you get growth out of it, there’s no debate that some deficit spending would be a good thing”.

“There is definitely room for fiscal stimulus”.

“We needed a bigger deficit in the short term, then a turn to ensure that the recovery was strong”.

This thinking may improve the numbers the world uses to keep track of production and consumption.  The economic numbers may look better, but nature will make sure that something gives in the process.

My bet is that the balance will come in a reduction of purchasing power of the US dollar.  Higher American deficits and greater US debt may create more millionaires.  However, their millions will buy far less.

This bodes well for value investors who have invested in the 20 Good Value Stock Markets we track and invest in. All twenty markets are denominated in other currencies.

See these markets and how to spot and profit from currency distortions here.

The currencies in these markets may be imbalanced as well, but the greenback may be the leader in rising debt.  Opposing opinions and ignorance of nature will bring distortions that create profit for those of us who use math instead of rhetoric to spot value.

Gary

(1)  Is Elastic Leadership Equal to Rubber Spine

(2) www.nytimes.com  Clinton Trump either way count on deficit spending to rise

The Essence of Real Security

How to Have Peace & Profit

There are still ways to reduce stress.

Prolonged exposure to stress is the # 1 root of death and disease in our modern world.

Stress can ruin your health and wealth… in many ways.

Daily stress has been magnified because we no control, no way out of the current global political and economic mess.  The news makes current problems feel like things are getting worse.

This downwards spiral leads to health problems, heart disease, hypertension, impaired immune function, infertility, and mental illness.

The health problems lead to economic problems from loss of income, poor investment decisions and high disease management costs.

farm

farm

Yet there is a way back.

I was reminded of this once when I made a horrible mistake.

The supposed error?  Letting my mind wander six decades back to an hour I spent with a girl.

Learn from this near disaster, seven most powerful sources of wealth, health, security and fulfillment in this era.

The girl was pretty and blond.  Terry was her name. My imagination spanned decades returning to my Oregon roots seeing her as if she were there.

We were 11 or 12 and had known each other since we started Rockwood grade school.  Just buddies, our non-romantic friendship lasted 12 years, from first grade till high school’s end.  Then she went off to Pepperdine College in California.  I started traveling the world.  Never saw her again.  I hope her life has gone well.  But until that reflection I’d never thought much of Terry in so many years.

What could have been the tragic error was letting that memory touch my heart.  Two kids, walking on a crisp, Pacific Northwest autumnal afternoon.

We walked down a sun filled, pine needle covered, dirt path.  Huge, fat, green Douglas firs lined the road.  Traffic was no problem, not many cars.  Crossing Stark Street we turned left, hiking three blocks to 182nd.  There we passed an old clapboard candy store.  I can still hear the wooden sidewalk of that store slap beneath my feet, felt the soggy planks sag and smelled astringent pitch from the fir trees.  Then we turned right, up 182nd for about a mile.  There was Terry’s house.

I carried on, walking through a big field, waist high grass turned straw brown by an early frost.  There were dozens of paths made by who knows what.  Animals perhaps or countless generations of other kids walking home alone from school.  I chose one following it to another wood of tall, rough-barked fir.  Crossing one more field, I climbed a rock wall, struggled through a barbed wire fence (my Mom hated that fence ripping my jeans).  I was home!

Sweet simplicity, that dream.  Two kids holding hands, walking on a dirt trail under a crisp, but blue, sunny sky.  Pure innocence.

My tragic error was looking back.  I returned to Rockwood, Oregon with Merri and my kids to show them this part of their roots.  Following the route, Terry and I had walked were the candy store, grange hall, old wooden buildings and their home spun honesty and charm.

Instead we found six lanes of fast, frantic traffic and road rage.  McDonalds, KFC, strip shopping centers.  The car radio blared warnings of local gangs and drive-by-shootings.

Beauty, innocence, sweet simplicity, replaced by drive ins and drive bys.  Gangs and drive-by shootings replacing a tender walk in the sun.

Good bye memories, good bye.

How can our kids walk in places like this?  How can we return to those old feeling of security and comfort?

How can any of us possibly keep pace in this world that’s moving so fast?

Then something inside snapped.

“There has to be an answer for honest, hard working folks to enjoy the wonderful opportunities of today and regain what we’ve lost over the past forty years”, I swore to myself.

How can we keep up, without having such a fast paced life we turn into machines?  Where do we find time for God, family, charity, and our friends?  How can we rediscover those sun filled, pine needle covered, dirt paths we want to walk?

“There has to be places that are still innocent and pure”, I thought.  “There has to be a way of life that does not pound us with stress”.

This thinking led me to begin reviewing the thousands of economic and business experiences I have shared with readers over the decades.

This started a search for a simpler way of life and a better place to earn and protect our wealth.

By digging, asking and observing, traveling and talking to investors and investment managers all over the world I found that there are true paths to real security in the here and now.  That knowledge helped me develop courses on how to have natural health, everlasting wealth and purposeful investments.

This knowledge helped Merri and me invest in stocks and real estate all over the world.  It helped us find and develop our farms in North Carolina and Florida into sanctuaries.

That almost error led us to create an entire portfolio of information on how to keep pace, get ahead, enjoy our modern society but, to enjoy life wherever you choose without having to move too fast.

This is why I am making a special “Let’s get our lives back” offer.

“What would you think in the last 30 seconds of your life if you were the richest man in the world but were unhappy?”

This quote is from the opening slide of our Value Investing Seminar, “How to Secure Your Future With a Value Breakout Plan”.   This a vital question because few investors think about the value of comfort and happiness.  Yet the truth is, those who are comfortable and happy with their investments are most likely to succeed financially.

Without comfort, no matter how much money a person has, they are more likely to lose it or kill themselves with stress from worry.

There is a way to have the perfect form of financial security.

Let’s call it the perfect pension.  To help understand how to build an unshakable economic platform, here is Part One of the report, The Pruppie Factor.

The Pruppie Factor – Seven Steps to Comfortable Living & Profits.

“May you live in interesting times”.  That’s a Chinese curse that seems to have been cast on our modern world.  We can enjoy comfort and profits in the year ahead despite this fact.

Become a Pruppie.  Integrate your earning with your investing and enjoy peak living, everlasting wealth and natural health with PIEC Investing in the year ahead.

Before we look at what PIEC means, let’s delve into Pruppieism, the new economic and social realism.  Pruppies expect everything to expand.  They take advantage of every new benefit and technology they can.  Pruppies enjoy using the fruits of our ancestor’s deliberations and labors to earn in this advanced technological world.  They also engage in activity that they love that would sustain them in case society and the incredibly intricate weave of our global economy and society should fail.

Pruppies are prepared in case everything, everywhere, or at least everything relating to their income and savings fails and the fabric that surrounds their lives disintegrates into an unknown veil.  Yet a Pruppie’s preparation is not a sacrifice, but a joy as you will see.

Hope springs eternal and it should.  One of the key themes in my first book, Passport to International Profit, (published in the 1970s) was “The Sun Always Shines Somewhere”.  This thought has been in and remains a foundation of everything I do.

Sometimes this sunshine is hard to see because the press always focuses on doom and gloom.  Current news often makes the world seem about to end.  We cannot blame the press. Bad news sells.  The majority seem to want to worry instead of learn about all that’s good.  This does not make doom and gloom right.  This is why the majority are also the rich portion of the population, but bad news is an economic fact for the press.

Yet despite all the negative headlines, we have lived through the Cold War and MAD, Y2K, GridX II, the Peak Oil Crisis, the recession of the 1970s, 1980s 2007, etc. etc. etc.  Chicken Little is always out there, selling the falling sky.  Don’t buy into this story!

History suggests that there will always be opportunity.  The sun always shines somewhere.

Brexit, global warming and the American political process are examples of how the press gravitates to negative news.   The press  make anything and just about everything seem negative.  This can blind us to the positive realities ahead, if we let it.

Don’t.

Expect that the world will remain standing and look for opportunity instead!

