Currency also provides a universal measurement for accounting purposes. For instance, without currency, it is difficult to compare companies that sell different goods. Currency is used as a store of value, which makes saving, investing and banking easier.

Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status and only accept taxes through them.

Bitcoins do not have value as a physical commodity like gold and are not widely accepted as legal tender like dollars.

Bitcoin has value to those who by them for the following reasons.

There are buyers and sellers of bitcoin making it possible to buy bitcoins with dollars and to buy dollars with bitcoins. For those in the bitcoin world bitcoin is an accepted currency.

Bit coin is also decentralized making it hard to tax and hard to trace. Ongoing criticism of bitcoin is that drug dealers use the cryptocurrency to move their ill-gotten profits.

For those worried about governments printing more money to pay their debts there is a limit to how fast bitcoins can be mined and there is a cap on the total number of bitcoins so inflation will not take away bitcoin value.

And bitcoin is being used as an investment because the price is rising.

And last of all the cryptocurrency world is a social network that feeds on itself.

But, What Should a Bitcoin Be Worth?

The Forex market shows us that the value of any currency is relative to the value of others. Thus one trades dollars for euros and Swiss francs for yen. The value of a nation’s currency is based on central bank monetary policy, the strength of national economy and the stability of its political system. None of these are factors with bitcoin. Bitcoin is valuable because people see its value going up and want to get in on the profits. The base value of bitcoin is probably somewhere above zero as there is a benefit to some of keeping their transactions private.

Although some have called bitcoin a fraud that is not the case. Bitcoin is an alternative way to hold wealth and hopefully for bitcoin enthusiasts, to buy things. But what should a bitcoin be worth? Anyone trading bitcoin may be making profits but what happens when one approaches retirement? Will bitcoin hold its value over the years or will the wild swings in value accelerate making it risky as a long term holder of wealth? Short term trading of bitcoin with money that you can afford to lose may be profitable but this is not a widows and orphans stock that you can buy and forget about in your old age or you will wake up to find that bitcoin is back at $1.

Rising tensions around North Korea after it announced its sixth test of a hydrogen bomb has sent investors switching out of equities and searching for safe havens in the form of gold and the yen.

In South Korea, where Boris Johnson has warned that the capital Seoul will be “vaporized” by a nuclear threat, the Kopsi index fell by 1.19pc, or 28.04 points, to end at 2,329.65 points.

Supposedly North Korea’s leader wants to stay in power and sees a nuclear arsenal deliverable by ICBMs as his protection. However, some military analysts now are saying that he may want more. Where is this going and how will North Korea affect your investments?

“Like a bad horror movie, the North Korea saga intersperses moments of calm, with occasional action to jolt you out of your chair,” said ING’s head of Asian research than Rob Carnell.

“But we have been here now many, many times,” he added. “Unless this is the precursor to US military action, which we doubt, then in a little over a day or two, tensions will calm again, making this a good buying opportunity for investors with a strong enough nerve.”

How much of a threat North Korea is to your investments depends on what you are invested in.

US Stock Market

The US stock market is overbought and due for a correction. Add a ramping up of tensions in Korea to Hurricane Harvey and maybe hurricane Irma wreaking havoc somewhere on the US Eastern seaboard and the market could correct dramatically. On the other hand defense stocks would do rather well.

The ten largest US defense contractors account for 1 percent of the US domestic economy. Investing in defense stocks means buying stock in giants such as Lockheed Martin, Boeing with its Boeing Defense, Space and Security division, Northrop Grumman Corporation and, General Dynamics. It also can mean buying stock in Raytheon Company, the world’s largest producer of guided missiles or L-3 Communications Holdings, Inc. which provides the likes of NASA, intelligence agencies and the military with command, control, communications, intelligence, surveillance and reconnaissance (C3ISR).

Perhaps it is time to add a little defense to your portfolio.

Safe Havens

The Yen has gone up in value as it is considered a safe haven currency. This seems a little strange as Japan is right next door to Korea and would get involved if there were an armed conflict. Investing in gold is always popular when there are global tensions and today bitcoin will probably go up too. But be careful with cryptocurrencies when war breaks out in the cyber world as well as the real

How Much of a Threat is North Korea to Your Investments? DOC

How Much of a Threat is North Korea to Your Investments? PDF

How Much of a Threat is North Korea to Your Investments? PPT

The Cost of Investing Offshore

Likely the biggest barriers to investing in international markets are the transaction costs. Although we live in a relatively globalized and connected world, transactions costs can still vary greatly depending on which foreign market you are investing in. Brokerage commissions are almost always higher in international markets compared to domestic rates. In addition, on top of the higher brokerage commissions, there are frequently additional charges that are piled on top that are specific to the local market, which can include stamp duties, levies, taxes, clearing fees and exchange fees.

Currency Fluctuations and Worse

When investing directly in a foreign market (and not through ADRs), you have to exchange your domestic currency (USD for U.S. investors) into a foreign currency at the current exchange rate in order to purchase the foreign stock. If you then hold the foreign stock for a year and sell it, you will have to convert the foreign currency back into USD at the prevailing exchange rate one year later. It is the uncertainty of what the future exchange rate will be that scares many investors. Also, since a significant part of your foreign stock return will be affected by the currency return, investors investing internationally should eliminate this risk.

