Multi Currency Tug of War

by | Jul 14, 2012 | Archives

Here is a multi currency portfolio update from Thomas Fischer at Jyske Global Asset Management (JGAM) that can help us during this tug of war environment.

jyske-Global-asset-management- multi-currency

Click twice on photo to enlarge. See an explanation of this Jyske asset allocation below.

JGAM’s analyst Bank Credit Analyst is a Canadian company and it coined the phrase “economic-tug-of-war-environment” so it is not surprising to find an article in the Canadian paper Chronical Herald that we should ponder.

Here is an excerpt from 2012 article “Economic tug of war” by Keith Dicker says:   In Berlin in 1922, Alia Schmidt paid three German marks for a loaf of bread. Six months later, the same loaf cost her 700 marks. The German decision to print money caused inflation to skyrocket.

In Tokyo in 1994, Makishi Satou paid 217 Japanese yen for a McDonald’s hamburger. Eighteen years later, Satou is still enjoying hamburgers, yet he is only paying 216 Japanese yen for the same delicacy.

The Japanese decision to print money resulted in zero inflation. Yet, Satou and others are not at all happy with their money-printing experience and the subsequent 77 per cent decline in their stock market and the 90 pre cent fall in their property market.

Today, the U.S., Europe, Japan and Britain are all printing money and it is fact that only three scenarios are possible:

1) Printing money has absolutely no impact on prices rising or falling.

2) Printing money results in a return to the 1922 German experience.

3) Printing money results in a return to the modern-day Japan experience.

In other words, no one knows quite where to invest and the so called safe investments (such as US and euro bonds) that pay almost nothing might not be safe at all.  However there is a way to increase profits and safety at the same time through leveraged diversification as is described below.

Thomas wrote the JGAM monthly portfolio update yesterday.


Thomas Fischer chatting with a course delegate during a visit to our home for lunch.  Delegates learn a lot during the breaks, meals and get togethers.  Click twice on photo to enlarge.

Here are excerpts from the monthly analysis that Thomas wrote: At our Investment Committee meeting in June we made no new investment decisions, as we felt comfortable with our existing asset allocation and increased exposure to large dividend paying stocks. We felt certain that in the current fragile economic environment the central banks would come to the rescue.

Thursday 5 July the  central banks delivered when the European Central Bank (ECB), People´s Bank of China (PBoC) and the Danish National Bank (DNB) all lowered interest rates. Bank of England (BoE) did not cut interest rates , already at the lowest level in the bank´s history. However the bank injected another £ 50 billion into the economy taking the total to £375 billion.

We are now entering the third quarter and as coined by our research partner Bank Credit Analyst (BCA) a tug-of-war environment dominating the world economy and financial markets.  On the one side the eurozone debt crisis and weak growth will continue to cast shadows over the world economy, and on the other side falling energy costs and monetary reflation will be accommodative for global growth and thereby encourage risk taking.

The negative tug on the world economy is three fold.  A never ending eurozone debt crisis,  a slowing recovery process in the US and China experiencing a slump in exports and manufacturing. The main culprit for the dire situation is the eurozone debt crisis and haphazard response from the European politicians.  We have seen one EU meeting after the next and still with no clear cut solution to the debt problem. It has taken such a long time to deal with the issues at hand, that the crisis has now passed the point where one country (read: Germany) can provide sufficient funds.  The size of the German economy is euro (EUR) 2.6 trillion whereas the total debt of Italy and Spain alone is EUR 2.8 trillion. More meetings will follow before a political compromise can be achieved, but if/when it happens it will be bullish for risky assets. In the US the recovery is stalling, as the household sector is paying down debt,  whilst at the same time the corporate sector is increasing its savings. The US is furthermore heading toward the so called “fiscal cliff” and increased political polarization, which will not be conducive for the overall economy. Chinese economy is also facing headwinds with falling exports, manufacturing and domestic consumption.

The positive tug on the world economy is being provided by falling energy costs, declining interest rates and monetary reflation. The world economy is still balancing on a knife’s edge, but most central bankers seem to have learned a lesson from Japan and are  adamant in their hyper accommodative stance and fight against deflation. We will probably see more aggressive monetary reflation in the coming months and this should help steady the world economy.

