International Investments – Sneaking Up

by | Jun 5, 2006 | Archives

* International Investments – Currencies That Sneak Up

* Natural Health Tip – Toxins Sneak Up

* Ecuador Real Estate – Government Toxins Sneak Up

International investments can be like parts of the morning farm routine here that involve our hound dog Ma and our smarter than dogs chickens.

Each (the dog and the chickens) deems to ignore the other as though they do not exist, except when the chickens decide to graze on Ma’s territory which is divided by an invisible line near the front porch of our summer house. No one can divine this demarcation except Ma and of course the chickens.

Ma stands at point, stiff, tail straight out, glaring and daring. “Just try to cross the line,” she growls. The hens of course are casually sincere, grazing along acting as if they are not aware of what is about to emerge. Finally, they cross the magical border and Ma explodes. They scatter out of the sacred territory and once again all is well. Except the chickens never give up. For some reason, out of 250 plus acres, the grazing seems better in the small 5,000 or so square feet that is within Ma’s domain around the house. Rather than confront, they sneak in while Ma is not watching. See if you can see the hen in the background sneaking up on Ma while she is looking the other way. I had a hard time taking this shot because I was shaking so hard with laughter.

On the subject of borders and sneaking, we have been looking at the benefits of investing in emerging currencies so we should be aware that the Mexican peso credit spread to the US dollar has been sneaking up for some time.

This is due in part to general disturbances in the market caused by election jitters prior to the July 2 election. The leading candidate is believed to be the best for the Mexican economy and has had a comfortable lead according to polls. The rub is that leftists have recently gained increasing popularity in the polls. Their election promise is that Mexicans with the lowest income should have a 20% increase in wages. They have not explained how to pay for this and investors believe this could lead to rising inflation that could push the peso down.

The 10-year yield spread to the US dollar recently reached 400 bp. This means you could earn 4% more on a ten year Mexican government peso bond than on a ten year US government dollar bond.

Not everything about the peso is rosy. If US economic problems cause the US to buy less Mexican goods, the peso could fall. If the US dollar weakens, the peso could drop. Mexico’s stock market is on Keppler’s low value sell list. If the Mexican stock market drops, this could bring the peso down as well.

There are lots of ifs and coulds but the known is, you earn about 4% more per annum with the Mexican peso than the greenback. So a diversification of some dollars into the peso makes sense.

Here is a comparison of Keppler’s analysis to compare with China and India, two currencies we reviewed last week.

Country Price to Book Value Price to Cash Flow Price to Earnings Dividend Yield Return on Equity
Mexico 3.26 10.1 17.1 1.62 19.1
China 2.05 6.9 12.2 2.66 16.8
India 4.39 15.2 20.2 1.25 21.8

Watch for the release of consumer prices on Thursday (June 8, 2006). Other peso fundamentals are not bad (though not the best). Mexico has a small trade deficit (-4.9 billion) and current account deficit (-5.4 billion), but strong foreign reserves of $75.6 billion.

Also keep an eye on Mexico’s oil sector. Mexico’s large oil reserves give the peso some long term strength.

Here is a good article in the Chicago Tribune: “Analysts predict that Mexico’s oil reserves, second only to Canada’s in filling up U.S. gasoline tanks, could dry up within a dozen years. Meanwhile, Pemex lacks sufficient money to repair antiquated pipelines and search for more deep-sea deposits.

“One solution would be outside investment. But almost all Mexicans oppose loosening their constitution to allow private or foreign interests to break the government monopoly and hold a stake in the nation’s oil.” You can read the entire article at The Chicago Tribune

Look for short term emotional conditions that drive the peso’s interest rates up. Investments made at that time are likely to stay closely related to the US dollar but with much higher yields.

There could even be a Borrow Low-Deposit High play. You can borrow dollars now in the 5% range and invest in pesos at 8.93%.

For example, a US treasury bond that matures in 2013 yields about 5.08%. A Mexican Bono that matures the same year yields 8.93%. You can borrow US dollars from Jyske Bank right now at 5%.

If you invested $50,000 and borrowed $100,000 to invest in this bond, your return would be $13,395 (8.93% of $150K) less $5,000 interest (5% on the $100,000 borrowed). The $8,395 income represents a 17.8% return.

If the dollar falls faster than the peso, extra profit would be made. The risk of course is that the peso falls against the greenback in which case that extra profit could be lost or worse. Do not risk more than you can afford to lose!

Enhance great profit potential with a diversified portfolio of emerging currencies through a MultiCurrency Sandwich. Learn how at

Learn about investing in emerging currencies, gold, silver, Ecuador, import-export, overseas markets and more. Join Merri, Thomas Fischer from Copenhagen and Steve from Ecuador 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. Learn more about Ecuador import and export from Steve. Our May course was overbooked and the September session is filling up fast. Our free accommodations are reserved on a first come first served basis so do not delay! Go to

Natural Health Tip – Toxins Sneak Up

Our bodies are bombarded daily with toxins that evolution has not prepared us for. Electromagnetic pollution, pesticides, preservatives and such are all brand new in evolutionary terms. When enough toxicity builds up, the body protects itself by forming mucus to dampen the body’s energy down. This buildup eventually hampers digestion. Bad digestion leads to all types of stress and dis-ease.