Our wealth and economic opportunity is pushed by supply and demand.  We are part of a growing global population.  New technology makes more people, as a whole, more productive every day.  The world has increasingly larger markets creating more supply in increasingly efficient ways.

This reality increases everyone’s wealth.  Yes there is a lot of bad news in many places.  There is inequality.  There is crime.  There is war and hate and injustice.   Despite these negatives there is even more that is positive.  Opportunity grows.

Pruppies tap into and use every bit of the good news they can.  They have a plan B if everything goes wrong, but Plan B is based on something a Pruppie wants to do we love, not just a shelter from bad news.

At the end of this report, you’ll find a special offer that can help you integrate earning and investing for the ultimate form of profit and safety.

Imagine this example of Pruppism.  The Tiffany lamp casts an amber glow, rich, ivory and warm in the grey gloom of early dusk.  The gold knobbed mahogany desk, its deep patina waxed and smooth, shines with reflections of ancient leather Chesterfields stuffed full, but rumpled with age and of maritime shots that hang in brass frames on the wall. The room speaks of settled tradition, the kind that might never end.  But thoughts instead are on the demise of the business that has supported this room.

The late Jim Slater of Slater Walker, a British industrial conglomerate turned bank in the 1970s was in that room.  I recall his bank’s collapse well as I was living in Hong Kong and Slater Walker was a huge going concern in what was a British colony in those days.  The Slater Walker crash was big news that unsettled the entire British banking system at the time.

Slater, the founder, had been a really high roller, using every modern banking tactic available including buying many assets with cheap loans.  Then in the mid 1970s banking crisis interest rates skyrocketed and his bank was unable to refinance its debt.  The company failed and Slater had to resign.  Numerous charges were brought against him and he spent considerable time defending what he had done.

In the end he was only fined a nominal sum but despite this, his banking career was well and truly dead.

However he had already moved on.

He wrote about this in his autobiography, “Return To Go”.  He had always had a hobby making puppet shows and telling stories to his children, so instead of banking, he turned his passion into profit and wrote some children’s books.  His first effort sold a respectable 35,000 copies.  His next a monster series for younger children, became a huge hit.

He had also maintained a hobby of salmon fishing so again turned his passion into profit by creating a business that bought up fishing rights and resold them as time-shares.  He had quite a success.

Some day a catastrophe beyond our control could redirect the course of our lives.  We might lose a job, learn that our pension won’t pay or that our dollars won’t buy as much as they must.

Though Jim Slater was a banker, outside economic forces beyond his control caused his business disaster.  Yet he had options because he had been doing things he loved that were not related to his banking, but could become useful income generators in difficult time.

I do not know if Slater understood Pruppism but that’s what he was practicing.

Pruppism is a positive realism based on the knowledge that much of our lives are directed by events that we do not know or expect and could not change them even if we did.  There is always something we do not know and that’s okay.

Years ago I was speaking at an investing seminar in Marbella Spain.  One of the speakers was a brilliant strategist, Johan Peter Paludan, of the Copenhagen Institute for Futures Studies.  This institute has a large interdisciplinary staff with expertise in economics, political science, ethnography, psychology, engineering, PR and sociology.  They identify and analyze global trends that influence the future.  Paludan was speaking of these trends and answering questions that delegates had about the world’s economic future.

One delegate asked what to do if there was a global nuclear exchange.  Paludan replied that the results of some events are so unpredictable that it is not worth trying to plan for them.

This thought has stuck with me for decades because it helped me realize that no matter how cautious, how defensive and careful we are, there are events that we cannot even imagine that can turn our lives upside down, for the good or bad.  With this in mind my wife Merri and I have created a lifestyle where we turn our passions into profit but in a way that whatever happens we are likely to be in a position to spot the positive and the opportunity.

A PIEC Experience

Pruppies gain the benefits of PIEC wealth.  PIEC is an acronym for “Personal Income Earning Corridor”.  PIEC income and wealth come from doing what you do for love, rather than just the money.

Traditionally people get jobs to create income.  They work to live and support their lifestyle while attempting to spend less than they earn.  They hope, that maybe the savings will bring, sometime in the future, a lifestyle of doing something enjoyable without work.

Pruppies reverse the priorities.  Instead of working for money to save and invest, they focus their prime effort on doing something they enjoy right now.  Then they learn how to enjoy the effort in some profitable way.  They learn to create “Avenues of Abundance” that combine lifestyle with the necessary task of accumulating wealth.

If economic circumstances tie them to an existing income effort, they create hobbies that are income producers of the future.

For example, if a Pruppie loves golf; instead of working six days a week, 50 weeks a year just to golf on Sundays and during short vacations, instead he or she will create a business in some aspect of the golfing trade.

In another example, a client of mine, who loved animals became a vet.  But he learned that the vet’s lifestyle was not one he enjoyed.  He wanted to travel and move around, which is difficult for a professional who needs to stay at his office and build a practice.  So he built a business that prepares special animal foods for race horses.  Now he travels globally visiting horse breeders and makes much more money as well.

Pruppies combine money with time, energy and desires.  They generate income doing something desired.  Desire and fulfillment become at least as, if not more, important as the money.

#1: Do What You Love!

The reason PIECs work well is that when we love to do something, we do it better, for longer and with greater enthusiasm.

Effort, determination and tenacity are wealth building attributes that cannot fail.  Yet Pruppism does not mean we should suddenly abandon our jobs and try becoming golf pros, when we have never been able to break 100.  Smart Pruppies start small and gradually expand into their passion.

For example, as a writer and lecturer, I was never fully satisfied sitting behind a desk or standing on a podium all day long, even though I was making over a million bucks a year. I’m the physical, outdoors type and yearned for exercise and the wilds of the deep woods. “What good’s the money if this isn’t fun?” I often asked myself.

Rather than quit writing and teaching, I looked for ways to combine these professions with the outdoor life.  Through research I learned that many city folk like myself yearn to be in the primitive outdoors.  So I bought an isolated farm high in the Blue Ridge Mountains and an Andean plantation high in Ecuador where I developed seminar centers with charming but simple dwellings, set in rustic surroundings, with clean water and pure air.  Now I live in nature so after I finish the writing or talking, I can walk in the woods or take my axe and chop firewood or something physical.  I’ve combined my writing with physical work and have blended the life I want, with my readers’ needs in a way that makes great financial sense.

We built a series of cabins in the wild that bring more profits than most stocks or bonds could ever return.

The process took six years to shift. Now we have been at this for nearly two decades and we are far from finished.  But while doing what we love, who cares? This is one of the great benefits of PIEC investing. We can slow down and enjoy the work instead of always rushing ahead, looking for something more.

Those who work nine to five can start PIEC businesses part time if they are too uneasy to quit their jobs. Others, who like myself, already have a business can slowly shift their product or service in a sensible way and let it evolve toward their PIEC.

But where do we start?

There is a seven step process we can all use whether we have our own careers, a business or even if we are retired (PIEC investing is especially good for retired folks who have found the supposed good life flat or financially short).

The first step is to get a clear idea or vision of our dream.  This is sometimes harder to achieve than it seems.  We are so deluged with false ideals from Washington, Wall Street, Madison Avenue, etc. that we have to stop and really take stock.  What do we sincerely want?

There is a very practical economic reason to look inwards for wealth.  Warren Buffet recommends that we only invest in what we understand. What can we understand better than ourselves?

This inner search will lead us to an ideal that begins the second step which is gaining enthusiasm.  How can we be anything but enthusiastic about finally fulfilling our deepest dreams?  The enthusiasm leads to the third step; gaining an education.

We need to find out everything we can about our idea.  To succeed we must take the third step and become real experts in the product or service we offer.

Fourth, this educational process allows us to develop an intelligent, focused business plan we can act upon and the action is the fifth step which brings us the experience. Experience gives us the sixth step, a financial loss or profit.  We always profit in increased knowledge which creates the seventh step, more ideas.

Then the entire cycle starts all over again: Idea, Enthusiasm, Education, Action, Experience, Financial Profit and New Ideas.

