Pivotal Week – Emerging Markets Value Update – Day 4

by | Jul 28, 2011 | Archives

Emerging markets grow in importance as we draw closer to a dramatic global social economic shift.

The change is taking place in part because the democratic process is working.

Yesterday’s New York Times article “Vote on Boehner Plan Delayed Amid Opposition” says: House Republican leaders were forced on Tuesday night to delay a vote scheduled on their plan to raise the nation’s debt ceiling, as conservative lawmakers expressed skepticism and Congressional budget officials said the plan did not deliver the promised savings.

The pushback on the bill was the latest chaotic twist in the fiscal fracas on Capitol Hill, as the clock ticked closer to Aug. 2, when the Obama administration has warned that the nation risks defaulting on its bills. The scramble to come up with a plan that could be put to a vote, now moved from Wednesday to Thursday, represents a test of Speaker John A. Boehner’s ability to lead his restive caucus. The expected showdown over the legislation is the culmination of months of efforts by Tea Party-allied freshmen and fellow conservatives to demand a fundamentally smaller government in exchange for raising the federal borrowing limit.

Many people in America want a smaller government and enough of their representatives are now demanding this… so this process could in the long run be good.  The question is how fast will there be a shift.

Whether this current change comes at a fast or slow pace it will come and there will be some pain… but not for those who adapt to the restructuring.

Keep in mind this is a process that has been going on now since 1971 when the US dollar was unpegged from gold.

One the subject of gold due to the purchasing power risks associated with the current socio-economic changes, we have interviewed Thomas Fischer JGAM Sr. Vice president about multi currency diversification and…

Thomas Fischer (right) and  Rich Checkan (left).

we also interviewed Rich Checkan of the precious metals dealers Asset Strategies International.

You can also hear both recent interviews on where to invest globally now.  Order here $9.99.

The Big Problem

The main problem however goes way beyond politics to the energy source of industrialization over the past 300 years. That energy has not just been gas but has been fossil fuels accelerating a shift of farmers from rural to urban and suburban environments.   As these farmers moved from the farm to the factory they dramatically improved their productivity at a very low educational cost.  Their enhanced wages increased their consumption.

The burst of increased affluence over the past several centuries has been fueled by cheap labor and fossil fuels.

In this era big business followed the path of least resistance wherever labor was cheapest in the world.  Manufacturing jumped from the US to Germany and Japan.  Then as labor costs rose in these countries the move was to Hong Kong… then to the Tigers (Singapore, Taiwan, South Korea and Malaysia).  Then there was a shift to China, Latin America, India.  Now places like Cambodia and Vietnam supply a lot of the really low cost labor.

As the world runs out of farmers and as the farmers left become connected, this cost of labor everywhere is rising.   More government… higher social costs and the rising cost of fossil fuel all have an impact to increase labor expense everywhere.

This is causing inflation in emerging nations as this chart from the Bloomberg Businessweek article “Slamming on Brakes Shows”


The rising emerging market interest rates  creates a current five point economic dilemma.

Point #1: The rise in emerging markets puts upwards pressure on interest rates everywhere.

Point #2: The rising rates pushes up prices in the emerging markets also creates inflationary pressures in the Western countries who buy so many of the emerging imports.

Point #3: Emerging market inflation reduces purchasing power of emerging currencies exactly when major currencies are losing purchasing power due to overburdening debt.

Point #4: Emerging market inflation is likely to slow exports which increases the need for emerging countries (such as China) to call in debt from the US and  Western Europe at a time when these countries are least able to pay.

Point #5:  Rising emerging market interest rates puts downwards pressure on emerging stock markets.

In the past, emerging markets were better valued than major markets.  This meant that one easy diversification was to reduce positions in major stock markets and increase positions in emerging markets.

The five points above and increased emerging market costs mean that we can wantonly just jump into any emerging market. The Chinese market for example is overheated.

However, 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 second quarter of 2011 says:

After recovering in April, Emerging Markets stocks gave up territory again in both May and June. Last quarter, the Morgan Stanley Capital International (MSCI) Emerging Markets Total Return Index (December 1988 = 100) declined 2.7 % in local currencies, 1.1 % in US dollars and 3.2 % in Euros. 

Year-to-date, the Index was down 2 % in local currencies, up 0.9 % in US dollars and down 6.7 % in Euros.