We remain in the positive camp and expect equities to outperform bonds even though the eurozone will probably soften overall growth in the world economy.  The flare-up of the sovereign debt issues have also led to a large divergence in the equity markets in the second quarter. The eurozone equity market dropped between 10-18%  whereas the S&P 500 only was down 3%.  Going forward we still expect diverging markets and will focus our attention on markets with the best overall growth prospects.  According to BCA the stock markets of the US, the UK and Switzerland should do better than the average index. We already hold several equity positions in these countries, which has been a major factor in our good performance year to date and strong benchmark outperformance.

We  are of course still dealing with a world that is risky and we also expect volatility going forward.  However at current valuations we still prefer stocks to bonds  and will keep our current asset allocation. According to BCA equity premiums today are well above historical norms and based on past experience this should lead to superior performance of stocks compared to bonds.

Explanation of Asset Allocation

Fixed income:  JGAM is keeping an underweight position, favoring bonds with short duration.

Equities:  JGAM is keeping a neutral to overweight position, favoring large dividend paying companies.

Alternatives: JGAM is keeping a neutral position of holdings in gold and oil as protective investments.

Cash:  JGAM has a neutral position.

Loan mix: All loans for leverage remain unchanged with 100% of the loans in euro.

Leverage: The gearing is kept at a level below maximum.  There is no leverage on the low risk portfolio, 1 times leverage on the medium risk and 2 times leverage on the high risk portfolio.

Here is the Rub

The economic mess that prevails now has been created by too much debt already.  Part of the entire global instability is caused by the never ending eurozone debt crisis.    A debt crisis is caused by too much debt.   Usually the solution to too much debt is not more debt.  However belt tightening is being resisted and creates political and social tensions.  Governments do not know what else to do but lend more.  This makes all government debt dangerous and leads to currency volatility.  There is no place to hide… so one has to diversify into several currencies.    This diversification can be enhanced by regularly adding extra amounts of currencies that look temporarily strong and borrowing currencies that look temporarily weak.

This is what JGAM does with its forex portfolio.

Forex Portfolio

This message focuses on just the JGAM Managed Forex Portfolio


JGAMs forex portfolio reveiw.  Click twice on photo to enlarge.

The JGAM managed forex portfolios help us during tug of wars because they are very different from the typical high leverage forex trading that is often leveraged 10 or 20 times.

There are three main differences between this type of portfolio and currency speculation. 

First JGAM bases  its decision more on currency fundamentals rather than technical movements.   Second, JGAM uses far less leverage.  These two tactics allows Second JGAM  to work in wider trading ranges which creates longer trading positions.  This reduces risk and volatility while maximizing profit potential.

Because JGAM is looking for currencies that are seriously out of balance they will often have limited numbers of positions. Right now they have only two positions, the British pound and the euro short the US dollar.  In other words JGAM is betting the the greenback will rise versus these two currencies.

JGAM is also careful to limit the amount a client has in any one position.   For example the size of both current open positions is 20%. This is the percentage of the client’s available Assets Under Management  (the client’s own capital plus leverage).

Example:   If a client has $100,000 invested with a one time leverage the total Assets under management is $200,000 so when a position’s size is 20% the maximum position a client will have is $40,000.

A high risk investor with a $100,000 investment and four times leverage has $500,000 invested and could have at 20% a  $100,000 position.

JGAM is one of the very few investment management companies that can leverage an individual client’s position with any major currency… so when the euro is weak… (as it is now) leverage is in euro.  If the yen or the dollar or pound were weak, leverage could be in that currency.

Multi currency diversification and leverage are powerful combinations.  In good times they create awesome returns.

In tough times… like now… leverage can help improve diversification.

Leverage is very inexpensive… less than 3% and allows a portfolio to be increased into more currencies and shares. If the increased portfolio earns more than 3% extra,  added profits are gained.  Plus the larger portfolio brings extra diversification which enhances the steadiness of the assets.

This is the JGAM medium risk portfolio. Click on photo twice to enlarge.


Subscribers to our Multicurrency  portfolio reports can see all the JGAM portfolios and our comments at their password protected site.  Click here.

Learn how to get our report “Borrow Low Deposit High” on how to use leverage and a multi currency password here.

One good way to gain stability in a tug-of-war global economy is to have a diversified portfolio (low, medium or high risk depending on your investment profile) and enhance that portfolio with an investment in the forex portfolio.

For more details contact Thomas Fischer at

Non Americans contact René Mathys at


Meet with Thomas Fischer at our October 5-6-7 2012 International Investing & Business Seminar.  Click here for details.

Better still, meet with Merri and me and Thomas Fischer of JGAM throughout the year free as an International Club member.

