Saturday Q & A

by | Nov 27, 2010 | Archives

Here are our Saturday Question and Answers.

#1: Question on multi currency investing.

#2: Question about China and Russia cutting out the greenback.

#3: Question about renting in Ecuador.

#4: Comment on Super Thinking Spanish.

#5: Question about TSA pat down and XRays.

#1: Question on multi currency investing.. Hello,  I got your multicurrency course last year but this year the JGAM conservative strategy seems to be providing minimal income – only 4% return and after fees only 2%.  What strategies are you suggesting right now that will provide decent returns without too much risk? I have $100K to invest. Thanks

My Reply:  Because there is no magic bullet, yesterday I started a series on investing and terror.

This message pointed out that there are three ways that investors are being screwed.

Inflation is ruining the purchasing power of our wealth.

Western banks are keeping the money they have and the cheap money that the government gives them.  They invest it for more and keep the profits.  With this cheap government money they do not need deposits so traditional safe investments (dollar and euro bonds and CDS) don’t earn enough to protect against inflation.

Trading down keeps inflation down statistically… but means that your income and savings really buy much less.

This means that there are not decent returns available without embracing risk.

The best bets with maximum safety are a spread of bonds in a variety of emerging countries.

Since $100,000 won’t enable you to have a good spread emerging marker bond funds are probably a better bet.  Here are  three top performing funds in this sector that US investors can invest in. Shown is the fund’s name… its code and its performance for the last three months.

GMO Emerging Country Debt III –  GMCDX  – 12.43%
Invesco Emerging Mkt Lcl Ccy Debt Y – IYEMX – 12.35%
Morgan Stanley Inst Emerg Mkts Debt I  – MSIEX – 11.92%

#2: Question about China and Russia cutting out the greenback. Good morning gary.  Have you seen this article about China and Russia cutting out the US dollar?  What the the implications for the buck and , more importantly, the reprecussions for the U.S.?

The article in the China Daily News said:  St. Petersburg, Russia – China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

“About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

My reply: This is one more step in the continual 40 year decline of the US dollar.  This will increase inflation and cause imported goods to cost more as the US dollar falls. The solution is to invest out of the US dollar or even short the US dollar as I have been doing and writing about for many decades.

My report “Borrow Low Deposit High” can help develop a multi currency mentality as well as portfolio.


#3: Question about renting in Ecuador. You indicate that it would be proper for individuals to rent before buying in a location in which one is not familiar.  Could you, maybe in your Saturday Q&A, review what the rental market is for a one to three month rental in various locations around Ecuador? Thank you in advance.

I contacted numerous contacts across Ecuador to find out about renting in these areas.

Renting Reply from Bahia: Hi Gary, Yes we have a number of rentals and run from $100 to $800 per month.
The bridge opening was huge. Thousands of tourists and all in fun with no problems.

Renting Reply From Salinas:  December through April is high season in the Salinas area, with rentals at almost 100% occupancy, so it is good to plan well in advance if you are planning to visit in that time frame.  Off season it is usually possible to find a good rental with short notice.

Two properties on the market right now are a brand new, fully furnished 2 bedroom condo at our ocean front Spondylus 2 complex.  The owners purchased it with the intention to use it as a rental, but that doesn’t mean that they cut corners on the furnishings.  There are stainless appliances, custom made hardwood bedroom furniture, hardwood dining room set and sectional seating in the living room with a 32 inch flat screen TV.  The complex has a large pool, jacuzzi, bbq area, sauna and gym.  The unit is listed at $800 per month high season, with discounts available for off-season or long term rentals.

Another great rental is a one bedroom cottage in Ballenita.  It is just a few blocks from the beach on a property that has a huge social area with a pool and bbq area.  The first floor of the cottage has a kitchen, living room and dining area.  The second floor has the bedroom and bathroom.  The cottage has just been refurbished.  It comes furnished, with a/c and Direct TV.  The monthly rate is $650.

For those looking for longer term rentals, we frequently see nice houses just a block or two from the beach renting in the $300 per month range with an annual lease.

Rental Reply From Puerto Viejo: I know of at least three apartments in Crucita and several in Portoviejo.  Prices go from $200 to $500 a month depending on the location and size of the property.

Rental Reply From Cuenca: That’s going to be tough. Short term rentals are not plentiful and are hard to find. However let me do some digging and see if I can come up with a few to highlight. AND it will be important to state up front that by the time they are reading the article the property is unlikely to be available. They will simply be representative of the kinds of things that come on the market from time to time. A year long rental is a bit easier to come up with.

Rental Reply from Quito: I can provide a bit of help as I recently did a web search of available rental properties in Ecuador. There are ten links that have rentals such as

WE help our Premium Ecuador Living subscribers find rentals all over Ecuador and have numerous rental contacts and links .  Learn how to subscribe here.

