Dear International Friend,
One amazing feature about Ecuador is that every trip brings something surprising, wonderful and new. During a recent journey we shared with almost 100 IL readers, the spotlight was on the people of this Andean nation. Though the locals have suffered several years of extreme political and economic adversity, their sweet nature and desire to please hardly seems diminished at all. This national amiability made the trip, which was aimed at finding real estate opportunity, something more than just a money making tour. Because of this we are conducting another tour right away in November (details later).
I have been focusing strongly on Ecuador lately because Ecuador’s economic turmoil has kept prices very low yet has not reduced a brightness of spirit in the Ecuadorian people. I am not sure what creates this geniality, perhaps part history and partly the fact that Chamomile Tea is the national drink rather than strong coffee. Whatever this affable nature creates an atmosphere conducive to prosperity that is remarkably enjoyable as well.
For example we spent our first night in Guayaquil at the first class Oro Verde hotel. This five star hotel has opulent, European accommodations with rich hardwoods and marble, polished until they gleam. Service has always been good at this hotel but we noticed a special caring at every level of staff from the general manager to the lowest staff on this trip. For example the young shoeshine boy who works in the lobby, offered to fix my shoes. He not only raised them to a really high shine, but repaired some problems and brought them to my room in a hurry, all with sweetness and the biggest of smiles. He seemed to really enjoy what he was doing and when I gave him a dollar, was overjoyed.
These people have suffered every financial humiliation imaginable including a currency plunge from 3,000 to 25,0000 sucres per dollar. Now in an ultimate economic insult their currency is being totally d another highly successful futurist, Ian D. Pearson, is so important to attend. Ian is a high tech futurist who will speak about the future of telecommunications and technolo gy. He works for huge firms such as British Telecom and billions of dollars in investments are staked on what he says.
Here is even more background. To explain why this Copenhagen meeting is so providentially timed I have to go clear back to High School days when I worked as a busboy in Portland, Oregon at one of the city's busiest restaurants. Patrons often waited two ho urs in the lounge for a table. Consequently the bar business was brisk (the owners gave away the food and made their money on the booze). From this system emerged an occaisional drunk, but generally everything remained civilized, until the full moon. Talk about wolves howling! This time of the month seemed to bring out every looney, hard drinker and mean person in town. The diners were so aggressive and rude. The waitresses complained that their income from their tips fell and there were many, many more d runks!
Even though only 16 years of age, I quickly gained respect for our relationship with the moon, planets and stars. This respect and fascination has remained with me.
Let's zoom back to modern times. Now. The stock market has been boiling over for years. Price earnings ratios are astronomical. Yields are way, way down. Owning shares makes no economic sense. Every time in the past hundred years that markets have been li ke this, the market has crashed. The higher has been the rise, the larger and more rapid the fall.
The market is acting dangerously now.
When exactly will the big correction come? I have learned over the past several years that watching P/E ratios, momentum and value analysis does not work for predicting exact days. All that mathmatical stuff gives an overall impression, but understanding crash points requires more depth. We have to look for events that makes the whole of society move and itch!
Back to the stars. The Greek industrialist summed up their importance when he said, “You do not have to believe in astrology to become a millionaire. But to be a billionaire, you must understand the stars.” That quote always resonated with me because of m y restaurant experience. So I took special note when I learned that beginning in May the planets move into a position where the earth is on one side of the sun, while Mercury, Mars, Venus, Jupiter, and Saturn will be on the other side in a tight configura tion (all within 19.4 degrees of one another). This is a rare occasion that will create some very uncomfortable short term social consequences. If a full moon can turn diners bananas imagine what this astrological lineup can do to investor psyche all over the world.
Yet there is more to worry about than the fear, nervousness and anger this planetary event may evoke. Added to this social agitation the sun is at its strongest Solar Maximum cycle. This means that the sun is likley to spew deadly bursts of radiation that could interrupt or even destroy satellites, global communciations, computers and electricity grids. Match any kind of meltdown in our electronics and global communications with a period of planetary induced social apprehension and the conditions are ripe for a market collapse. The experts, market pundits and economists will come up with monetary reasons after the fact, but by then it's too late if you are still in what's left of the market.