Belong to the International Club

The Huge 2020 Risk

Here is a huge risk that could explode in 2020.

I hope I am wrong… but the numbers are clear.

According to, (1) as of December 26, 2020 the total US public debt was 23 trillion and 845 billion dollars.

This is not a theoretical problem for the future.  This is not something that our children and grandchildren will have to deal with.  This is a problem in the here and now for you and me.

Rising interest rates create a massive problem for every American.

treasury direct

Look at how the interest costs alone have risen to over a half trillion dollars a year.

treasury direct


The bad news is that the (US federal debt) is getting bigger….harder to miss.  The Congressional Budget Office (CBO) projected in 2010 (the debt then was a bit over 14 trillion) that, under law at that time, debt held by the public would exceed $16 trillion by 2020, reaching nearly 70 percent of GDP.

The $7 Trillion Error.

They sure goofed on that.  Here we are… only in 2020 and debt has shot past 23 trillion.

How could the CBO be so wrong? 

The CBO screwed up because they could never imagine that the Fed would push interest rates so low… and keep them there.  The interest rates are so low that the government has been able to borrow more than imagined and still afford the interest.

For example, US Federal government interest last year amounted to around $573 billion.  Yet in 2008 on debt of only $9 trillion +  the interest that year was $451 billion +.

Interest payments in 2017 were 27% higher than they were in 2008.  Yet the debt is over 250% higher.  

Very low interest rates have helped the government borrow.  Low interest has also helped the US stocks reach all time high prices.

The government will resist raising rates because it will ruin their budget, cause a collapse of the stock markets and destroy the US dollar.

Rising interest rates, will create an almost unimaginable debt crisis.  If government interest doubles it is like the $23+ trillion national debt  rising to 46 trillion!  Unless there are some huge tax increase the interest payments are not sustainable.

Learn how to have more freedom and time, less stress, better health care, extra income, greater safety and profit in your savings despite America’s deficits, debt and currency risk.

Fortunately there are secrets that will allow a few to live much better, free of debt and worry despite the decline in the dollar’s purchasing power.   My wife, Merri and I, have traveled, lived, worked and invested around the world for nearly 50 years to gain this information.

Let me share the basics of this data and how we can be of help through 2020.

The first fact behind this secret is that things are really good in the western world.  Despite many problems, we are surrounded by more abundance and greater opportunity than almost anyone has ever enjoyed, anywhere, ever.   To enjoy a fair share of this wealth, all we have to do is understand human nature and learn how to invest in the new economy, as it changes and becomes new, again and again.

Merri and I have made seven huge transitions in the 50 years.  Each has allowed us to always stay ahead of losses that the majority of Americans suffer.  We are in another transition right now and want to share why and what to do so you can stay ahead and live a richer, independent life through 2020 and beyond.

A falling US dollar is one of the greatest risks we have to our independence, safety, health, and wealth, but also brings a window of huge profit as I explain below.   Though the greenback has been strong for a number of years, its strength is in serious jeopardy.  The growing federal deficits increase the national debt and this with rising interest rates propels a growing debt service.

While the Dow Jones Industrial Average passed a record high, the U.S. national debt passed the $20 trillion mark.

The problem is that the Dow will come back down.  National debt will not fall.

The double shock of money fleeing Wall Street and US debt skyrocketing, will destroy the purchasing power of the greenback.

Go to the store even now.  Statistics say inflation is low, but buy some bread or, heaven forbid, some fresh vegetables like peppers or fruit.   Look at the cost of your prescription or hospital bills.  Do something simple like have your car serviced at an auto dealer.  Look at the dollars you spend and you’ll see what I mean.

The loss of the dollar’s purchasing power erodes our independence, our freedom and our savings and wealth as well. 

At the same time, low interest rates by big banks and higher health care costs soak up the ever diminishing income and savings we have left.  According to a Gallup poll, the most unpopular three institutions in America are big corporations & Wall Street banks, HMOs and Congress.

Yet there is little we can do because these institutions are in control.

Over the last 50 years the average income for 90 percent of the American population fell.  Our health system is restricted by a Kafka-esque maze of legislation and insurance regulations that delay, frustrate, and thwart attempts by patients and doctors from proper medical care.  Big banks and corporations restrict our freedom of choice.  The business customer relationships are no longer transactions between free equals.

