See what Ginseng, Ecuador and the US Dollar have in common in this Q&A.
All questions this Saturday relate to inflation. This is good because inflation is here and it probably will grow worse.
#1: BRIC countries leaving the dollar standard.
#2: What’s up with Ecuador prices.
#3: Why Ginseng?
Question #1: Are BRIC countries leaving the US dollar standard? A reader wrote: Hi Gary: If you have been following the Meeting of the BRICS (Brazil, Russia, India, China and South Africa) the New Economic Power Houses, in the last few days, they have voiced their concern about the Dollar being the dominant currency. In fact, they have made it clear that the World Economic Order needs a new Monetary System.
If this happens what happens to all the dollar denominated investments? In particular, since Ecuador uses the dollar as its national currency, how will the country and its foreign investors be affected, if the Dollar is relegated to only a national currency? A concerned investor.
My Reply: This is pretty ancient news that a lot of countries no longer like the US dollar standard. They fuss and fume, but on the other hand, what is the solution? The bottom line… is that the USA is still a very stable democracy… it is the military might and is still incredibly rich. There is no other currency that can come close at this time to being the standard.
A global reserve currency has to be huge… and strong. No currency does that at this time so the dollar wins by default and inertia. Expect a slow departure from the greenback. Other countries will expand their reserves to hold more gold… and a basket of other currencies. The purchasing power of almost all currencies will fall… but at faster or slower rates.
The way to protect your purchasing power is with a multi currency portfolio.
Question #2: What’s up with Ecuador prices? Another reader wrote: You have confused me. Original updates tell of how inexpensive it is to live in Ecuador, and Cuenca especially. Today’s update tells of $24.00 per person breakfasts. I had planned on coming to Cuenca in Sept or October. Second thoughts are starting to infiltrate my mind with updates like the one I received today. Please shed more light on a retirees cost of living. You also indicate a $1,000 figure is now a $2,000 amount for average living. Please advise.
My reply.There are several problems here. First, we have nearly 5,000 pages at our website posted over the past 15 years. Many readers tap into old news at the site without looking at dates. Those who came with us to Ecuador 15 years ago have enjoyed incredible appreciation on their property.
Today… between inflation, the falling US dollar and a heavy immigration of expats creating enhanced demand on real estate… the low hanging fruit is gone. Yes, you can still live in Ecuador for $700 a month. Millions of Ecuadorians do. But life at that level is different than what North Americans are used to and not so easy to attain for gringos.
We used to say you could live well for $700 a month IF you owned your home and lived like a king for $1,000 a month. Those times have passed. To live like a king is more likely a cost of $2,000 a month.
Ecuador is not immune from inflation. The economy there is just starting from a lower threshold. You can still get better food… better accommodations…. better help…. better health care at much lower costs. Yet the cost of living is nowhere as low as before and we should expect it to rise. Inflation is global.
This is why we feature courses on how to earn anywhere in the world. Many who planned to live off Social Security or pensions may have to supplement that income before inflation once again subsides.
See more on how to have your own micro business below.
My belief is that the current greatest bargains are on the coast and the hotbed of activity (as this site has predicted for a decade) is in the Bahia area now that the bridge over the Chone Estuary is complete.
Question #3: Why Ginseng? Dear Gary, There is American, Korean and Russian Ginseng. Korean is quite strong and not recommended for women. American Ginseng grown in Michigan, Wisconsin, Minnesota is considered the best for women. The nutritional and healing properties of ginseng depend on the soil nutrition. Since it is the root that is harvested, how long does one wait to harvest the plant’s root? A year or 3? Is it sold by weight or by individual root? Do you have a photo of what the Ginseng plant looks like?
My Reply: One business sector that I believe will grow a lot in the years ahead is agriculture. Ginseng is one crop that benefits in two ways. First, it grows on north facing mountain slopes in North America which is still some of the least expensive land for sale in Small Town USA. Second, the demand comes from China, one of the greatest contributors to inflation. This means that as inflation rises… so too will the price of ginseng.
The price of ginseng as an agricultural crop will rise and fall and the price for good quality, dry ginseng will be different in seven or eight years which is the time it takes to bring a crop to harvest. Over the last five years, ginseng has been selling from $250 to $500 per pound. Price variance due to quality and the difference between wild and commercial ginseng is very substantial more than with most crops. Ginseng prices exploded up in 2007 when wild ginseng hit close to $1,000/lb for dried and woods-grown ginseng. Wild-simulated ginseng roots fetched $350 to $750/lb dried, depending on the age and quality of the root. This price trend is likely to stay and strengthen because China… the big buyer of ginseng is growing in wealth.
There you have it… Ecuador… beat inflation by moving to a lower threshold for inflation. Ginseng… a business likely to boom during inflation and multi currency investing… something we all should do to protect against the US dollar’s fall.
Learn more about investing in ginseng and Small Town USA. Learn more about multi currency investing. Learn more about living, investing and earning in Ecuador all at our upcoming June 24 to 26, North Carolina International Investing and Business Seminar.