Jun 30, 2010

Money Morning: The only two Latin America countries to buy into now.... June 30th., 2010

 


June 30, 2010
48 American States Have Secretly Transformed Themselves into New Rogue-Trading ENRONs...

And now they're about to blow up one of Mom & Pop's favorite financial retirement sanctuaries...

When it goes, it will take down Blue-Chip Stocks... Bonds... Money Markets... CDs... (and even your neighborhood) with it...

But if you retreat to these 6 Ponzi-Proof investments right now, your wealth could multiply 3-5 fold, even as millions of Americans watch their retirement accounts go up in smoke.


It's Time to Invest in Chile and Colombia - Latin America's Reigning
'Good Guys'


By Martin Hutchinson, Contributing Editor, Money Morning

For decades, investors with an interest in Latin America were essentially limited to two choices: Invest in countries that were moderately badly run; or invest in countries that were truly dreadfully run.

Most recently, it's been the "dreadfully run" group that seems to be attracting new members: Bolivia, Ecuador and Nicaragua have subscribed to the economic and political doctrines of Hugo Chavez's Venezuela.

However, two elections this year have created a new category of Latin American country - the "truly well run" class - and installed the first two members: Chile and Colombia. As investors, we should rejoice, make them part of our portfolio, and keep an eagle eye out for other countries that may join this promising new category - the "good guys."

For an overview of the two Latin America stocks to buy now, please read on...

Hutchinson on...
- How to Profit From Europe's Stealthy Resurgence
- The Midterm Elections: No Panacea for the U.S. Economy


29 Picks. 29 Wins. 100% Perfect Record.

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Commodities Are Key as China Continues to Call the Shots

By Jon D. Markman, Contributing Writer, Money Morning
China ended up being the big story this month, as investors looked past Europe to the Far East for clues about what shape the global recovery - if you can even call it that - is taking.

Markets around the globe tanked yesterday (Tuesday) after the Conference Board revised its leading economic index for China to show the smallest gain in five months in April. The index rose just 0.3% in April, which was a significant reduction from the 1.7% gain the Board reported on June 19.

The news of the error contributed to the biggest sell-off in Chinese stocks in more than a month, and sent U.S. indices into a dizzying downward spiral. The Dow Jones Industrial Average plunged 268.22 points, or 2.65%, to close at 9,870.30 and the Standard & Poor's 500 Index tumbled 33.33 points, or 3.10%, to close at 1,041.24.

Continue





Question of the Week: Readers Respond to Money Morning's Question on China's Currency

By Kerri Shannon, Associate Editor, Money Morning

After months of intense political pressure, China last week announced that it would allow its currency to gradually appreciate against the U.S. dollar. China's currency - the yuan - has been pegged to the American greenback since 2008.

"This is going to lead to a transition from export-lead, investment-lead to more of a consumption-lead economy going forward," Jing Ulrich, chair of China equities and commodities at JPMorgan Chase & Co. (NYSE: JPM), told CNBC. "I think the ramifications are profound not just for the next few months but actually for the coming years."

Not surprisingly, U.S. exporters embraced the news as an opportunity to compete against Chinese companies and to reduce the U.S. trade deficit. Foreign nations, including the United States, have accused China of undervaluing its currency to give its exporters an advantage in global trade.

Chinese domestic consumption stands to benefit the most, as consumers will have more purchasing power on top of China's recent wave of multi-industry wage increases. Western companies that reach out to Mainland China can access a consumer base with more money and an increased desire to spend, which should give Western investors a chance to cash in on climbing profits.

However, not everyone will see immediate benefits from the new currency policy. In fact, the combination of big double-digit wage increases in China and an increase in the yuan will reanimate inflation.


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