#4: Comment on Super Thinking Spanish: Hi Gary. Good morning to you, I was reading your Spanish, I recommend to buy one of many courses that they have to learned the second language I’m sorry for recommended because you have a errors in the spelling,this is my suggestion,also thank you for all the information that you has been sending to me regarding how you can do the investments in my country.

My reply: Jorge, You have many errors in your English… but I congratulate you as you are communicating which we believe is what is most important.

Yes after four days of teaching… though our students can already communicate in Spanish…. where most people give up because they do not learn after months…. they make some errors.

So what?

If you wish perfection then you should stop communicating in English as your English has many errors.

Our course is based on the importance of rapid communication not perfection and I believe that if you think about it… you would agree… getting started is more important than being perfect to begin.

Regards, Gary

Learn more about our Super Thinking Spanish course where you can learn Spanish in four days. Click here.

#5: Question about TSA pat down and XRays. The airline situation is a mess right now. There is increasing evidence from experts that the electronic screening methods could very possibly be a health risk when looking at it from a long term stand point. There have been so many things over the years that were said to be safe and then new evidence would point that what was stated as initially safe becomes unsafe as more time and data comes in. So basically one is rolling the dice when going through the electronic screening methods. Of course it’s stated you can have the option of having your body physically fondled instead.

A movement is starting, which I’m sure you have heard about that is encouraging people to boycott flying if at all possible. I feel the same way. I use to fly all the time, but now because of all the things stated above, I will not fly unless it’s an emergency. It’s just not worth it anymore.

I am seeing more and more people talking over the internet that they had intended to move to another country, but now with this huge flying problem, they have changed their mind. Who wants to commute back and forth between and U.S. and other countries having having to deal with these hassles and health issues?  With all this in mind, is there any other method you know of where you could reasonably get back and forth to Ecuador on a regular basis without going through these problems mentioned above?

Your response would be appreciated on this.

Another wrote: My best wishes to you and family on this this day that for sure is full of reasons to be thankful.  Gary, I’m a loyal reader of your daily E zines and highly value your opinion but I’m no sure if I missed any articles on the new TSA  airport security procedures, have you written anything on this subject?  Since you travel often, I like to know if you care to share your take on this matter. If one wants to get on an airplane there are only two choices: a body scanning machine that emits a dosage of radiation so small that they claim should not cause any harm or body search that some people say very invasive.  Would you care to share your approach?  Please give Merri my regards.  Gratefully yours.

My reply.  On this issue… I feel this is much to do about nothing in the little picture. I just flew to and fro across the US last week and nothing different happened.

I am sort of tickled that the TSA is doing this though, because in the big picture this extreme forcefulness has the potential to get so many voters so really angry that they really will force some change.  Let’s not forget Honest Abe Lincoln’s quote… “The way to get rid of a bad law is to enforce it strictly”.

Already USA Today is running articles about the companies who build these machines having spent so much on lobbies.  Another USA Today article suggests that Americans are increasingly favoring the Tea Party, which I think is in part because of this ridiculous regulation that I suspect is more about making money for scanner makers than about increased security.

I am no security expert, but my study of history indicates to me that when people give up their basic human rights for security they give up both. A certain amount of personal space is certainly a human right and pat downs like this violate those rights in my opinion.   That’s the big picture.

In the small picture personally… no XRays for Merri or me. If you have read our reports for some time you’ll know that I was dosed with radiation in the Columbia River and both Merri and I were radiated during the Chernobyl accident. We won’t even let dentists Xray our teeth… which sadly means most US dentists can’t or won’t even clean our teeth. Thank God for Ecuadorian dentists who will.

Re the pat down.  I find 80% of the TSA employees helpful polite and I think they are diligent in their duties. Like in any organization there is that pesky 20%  who have refined the art of making others uncomfortable.

Odds are I won’t ever have to have a pat down and if so, odds are four to one I won’t have to face one of those nasties.

Should I be so unlucky despite the odds in my favor… should  some guy get his jollies fondling a 64 year old guy… then that’s his problem not mine.   I have had customs people hassle me before and the way I handled this was to complain  to my Congressman. He managed to get an internal investigation which at least I have the satisfaction of and at least put my complaint on record.

I would insist in an exceedingly polite way that the person doing the pat down put on a new set of gloves.

In the practical picture, right now flying is the only efficient way to get to Ecuador.  If you fly from or through the USA you face the risk of having to make this option.  This is reason enough for some people to choose to leave the USA.  Others are choosing to stop flying.

One reader wrote: Who wants to fly to Ecuador and put up with this?

Personally I won’t let this process wear me down.  I’ll grin… bear it… remember Abe Lincoln… keep letting my representative in Congress and the airlines know and always be super polite but also will stand my ground if they become too arrogant or forceful.  Nothing a lazy person hates worse than the words. ” SIR, PLEASE let me speak to you supervisor”.

Until some change comes along every person has to decide… flee, fly or not and if you choose flee… you’ll have to risk of a pat down or Xray at least once for now.


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