This is a way to keep adding new opportunities into our lives.  Business is rarely static. It is an ever evolving process instead.

This seven step cycle may take days, weeks, months or years, but the moment you begin you’ll start moving into an avenue of affluence where you love your work so though money isn’t your main goal it comes more easily.

#2: Do what you love, but also be of service.  Do something for others that is meaningful and important to you.

We all have a purpose in life and when we are filling it, we feel fulfilled.  Wealth and fulfillment is the goal.  Fulfillment is important because of the law of diminishing returns.  A 2008 study that analyzed Gallup surveys of 450,000 Americans suggested that day-to-day contentment improves until income hits around $75,000 per annum.  After that, more money just brings more stuff, with far less gain in happiness.  Income beyond $75,000 does not do much for a person’s daily mood.

This is a pretty general study and regional differences in costs, inflation and life circumstances will create many fluctuations from this norm, but the point is when money is the main goal, the better you get, the harder it will be to gain satisfaction.

Giving, on the other hand, never has limitations, especially when the giving helps complete a purpose that is part of our destiny.

This is true in business and investing.  A study of investors for example found that investors with socially responsible ideals gained the best returns.  A dual goal of profit and achieving some social benefit provides a purpose beyond returns.  This brings comfort and determination to the investments and the added stick-to-it-ness helps increase profits.

The study helped define three aspects of investing that are generally ignored, purpose and habits.

Purpose.  Purpose requires some soul-searching questions about what we each want our life to be.  This purpose is more important than the investment goal.  The purpose of the money we have becomes more important than the amount in the portfolio.

Habits.  Habits come next because we need to create habits and routines that keep us on the path of our unique purpose.  The marketplace does all it can to distract us from our goals.  There is an endless stream of news, rumor, conjecture, facts figures, ideas and tactics generated by every part of every stock market aimed at getting us to act in ways that benefit the agenda of others.

Good habits help us avoid being distracted from what we are meant and want to do.  Good habits muffle the noise of Madison Avenue, the spin from Washington DC and the hidden agendas of big business.  These are among the most powerful ways to increase wealth.  Having greater fulfillment as well as more wealth is a bonus that Pruppies call “Everlasting Wealth”.

#3: Integrate your earning and investing. 

Long term success in business and investing are determined by control and comfort.

Comfort comes from feeling in control, but since there is always something we do not know, real comfort comes from knowing that we are serving a valuable purpose, the best we can, regardless of how events unfold.

Real comfort helps maintain determination, dedication and enthusiasm, all among the most vital parts in the process of succeeding in investing and business.

Our own business increases comfort because a business is simply an investment that gives us more control due to the addition of our own time and energy. 

A Personal Income Earning Corridor (PIEC) begin with a main income generator that we control.  For some this is a job with a salary.  For others it is a pension. For many it is their own business using the concepts of SNAP (Small Niche Area Publishing).

Here’s why self publishing offers such great potential.

Sam Walton… or is it Warren Buffet?  Self publishing is based on three cherished beliefs that two of the wealthiest people in the world, Sam Walton and Warren Buffet, shared.

Buffet and Walton shared several cherished business beliefs that you can gain from a special writing and publishing business that is at its very beginning stage.

Cherished Belief #1:  Small is Beautiful.  Both Sam Walton (Bentonville, Arkansas) and Warren Buffet (Omaha, Nebraska) chose America’s heartland away from the big cities as their homes.  What’s more, Walton chose to do business in these small places as well… building the largest retail operation in the world almost entirely in small towns.

Warren Buffet believes that potential in small towns offers special value.  He believes this so strongly that he has been buying newspapers in small towns.

Over the last few years Berkshire Hathaway purchased 63 small and mid-sized daily and weekly newspapers throughout the United States.

He plans to buy more and says: “I like buying individual papers at the right prices.” 

Buffet stated that Berkshire is not buying big newspapers or more newspaper shares. He is sticking with small publications because he believes in the value of local communities.

Cherished Belief #2:  Community Orientation.

Buffet is not buying big publications but is grabbing up small community focused publications.

His bet is that publications focused on local communities can withstand the shift of readers and advertisers to the Internet.

The individual papers can be really small as 10,000 circulation with tiny staffs.

He said no one has stopped reading “half-way through a story that was about them or their neighbors.”

He also noted, “Berkshire buys for keeps. I’d rather buy newspapers myself directly,” and is seeking papers that publish in cities and towns with a “Sense of  Community.”

From this vision WalMart remains committed not just to expanding the businesses but to improving the communities.

You can enjoy all these benefits through Self publishingbecause small communities can be places, ideas or ideas within places.

The factors that makes publications like this successful are its common interests.  Common interest can be focused on a geographical area or a niche idea that targets a niche of a larger market.  For example, the market for truckers is quite large, but trackers that look after their health is a much smaller niche.  One benefit of SNAP publishing is it surrounds you with people who have a common interest, so your readers are like-minded souls.

Cherished Belief #3:  Seek Good Value.

Sam Walton built one of the largest fortunes in the world… with the simple goals of providing great value and great customer service.  Warren Buffett’s belief is that the essence of value investing is buying stocks at less than their intrinsic value.  The discount is called the “Margin of Safety”.

Both Buffet and Walton shared a vision that small towns ignored by the mainstream offered good value.  You can tap into extra profit potential as a SNAP publisher who helps a small community.

Knowing BOTH successful niche magazine publishers and internet marketing geniuses is important for a reason that Buffet outlined to his publishers when he purchased their papers.  Buffet believes that small newspapers will change and that they serve an important purpose.  He said, “Papers must rethink the industry’s initial response to the Internet as focus on continuing to maintain a strong sense of community“.

His bet is that publications focused on local communities can withstand the shift of readers and advertisers to the Internet.  Buffet has said that giving news away free online is “unsustainable” and has sought papers that publish in cities and towns with a “sense of community.

We have never seen this need for a sense of community as we do know because community creates trust.  As the world has expanded on big is better, the public has lost trust.  We no longer trust big business, big government, big hospitals, big banks, etc.  Yet publications offer nothing if they do not have the reader’s trust.  Internet publishing on the big scale has reduced trust.  Anyone can say anything on the internet and thus internet information is highly suspect.  Publishers who use a small niche to create trust have an advantage.

To begin this introduction let me add one more point and outline the value of what I am about to offer.  A SNAP publication may eventually require $5,000, $10,000 or even $15,000 in start up costs but can make up to $11,835 a month… or more.  That’s value… plain and simple.

Join The International Club for all of 2018 NOW.  Learn how to wrote and publish.  Save $418.78.

Club members start by receiving seven workshops and courses on how to earn everywhere with home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • The course “Self Fulfilled – How to Write to Self Publish”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”
  • The course “International Business Made EZ”
  • Video Workshop by our webmaster David Cross
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”

Club members also learn ways to be be healthier and have more energy.   I have created three natural health reports about:

#1: Nutrition

#2: Purification

#3: Exercise

Recent news about Social Security, pensions and health care shows that the US government has excessive debt today and that we as individuals need tactics to make sure, when governments, pensions and insurers weasel out of their promises, that we can take care of ourselves.

One big broken promise is Social Security and Medicare.  The most recent Social Security trustee report shows that the programs will begin to spend more than they earn within just three or four years.   The Medicare hospital-insurance trust fund, could use all its reserves by 2028.  They face insolvency over the next 20 years because Social Security runs totally out of money by 2034.

My three natural health reports help learn ways to be happier, healthier and avoid much of the Western disease management (aka healthcare) expense.

Each report is available for $19.95.  However you’ll receive all three FREE as club member and save $59.85.

Next, club members participate in an intensive program called the Purposeful Investing Course (Pi).  The purpose of Pi is finding value investments that increase safety and profit.  Learn Slow, Worry Free, Good Value Investing.

Stress, worry and fear are three of an investor’s worst enemies.  These destroyers of wealth can create a Behavior Gap, that causes investors to underperform in any market good or bad. The behavior gap is created by natural human responses to fear.  Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of numerous Model Portfolios, called Pifolio.