This period peaks June 21st, so if there is ever a time in the near future to watch out for non-anticipated, unexplained crashes of any sort, including financial markets, this will be the time.
This is why the June 14-18 Copenhagen meeting is perfect. Most professionals already know that a market crash is coming. I saw this fact when reviewing the Copenhagen speakers' schedule. Along with the two futurists and me there are a handful of experienc ed investment managers and economic advisors speaking. Most have set the titles of their speeches on how to survive the market crash!
This course also makes incredible sense for three other reasons:
#1: You'll learn how to make money by using guaranteed investments. I have personally used these vehicles for several years. The original capital is guaranteed like a bond, but profits can rise. My first guaranteed plan (in the English stock market index) gained 38%. My second (in the Japanese stock market index) is up about the same yet it was guaranteed I could not lose! You'll also learn the latest way to borrow low and deposit high with a diversified portfolio of mutual funds. Spreading out is a great way to reduce risk. Yet consider the following result you would have had in the last year if you had diversified globally equally in the seven Jyske mutual funds beow:
Jyske Europe Fund + 85.50% Jyske East Europe Fund + 69.82% Jyske Emerging Markets Fund + 63.46% Jyske Sweden Fund + 58.01% Jyske Japan Fund + 46.78% Jyske Latin Fund + 38.39% Jyske German Fund + 30.65%
Your annual return would have been 46.87% yet you would have had your assets diversified around the world.
Now consider if you had borrowed Japanese yen at 1.75% and doubled your investment. Your return on capital would have increased to 92.24%. Had you tripled your investment with yen loans the return would have grown to 137.11% or if quadrupled (the maximum loan available) the return would have been 182.23%. Yet you still would have enjoyed the stability of investments spread worldwide. Learn how to do this and more at the seminar.
#2: This seminar is a bargain. The entire course and all meals and hotel which are provided costs less than a three hour session at my hourly fee for private consultations.
Yet my fee is nothing compared to the cost of sitting with the futuri sts. You hear all of us at the seminar at a cost that is a fraction of their fees. (Plus because politics plays a pivotal role in the era ahead, you'll also meet and hear Denmark's former Prime Minister Poul Schluter.
#3: Jyske hosts some of the most entertaining seminars I've ever attended. Delegates are treated to fireworks at Tivoli Garden, tours and a gala evening which includes entertainers from the Danish Royal Opera. Delegates last year told me they lear ned more than they could have imagined, but that the seminar was also just plain fun. Won't you join Merri and me in Copenhagen, Denmark: Wednesday to Sunday, June 14-18, 2000. Don't delay. To assure hotel space, reservations must be reserved this mont h. To reserve your space call Agora Travel, 1-800-926-6575 or 561-243-6276 or send an email firstname.lastname@example.org
For more information about this and other seminars send a blank email to email@example.com
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sweetest Ecuadorian people of all, the indigenous Ecuadorians. These are Incan descendants who live and work in fertile valleys, crisscrossed with plantings of corn, potatoes and Quinoa. Though they are poorest of all (with incomes ranging as low as $30 a month) they have a charm and sweetness that cannot fail to touch one’s heart.
There are some economic reasons for Ecuadorians to be feeling brighter as well. The roads and bridges are now in much better shape than those encountered on our previous tours. A year’s worth of road work after El Nino and La Nina have improved transportation throughout the country. Better paving is not the only improvement we found in this Andean nation either.
Ecuador’s economy appears to be improving. The consensus from the many experts who spoke to the group is that Ecuador’s economy has turned the corner and is now ready to improve. A recovery may be on the way based on five cornerstones of higher oil prices, dollarization, government reorganization, privatization and a simple rebound.
Ecuador is the second largest oil exporter in South America and oil is the Ecuadorian government’s main source of income. As oil prices have skyrocketed so have government revenues. In addition the government is now finally starting to privatize oil, telephone, electricity etc. If this trend continues the economy will be helped enormously.
