Join Gary Scott and Thomas Fischer in North Carolina

by | Jan 1, 2005 | Archives

$499 Single/$749 per couple

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Colonial breakfast in the tropics, dining outdoors under ancient ceiling fans that turn in lazy arcs coaxing gentle breezes. Shafts of morning sun warm crisp, white linen while traveler palms sway in soft harmony with grackles, katydids and gentle clinks of silver.
This true story (and warning) took place in Singapore at the Raffles Hotel in an open-air restaurant, near the Long Bar around 1970. A 25-year-old executive was having breakfast there. He was a mutual fund marketing executive and continually traveled the world. On his journeys through Asia, all he carried was U.S. dollars. The greenback was king currency then. That currency, all that anyone needed anywhere, was as good as gold!

However the U.S. was waging a war and the government was running a huge deficit year after year. This had put enormous pressure on the dollar and that day when the executive opened his morning paper, The Straits Times, the headline was bold, “U.S. Dollar Collapses”.

The dollar crash of the early 70s is eerily similar to the U.S. dollar's drop of today. War, huge government borrowings, continual trade deficits, a stagnated stock market, all bring downwards pressure on the greenback.

Spotting these similarities can help us see future problems and increase our profits. I know because I was that young executive trapped with only greenbacks in my pocket (credit cards were not commonly used then). Money exchangers would not even take my dollars that day! I had no way to buy anything or even to pay my hotel bill. I was stranded thousands of miles from home. Yet that painful lesson was a good one because I have never trusted any one share or any one currency since. This has paid off. My best profits (along with many of our readers) have come from investing in currency shifts.

Now the U.S. dollar is fluctuating again and economic events are very similar to those that took place 30 years ago. This means we can predict (to a degree) what is ahead. We can see a crash coming. This gives us time to prepare so upcoming economic events will make us richer instead of robbing us.

There is rising danger in the U.S. dollar but a profit opportunity as well. I invite you to learn more about global investing and how to gain this profit potential.

One great way to cash in on currency shifts is through the Multicurrency Sandwich (Borrow Low-Deposit High) tactic. This is a perfect time for such investments because they diversify currencies.

Here for example is the portfolio I recommended in 2000 that earned 46.76% profit in one year (while the stock market crashed 40%). This example shows how investors used existing assets (with 6% yield) worth US$100,000 to borrow US$400,000 of Japanese yen at 1.5% for investment in European and other currency CDs and bonds.

Currency     Investment                                     Return Yield

US$100K Original Asset earning 6% in AAA investment 6.00% US$6,000
US$ 50K General Electric Polish Zloty Bond AAA 11-2-02 17.06% US$8,530
US$ 50K Hungary Government Florin Bond A1/A 12-1-01 10.30% US$5,150
US$ 50K IFC Slovakian Kroner Bond AAA 10-8-01 8.72% US$4,360
US$ 50K Argentina Gvt Euro Bond B1/B+ 6-02-03 8.28% US$4,140
US$ 50K Brazil Government US$ Bond B1/B 5-11-01 8.39% US$4,195
US$ 50K Mexican Gvt 3 Month Peso Cetes Bond Baa3/BB+ 14.00% US$7,000
US$ 50K Norwegian Gvt NOK Kroner Bond AAA 31-05-01 6.77% US$3,385
US$ 50K Turkish Gvt Lira 3 Month Bond B1/B 32.00% US$16,000
US$400,000 Japanese yen loan interest 1.500% US$-6,000

Total return on initial $100,000 at risk 52.76% US$52,760/pbr>

These were actual recommendations made well before the Euro rose dramatically against the dollar.

This multicurrency portfolio was based on the bond and interest rates available at that time and took advantage of several principles. First, it took advantage of leverage. 46.76% of the profit earned was pure, extra profit above the 6% that the original asset earned. This worked because existing assets were used as collateral. No additional cash or investment was required.
Second, the principle of positive carry meant that borrowed money at 1.5% earned an average return of 13.05% (the average return of the investment before leverage). There was an 11.55% margin of error (the difference between the 13.05% and 1.5) that gave protection from fees, defaults and forex losses.

The next advantage was diversification into nine currencies, nine different investments of which more than half had strong A to AAA ratings. This reduced forex and default risk, but because five of the currencies were related to the Euro, so forex profits were enhanced. The euro had fallen by 22% (at the time of this recommendation) since its launch in January 1999. Yet the entire euro economic area had been growing at a robust rate of almost 4% in the second half of 1999. Because Europe was running behind the U.S. in the economic cycle, just as the U.S. dollar's fall is overdue, so too was the Euro's rise. Plus the dollar's strength had been boosted by a hot U.S. stock market and a much higher interest rate than the Euro.

