By
Gary
Scott
There
is little doubt that every economy around the world is threatened
by huge government debts and deficits in the Western world.
Spotting international investment trends can help reduce
this threat because there is always some good value market
or distortion opportunity somewhere in the world.
Today spotting international
investment trends shows us that there is great concern about
the falling U.S. dollar. A greenback collapse will create
inflation and reduce purchasing power everywhere.
Right
now this problem is intensified. Global monetary
policy has flooded the world's banking system with
cash. Too much cash and too few products
create inflation. Inflation normally causes interest
rates to rise, but due to Japan and America's easy
money policy, interest rates remain low despite rising
prices.
This
problem is not likely to go away overnight either.
An article in the February 26, 2005 Economist entitled
"Saturated" explains
why. The article states that over the
past two years that global liquidity has risen more than
annual rates of more than 20%. This type of two-year
rise has not happened since 1975. Here is what the article
said:
"America's
easy money policy has spilled abroad. Low American interest
rates have encouraged large inflows of capital into emerging
economies, especially in Asia, as investors there have sought
high returns. Central banks have then tried to resist upwards
pressure in their currencies by buying foreign exchange-
mainly dollars. When a central bank does this, it credits
domestic commercial banks with deposits (for examples the
monetary base expands) encouraging banks to lend more. Central
banks are supposedly the guardians of money, yet between
them they may have created the biggest liquidity bubble in
history."
Gary and Merri
Have Investing Meetings at Hotel Quito in Ecuador
Yet if we are spotting
international investment trends we know that problems also
create seven powerful
opportunities. You can stay abreast these opportunities
with the FREE Gary Scott daily ezine.
Gary & Merri
Scott at the Hacienda in Ecuador
For
details on Gary Scott courses go to GaryScott.com/catalog
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