Plus China’s inflation creates a greater risk for stagflation in the Western world. Stagflation… inflation during a recession, is the worst economic scenario of all. Normally stagflation is not much of a concern. Recessions reduce demand… create unemployment and stop buying which stops inflationary trends.
Photo from New York Times article on China’s inflation quoted below.
In our modern global economy the risk of stagflation is greater. North America could have a recession but… the growth in emerging markets… especially the huge markets of China and India could create enough demand that prices keep rising for food… oil… construction materials and such.
This would create the worst imaginable of conditions of… a hugely indebted nation with little ability to borrow more to stimulate the economy or protect the financial system… increasing unemployment… and rising prices.
This inflation risk is real and it is here. An April 17, 2011 New York Times article entitled “Inflation in China Poses Big Threat to Global Trade” by David Barbosa says: As the United States and Europe struggle to get their economies rolling again, China is having the opposite problem: figuring out how to keep its revved-up growth engine from generating runaway inflation.
The latest sign that things were moving too fast came on Sunday, when China’s central bank ordered the biggest banks to set aside more cash reserves.
The move essentially reduces the amount of money available for loans, and is an attempt to cool down the economy. It follows the government announcement on Friday that China’s economy was growing at an annual rate of 9.7 percent, by far the strongest performance by any of the world’s biggest economies.
Because China is now the world’s second largest economy, after the United States, and because the country has been a leading source of global growth during the last two years, money problems here can reverberate from Wal-Mart to Wall Street and the world beyond.
High inflation endangers China’s status as the low-cost workshop for the world. And if the government’s efforts to fight inflation cause the economy to stumble, that will cloud the outlook for international businesses — whether multinationals like General Electric or copper miners in Chile — that have been counting on China for growth.
Inside China, inflation also poses a threat to social stability, a particular worry for Beijing, especially since authoritarian governments in North Africa and the Middle East have become the focus of popular uprisings.
For example, housing prices continue to climb even though Beijing has long promised to curb the property market and to spend billions of dollars over the next few years on affordable housing.
The average apartment in central Shanghai now costs more than $500,000. Even in second-tier cities like Chengdu, in central China, the price of a typical home costs about 25 times the average annual income of residents.
Gasoline prices have also jumped sharply, in line with global oil prices. As the world’s largest car market, China’s demand for fuel is soaring, and gasoline prices are close to $4.50 a gallon, up from $3.82 a gallon in late 2009.
Rising food prices, meanwhile, are showing up in various ways — including higher prices at fast-food chains, like Master Kong, which in January raised the price of its popular instant noodles by about 10 percent.
There are a number of ways to protect against inflation and stagflation. One way to is invest in multi currency equities and especially the same emerging markets that create the threat. During inflation… shares tend to really rise.
However we cannot wantonly just jump into any emerging market. The Chinese market for example is overheated.
We must choose the correct markets with care… because there is always something we do not know… especially in emerging markets.
This is why seeking value is so important. Value is the harmonious aspect of existence that wishes to fill every void. Value is the ecstasy that harmonizes away the agony of imbalance. Value means you are buying what is NOT in demand at a price lower than the object’s or share’s worth.
This is why once a quarter we look at an emerging equity market value analysis by Michael Keppler.
If you are a new subscriber learn about Keppler Asset Management here.
Keppler’s latest emerging market value analysis for the first quarter of 2011 says:
After closing down in both January and February, Emerging Markets stocks recovered again in March.
Last quarter, the Morgan Stanley Capital International (MSCI) Emerging Markets Total Return Index (December 1988 = 100) gained 0.7 % in local currencies and 2% in US dollars.
However, due to the strength of the Euro versus the US dollar, the Index lost 3.5% in Euros.
In the last fifteen months, the Index was up 14.8% in local currencies, 21.3% in US dollars and 22.6% in Euros.
The Euro gained 5.8% versus the US dollar in the first quarter and finished at 1.4191 USD/EUR compared to its year-end 2010 level of 1.3416.
Among the three regional indices, Asia (+0.6%) and Europe, Middle East and Africa (EMEA +3.1%) advanced, while Latin America (-1.1%) declined.
In the last fifteen months, Asia is up 15.3 %, EMEA 22.6 % and Latin America 7.8 %. Performance numbers are in local currencies unless mentioned otherwise.
Twelve Emerging Markets advanced and nine markets declined last quarter. The three best performing markets were Russia (+9.5%), Hungary (+8.4%) and the Czech Republic (+7.6%).
Egypt (-21.3%), Peru (-13.6%) and Chile (-5.7%) fared worst last quarter.
In the last fifteen months, all markets but Egypt were higher. The biggest winners in the last fifteen months were Thailand (+47%), Peru (+32.5%) and Colombia (+31.7%).