Banks can trap us in indebtedness at every age from student loans to mortgages to health care costs.  They pay almost nothing on our savings.  They hide unexpected fees and payments in complex and unreadable documents.  Banks and big corporations routinely conceal vital information in small print and then cheat.  Weak regulations and lax enforcement leave consumers with few ways to fight back.  Many of these businesses ranging from cable TV to phone and internet service to health insurance have virtual monopolies that along with deceptive marketing destroys any form of free market.

These same companies control the credit-scoring agencies so if  we don’t pay unfair fees, our credit scores will plunge and we could lose the ability to borrow money, rent an apartment, even to get a job.  Many consumers are forced to accept “arbitration clauses” in lieu of  legal rights.  The alternative is to lose banking, power, and communication services.

Big business has also usurped our privacy.  Internet companies sell our personal data.  Personal information is pulled from WiFi and iPhones track and store our movements.  The government can access this information, sometimes without subpoenas.  There’s a lot that we don’t know, often withheld under the guise of “National Security.”

The glow on Western democratic capitalism has dimmed… or so it seems.  The US, leading the way, is still a superpower with economic, innovation and military might, but the institutions that should serve the people have become flawed or broken.

America’s infrastructure is in shambles.  The nation’s bridges are crumbling, many water systems are filled with toxins, yet instead of spending more to fix this, we build more prisons.  The 2.2 million people currently in  jail is a 500 percent increase over the past thirty years.  60% of the inmates belong to ethnic groups.  Not just non-white ethnic groups are suffering.  Annual death rates are falling for every group except for middle-aged white Americans.  Death rates are rising among this group driven by an epidemic of suicides and afflictions stemming from substance abuse, alcoholic liver disease and overdoses of heroin and prescription opioids.

America’s middle class is shrinking.  Nearly  half of America’s income goes to upper-income households now.  In 1970 only 29 percent went to this group.  How can we regain our freedom, our happiness and our well being in such a world?

What can we do?

Gain a better, freer life is to combine better health, higher income and greater savings for a happier, more resilient lifestyle. 

Merri and I will celebrate our 50th year of global living, working, investing and researching to find and share ideas on how to have simpler, low stress, healthier, more affluent lifestyles.  Our courses, reports and email messages look at ways to gain:

#1:  Global micro business income.

#2:  Low cost, natural health.

#3:  Safer, more profitable, investments that take little time or cost to buy and hold… so you can focus on earning more instead

Many readers use our services for just one of these three benefits.  They focus only on health or on earning more or on better, easier investing.

28 years ago Merri and I created the International Club as a way for readers to join us and be immersed in all three of these benefits.   The International Club is a year long learning program aimed at helping members earn worry free income, have better affordable good health and gain extra safety and profits with value investments.

Join us for all of 2020 NOW.

The three disciplines, earning, health and investing, work best when coordinated together.  Regretfully the attacks on our freedom are realities of life.  There is little we can do to change this big picture.  However we can change how we care for our health, how we earn and how we save so that we are among the few who live better despite the dollar’s fall.

We start with better lower cost health care.

Club membership begins by sharing ways to be free of the “Secret Hospital Charge Master”.   Just as governments hide truth behind “National Security”, big health care businesses hide medical truths behind “Charge masters”.  Most hospital charge masters are secret because big business does not want us to know how much hospital costs have risen.  Motivations beyond our good health, like corporate greed, want to keep us in the dark about health care cost.

Despite rising health care costs, a report from the Centers for Disease Control & Prevention shows that hospitals are the last place we want to be for good health.  One report shows that hospital-acquired infections alone kills 57% more Americans every year than all car accidents and falls put together.

Often, what patients catch in the hospital can be worse than what sent them there.  Governments and health care agencies agree  – antibiotic resistance is a “nightmare.”  An antibiotic-resistant bacteria may be spreading in more hospitals than patients know.  About one in every 25 hospitalized patients gets an infection and a report from the Journal of Patient Safety showed that medical errors are the third-leading cause of death in the country.

Along with the risk of hospital acquired illness and medical errors, the second huge threat to our well being… is health care costs, especially at hospitals.  This is why charge masters are so often secret.  There are few risks to our wealth that are greater than a hospital stay.

I have created three natural health reports are about:

#1: Nutrition

#2: Purification

#3: Exercise

Each report is available for $19.95.  However you’ll receive this free as club member and save $59.85.

Club members also receive seven workshops and courses on how earn everywhere with at home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn and be free. These courses and reports are:

  • “International Business Made EZ”
  • “Self Fulfilled – How to Write to Sell”
  • Video Workshop by our webmaster David Cross,
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”

This program is offered at $299, but is available to you as a club member free.  You save $299 more.

