International Investments – Don’t Cry for Me

by | May 30, 2006 | Archives

* International Investments: Don’t Cry for Argentina – but be Careful of Argentina Bonds

* Natural Health Tip: Don’t Cry for Onions – Avoid Them Now

* Ecuador Real Estate: Now You Can Cry

The global currency structure is changing. Emerging currencies are in turmoil. This may be exactly the opposite of what should happen.

Investors are rushing to major currencies because the old global economic engine was the development of the West. The industrialized nations had the best growth.

Today, the driving engine of the global economy is the development of emerging nations. Three of the most indebted currencies are the US dollar, euro and Japanese yen! Each of these areas has aging populations and huge, future retirement obligations.

Yet once again the thundering herd is rushing in reverse, using its past, emotional feelings as a guide.

Hopefully we are the wise, forward looking, few who will benefit from this.

We are reviewing a short list of emerging currencies that currently offer high interest rates (near or over 10%). The list includes Argentina, Brazil, Indonesia, Pakistan, Russia, Turkey and Venezuela. We most recently looked at the Turkish lira called the TRY, where I just invested 5% of my liquid portfolio. Now let’s look at the Argentina peso.

I have passed on investing in this but one of my advisors wrote:

“Gary, We recommend that you hold on Var Argentina, but if you choose to buy I recommend that you buy Argentina 03, 08, 2012. with a yield of 8,50% p.a. There is a sinking fund on these bonds and you will have 12.50% of the face value re-paid every year. You mentioned in one of your last mails, that you prefer to have the more risky investments in the pension account. If you want a real risk with high potential the bonds of this bank would be a good idea for the pension account.”

First, why high risk in the pension? If you have a pension and if it is not your only investment account, think about this. If you are going to make two investments, one seemingly safe (with low profit potential or income) and one seemingly risky (with high profit potential or income) look at what happens if you invest the risky deal in your pension. Your low profit deal pays low tax. If your risky deal, wins the big profit in your pension is tax deferred. If you lose, you get to top up your losses with tax deductible contributions. This is a way to get the tax man to share speculative losses, but not immediately tax speculative gains! This rubs against the grain of normal financial advice and only works if you have the two equal investments to make (and have asset protected both investments)! In the right circumstances it really makes sense.

Back to Argentina. Let’s return to fundamentals we recently reviewed.

Country Interest Rate GDP Growth Billions Foreign Reserves
Argentina 9.88% 9.1% 19.6
Brazil 15.68% 1.4% 59.2
Indonesia 13.45% 4.9% 33.8
Pakistan 9.33% 8.4% 9.8
Russia 12.00% 7.0% 205.0
Turkey 14.13% 9.5% 56.5
Venezuela 10.65% 10.2% 21.8

Argentina has good growth but foreign reserves are pretty low. Plus the country has previously reneged on its debt.

Plus let’s add one more factor … inflation.


Country Consumer Price Increases
Argentina + 11.1%
Brazil +5.3%
Indonesia +15.7%
Pakistan +6.9%
Russia +10.6%
Turkey +8.2%
Venezuela +12.1%

Now you are beginning to see why I have added only Turkish and Brazilian bonds to my portfolio. Real returns are generally interest less inflation. So we could expect a real return on an Argentine bond to be 9.88% less 11.1%. That’s not so good. Brazil at 15.6% minus 5.3% (10.3%) and Turkey at 14.2% minus -8.2% (6%) look an awful lot better.

Enhance your profit potential with a diversified portfolio of emerging currencies through a MultiCurrency Sandwich. LEARN HOW

Learn about investing in emerging currencies, gold, silver, Ecuador, import-export, overseas markets and more. Join Merri and me at our September 15-16-17, 2006 International Business and Investing Made EZ course in North Carolina. Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Our May course was overbooked and the September session is already filling up fast. Our free accommodations are reserved on a first come first served basis so do not delay! DETAILS

Natural Health Tip: Don’t Cry for Onions Either

In ayurvedic terms our bodies are composed of three elements, air, fire and water. The key to good health is keeping these three elements in balance, just like a car requires the proper mix of gas, air and fire. Each element is affected by our seasons. Late Autumn and winter are air aggravating seasons. Late winter and early spring are the water aggravating season. Late spring and summer aggravate fire. One way to balance this problem is to avoid foods that also aggravate the same as the season.