Egypt (-6.7%), Brazil (+2%) and the Czech Republic (+6.6%) performed worst since the end of 2009.
There was no change in our performance ratings last quarter. The Top Value Model Portfolio contains the nine national MSCI markets Brazil, the Czech Republic, Egypt, Hungary, Poland, Russia, Taiwan, Thailand and Turkey at equal weights.
According to our performance ratings, a combination of these markets offers the highest expectation of long-term risk-adjusted performance.
The following table shows how the Emerging Markets Top Value Model Portfolio compares to the MSCI Emerging Markets Index at the beginning of 2011 based on selected asset and earnings valuation measures:
SELL CANDIDATES (Low Value) Chile India Indonesia Korea.
NEUTRALLY RATED MARKETS China Colombia Malaysia Mexico Morocco Peru Philippines South Africa.
Inflation is with us and the risks of stagflation grow. Selecting good value stock markets is the first step in selecting good equity investments that can help you prosper despite these economic distortions. You can find some extraordinary shares in any markets and increase your odds when you look in markets that offer good value.
Prosper From Forces of Inflation
Join Merri and me as we look at ways to prosper from the forces of inflation.
International Club 2011-12 Membership special until May 7, 2011 $1,499. Enroll here.
Inflation is here and the US dollar will fall. This fact is conformed in an April 12, 2011 Wall Street Journal article by Cynthia Lin “Inflation Concerns Weigh on Treasurys”. Here is an excerpt: Worries that the central bank may be falling behind the curve on inflation weighed on U.S. Treasurys on Monday, even after a senior Federal Reserve official signaled that interest rates could stay low for longer.
The prospect of $66 billion of note and bond auctions also dragged prices lower, strategists said.
“The bottom line is that the current perception has subtly shifted toward the view that global central banks are in monetary tightening mode,” said Andrew Wilkinson, senior market analyst at Interactive Brokers. “Even though the Fed appears to be nowhere near that point, U.S. yields have been dragged higher by surrounding fears of inflation.”
Highlighting those fears, the 10-year breakeven rate—which measures the difference between 10-year Treasurys Inflation Protected Securities, or TIPs, and nominal rates—hit 2.655% on Monday, the highest since May 2006. That signals the market’s annual inflation expectation over the next decade.
As other central banks begin to tighten—including the European Central Bank, which raised rates by 0.25 percentage point Thursday—the fear that U.S. officials may be lowering their guard against global inflation has been a headache for bondholders. It has been especially troubling for investors holding 30-year bonds, those most vulnerable to inflation eroding their value.
Government bonds were also under pressure from the prospect of supply.
The Treasury is scheduled to sell $66 billion in notes and bonds this week, comprising $32 billion in three-year notes, $21 billion in 10-year notes and $13 billion in 30-year bonds.
With a government shutdown averted, “the focus is back on how well these auctions will go and who will participate in the face of what appears to be future inflation,” said Kevin Giddis, president of fixed-income capital markets at Morgan Keegan.
Still, the policy debate underscores an increasing focus on inflation.
This means that while the US government continues to borrow to spend, other governments are cutting back… a sure sign of US inflation and a weakening greenback.
We consider this risk so high that we have taken the unusual step (the first time in our 43 years of business) of setting our 2012 Spring schedule.Then we created a new option so you can participate in all these seminars and course into 2012.
There are five ways to combat the destructive inflationary forces that will raise havoc with your purchasing power.
#1: Multi Currency Investing through US brokers and bankers abroad.
#3: Real estate.
#4: Living in lower cost zones.
#5: Having your own micro business for extra earnings, freedom fulfillment and fun.
We have specialized for over four decades in helping our readers excel in these five inflation beating opportunities.
The big benefits of belonging to the International Club is the power of repetition, updates and international friendships. As a club member you become friends with other members as you meet again and again.
International Club members are invited to our Florida home during the winter seminars.
Your first savings is $7,690 in 2011 and 2012 just on waived seminar fees.
As you will see below you can attend 11 Florida & North Carolina seminars that would otherwise cost $9,189. The $1,499 membership saves you $7,690.
Join us and our International Club 2011 – Spring 2012 and enjoy this savings plus much more.
The International Club brings together experienced, like minded souls, who take a positive view and think outside the box..in a constructive…thoughtful way.
Merri and I are in our 43rd year of organizing courses, seminars and newsletters about international and quantum lifestyles. The importance of this sharing…by like minded souls…was reinforced when a delegate from a course sent an email that said:
My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group. You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon. You made us all feel so welcome and cared about. You were so kind to make arrangements for a ride with the other delegates from the Charlotte airport. They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it. Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.