Next, club members participate in an intensive program called the Purposeful investing Course (Pi).  The purpose of Pi is finding value investments that increase safety and profit.  Learn Slow, Worry Free, Good Value Investing.

Stress, worry and fear are three of an investor’s worst enemies.  These destroyers of wealth can create a Behavior Gap, that causes investors to underperform in any market good or bad.  The behavior gap is created by natural human responses to fear.  Pi helps create profitable strategies that avoid losses from this gap.

Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio.  There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).

There are seven layers of tactics in the Pi strategy.

Pi Tactic #1: Determine purpose and good value.

Pi Tactic #2: Diversify 70% to 80% of portfolio equally in good value developed markets.

Pi Tactic #3: Invest 20% to 30% equally in good value emerging markets.

Pi Tactic  #4:  Use trending algorithms to buy sell or hold these markets.

Pi Tactic  #5:  Add spice speculating with ideal conditions.

Pi Tactic  #6: Add spice speculating with leverage.

Pi Tactic  #7:  Add spice speculating with forex potential.

The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:

#1:  Current book to price

#2:  Cash flow to price

#3:  Earnings to price

#4:  Average dividend yield

#5:  Return on equity

#6:  Cash flow return

#7:  Market history

We combine the research of several brilliant mathematicians and money managers with my years of investing experience.

This is a complete and continual study of what to do about the movement of international major and emerging stock markets.  I want to share this study throughout the next year with you.

This analysis forms the basis of a Good Value Stock Market Strategy.  The analysis is rational, mathematical and does not worry about short term ups and downs.  This strategy is easy for anyone to follow and use.  Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.

The costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investment is simply a diversified portfolio of good value indices.  Investments in an index are like investments in all the shares of a good value market.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $299 per annum but as a club member you receive Pi at no charge and save an additional $2299.

Profit from the US dollar’s fall.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Club members receive a report about opportunity in the  current strength of the US dollar is a second remarkable similarity to 30 years ago.   The dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but when you become a club member you receive the report, “Three Currency Patterns For 50% Profits or More” FREE.

Plus get the $39.99 report, “The Platinum Dip 2019” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.

Now there is a new distortion ready to ripen in the year ahead.

These two events are a strong sign to invest in precious metals.

I prepared a special report “Platinum Dip 2019”.   The report explains the exact conditions you need to make leveraged precious metal speculations that can increase the returns in a safe portfolio by as much as eight times.  The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.

The low price of silver offers special value now so I want to send you this report because the “Platinum Dip 2018” offers enormous profit potential in 2018.

The report “Platinum Dip 2019” sells for $39.95 but club members receive it free as well.

The $39.95 new “Live Anywhere – Earn Everywhere Report” is also free.

There is an incredible new economy that’s opening for those who know what to do.  There are great new opportunities and many of them offer enormous income potential but also work well in disaster scenarios.

There are are specific places where you can reduce your living expenses and easily increase your income.  Scientific research has shown that being in such places actually make you smarter and healthier.  Top this off with the fact that they provide tax benefits as well and you have to ask, “Where are these places?”.

Learn about these specific places.  More important learn what makes them special.  Discover seven freedom producing steps that you can use to find other similar places of opportunity.

The report includes a tax and career plan broken into four age groups, before you finish school, from age 25 to 50 – age 50-to 65 and what to do when you reach the age where tradition wants you to re-tire.  (Another clue-you do not need to retire and probably should not!)

The report is very specific because it describes what Merri and I, our children and even my sister and thousands of our readers have done and are doing, right now.

Live Anywhere – Earn Everywhere focuses on a system that takes advantage of living in Smalltown USA, but earning locally and globally.

This report is available online for $39.99 but International Club members receive it free.

Save when you become a club member.

Join the International Club and receive:

#1: The $299 Personal investing Course (Pi).   Free.

#2: The $299 “Live Well and Free Anywhere Program”. Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”. Free.

#4: The $39.99 report “Platinum Dip 2019”. Free

#5: The three $19.99 reports “Shamanic Natural Health”.  All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report. Free.

#7: A year’s follow up subscription to the Purposeful investing course… Plus more.

Join the International Club for $349 and receive all the above online now, plus all reports, course updates and Pi lessons 2019 at no additional fee.

Click here to become a member at the discounted rate of $349




Read the economic tug of war