One way to keep the digestive fires burning through the sludge is with ginger and turmeric. Here is an enjoyable recipe that can help.

Ginger Healing Detox Tea with Turmeric. This recipe inspired by “The Seasonal Detox Diet”, by Carrie L’Esperance (Inner Traditions, 2001).

Here is a warming, detoxifying ginger-turmeric tea that is delicious.


2 cups water
1/2 teaspoon powdered ginger
1/2 teaspoon powdered turmeric
1 tablespoon panela, a natural sugar (buy in Latin section of the super market)
Juice of 1/2 lemon

1. Bring water to a boil, then add powdered herbs. Simmer for 10 minutes.

2. Strain tea into a mug, add sugar and lemon, stirring to combine. Drink warm.

Turmeric, a free-radical-fighting antioxidant-rich spice has many healing qualities. Some even say it is a defense against both cancer and Alzheimer’s.

Learn more about Turmeric in tomorrow’s message.

Turmeric and Ginger are two special ayurvedic foods. Merri and I spent weeks at Ayurvedic Clinics and dramatically improved our health using ancient, natural cleansing techniques. Not only did we gain better health, we gained great friendships with many medical ayurvedic doctors and chiropractors. During these times we met many special healers and a very special one is Vaidya K.S. Mishra who is a master healer in the eight avenues of ayurvedic healing.

This is why we are excited about our June 16-17-18 course here at the farm with Vaidya Mishra. He is a healer with immense healing knowledge to share. This course will be an experience that immerses you in naturally healthy surroundings, such as the pure water, clean air, silence, freedom from electromagnetic radiations, specially prepared food. Join us at Merrily Farms June 16-17-18 2006. For details go to

Ecuador Real Estate – Government Toxins

On the subject of imaginary lines, sneaking up and the build up of toxicity, what is this huge fuss about closing the US-Mexican border? Imagine trying to turn this enormous and great nation that was built on immigration into a gated community! Look how losses of freedom are sneaking up on us.

Not only is closing the border impossible, it conflicts with a basic tenet of economic growth. Open gates to the global community is good. Closing the doors on the free flow of ideas, people, commerce is bad. This fact has been proven again and again.

This fence across the border will do nothing but add one more layer to a system that is fencing us in! Has anyone thought about this?

This fence has the potential of becoming another huge waste of resources that further erodes the joy and benefit of living in the US. When will we ever learn?

First, we immersed ourselves in the fight against drugs rather than invest in making materialistic Western life more fulfilling so people are not as likely to want drugs. Billions that could have been spent on education, health, infrastructures have been wasted. Enormous erosions have been in our privacy. Piles of red tape have been added I our lives. Freedoms have been lost. Did any of this restrict the flow of drugs?

Then we began to battle terrorism. We became bogged in the Iraqi war. More (trillions this time) were diverted from education, health, infrastructure and things that might have helped resolve an age old dilemma. Even more freedoms have been lost. Do we have fewer terrorists that hate us now?

Last week a USA TODAY front page article says that now the government wants servers to save our email and web activity (child porn is the enemy this time). Will this reduce terror and child porn or divert more money from what really can help our nation as it increases more red tape and robs more of our freedoms?

Are the walls and barriers being built to keep others out or to hold Americans in? I get more and more readers writing me notes like the one below.

“Gary, In searching for a possible country in which to retire outside of the United States, I came across the ‘Economic Citizenship’ program that is currently offered/sold by the Commonwealth of Dominica. Dominica must not be confused with the Dominican Republic, which is an entirely different island country. Both island countries are in the Caribbean. A general overview of the Dominica Economic Citizenship Program can be found at”

I see a groundswell of Americans lining up, looking for other places to live. We must ask, will the futile process of trying to keep things that purportedly will destroy America’s rich lifestyles actually make the US an unbearable place to live?

I surely do not know the answer. Nor do I hold the solutions. I do know that having the option to live and earn makes life easier and better as it broadens horizons. This ability is the ultimate freedom.

Ecuador by the way is a very easy place to live and (if you desire) to become resident or a citizen.

Join us for our Super Thinking – Super Spanish course. Enjoy Ecuador and the sun! See real estate for sale. Inspect the great markets as you learn to speak Spanish. For details go to

Delegate Hunter Toole took this great shot his wife, Amy, and Ma lounging in the sun at the entrance of the inn, El Meson de las Flores. They came for a course and loved it so much they stayed over a month!

Until next message, good health, wealth, investing and earning wherever you choose.


Learn how to live and earn wherever you choose. Join Merri, me, Thomas Fischer and Steve at our next International Business and Investing Made EZ course in North Carolina. Steve will review how to earn with exports from Ecuador. This September session is already filling up fast. Our free accommodations are reserved on a first come first served basis so do not delay! Go to