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

There are no secrets about this portfolio except that these mathematicians ignore the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout the next year with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $299 per annum but as a club member you receive Pi at no charge and save an additional $299.

There are two more reports I’ll send about the most exciting opportunities I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you become an International Club member you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Silver Dip 2019” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the past two years.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Silver Dip 2019” updated in late 2018.   The report explained the exact conditions you need to make leveraged silver & gold speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The price of silver may offer special value later in 2019, but the price of platinum is special now.   So I want to send you the report “Platinum Dip 2019”.

Save $418.78… when you become a club member.

Join the International Club and receive:

#1: The $299 “Live Well and Free Anywhere Program including SNAP”.  Free.

#2: The $299 Purposeful investing Course (Pi).   Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”.  Free.

#4: The $39.99 report “Silver Dip 2019”.  Free

#5: The three $19.99 reports “Shamanic Natural Health”.   All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report.  Free.

#7: Plus updates and other report I release in the year ahead.

These reports, courses and programs would cost $767.78 so the 2018 membership saves $418.78.

The International Club membership is $499. 

To encourage our first 100 members for 2018 to join quickly so we are currently accepting discounted membership at $349. 

Save $418.78.  Join the International Club for $349 and receive all the above online now, plus all reports, course updates and Pi lessons through the rest of 2018 and all of 2019 at no additional fee.

Click here to become a member at the discounted rate of $349

Gary

 

 

 

 

 

 

 

 

 

 

 

Why the Greenback Will Fall


Understanding why the greenback will fall is important if your savings or income is in US dollars.

As we have warned at this site for months the US dollar trend versus major currencies (even the troubled euro) is down.

The www.finance.yahoo.com chart shows how the greenback has fallen over 5% against the euro in the last year.

greenback

If there were as great an investment that earned 12% last year… in US dollars,  the return in euro was less than 7%.

Alan Greenspan in an interview with Charlie Rose explained one reason why the dollar is falling. He said “If you don’t have growth, you cannot have entitlement programs. You cannot finance them.”  

The US government is deeply in debt… spending way more than it earns and has now started one of the biggest entitlement programs of all… affordable care… that pays for drugs.

An MIT Technology report  “A Tale of Two Drugs”  by Barry Werth clarifies this problem.  Here is an excerpt (bolds are mine):  New drugs can cost hundreds of thousands of dollars a year.

In January 2012, the U.S. Food and Drug Administration approved Kalydeco, the first drug to treat the underlying cause of cystic fibrosis, after just three months of review. It was one of the fastest approvals of a new medicine in the agency’s history. Vertex Pharmaceuticals, which discovered and developed the drug, priced Kalydeco at $294,000 a year, which made it one of the world’s most expensive medicines. The company also pledged to provide it free to any patient in the United States who is uninsured or whose insurance won’t cover it. Doctors and patients enthusiastically welcomed the drug because it offers life-saving health benefits and there is no other treatment. Insurers and governments readily paid the cost.

The FDA approved 39 new drugs in 2012, the most in a decade and a half—a sign that the pharmaceutical industry may be recovering from its long fallow period. All carried extremely high price tags.

But a closer look at the rollouts of Kalydeco and Zaltrap reveals startling differences in how companies value a drug and justify its price. It also provides a preview of a likely future in which extremely costly drugs are common.

Because of medical insurance, co-pay reductions, and expanded access programs for the uninsured, relatively few Americans pay more than a few thousand dollars per year for even the most expensive drugs. The primary customers in the United States are not patients or even individual physicians, although physicians can drive demand for a drug; rather, the customers are the government (through Medicare and Medicaid) and private insurance companies. And since the insurer or government is picking up the check, companies can and do set prices that few individuals could pay. In the jargon of economics, the demand for therapeutic drugs is “price inelastic”: increasing the price doesn’t reduce how much the drugs are used. Prices are set and raised according to what the market will bear, and the parties who actually pay the drug companies will meet whatever price is charged for an effective drug to which there is no alternative.

Increased cost of health care is just one way the dollar is being dragged down.

This past year, the dollar’s weakness has been made up for by the US stock market’s strength.  Now is the time to look at shares values again because Wall Street is overheated.

Once a quarter we look at the emerging equity market valuation analysis by Michael Keppler.  Michael’s firm is the best when it comes to value analysis of stock markets.

Here is an update on the values of developed stock markets by Keppler Asset Management.

If you are a new multi currency subscriber learn about Keppler Asset Management here.

Excerpts from Keppler’s Recent Developments & Outlook Developed Markets:

After moving sideways in the second quarter, Global Equities had a strong come-back. In the third quarter, the MSCI World Total Return Index (with net dividends reinvested, December 1969 = 100) advanced 6.4 % in local currencies, 8.2 % in US dollars and 3.9 % in Euros. This marks a new all-time high for this index in both local currencies and in US dollars, though if measured in Euros the global equity benchmark is still 6.2 % below its all- time high from August 2000.

Year-to-date, the MSCI World Index is up 18.9 % in local currencies, 17.3 % in US dollars and 14.2 % in Euros. The Euro rose 4.1 % versus the US dollar in the third quarter and now stands at 1.3537 USD/EUR — up 2.7 % from its year-end 2012 level of 1.3184.

Twenty-three markets advanced and one market (Israel) declined last quarter.

Greece (+28.3 %), Finland (+21.6 %) and Spain (+20.7 %) were the best performing developed markets last. Israel (-1.0 %), Singapore (+3.6 %) and Switzerland (+4.6 %) performed worst. Year-to-date, the best performing markets were Japan (+41.1 %), Greece (+33.6 %) and Finland (+27.2 %). Israel (-1.3 %) — the only losing market — together with Singapore (+3.7%) and Canada (+4.9%) performed worst year-to-date among the developed markets. Performance is in local currencies, unless mentioned otherwise.

There was one change in our performance ratings last quarter: Canada was upgraded to “Neutral” from “Sell”.

The Top Value Model Portfolio holds the ten “Buy”-rated markets — Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom — at equal weights. According to our analyses, an equally-weighted combination of these markets offers the highest expectation of long-term risk- adjusted performance.

http://www.flickr.com/photos/garyascott/10645641105/

The table below shows how the Developed Markets Top Value Model Portfolio compares to the MSCI World Index, the Equally Weighted World Index, the MSCI Europe Index, the MSCI US Index as of September 30, 2013 based on selected variables (current numbers for book value; 12-month trailing numbers for the other variables – no forecasts).

In addition we show the MSCI World Index at its All-Time High Valuation at the end of the last Millennium and its All-Time Low Valuation at the end of 1974.

The chart below shows the entire real-time forecasting history of Keppler Asset Management Inc. for the Equally Weighted World Index. Our numbers are based on relationships between price and value over the previous 15 years. The chart includes two remarkable episodes: the five-year period (1997-2001) during which the Equally Weighted World Index stayed above the upper valuation band, and the period starting in October 2008, when the Equally Weighted World Index fell below the lower valuation band, where it has stayed ever since.

Our implicit three-to-five-year projection indicates that the Equally Weighted World Index is expected to rise to 12,084 from its current level of 8,072 in three to five years. This corresponds to a compound annual total return estimate of 10.6 % in local currencies — down from 13.4 % last quarter. The upper-band estimate of 14,500 by September 30, 2017 implies a compound annual total return of 15.8 %, while the lower-band estimate of 9,667 corresponds to a compound annual total return of 4.6 %.

keppler

Growth rates of important fundamentals have kept up relatively well in the current low-interest environment: While the annual book value growth (September 2013 over September 2012) for the Equally Weighted World Index in local currencies dropped to 4.8 % from 7.5 % at the end of last June, both, cash flow and earnings growth accelerated to 5.1 % (previous quarter: 4.8 %) and 6.0 % (1.0 %), respectively. Dividend growth, which jumped to 7.6 % year over year at the end of June, slowed down a bit to an annual growth rate of 6.9 % at the end of the third quarter.