Thanks to you I now have new hope and a new direction to move forward in my life. Thanks to you I am so ready to move to Ecuador and begin a new life. I just have to figure out what I am going to do and how to do it.
I know by attending your classes and conferences that through education and due diligence I will make the right choices.
This delegate’s comments about “belonging and feeling like a brother” to the other delegates is a wonderful refrain we have heard from our readers, year after year.
21 years ago Merri and I created a way that readers can join us to be immersed in a year-long learning program through our International Club.
The ideas behind this program began all those years ago in Vienna, Austria while we were conducting a course there. One of our older delegates, had some sort of attack. The first fear was heart trouble. Several delegates took him to the hospital. Others stayed with him there. I don’t think that delegate was alone for a minute!
What impressed Merri and me was that no one asked the delegates to help this man.
The friendships of delegates sharing many courses had just grown so strong that it was a natural reaction, just as if a family member was ill. Fortunately, it was only travel fatigue and the delegate didn’t miss a session of the course!
When you join our International Club 2011- Spring 2012 you become part of a special family. The very first member to join the club all those years ago wrote, Thank you for the enjoyable and informative courses. I am pleased to be part of your international family and look forward to continuing my education at the next course.
His feeling struck a familiar chord. It has always been one of my greatest satisfactions to see how much fun delegates have getting together, sharing information and making friendships.
These courses somehow draw together like-minded souls. For this reason some delegates come back again and again. They come to learn, but also to be with their many friends made at the courses. When like-minded souls get together again and again to discuss a common purpose, magic happens! I can’t explain it in any other way-but it is true.
In a way our meetings are almost like family reunions. Perhaps it is getting together and reflecting on what has been said and what has been happening.
Learning with those who are also interested in the world creates thoughts that multiply the value of what we gain. This is hard to describe but results are most powerful and wonderful! This is to me is as important as the great financial benefit of attending many of our courses.
See our 2011 – Spring 2012 schedule below.
We started and have continued this program for 21 years because there are wonderful benefits from having repeat delegates at courses. Having repeat delegates makes the whole course somehow more exciting for all. Being a repeat delegate makes it easier to make and keep wealth and to lock in the knowledge you gain. It’s an exciting lifestyle. We have fun, gain adventure, discovery and friendships and share ways to improve our health and wealth!
Normally we only accept membership at the end of each year… but due to the unusual risk we see now, we added this new option to club membership that entitles you to all US courses in 2011 and the Spring of 2012… in the cool Blue Ridge of North Carolina and in Historic Old Florida.
The next saving is Seminars via MP3 (or disc) and one Ecuador tour fee is waived as well.
You’ll see a very busy 12 month schedule below. Very few club members actually attend every course and tour… but certainly some attend almost all of them!
If you attend even a few of the courses, you gain considerable savings… PLUS we record the investing and business seminars so you can have the course downloaded on your computer to listen on MP3 or on disc when you cannot attend in person.
This means that you stay in touch with all the business and investing ideas we develop at each of the investing and business seminars you cannot attend.
Here are the courses and tours where your seminar or tour fee is waived. Then see more savings below.
May 7-8 Imbabura Real Estate Tour ($499 or couple $749)
May 9-10 Shamanic Mingo Tour ($499 or couple $749)
May 12-13-14 Cuenca Real Estate Tour ($499 or couple $749)
May 17-18-19 Coastal Real Estate Tour ($499 or couple $749)
June 24-25, 2011 International Investing Made EZ, Jefferson NC. ($499 or couple $749)
June 25-26, 2011 International Business Made EZ, Jefferson NC. ($499 or couple $749)
International Club members are invited to our farm during June, September and October seminars in North Carolina.
June 16-17-18 Coastal Real Estate Tour ($499 or couple $749)
Sept. 8-11 Learn Spanish in 4 Days, Seattle, Washington ($749 or couple $999)
Sept 15-16-17 Coastal Real Estate Tour ($499 or couple $749)
September 23-24-25, 2011 Investing & Business Beyond Logic, North Carolina with Blaine Watson ($499 or couple $699)
(Blaine Watson teaching delegates and International Club members at a previous seminar.)
Oct. 7-8, 2011 International Investing Made EZ, Jefferson, NC. ($499 or couple $749)
Oct. 8-9, 2011 International Business Made EZ , Jefferson, NC. ($499 or couple $749)
November 3-6, 2011 Learn Spanish in 4 Days, Mt. Dora, Florida ($749 or couple $999)
January 12-15, 2012 Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)
Feb. 10-11, 2012 International Investing Made EZ. Mt. Dora FL ($499 or couple $749)
Feb.11-12, 2012 International Business Made EZ, Mt. Dora FL ($499 or couple $749)
March 8-11, 2012 Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)
Schedule subject to change. Always check final schedule at www.GaryAScott.com/catalog
International Club 2011 Membership $1,499. Enroll here
There is even a third saving: $897 more!