There are some problems associated with all this change. Dollarization will hurt the poor from a psychological and buying power point of view, (someone who was earning 100,000 sucres a week will be earning four dollars). This will make their income seem less. Buying power will drop as low cost products and services (shoe shines for example) that used to cost less than the lowest U.S. coin in regular circulation will rise. Also inflation will not be offset by currency devaluation and is expected to run about 30% in the next year.
However the good news is that the dollarization law prohibits the National Bank of Ecuador from printing money or from being a last resort lender to banks. This will force the government to increase its spending discipline. This should force it to reduce costs and keep privatization on track. This should reduce long term inflation and increase the economic efficiency in years ahead.
Will the economy really improve and will the people of Ecaudor become even sweeter in the future? These are answers I don’t know, but what I do know is the country does offer sweetness and opportunity now. During this limited time, before the economy really recovers, this rich country offers an special blend of wonderful service, low prices and a sweetness we may never see in this world again.
The final property inspections on the tour were at a visit back to the coast at the Casa Blanca Resort. Delegates found everything, tennis, golf, marina and water sports. Yet 600 to 1400 Sq. foot apartments and houses were only from US$30,000 to US$77,000 with financing and including golf membership.
The tour ended with a visit to Otavalo, the largest market in South America. Wool coats, handmade “fishermen” sweaters, and vicuna blankets cost under $10. A good leather coat goes for under $100. Panama hats are made in Ecuador, and the least expensive come in their own handmade balsa boxes for about $3. Rugs, jewelry-especially silver and emeralds, crafts, wood carvings, and pots are on offer at bargain-basement prices. The savings here were more than the cost of the tour!
The group lunched on that last day at Hacienda Cusin, a 17th century monastery that has been converted into a lovingly restored 40 room hotel. There delegates saw new houses, built to look 300 years old and available on seven year leases (the price is $25,000-which seemed expensive to us but did include all hotel facilities.)
On the way back to Quito we inspected brand new pre-fabricated vacation homes that can be purchased for as little as $3,000. These houses were previously $800, so inflation without devaluation is having some impact. But these sweet, little places(about 460 sq. feet) are still bargains for those who want a little vacation home in the mountains or on the sea. Honestly!
Both trips were thoroughly enjoyed by all and some acted on the spot (though we discourage this). One delegate rented a three bedroom apartment just off the main Amazonas Avenue, which is in the center of galleries, cafes, bookstores, mueseums and shops. This three bedroom apartment with servant quarters was US$150 a month.
Another delegate said he is making an offer on an six bedroom, three story, Italian villa. This 5,000 square foot mansion which is ripe for restoration is adorned with marble and rich hardwoods. The 14,000 square foot grounds have terraces and are centrally located near Amazonas as well. The asking price is only in the US$100,000 range.
Yet what these delegates will gain is more than incredible value in real estate. They will move in and find neighbors that are friendlier and more helpful than any they may have ever found before. This history of amiability and goodwill towards all cultures, creeds and religions may be Ecuador’s biggest asset of all.
By the way these two IL real estate tours sold out so quickly that IL will conduct another November 11-19, 2000.
Contacts Who Spoke at IL Ecuador Seminar
Real Estate Broker, Gus Hernandez Tel: Tel: 593-2-540-702 Fax: 593-2-568-676 Gus lived in the U.S. for 14 years, speaks perfect English and seems to know what Americans want. I have noticed that more people seem to buy from him than others. He currently has three brand new 1,400 sq. foot three bedroom houses with garage in the fabulous El Bosque area off Occidental Avenue. The houses have incredible views from terraces. Asking prices are US$32,000.
Rolf Stern, BDO Stern, Tel: 593-2-566-915. Fax: 593-2-504-477. email: firstname.lastname@example.org BDO Stern is part of one of the largest accounting organizations in the world and Rolf is a wealth of information on Ecuadorian tax, law and business. His firm offers all aspects of business assistance, corporate formation, real estate purchase, introductions, accounting, tax planning, legal.
Dr. Andres Cordova. Tel:593-2-241-105. Fax: 593-2-920-665 Email: email@example.com Andres is an attorney in Quito. His firm represents the National Bank of Ecuador and other government economic agencies as well as private individuals.