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International Investments



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International Investments - In Silly Things

By Gary Scott

Jets. Yuck! “What I hate second most is doing silly things. But being human, I do.” These were the thoughts as we bounced from one harried traveler to the next while scurrying through Atlanta’s Hartsfield Airport. Merri and I were traveling for the weekend to Portland for my mom’s 84th. Congratulations mom!

Jet travel in this day and age can make you do some pretty silly things. I’ll explain why in a moment. Yet born and bred in the West, with family scattered around the world and homes in two nations, despite its ridiculousness, jet travel is something I sometimes choose.

This brings us to what I hate most, “being forced to do silly things. This includes taking off shoes and coats and showing ID three times within 50 yards. Mental disengagement is all we can do. Go blank, accept, tread on and ignore the rude silliness. Imagine this age. We can walk on the moon, travel the solar system and beyond yet cannot engineer even a touch of friendliness, compassion or happiness. Isn’t it silly? Walking on the moon does not do the world a lot of good. Yet what if we had spent the trillions learning to be happier and get along better?

So we ran through the hoops, got on the plane, (Delta’s commuter partner in Tri-Cities Tennessee to Atlanta) and then onto Delta’s flight to the Pacific Northwest.

Merri and I usually fly business or first class. We rarely pay…direct. Again this is silly the way we twist our lives to get frequent flier miles. Credit cards that earn FF miles kinda control so much of the way we do….so we can travel first class at low cost. This is silly, chasing free upgrades. Somewhere along the line we pay for those seats.

But here we are and I need to get to the point. This message comes from a Delta first class seat…2 A and 2B. Being here reflects some interesting trends we can use to help us in investing, in health and even in life.

My rear end and the back of an airline seat know each other pretty well. At age 21, I started commuting the Pacific. Every month or two my routine was flying to Portland, Tokyo, Seoul, Taipei, Hong Kong, Saigon, Bangkok, Kuala Lumpur, Singapore, Manila. I did my work, stopped home for a bit and then took the flight again.

This ability to work this way, as a 21 year old baby boomer, was a reflection of the industrial evolution. Man’s technological advancement was first powered by the water wheel, then steam, then internal combustion engines, then jets, telephone, TV and finally the computer and telephone. We baby boomers entered the business world just as the era of the jet, TV and telephone really began. We were reared on Howdy Doody, Ma Bell and Pan Am. All great American names…now mostly dead.

This trip today shows what is coming of age. Here in first class the food was lousy, more like what used to be served in economy. In economy all they had was snacks! Of course they had five choices. Potato chips, peanuts, chewy granola, crackers or pretzels. This is really silly as I’ll explain below.

Yet how can we expect a bankrupt airplane to do more? Worse in Business Class, Merri asked for a pillow. She was rudely informed the plane no longer has pillows. Why should the airline have pillows when it’s bankrupt? Why shouldn’t the stewardess be rude? Her pay has been cut. She has job insecurity. After over 25 years of service and hard work, her pension is in shambles. Her plans are in ruins. No wonder the severe is mad. Yet this is silly as well. Getting mad just complicates the problem!

The airports are run down, the carpets frayed, the toilets dirty, the seats cracked, the halls overflowing.

Here is an economic observation that comes from seeing all this. History suggests we are at the end of a financial era when middle class Americans were very rich and very spoiled (I recognize this in myself). This is much like the fall of the Roman or British Empires. Ignoring history is pretty silly. The US economy is coming apart and no fence, no army, no military might, no written laws, no congressional act or Presidential decrees can hold this together. Getting mad, writing your Congressman, demonstrating or even boycotting won’t change this fact.

Yet most investors will ignore this and stick their head in the sand. History suggests that in the West, the rich will get richer. The poor will suffer more. The middle class will become poor. This is the nature of economies and societies!

Most investors however will get mad at Congress, at the institutions etc and demand their rights. The sad fact is the establishment can do very little to change this relentless tide.

Baby boomers were the first to really enjoy this great American boom. The boomers who do not shift with the change will be the first to suffer as they retire, even sooner. I think many are feeling the pinch now. Inflation robs the retired and those on a fixed income first. It steals from the salaried worker second.

Do not be a duck in the pond when the shooting starts! See what I mean

Fortunately history also shows that in every collapse there are those who become even richer as the Phoenix arises. Since one way Americans will become poorer is through a fall in the purchasing power of the greenback, one solution is easy. Invest in other currencies. You can see how I am doing this.

Be sure to diversify out of the dollar with care! There is no guarantee when the dollar will fall. For example, one way I have hedged against the dollar is in Turkish bonds. They have not done well the last two months. Jyske Bank recently wrote:

“Turkey's central bank raised key interest rates by 225 basis points on Sunday in line with expectations and said it would start lira purchase auctions in moves welcomed by analysts to halt the currency's slide. The moves could bolster the lira, which has tumbled some 23% against the dollar since the end of April. Bond yields have also surged and shares dropped in a sell-off triggered by a sharp rise in inflation.”

This makes this a better time to invest in Turkey. Just do not diversify more than you can afford to lose or wait for to recover. This may be an especially good time to invest in Turkish shares. History suggest that when the Turkish lira falls the Turkish stock market rises.

Learn more about Turkish investments from Thomas Fischer at fischer@jyskebank.dk

Learn more about fighting inflation by investing in emerging currencies, gold, silver, Ecuador, import-export, overseas markets and more. Join Merri, Thomas Fischer from Jyske Bank Copenhagen and Steve Marchant from Ecuador and me at our September 15-16-17, 2006 International Business and Investing Made EZ course in North Carolina. Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Learn more about Ecuador import and export from Steve. Our May course was overbooked and the September course is filling up quickly. Our free accommodations here on the farm are reserved on a first come first served basis so do not delay! Go to http://www.garyascott.com/catalog/ibeznc.

Until next message, may all your silliness be laced with joy!

Gary

June, 2006

 

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