The Euro gained 2.2 % versus the US dollar in the second quarter and finished the first half of the year at 1.4499 USD/EUR — 8.1 % above its year-end 2010 level of 1.3416.

All three regional indices declined in the second quarter: Asia was down 1.2 %, Europe, Middle East and Africa (EMEA) declined 3.3 % and Latin America lost 5.8 %.

In the first half of the year Asia lost 0.5 %, EMEA gave up 0.3 % and Latin America 6.8 %. Performance numbers are in local currencies unless mentioned otherwise.

Eight Emerging Markets advanced and thirteen markets declined last quarter.

The three best performing markets were Chile (+6.1 %), Indonesia (+6.0 %) and Malaysia (+3.2 %).

Peru (-15.2 %), Brazil (-7.9 %) and Russia (-7 %) fared worst last quarter.

Year-to-date, nine markets were higher, eleven markets declined and one market was unchanged.

The biggest winners so far this year were the Czech Republic (+10.2 %), Hungary (+7.9 %) and Indonesia (+7.3 %).

Peru (-26.7 %), Egypt (-22.1 %) and India (-8.5 %) performed worst since the end of 2010.

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.

SELL CANDIDATES (Low Value)   Chile            India           Indonesia       Korea.

NEUTRALLY RATED MARKETS China        Colombia      Malaysia      Mexico         Morocco      Peru    Philippines     South Africa.

The economic emergence of poor countries is good. More people will have more wealth in the long run.  The political struggle to reduce debt in rich nations will also help.  An improved balance between the rich and the poor created through opportunity for all will enhance peace efforts and reduce the likelihood of terrorism, revolution and war.

Yet these positive evolutions are slow, often hard to see and keep in perspective.  Such macro shifts also brings pain for those who do not adapt to the change.

Seeing and embracing change are as hard as seeing into the future… but value is an easy way to stay in touch with evolution and is easier to see!   We thank Michael Keppler for these valuable statistics.


Join Merri and me at our next seminar as we look at ways to gain from the international economic shifts in the year ahead.

Enrollment details for our October 7-9 North Carolina Course click here.

We have started a program to help our readers create their own micro business working with these businesses as referrers, dealers and distributors.

What a match… tens of thousands of readers, many wanting to earn globally… meeting some great… really unique global businesses tied together with our communication system that can bring all this: training…. communicating and networking.

We are starting with these five businesses first.

#1: Jyske Global Asset Management  (JGAM)
#2: Bio Wash
#3: Candace Newman Essential Oils
#4: Roses
#5: Ecuador Imbabura Export Products

After attending our International business and investing seminar on October 7-8-9, you will be qualified to enroll for referrer, distributor and dealer programs above and any others we develop. 

Enrolling in any of our online business development courses and attending one seminar provides full qualification to apply for all programs we provide for a year.

I’ll explain the first specific way you can tap into greater power for everlasting health and wealth in a moment.

We provide three e-courses that can help you develop your own micro business that we designed to help you earn anywhere you live in the world.

International Business Made EZ ($299)

Self Fulfilled – How to be a Self Publisher ($499)

Event – Full How to Earn With  Your Own Seminars ($349)

We have started the beta program, and the good news is that we are not charging a penny more more.  Our International Business Made EZ online course and our International Business Made EZ seminars remain the same price though we’ll now offer subscribers an entrance to doing business with many turnkey businesses.

The overall service can bring you the following benefits:

#1: Connect you via our our online course “International Business Made EZ” to here and now specific business opportunities.

#2: Keep you in touch with other readers in the program, share business tips, ideas contacts and even website support in some instances.

Our first turnkey business program is Jyske global Asset Management because our activities as publishers has a synchronicity with Jyske and JGAM.   We have been able to combine our training, communications and lead generation abilities with their financial organization.

Business is always a little more complicated when it entails financial products so we have created a beta program to develop this system.

A referrer does not have to be a registered as an investment adviser but JGAM does have a due diligence requirement. JGAM will also expect a certain amount of referrals per year though this amount has not been determined… hence this beta offer.

JGAM pays a percentage of their fee to the referrer up to a maximum 25% of their fee. This not only offers an excellent income generating opportunity but creates a potential long term income stream because JGAM keeps paying the fee as long as the client remains a client. Fees are paid on a quarterly basis.