Monetary easing and high opportunity costs continue to drive equity prices. As expressed here before, multiples continue to expand: The price/earnings ratio of the Equally Weighted World Index which bottomed in September 2011 at 10.8 has now reached a new 42-month high at 16.4 – up from 14.2 at the beginning of the year. This 15.4 % increase of the price/earnings ratio in the first nine months 2013 now exceeds the 14.3 % year-to-date total return of the Equally Weighted World Index. Since the 43 3⁄4-year average price/earnings ratio of the Equally Weighted World Index is 15.2, we are now slightly above the historic average, but far from being excessive, considering that we experienced p/e-ratios in the high twenties on several occasions in the past. Multiple expansion will most likely continue in the current low-interest environment.

There you have it… a trifecta of risk… a falling dollar trend… rising PE ratios for shares and continued easing at the Fed.  These are three signs that the greenback will continue to fall.

Find out how to create a multi currency portfolio from Thomas Fischer at Thomas@enrasset.com

Non US  investors contact Jyske’s Henrik Boellingtoft at Henrik.boellingtoft@jbpb.dk

How to Gain With Multi Currency Value Investments

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

 

 

 

 

A Tale of  Two Drugs

Sailing Along With a Weak Dollar


The key to successful investing is to find trends that put the wind behind your sails.

I was lucky 45 years ago to have an opportunity to move to Hong Kong to sell US mutual funds. That was exactly the wrong place and time to be… sailing into a harsh wind.   But the error and a great sailor put me in a unique position to see beyond the US dollar.

hk sailing

Photo of the Hong Kong Tommy Bahama Round the Island Race for the La Cigale Trophy.  The winner had the wind behind his sails!

Noel Croucher, an eccentric Hong Kong expat, loved to sail alone.  He loved to make money as well.  The Royal Hong Kong Yacht Club still honors his contribution as commodore and secret financier.  The La Cigale Trophy is named after his yacht La Cigale II.

I arrived in Hong Kong in 1968 to sell US mutual funds but this was just about the end of a great US market bull cycle.  The Dow was entering a 15 year bear.  However Hong Kong was about to explode upwards.

I might have missed this fact but was lucky that one of my clients was Noel Croucher.  He lived to be 88, but when I walked in his door on a cold call, in the 1970s I suspect he was somewhere in his 70s.

There is a book “Quest of Noel Croucher by Vaudine England” which tells his story.

croucher

Image from Amazon.com page offering the book “The Quest of Noel Croucher” by Vaudine England.

The book tells that Croucher was a man of many facets, some not very nice.  All I saw was his good side.  Perhaps he saw in me a similarity to his past, a young man just starting with nothing but a willingness to work.  Whatever the reason, Croucher was happy to provide me with many hours of his time.

I knew he was a founder of the Stock Exchange and had been in Hong Kong so long that he could remember the colony before WWI.  He was a wealth of legends and stories about the Colony and seemed willing to sit and talk for hours of the past.

He shared stories of Hong Kong and his being interred during the wars and how the stock exchange was formed.

Croucher had a very poor background. His mother brought the family looking for a fugitive husband. She became a single mother in a hard world.  He started working hotels and the post office but worked his way to become a stock broker and became a founder of the HK Stock Exchange.

His surroundings were humble so I had no idea that he was the richest white man east of Suez when he emerged from a Japanese prisoner of war camp in Hong Kong in 1945.

He was never fully accepted by the Hong Kong upper crust but he left a vast fortune in trust that helps fund education to this day via the Croucher Foundation and he left me with wonderful insights both into the HK Exchange and the colony’s history for which I am forever grateful.   Noel Croucher helped me see how times had changed and that I should be selling Hong Kong investments to Americans rather than American investments in Hong Kong!  Nothing could have been more brilliant.

I switched and have never looked back.  Statistics support that this was a good decision.

dji

Dow Jones Industrial Index 1970s to now

Had I invested in the Dow Jones Industrial Index in 1970 and left the investment there… it would have done very well… rising from 973 to over 15,000… an appreciation of 873%.  That is an increase of about 15 times.

However when the Hong Kong Stock market’s Hang Seng Index was first published, its base was 100 points.

heng Seng

Heng Seng Index 1970s to now.

The Heng Seng Index rose from 100 to 30,000 and now is around 23,000. That’s an increase of 230 times.

I am not sure it would have been possible to invest just in the indexes at that time.    However one fact is clear. Anyone who invested long term in something as simple as the Dow Jones Industrial Index for the past 45 years has certainly had the wind behind their back.

Those who invested in emerging markets, like Hong Kong, during the same time had a much stronger wind.

During this weekend’s course in the Blue Ridge, I will expound on Croucher and Sailing Along with a Weak Dollar.  After all, I am still grateful and look forward to sharing more wisdom from Noel Croucher.

Gary

We’ll look at where the economic winds may be blowing for the next six months at our International Investing Seminar this weekend. Due to a larger than normal attendance we became overbooked so have moved to a larger meeting room and still have space.

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

 

Are We Days from Dollar Disaster?


Are we days from a US dollar disaster?

This is such an urgent question, I posted a free report for all readers entitled “US Dollar Protection Review“.

This report is quite long so here is an executive summary as it is important that you do not miss this part.

Understanding multi currency investing is very timely and important.

There are three factors that suggest there will be another significant US dollar fall.   If the dollar weakens… everything Americans buy abroad… which is a lot… will cost more.  Interest rates may rise and business may suffer.

Factor #1:  Economic recovery.  Since the 1960s the greenback has lost as much as 95% of its purchasing power to other major currencies, but it  has been strong since the 2007 recession.  There is a precedence for this.  After the other terrible recession in the 1980s, the US dollar became the currency of choice for about five years. Then after the recession ended, it took a terrible fall.  Investors have fallen back to the dollar again and again in times of fear.  They do not know where else to invest.  This is a short term emotional response that is fundamentally wrong.

Factor #2:  Congress.  Congress has just days left to approve lifting the $16.7 trillion borrowing cap and a government operating budget.  If this does not happen… an increasingly likely prospect… the government will shut down and the US could default on its debts shortly after.

This is a first-ever scenario which could throw the dollar into a tailspin at any time.

The $16.7 trillion debt limit was breached last May but the government has continued by using emergency measures such as not funding pensions for federal workers to stay open.

The Treasury says it will run out of options around mid-October and could default around that time.

However a US dollar crunch could come sooner… at any time in fact, because investors may lose confidence and stop reinvesting in U.S. government debt.

If this happens and bond investors switch to other countries’ bonds… the greenback’s snowball downwards could turn into an avalanche.

Every Thursday, the Treasury pays about $100 billion to investors.  Normally these investors roll over the investment.  If they lose confidence and want to be repaid instead, the Treasury’s entire cash balance could be wiped out leading to default.

In other words, America… right now is living from payday to payday.  Any Thursday payday could stop.

This would likely cause a crash on Wall Street and hurt the US economy, business and the public with a sharp and high increase in interest rates.

The administration acts as if it is expecting a shutdown and the Office of Management and Budget’s director has sent memos to federal agencies outlining preparations for closure.

Congress will most likely get their act together… again but this could cause an emotional panic and force the dollar down.  This emotional weakness is important because the US dollar should not be so strong anyhow. The dollar has been buoyed for some time by inertia… not by strong currency fundamentals.

Factor #3:  Weak Fundamentals.   The forces that support a currency are weak in the US.  Other currencies have better fundamentals.

Start for example with the Mexican peso and how it protected its purchasing power over the past five years.

At the bottom of the 2000 recession when investors were flocking to the US dollar,  I invested in Mexican Fixed Rate  MXN 780.000 with an  8% coupon. They mature December 2015 and are still in my portfolio.

I purchased at a premium of 103 ($10,000 of these bonds cost $10,300) so my yield has been 7.30% per annum for the past four years… plus as you’ll see I have enjoyed a forex profit.

