An Australian Dollar Play on China’s Growth

Tony Daltorio, The Investment U Research Team

Despite the continuing negative sentiment toward China from much of Wall Street, China’s remarkable economic growth continues unabated.

While Wall Street “experts” focus solely on the export-oriented eastern cities in China, they are missing the rapid growth occurring in other parts of China with the government’s “Go West” program.

And let’s not forget that within a few years, the size of China’s middle class will exceed the entire population of the United States.

However, there are still many investors who are not comfortable investing directly in China and buying Chinese companies.

There is another way to invest profitably in the economic growth in China, of which most investors are completely unaware. And it doesn’t involve owning any Chinese or Asian stocks.

It is the Australian Dollar.

The Australian

The China Lie

Ryan Cole, The Investment U Research Team

Get out of China, now. The entire economy is about to implode.

Let me explain.

The accepted story is that China is going to lead the world out of this recession. It’s successfully decoupled from the U.S., and GDP is going to grow about 8% this year, even as virtually every other country is shrinking or treading water.

The only problem is, the claim is entirely bogus.

This isn’t the first time China has lied about its economic numbers. Most people forget, but last year, everyone thought China’s GDP was approaching $10 trillion.

That was until economists took a closer look at the country… and revised the number down to around $4 trillion.

That’s a pretty big gap.

Lies

And still today, the lies continue. China counts everything made in the country as part of its GDP. That’s right,

Adding Iron for a Healthy Portfolio

Tony Daltorio, The Investment U Research Team

Hiking along back-trails has a calming effect, is good for your cardiovascular system, and is good for your health in general. It’s serene, with few people around.

Hiking along investment back-trails where few Wall Street sales people are around can also have a good effect on you. It can be profitable and very good for your portfolio’s health.

One such isolated back-trail can be found in the world of commodities, which Wall Street usually gives the cold shoulder. This particular commodity does not even have futures traded on it, so Wall Street completely ignores it.

The commodity is iron ore. (Let’s?) take a look at the positive fundamentals for iron ore and the ways that investors can profit from it.

Iron Ore and China

Iron ore is

Hot New Spanish Model… for Banking

Tony Daltorio, The Investment U Research Team

There’s a hot new Spanish model that has everyone in Europe going ga-ga.

No, it’s not a runway or swimsuit model. It’s Spain’s banking model.

The Bank of Spain forced Spanish banks to follow a very conservative banking model using what they call “dynamic provisioning” requirements. These requirements forced Spanish banks to build reserves during the good times. This left the banks with capital to draw upon which is helping them survive the downturn.

The Bank of Spain also restricted local banks from piling into mortgage securities. And Spain has a small credit-card and commercial property market which limited risk exposure for the banks. But the banks did their part too. They focused on the retail market rather than risky investment banking, as did their American counterparts.

This new ‘hot’ model

Japan’s Darkest Days Lay Ahead

Ryan Cole, The Investment U Research Team

Bet against Japan.

It pains me to say it. I lived in Japan for five years – great years. I love the country, I love the people, I love the cherry blossoms in spring and the festivals in the streets and the poetic dewdrop in my window each morning.

But right now, I hate Japan’s economy. Here’s why:

1. It’s an exporting country, and nobody’s buying.

The American savings rate has gone from 0 to around 5%, and it’s still rising. Remember, this is with U.S. unemployment hovering just under 10%, officially. And, with furloughs and cost-cutting measures, the average work-week for the “fully employed” has fallen to 33 hours – the lowest number on record. So a 5% savings rate of a markedly smaller income pie, equals the collapse of disposable income spending.

That

Profit From the “New Decoupling”

Tony Daltorio, The Investment U Research Team

Emerging markets first hit investors’ radar screen about 20 or so years ago. There was a lot of skepticism and a lack of understanding about emerging markets, which was understandable because there were few emerging markets open enough (or large enough) to invest in with a degree of safety.

That has all changed in the past two decades as most emerging markets are open to foreign investments and have a high degree of liquidity. The number of so-called emerging markets has also grown from a mere handful to over 60.

Yet Wall Street seems to have missed these changes – there is still a lot of skepticism on Wall Street when it comes to investing in emerging markets. That is where the opportunity for investors lies.

Famed investor

Taiwan and China: Rivals, and now, Partners

Ryan Cole, The Investment U Research Team

With MJ’s passing, some rather astonishing news flew under the collective radar last week.

Taiwan has opened its economic borders to investment from China.

That’s a really big deal.

If America dropped the Cuban Embargo… that would be about 1/100 as momentous. It’s more like an apolitical (for now) eastern version of the Berlin Wall coming down.

Taiwan’s part in the play that is the Asian theatre is about to get much more complex.

And for investors, the opportunities are only beginning. Here’s a little background on why Taiwan will make a good trade partner for China, and why foreign investors need not worry.

Taiwan’s History of Fighting and Independence

A little history: In 1949, Chiang Kai Shek – the insurgent leader of China during the Japanese occupation –

Germany, Europe, and America: Central Banks Growing Apart

Ryan Cole, The Investment U Research Team

Two weeks ago, German Chancellor Angela Merkel tried to raise a stink. She laid into the central banks of Britain, the European Union, and the United States.

Without explicitly saying so, Merkel hinted that the current policies of central banks look more like those of the Weimar Republic and less like FDR’s New Deal.

And while she may have succeeded in lifting an eyebrow or two on Fox Business News, for the most part, her outburst was ignored.

That’s a mistake.

Germany rarely speaks out about the policies of central banks – especially ones outside her borders – so to do so now suggests there are strong beliefs behind Merkel’s words. And where there are strong beliefs, policy follows.

In other words, Merkel’s dissent is a leading

Best Economy in the Americas – Brazil

Tony Daltorio, The Investment U Research Team

Wall Street tends to take a very myopic view of the world – the view that the entire financial universe revolves around them and the United States. And that what goes on in other countries is unimportant.

It’s why many Wall Streeters have missed one of the greatest rags-to-riches stories in global economic history – Brazil. Brazil’s economy has gone from a “basket case” to being as solid as a Brick.

Brazil has made huge strides from the very debt-ridden, bureaucratic country of the past. Years ago, the country restructured its finances and has resisted the temptation to use economic crises, such as in neighboring Argentina, as an excuse to default on its obligations.

Yet, many on Wall Street still think of Brazil as a backwards “third-world” country that goes crazy

Canadian Banking: Sober, Boring, and Successful

Ryan Cole, The Investment U Research Team

It wasn’t so long ago Canada’s banking system was considered behind the times. Almost cute, an antiquarian relic, it banked in the old ways… and it was holding Canada back.

After all, while real estate throughout the world was doubling every few years, Canadian homes were moving up relatively modestly.

While risk in the rest of the world had been eliminated through complicated instruments that everyone trusted “someone else” understood, Canada was still using the traditional loan-and-hold mortgage model…

I’m sure you see where this is going.

Canada’s banks weren’t caught up in one of the biggest global bubbles of the last few decades, and they aren’t participating in the fallout either. It’s why investors around the world are looking at Canada, and three of its banks that