According to as we move into the hot fire season good balancing foods are:

Fruit – Apples, Avocado, Berries, Dates, Figs, Grapes, Mango, Melons, Pears, Pineapples, Plums, Pomegranate, Prunes, Raisins, Watermelon. Sweet fruits are balancing.

Vegetables – Artichoke, asparagus, bell pepper, broccoli, brussels sprouts, cauliflower, cucumber, celery, green beans, leafy greens, mushrooms, okra, parsley, parsnip, peas, potatoes, squash, sprouts, zucchini. Sweet and bitter vegetables are balancing.

Grains – Barley, Cooked Oats, Basmati Rice, White Rice, Wheat, Wheat Bran, Wheat Granola are balancing. Legumes and Nuts – All beans except black and red lentils are balancing, such as adzuki beans, chickpeas, kidney beans, soy beans, split peas and tofu. Coconut, psyllium, pumpkin and sunflower are balancing.

Meat – Chicken white meat, turkey white meat, egg white, freshwater fish, shrimp (in moderation) are balancing. Beef

Herbs, Spices and Condiments – Maple Syrup, Fruit Juice Concentrate, Barley Syrup, Brown Rice Syrup.

Coconut, Coriander, Cumin, Dill Fennel, Ghee, Mint, Orange Peel, Peppermint, Saffron, Seaweed, Spearmint, Sprouts, Turmeric, Wintergreen are balancing.

Dairy – Butter (unsalted), Cottage Cheese, Mild Soft Cheeses, Ghee, Cow’s Milk, Goats Milk are balancing.

Fire aggravating foods include:

Sour fruits.

Amaranth, Buckwheat, Millet, Oat granola, Quinoa, Brown Rice and Rye are aggravating grains.

Almonds, Brazil Nuts, Cashews, Chia, Filberts, Flax, Macadamia Nuts, Peanuts, Pecans, Pine Nuts, Pistachios and Sesame are aggravating nuts.

Egg yolk, duck, lamb, pork, venison and seafood are imbalancing.

Honey and molasses are fire aggravating.

Salted butter, Buttermilk, Hard Cheese, Feta Cheese, Sour Cream and Yogurt are aggravating.

Chili peppers, Ginger, Horseradish, Ketchup, Mustard, Lemon, Mayonnaise, Pickles, Salt, Sesame Seeds, Soy Sauce and Tamari Garlic and Onions are aggravating.

According to ayurveda, tomato is sour and warm, a fire aggravator as well, so as the hot, fire season arrives, watch out for big Italian meals with lots of onion garlic and tomatoes. Stick to the fire balancing foods and avoid the aggravating above.

Learn more on how to eat correctly for your body type and for the season. Dr. D.K Mishra, Ashta Vaidya, one of the most advanced ayurvedic healers, is conducting a course at Merrily Farms June 16-17-18 2006. DETAILS

Ecuador Real Estate: Now You Can Cry or Maybe Not

Sometimes a photo gets taken that you could cry over.

Not here. The greatest way to achieve financial freedom is to be able to earn anywhere! Ecuador is so full of export opportunity that Merri and I get excited enough to model the goods. Here we are at a sweater factory where really great sweaters are exported back to the US at about $17 bucks. I was showing the group this little winner, a hat with a scarf and hand warmer attached! Made in school colors this sells at northern, school football games like hotcakes.

Join us at our next Super Thinking – Super Spanish course. See real estate for sale. Inspect the great markets as you learn to peak Spanish. DETAILS

Until next message, may all your tears be ones of joy from good health wealth and happiness!