Mexican peso data

Dollar peso multi currency chart from www.finance.yahoo.com

Click on image to enlarge.

When I invested in these bonds, each dollar I invested purchased 13.6 pesos.  That means that each peso was worth 7.35 cents.

I would like to say I was a hot shot and made the investment in February 2009 when the peso had drop temporarily to 15.3 pesos per dollar.  I did not. I do not ever try to capture the absolute tops and bottoms…for a reason.

This is multi currency diversification, not multi currency speculation.

I invested in these bonds when the peso was a bit stronger… as mentioned 13.6 pesos per dollar.  I immediately made a nice forex profit as the dollar fell from 13.6 pesos per dollar to 11.3 pesos per dollar.  That was a 15.4% forex profit in nine months.  I did not take that profit though.

This is multi currency diversification, not multi currency trading.
I was not looking for a short term speculation but a long term profit.  The US dollar strengthened again.  Today each US dollar buys about 12.9 pesos. This means that each peso is worth 7.75 cents.  In other words every 10,000 peso bond I bought was worth $735 at purchase.   Today each 10,000 pesos is worth $775 and the dollar is trading down versus the peso.

I am still earning 7.50% per annum and in 2015, I’ll get my money back with either a forex profit or loss.  If the peso has a strong run up in the next year or so, I may lock in the forex profit with a forex contract.

Simply put, the purchasing power of those bonds has increased, plus every year I received 7.5% income.

Let’s look at what this means in terms of total return.

From 2009 till 2015, I get $750 for every $10,000 I invested.  In simple return I earn 45% and then I get my money back.

Compare that to having invested in a Dow Jones Industrial Index ETF.  Right now had I invested in October 2009 my return would be about 35%.  The Dow has to rise 10% more to match the peso bond return.  Of course if the peso rises the Dow would have to climb more to provide an equal return.

Why the peso still makes sense.

Here are three charts from the Economist magazine.

Mexican peso data

Mexican peso data

Click on the image to enlarge or go to the Economist Statistics by clicking here.

Compare the fundamentals of the US versus Mexico. The first important statistic is the interest rate, 7.75% for Mexico and  2.92% for the US.  Budget deficit for Mexico  is -1.8% of GDP.  The US deficit is -4%.  The US current account is -2.7% of GDP. Mexico’s is about half that at -1.4%.  These fundamentals suggest that the peso with strengthen  versus the US dollar.

This next chart shows that Mexico has strong foreign reserves.

Mexican peso data

Click on the chart to enlarge or go to the Economist chart by clicking here.

Finally this chart shows that the Mexican peso is the 8th most traded currency in the world so there is plenty of liquidity.

Mexican peso data

Click on image to enlarge or go to the Economist website here

Jyske Bank’s website says:  We recommend investors to BUY MBONO 9.5% 2014 as we find that the bond and the currency offer reasonable return potential. We estimate that there is basis for a strengthening of the currency. However, a number of factors may weaken the currency in the short term. Sustained moderate growth in Mexico and the US and the Fed’s initiated scaling down of its purchase programme involves a risk of affecting the currency adversely.

It is important to keep an eye on particularly two issues with respect to our expectations of a strengthening of MXN over the next 12 months. Firstly, that energy and fiscal policy reforms will be implemented and, secondly, that growth will improve in H2. We expect that both of these factors will materialise. There is still potential of a number of upgrades of Mexico’s credit rating, and Mexico’s proximity to the US will be beneficial.

This bond yields about 3.5% per annum at this time.

How to Leverage

There is one more step that investors with a more speculative nature can take.  Borrow US dollars in the 3% range  and invest in pesos in the 6% range.  The idea behind this Borrow Low – Deposit High Strategy is to take advantage of the interest differential called the “positive carry”.  This creates additional income and potential for increased forex profit at the cost of risk from forex loss.

We will review how to calculate risk reward on such speculation at the upcoming International Investing and Business seminar October 4-5-6.

The bond that matures in 2104 does not pay high enough interest now, but longer term bonds do such as the 8% Mexican Bonos maturing 07-12-2023  is rated Baa1 A- and selling at 114.34 yields 6.11%. You borrow for 3% and invest for 6.11%.

EZ Peso

An easy way to invest in the peso is with the ETF iShares MSCI Mexico Index Fund (EWW) launched in 1996 on the New York Stock Exchange. This is an easy way to invest via the Mexican Stock Market into pesos, but of course has the normal market risks.

The iShares MSCI Mexico Index Fund seeks to provide investment results generally equivalent to publicly traded securities in the Mexican market, as measured by the MSCI Mexico Index.

You can learn more about investing in a diversified portfolio of ETF from Morgan Hatfield at mhatfield@ruggiewealth.com .

In the past year we have also looked at the potential of investing in Singapore dollars.

We also looked at how we sort of cleaned up with a Yen dollar- Multi Currency Sandwich.

See ENR Asset Management’s six currency diversification recommendation here.

We will look at the seven best currencies to invest in now at our International Investing and Business Seminar October 4-5-6.

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

 

To help you see a bigger picture I have posted a free report for all readers entitled “US Dollar Protection Review“.

Best of Multi Currency Investing Times & Worst


We can seize multi currency investing opportunity when we reflect on a tale… of two cities.

Take of Two Cities

A Tale of Two Cities at Amazon.com is FREE

A note from a concerned multi currency reader revealed ideas about good times and bad… the ups and downs… joys and sorrows… expansions and contractions – the frequencies that compose every measure in this symphony we call life.

This multi currency investor  wrote: Hi Gary Scott!  A long term reader trying to learn as much as possible before coming to Super Thinking International Investing Business Seminars.  Due to Newsmax I got tuned into Aftershock Survival Summit with Robert Weidemer who says real estate values going to dive down double dip from now until 2016.  He says don’t buy real estate now… rent until the significant declines hit.  What to do?

The answer came from Charles Dicken’s “A Tale of Two Cities” as it starts:  It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.

I replied to the reader.  There are always multi currency problems and opportunities regardless of the current public mindset.

There is always someone predicting an upcoming disaster.  There is always someone lauding the upcoming boom. However dire and manic predictions never cover the entire picture.  Nor is the state of the canvas all that important.  It is what we do with the paint we possess that will determine our affairs, our fate and our fortunes in the coming days.

There are some good reasons to expect another shock between now and 2016.  Since 2000 our research (and our notes to readers) have shown that global equity markets are in a bear cycle of 13 to 20 years.

This last downwards pressure creates a huge opportunity.  This may be last bargain basement for investments that many of us will see.

First… the world  has a bigger global population with greater productive capacity and better ability to trade.  In other words, the really big picture is more production and more consumption.  Bigger… greater… better.  More people…. more to do…. more opportunity.

Second… we have more energy and use it better.   The industrial revolution has been fueled by fossil fuels and farmers (coming off the farm into the factory).   The increase in global natural gas and oil reserves along with the many steps that have been taken to increase fossil fuel efficiency are encouraging.

A September 2013 New York Times article “How We Learned Not to Guzzle” by Ralph Cavanagh says:  Over the past 40 years, we have found so many innovative ways to save energy that we more than doubled the economic productivity of our oil, natural gas and electricity.

Government data indicate that our energy-saving efforts already have yielded some amazingly good news. Our factories and businesses are producing substantially more products and value with less energy, which goes to the heart of the president’s climate strategy. In fact, energy use in the United States has been dropping since 2007, and last year’s total was below the 1999 level, even though the economy grew by more than 25 percent from 1999 to 2012, adjusted for inflation.

At the same time, the amount of oil we are using in our vehicles, homes and businesses continued to decline last year, down 14 percent from a peak in 2005. Surprisingly, oil use was lower in 2012 than in 1973 (when the nation’s economy was only about a third of its current size). The main reason is that we are demanding better mileage from our vehicles and driving them less.  (see a link to the entire article below).