None of this guaranteed that the Euro would rise but these forces increased the likelihood that it would. This of course is now all history. The Euro did rise and those who followed this portfolio cleaned up both from the positive carry, plus from forex profits.
In addition because the loan is in an overvalued yen and Japan still has many economic challenges, there is an added chance that yen will fall even further and create even more profits.

Since that time I have recommended to my readers that they borrow Swiss francs (at a low 3%) to hedge their Euro position and make even more profit!

This tactic has worked for me (and my readers have reported great success as well) again and again for more than ten years. For example when I recommended taking yen loans to invest in U.S. dollar and Mexican peso CDs and bonds in the early 90s, profits exceeded 108%. Later when I recommended yen loans at 1.75% invested in Korean won AAA rated bonds paying 15%, the won immediately revalued and made 43% profit in two months (plus 53% on interest differentials or 96% in the year).
In 1998 one of my recommendations was to borrow Japanese yen and invest in Japanese stocks. This idea made triple sense then…first, giving global diversification and second entering Japanese markets at decade low prices. (Japan was in its tenth year of recession.) Getting in at this bottom made more sense than staying in super inflated .coms, high tech and U.S. shares that had peaked in Wall Street's highest and longest bubble. Third, the risk was reduced because the investment was in yen, the currency borrowed. This tactic quadrupled profits and turned an astounding 1,315.5% gain in 1999 when invested in the Warburg Pincus Japan Small Company Fund (which rose 329.7%).

I lack space to explain the Borrow Low – Deposit High and other diversification tactics here, but feel these issues are so vital at this time that I asked Thomas Fischer of Jyske Bank to come along and help me conduct a course on this subject at our farm in North Carolina. The seminar was so packed that we had to turn potential delegates away so we have scheduled another course to be held at our North Carolina farm Friday, Saturday and Sunday, October 8-9-10.

The price is $499 single and $749 double and you can book here.

Copenhagen is an unknown private banking center of Europe and Jyske Bank is Denmark's second largest Danish bank and has one of the most advanced Borrow Low – Deposit High programs I have ever seen called Invest Loan. I have used their system for more than a decade because they make the strategy so easy to use. Jyske also offers a complete range of private banking services including multicurrency demand deposits, CDs, bonds, stocks and a full range of mutual funds. There are no taxes charged in Denmark on interest and profits for non-Danish accounts. Thomas will be at the course to help explain economic and currency tactical details.

The course teaches all the important facts you'll need to know including the laws that relate to tax and banking abroad.
You will learn the differences between the banking centers, the way to correctly open accounts and how to bank so you can keep your account regardless of what laws in the future say. Find out how to diversify, borrow different currencies and how to use structures for asset and tax efficiency.

A Few Comments From Gary Scott Readers who have attended my courses:

” I was so overwhelmed with information I received I had to spend several days reading, sorting and filing it! I have decided to move my modest investment capital overseas.” B.W. MONTREAL CANADA Professor
” Send me your report on safe banks lending at 7% for redeposit at 13% or more.” B.V. ADDIS ABADA ETHIOPIA Economic Commission United Nations

” A number of new and significant contacts were made. It would be extremely helpful if you could supply us with WORLD REPORTS.” I.M. TORONTO, CANADA Banker

” You are as good as your word which is rare these days. I look forward to attending one of your seminars.” C.K. GENEVA, SWITZERLAND Banker

” In spite of my marketing experience, your information really got me going!” M. C. LONDON, ENGLAND Marketing Consultant

” Thanks for the three reports. They are very interesting and should find many readers here in Japan.” M.A. Tokyo, JAPAN Computer Programmer

” I would like to say how much I enjoyed the information I received.” A.B. Providenciales TURKS & CAICOS Accountant

” First let me say how much we enjoyed the investment seminar.” W.J. SAUDI ARABIA Oil Engineer

” Once again thanks for all the great information.” G.K. PERTH, AUSTRALIA Insurance executive

” Your letter of November 8th warned me to beware of the market just a week before the 120 point crash on November 15th!” T.G. N.CAROLINA Pilot

” I made over $50,000 right away. My portfolio was up 10.3% in one month alone.” S.P. TEXAS OIL PRODUCER