There is also potential for growing long term income because JGAM pays the referrer based on the total assets under management.  If a referred client makes additional payments, the referrer will be paid on the total amount.

For example if an referrer refers a client who invests a minimum $100,000 and the annual fee is 2%, the referrer earns $500 per annum basic fee (as long as the customer remains with JGAM)… plus if the assets grow either through portfolio growth or added deposits… so too does the referrer’s fee.

We have set our first training JGAM training session for October 10, 2012.

This program will allow subscribers to any of our  online courses who have attended an International Business Made EZ seminar to become referrers for JGAM.

We have been working with Jyske Bank for over 20 years and Jyske Global Asset Management, a Jyske Bank wholly owned subsidiary. We started talking to Thomas Fischer Senior VP about an referral program for some time.  Finally,we introduced this opportunity for the first time at our June 2011 seminar.  The response was overwhelming.

Jyske Bank employs a staff of about 4,000 and operates 116 Danish branches, which makes it the second largest independent Danish bank. They offer a full range of financial solutions to retail as well as small and medium-sized corporate clients.

We have always liked Jyske because they are one of Europe’s largest currency traders and offer very simple but sophisticated multi currency investing services.  They are one of Europe’s largest currency traders and dealers.

We have especially enjoyed our business relation with Jyske because being open and honest is one of the core values of the bank group. Traditionally, Jyske formulates and communicates its values – and the way they understand and live by them – to the surrounding world. They work hard offering shareholders, customers and employees balanced opportunity.

We especially like the fact that Jyske employees are not paid bonuses.  No multi million pay outs are in the system that might temp staff to distort earnings or take undue risks.

Here is how you can apply for this program.

To start as a referrer,  there is first the compliance process with Jyske Bank.

Once that process is complete, our IBEZ system helps educate and assist referrer.

First… once a referrer has been approved by JGAM, and the referrer has completed our online course International Business Made EZ course and attended one of our  international investing and business seminars they can attend an exclusive training seminar at our farm.

We have a…




seminar hall where…


unless the group grows too large, we’ll meet.   We’ll have lunch  on the deck looking over Little Horse Creek.

JGAM and our company conduct this one day intensive training for agents the day after each International Investing and Business seminar.

The first such seminar will be conducted Monday, October 10, 2011 immediately after our October 7-8-9 International Investing and Business Seminar in West Jefferson, North Carolina.

Part of the JGAM program is designed so we can assist referrers by referring readers in their locale to them.  So for example if a referrer is in Miami, we will send special emails to our readers in that area, help organize mini seminars… etc.

We can zero in as close as 20 miles to a location so for example we can send a separate email to every reader within 20 miles of the address of a referrer.  And although we won’t release the names in that area, we can send them a note of the opportunity.

We will also provide a referrer communication forum and update training as well as portfolio and investing ideas.  We have general plans at this stage but find the best way to develop systems is to refine through action. We expect our beta program this year to clarify how we can best help our readers become referrers and how we can help them succeed.

Step one is to start the compliance process with JGAM.  Thomas Fischer  can send you the Introducer Questionnaire and Terms of Business.

Thomas Fischer’s email is fischer@jgam.com

This will begin the process of establishing a relationship with JGAM.  Once this relation is approved and verified, then you will be able to enroll in the referrer training.

Satisfaction Guaranteed.  Three Guarantees.

There is no guarantee that JGAM will approve your application as a referrer just because you enroll in the seminar or take the online course so we make two special guarantees.

First Guarantee. Regarding the online course International Business Made EZ.  Enroll in this course. Take it and if you are not satisfied for any reason within 30 days… let us know and we’ll give you a full refund.

Second Guarantee. Enroll in our October 7-8-9 International Business & Investing Seminar.  I’ll send you a recording of the June seminar now so you better understand what these seminars are and how they help you.  If you are not happy with what you hear, let us know within 30 days and we’ll give you a full refund. You keep the recorded seminar as our thanks.

Third Guarantee.  Your earnings potential has this guarantee.  First, any time between now and October… before you attend the International Business and Investing seminar if you fail to qualify as a JGAM referrer agent or change your mind before attending the International Business and Investing seminar you can ask for a full refund.

Enrollment details for our October 7-9 North Carolina Course click here.

See Slamming on the Brakes at Bloomberg Business Week