Third… the value analysis from Keppler Asset Management shows an implicit three-to-five-year projection that the Equally Weighted World Index is expected to rise to 12,259 from its current level of 7,401 in three to five years. This corresponds to a compound annual total return estimate of 13.4 % in local currencies – up from 12.8 % last quarter. The upper-band estimate of 14,710 by June 30, 2017 implies a compound annual total return of 18.7 %, while the lower-band estimate of 9,807 corresponds to a compound total return of 7.3 % p.a.

Keppler Value

Click on charts to enlarge.  Read more about Keppler’s best value stock markets below.

In other words, the stock market should be good.

Fourth… our long term analysis of 30 year stock market cycles suggests that we are in the 13th year of a bear cycle that normally last 15 years so should expect a bull market to start fairly soon and last until about 2030.

dow-chart

Fifth…there is a new wave of technology that is changing the global socio-economic efficiency.   This has the potential  to create the buzz and exciting news that will stimulate non thinking expansion and reduces non thinking fear at the .com bubble news in the 1990s.  Those who do think can take advantage of the values created by distortions from the thundering herd as it stampedes up or down.

Sixth…the new wave of communications ability and technology allows society to tap productive markets (older people) who normally would leave the work place and become a social expense.

Seventh…changes in weather and the reorganization of emerging economies such as the Middle East will continue to stimulate the economy.

That is seven pieces of good news.

However, there are three negative forces we’ll want to avoid:

NF#1: The same technology that helps the economy also helps those in charge of the technology take advantage of the public.  We can see this in the New York Times article “The Rich Get Richer Through the Recovery” by Annie Lowrey that says:  The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.

NYT chart

To read “The Rich Get Richer” see the link below.

NF#2: During the last 15 year bear cycle the US and many other nations have badly increased debt.

US National debt alone is now near 17 trillion dollars or over $148,000 per person. That’s just Federal debt. State, County, City, Personal all make this worse.

debt clock

See more US debt data at the www.usdebtclock.org link below

The US is not unique in this problem and has led many governments to confiscate pensions.

The Christian Science Monitor article “European nations begin seizing private pensions” by Jan Iwanik shows how governments have started tackling private pension funds in a stronger way.  The article says:  Hungary, Poland, and three other nations take over citizens’ pension money to make up government budget shortfalls.

People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations.

The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.

The Bulgarian government has come up with a similar idea.

A slightly less drastic situation is developing in Poland.

The fourth example is Ireland. In 2001, the National Pension Reserve Fund was brought into existence for the purpose of supporting pensions of the Irish people in the years 2025-2050.  However, in March 2009, the Irish government earmarked €4bn from this fund for rescuing banks. In November 2010, the remaining savings of €2.5bn was seized to support the bailout of the rest of the country.

The final example is France. In November, the French parliament decided to earmark €33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit.

Since that article, Poland, the largest of central Europe’s emerging economies, did take over many of the assets held by private pension funds, including treasury bonds, to a state vehicle.

Also in Cypress as part of a last-minute $13 billion deal with international lenders to prevent the country from financial collapse, deposit-holders with more than 100,000 euros will face big losses up to 40% of their assets.

This is not likely to happen in the US. There hasn’t been a depositor haircut in the U.S. since the Great Depression.

Instead the government has been putting pressure on private pension managers to be safer and has been subtly coercing them to invest in the US dollar and US bonds.  Because the US is a currency issuer the government can create conditions so more dollars are printed which leads to the third problem.

NF#3:  Terribly weak dollar fundamentals. The one thing I have learned about stocks and currencies is you can never predict what will happen short term as both markets are ruled by emotion.

However you can also be sure that long term the markets will be ruled by fundamentals and four important currency fundamentals are:

* Trade Balance and Current Account
* Federal Debt as % of GDP
* Federal Deficit as % of GDP
* Interest rate
* Inflation

The US is among the worst of any developed nation in four of the five these fundamentals.

Concerns over these weak fundamentals are compounded by the history of the dollar after the 1980s recession. The dollar showed a strength that was not supported by fundamentals in the 1980s with a steep decline after.

granfather economics chart

This chart is from a great report about dollar fundamentals at Financial Sense Editorials.(See link below)

These facts suggest that the dollar could have a serious decline in forex parity and purchasing power and should not be trusted as the only currency held.

This is what we look at in the multi currency sessions of our International Investing and Business seminar October 4-5-6.  There is always someone telling us that it’s the best times. There is always someone warning it’s the worst.

Our seminars explains why the times are both and looks at how to take advantage of the new wisdoms and avoid damage from the old foolishness.

This is our 45th year of creating ways to serve. to earn and diversify our savings and investments to protect against loss of the dollar’s purchasing power.

We share what we are doing and what one can do in small and large ways at our seminars and courses.

Read more about our philosophy about how to earn and invest below.

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

 

Read more about our philosophy about how to earn and invest at PIEC Investing

How We Learned Not to Guzzle by Ralph Cavanagh

Read about the best value stock markets here.

Read The Rich Get Richer click here  US Debt Data is at www.usdebtclock.org/

European nations begin seizing private pensions

Read about the dollar’s demise at Financial Sense Editorials.

Protect Your Wealth, Savings & Pension With t1/2


Protect your wealth by understanding the half-life (t1/2) of the US Dollar.

According to Wikipedia, Half-life shown as (t½) is the time required for a quantity to fall to half its value as measured at the beginning of the time period. In physics, it is typically used to describe a property of radioactive decay, but may be used to describe any quantity which follows an exponential decay.

There are three aspects for having and keeping wealth.   First, earn,  second, spend less than you earn and third… invest the savings so they increase future spending power.

We’ll look at the earning aspect in a moment… but first let’s talk about the half life of the US dollar because most of us will at be earning and saving (or at least accounting) with the greenback… which has been proven to lose purchasing power.

This means we have to keep earning and profiting more just to financially stand still.

One way to stay abreast of how much we lose is by tracking the half life of the dollar as compared to the price of gold.

Our long time friend Charles Vollum produces the Pricedingold.com website and wrote this about the half life of the dollar: Since 2001, the US Dollar has lost half of its value every 4 years. Of course, its actual value dithers about, sometimes more than this theoretical value and sometimes less, but as you can see from the chart below, it tracks very close to this decay line.

dollar gold chart

This chart is from www.Pricedingold.com

Charles continues:   The chart below also projects this line into the future, giving a reasonable guess at what the continuation of the last decade’s policies will do to the USD’s value in gold terms.

dollar gold chart

See the entire “Half Price of the Dollar” article at pricedingold.com here.

Half of our October International Investing and Business course October 4-5-6 will review ways to protect purchasing power with precious metals, commodities, real estate and multi currency investments. Thomas Fischer who is moving from Jyske in Copenhagen to ENR Asset Management in Montreal will join us to look at global portfolios and multi currency investments.

blue-ridge-leaf-change

October leaf change at our North Carolina farm.

Half of our International Investing and Business Seminar is about how to earn through your own business and the other half is about how to save and invest beyond the US dollar.

We hope to see you there.  October 4, 5, 6 in the Blue Ridge.

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

 

 

Micro Business & Multi Currency Abundance


Our recent International Business & Investing Seminar looked at the micro business & multi currency abundance we have ahead of us now.

gary-scott-seminar

We met at Jefferson Landing and enjoyed autumn’s blaze of colors.

Little Horse Creek view

An October view from our North Carolina farm.

Life is such an analogy and nature is reality’s artist showing us truth in so many ways…. everyday.  This picture of golden richness is that time of reality’s greatest beauty as it also heralds the darkest hour.

This was the theme of our International Business & Investing Seminar last weekend at Jefferson Landing here in the mountains.  We looked at how so much news is focused on doom and gloom but why and how this is the richest of times for opportunity.

We first looked at the benefits of the economic cleansing we have seen in the past few years… how housing has become affordable… how big government is being exposed…how labor costs are reaching competitive levels and how North Americans and Europeans are beginning to work harder and save again… how they are seeing the importance of relying on themselves instead of big brother.

The delegates at the seminar enjoyed perfect autumn weather and as we examined why we should be afraid but also bold.