When you join the club, I’ll email you our online course “International Business Made EZ”, a $299 value, plus four bonuses. You receive the bonus course “Self Fulfilled – How to be a Self Publisher”. which also has a $299 value.
Plus I email you the bonus course “Tangled Web – How to Have Your Own Web Based Business” which also has a $299 value. Because our self publishing business has become totally online, I am send you this extra course free as I think it will help you have greater success.
In addition you’ll receive the 52 lesson course on how to create your own website using sitesell and finally I include an internet video on how to set up a website presented by our webmaster David Cross.
These courses are valued at $897… in addition to all the US seminars you can attend.
You may well wonder why I would make such an offer and ask why the cost is so low?
Let me answer this question frankly and from the heart. First, it helps us do a better job for you. We feel greatly enriched when we can really help our clients improve their lives. We have learned through years of experience the best way to do this is to meet with you regularly. We can best help you learn how to improve your health and wealth through continual expansion of knowledge.
Second, we gain enormous fulfillment from the many friendships we form through the years. Our friends have enriched our lives tremendously. Let me explain this in more detail.
As a member, you will be part of our international family that meets intensively over the next year to examine ways we can make our lives better. Our goal is beyond just having money. Our goal is to have quantum wealth… good health… wealth and fulfillment through service.
Though we give all course delegates our very best, we cannot help but to do a better job for those who come again and again. As we meet often; your particular wants, needs and desires become clear, and it is easier for us to help you find the right direction.
Another phenomenon is that repeat delegates help each other! They get to know one another, help each other learn, share their insights, make contacts, become friends and gain more wealth.
The fourth savings: Lifestyle for Two.
There is still more!
We have learned at our courses that many repeat delegates were couples.
We want couples! As a member of the program, you are entitled to bring another person to every single course or tour. The cost for that extra person will be ZERO! You can bring whomever you wish. Bring your spouse, a friend, son or daughter, partner, accountant, adviser. You can bring the same person each time or a different person, whomever you choose to accompany you. (Accommodations and air fares relating to the courses are not included for members, delegates or their guests.)
Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year?
We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!
The fifth savings: You gain Ecuador tour savings as a member of the International Club.
International Club members can benefit in Ecuador in the mountains or…
on the sea. Delegates and International Club members on tour at Land of the Sun Inn.
View shot by an International Club member of real estate for sale on an Ecuador Pacific real estate tour.
The International Club offers this benefit… as a gift in Ecuador from the organizers of Ecuador Discovery Tours.
The International Club fee is normally $1,799 yet during this Spring offer which ends May 7, I have reduce membership to $1,499. You save $300 more.
Take for example if you plan to attend our Super Thinking + Spanish, $999 for a couple and one International Investing and Business program, the normal cost would be $1,998. International Club members attending just these two programs would already save… plus could attend all the other Florida and North Carolina seminars plus receive $897 worth of emailed courses.
Our seminars and the Ecuador tour schedule is shown above. You can attend all the Florida and North Carolina seminars and choose to accept an Ecuador’s savings. Morya Ecuador Discovery SA has agreed to let International Club members attend one Ecuador tour in the schedule above for just $40 per person per day internal transportation cost.
This is a savings of up to $599.
I invite you to be a member of the International Club which allows you and your guest of your choice to attend all of these courses and tours.
Savings #6: YOU SAVE EVEN MORE if you take a Galapagos Cruise.
We work closely with Haugan Travel which have expanded their fleet so club members can enjoy a Galapagos cruise for as little as $509 per person.
Haugan Cruises has added three new vessels so they have a broader range of cruises to suit all budgets. They now have 5 vessels and are offering several special introductory tours. This creates special savings up to $1,000 for all our readers and provides club members an extra savings of up to $554 more…. a total of $1,554 saved.
Savings #7: Membership is normally $1,799 – save $300 more. International Club 2011-12 Membership $1,499 until May 7.
Add all the savings together!
You can calculate the savings as our schedule of all 2011 courses.
Florida & North Carolina seminars you can attend or receive in an MP3 file worth $9,189.
emailed courses sent to you worth $897.
Ecuador Tour Savings up to $599.
$300 membership discount until May 7, 2011.
Total Savings from your $1,499 club membership fee.
You Gain $10,985 of benefit for just $1,499.
Plus more if you take a Galapagos Cruise.
Lock in savings!
Here is one final benefit. When you enroll… we automatically lock in this low fee for next year so your savings are automatically renewed in 2012 and 2013 at $1,499. Of course if you choose not to renew, just simply cancel membership at no cost.
Let’s beat inflation. Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year? We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!
International Club 2011-12 Membership $1,499. Enroll here.