Why the Fear?

Do not get me wrong.  We let our delegates know that not all the news is good.  Many in the world will suffer from the evolution that is taking place.

An October Bloomberg news article entitled “Falling Wages Threaten Consumer Spending” shows an avenue of suffering when it says: Ninety-one percent of people in the U.S. labor force have a job. That may be the extent of the good news for these Americans, whose incomes tell a darker story.

Take-home pay, adjusted for prices, fell 0.3 percent in August, the third decrease in five months, and personal income dropped for the first time in two years, the Commerce Department reported last week. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.

Salary and benefit growth “has been going nowhere,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “One of the key reasons the recovery has stalled is that real incomes have fallen.”

The earning power of the average American male’s age has dropped back to 1950’s levels.

The October 10, 2011 New York Times article “Recession Officially Over, U.S. Incomes Kept Falling” by Robert Pear shows another bout of economic pain:   In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.

Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.

Many with old mindsets could have a hard time.

Reasons for being bold now!

Let’s look at the good.  A reader recently forwarded one of those emails I never pass on but this one began with a note that is so applicable to this message that I have included this excerpt: ONE AT A TIME.  Yesterday I was in WalMart looking for a wastebasket. I found some made in China for $6.99. I didn’t want to pay that much so I asked the lady if they had any others. She took me to another department and they had some at $2.50 made in USA. They are just as good. Same as a kitchen rug I needed. I had to look, but I found some made in the USA and they were $3.00 cheaper.  We are being brain washed that everything that comes from China and Mexicois cheaper. Not so. That is also why I don’t buy cards at Hallmark anymore. They are made in China and are expensive. I buy them at Dollar Tree….50 cents each and made in US .

I have not researched this and don’t know how this works as I haven’t been buying anything much lately…but the sentiment is well said and the factors behind it true. We are seeing big changes as US workers become more competitive….and this is not bad.

A Rising US Dollar

At the seminar we looked at why this is time for a short term US dollar rebound as well.  A recent New York Times article on the US dollar confirms our thinking and says: For the better part of the past decade, the American dollar has been the 98-pound weakling of the foreign exchange world. It has lost value against almost every other global currency — not just the euro, pound and yen but even the Romanian new leu and the Latvian lats.

Driven largely by the Federal Reserve’s policy of printing dollars to help spur a healthy economic recovery that remains stubbornly elusive, the dollar, weighed against a basket of other currencies, hit a 40-year low in May 2011.

But betting against the dollar may no longer be such a safe play — not necessarily because of any sudden macroeconomic shifts but because of a sense that the long dollar sell-off may have finally gone too far.

The dollar’s bounce, though too brief to be called a trend, has not been driven by any noticeable improvement in America’s economic fundamentals. Indeed, the faint but real risk that Congress will fail to reach agreement on raising the legal ceiling on government borrowing only underscores the still parlous state of the American economy.

At the same time, unemployment in the United States remains stubbornly high, at 9 percent. And there is a strong belief among big money investors that the Obama administration as well as the Federal Reserve chairman, Ben S. Bernanke, tacitly welcome a cheaper dollar to spur exports and encourage American manufacturers to hire more aggressively.

Opportunity from a Stronger US dollar.

Thomas Fischer, Senior VP for Jyske Global Asset Management, spoke about how their low risk portfolio currently holds 40% dollar cash.   This was not because JGAM believes in a long term strong US dollar but because they expect the stronger US dollar will create extra buying opportunities  in the near future.

We looked at why equities provide the greatest opportunity for long term profit.  We shared with delegates a study by Dimson, Marsh & Staunton at London Business School on long-term global equity performance from 1900 to 2009. Over a 110-year period, 19-country capitalization-weighted stock index total return of 8.6% per annum in U.S. dollars compared to a 4.7 % return per annum for the equivalent 19 country bond index. Allowing for inflation, 3.0% per annum real returns of 5.4% and 1.7% per annum,  the global stock portfolio grew 331 fold vs. global fixed-income which grew only 6 fold.

We also viewed how the current downturn has totally been expected.  This site has continually reviewed the 15 to 17 year economic cycle as outlined by Austrian economist, Joseph Shumpeter. The global economy (and US stock market) enjoys an approximately 15 year bull…. then about a 15 year bear (a period of no growth) and then moves back to start a 15 year bull.   These stock market bull and bear cycles are based on cycles of human interaction, war, technology and productivity.

15-year-economic-cycle-chart

At this seminar we looked at how the US equity market is currently about 12 to 13 years into the 15 year trend.

We then compared the last 15 year bear cycle that began in 1968 and saw how in the 12 years from 1968 to Oct 1980 the S&P 500 index was almost flat having dropped from 103 to 102.

Then we saw how from the beginning of this bear cycle that began Oct. 2000 into 2011,  the S&P was again almost flat from 1249 to 1150.

Then we looked at this chart from Moore Research Center, Inc. to see what to expect from Oct. 2011 to Oct. 2012 if that period compares with the same period in the cycle.  The historical story tells us to expect little growth in the next year.

Notice the similarities between the market in early 1980 (Blue Line) and the current S & P 500 below.  There is also a strong synchronicity between the S&P 500 and the MSCI World Index below (covers all shares globally).

s&P chart

Moore Research showing S&P 1980 to 1982.

charts

S&P 500 Index for the last year.

charts

MSCI World Index for the last year.

The S&P 500 dropped about 9.6% from October 1980 to October 1981 and rose 3.7% from, October 1980 to October 1982.

If this cycle theory were to repeat itself neatly… we should expect a downwards drift for the next 12 months then just a tiny bit of recovery in 2013.

Here is the good news.  From 1982 forward the market experienced steady growth for the next 17 years.  By October 1994 the S&P 500 was 460 and by October 1999, 1470… when the next bear cycle began.

chart

Again if the theory repeats… around October 2013 the S & P will once again begin to rise.  This is when the next bull market begins and we can be sure that the next rise will be due to good economic news.

So hang on!  Plus be sure to look for what new exciting evolutions will once again jump start social economic expansion.

These broad trends are not very exact… but history strongly suggests the bear market we have seen since 1999 is normal… the worst is over but we could see some added downwards drift this next year.  However, a great time to buy!

Perfect Time for A Micro Business

We also shared ways to earn income from micro business start ups.  There has never been a better time to have a lifestyle micro business.  Technology and rapid change in the way the world works all favor small mobile flexible businesses.

We looked at ways that readers can have a small micro business in global finance.   Another way is with environmentally safe organic chemistry.

Another idea we looked at was how to have an export business.  One export is Ecuador Flowers and we shared 50 Ecuador roses with the delegates at the seminar.

See how to get a FREE recording of this October seminar and how to attend our  Mt. Dora Florida, February, 2012 International Investing and Business Seminar.

On the subject of Ecuador roses now is the time to order 50 Halloween roses.  These orange bi colors are called High & Mighty.

gary-scott-seminar

To give you an idea what you can do with 50 roses, we had 50 roses at the seminar. I gave a dozen of them away at the hotel but now have…

gary-scott-seminar

some at the entrance to our house, plus…

gary-scott-seminar

bouquets and…

gary-scott-seminar

numerous small…

roses

arrangements like…

roses

these.

Once again on the subject of Roses, these are not economic days of wine and roses…these are days of risk management when global economics look bleak.  However, such times are the most fertile beds of opportunity for those who recognize the true nature of all cycles and take this time of change as a time to accumulate great value and future potential opportunity.

Gary

Order fresh Ecuador Roses Delivered to your home by Fedex by October 19th for delivery Tuesday October 25th.

Order the 50 fresh cut Halloween roses for $91 here.

Save $53.  Order 100 fresh cut Halloween roses for $129 here.

Save $41. Subscribe Ecuador Living Premium Service (normally $119).   Get your subscription and first Halloween rose order at half price. $169 total.

See more about ordering fresh Ecuador roses here.

Gary

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The Dollar

Recession Officially Over, U.S. Incomes Kept Falling