Buying stocks as ADR’s is a simple solution for someone who wants to invest only in foreign stocks. Otherwise you need to know how to use the Forex market to hedge your currency risk. Because currency futures, options and forwards are relatively complex for beginners an alternative might be to use a currency ETF. Of course the worst risk is if a country goes bankrupt, its currency becomes worthless and assets get frozen.

Liquidity Issues

Another risk inherent in foreign markets, especially in emerging markets, is liquidity risk. Liquidity risk is the risk of not being able to sell your stock quickly enough once a sell order is entered. There are some common ways to evaluate the liquidity of an asset before purchase. One method is to simply observe the bid-ask spread of the asset over time. Illiquid assets will have wider bid-ask spread relative to other assets. Narrower spreads and high volume typically point to higher liquidity.

Sovereignty Risk

This one is our own take on foreign investment risk. If you owned assets in Libya before Gadhafi took over in the 1970’s you lost everything. The same thing happened in Cuba with Castro and to a degree in Venezuela first with Chavez and now Maduro. Unique risks associated with foreign investments can include having a strongman take over and nationalize all private assets. Make sure you have a clear sense of how stable the country is before investing there.

What Are the Unique Risks Associated with Foreign Investments? DOC

What Are the Unique Risks Associated with Foreign Investments? PDF

What Are the Unique Risks Associated with Foreign Investments? PPT

Emerging-market stocks rose toward the highest level since China’s currency devaluation last year, while volatility fell to an 11-year low, on optimism earnings are improving and central banks remain supportive of growth.

More than half of developing-nation companies that have reported financial results for the last quarter have beaten estimates, following similar positive momentum in the U.S. and Europe.

The MSCI Emerging Markets Index climbed 0.5 percent to 874.98 at 9:22 a.m. in New York, heading for the highest since Aug. 11 and tracking gains in Europe after the U.K. reported second-quarter growth that was quicker than estimated. Eight of the 10 industry subgroups on the developing-nation gauge rose, led by technology companies.

The old wisdom is that the best time to buy stocks is when things are at their worst. The problem is knowing just when that is and not investing your money at the beginning of a prolonged period of stagnation. Thus many investors look for the first sign of an uptick in order to buy and ride a bull market to profits. If this a good time to purchase, why buy emerging market stocks?

Strong Dollar, Offshore Bargains and ADRs

The US dollar is strong and will likely get stronger as interest rates go up in the USA. The current best guess is that rates will go up in December and not before. Nevertheless, a strong dollar makes stocks in foreign countries cheaper, even if you purchase them via American Depositary Receipts (ADRs). You hope, of course, is that when the dollar weakens and the foreign currency gets stronger that your investment in that country will profit both from the business and from the exchange rate. The web site Top Foreign Stocks offers lists of foreign ADRs available from Austria through Zambia. Here is Zambia.

• Copperbelt Energy Corp: Electricity
• Zambeef Profits: Food Producers
• Zambia National Commerce Bank: Banks
• ZCI Limited: Industrial, Metals, Mining

We are not suggesting that you buy any of these specific stocks but rather suggest that you look at companies that make money within the country instead of exporters. This is because virtually all commodities are denominated in US dollars so the exchange rate changes make little difference to the value of the stock. But in a growing economy the service sector can prosper and your profits will be denominated in an eventually stronger currency.

ADRs and Analysis of Intrinsic Value

Successful long term investing requires that you look at the intrinsic value of the stocks that you buy, hold or sell. The value of ADRs is that first of all you do not need to speak a foreign language or buy stocks in a foreign market. And secondly top level ADRs provide the same sort of financial info that US stocks do which allows you to make an accurate assessment. To the extent that you spend the time researching emerging market stocks and make reasonable picks you will have a stock portfolio that is nicely diversified across currency exchange rates and various world economies.

Why Buy Emerging Market Stocks? PPT

One of foreign exchange traders’ favorite rules of thumb hasn’t been working too well.

Currency pairs tend to loosely track the difference between yields on the two nations’ short-term sovereign bonds, often the two-year maturity. But that axiom would’ve impoverished anyone trading the Japanese yen against the U.S. dollar this year.

The world’s reserve currency is being driven not by nominal yield differentials but real ones; that is, interest rates adjusted for inflation.

This isn’t a new phenomenon, but rather the re-establishment of a relationship that’s proven more reliable over the long haul.

The correlation between 10-year Treasury Inflation-Protected Securities and the Federal Reserve’s real U.S. dollar trade weighted index is stronger than relationships between real yields and the nominal dollar index or nominal dollar index and yields.

Thus, as long term yields remain low the dollar will continue its current slide. And stocks should rejoice because a stronger dollar has hurt U.S. exports. But what happens if the Fed raises interest rates more than expected?

Whose Bear Market Is Next?

Investing.com predicts a bear market for stocks or the dollar.

On January 25, 2016, the dollar index, which measures the greenback against a basket of six major currencies, hit a short-term high of 99.52. Since then, it dropped to a low of 93.62, which was a drop of 6%. The decrease in the dollar was the primary contributor for the rebound in the major averages. Investors sold dollars because Fed Chair Janet Yellen backed away from her previously threatened four rate hikes during 2016.

The fall in the dollar provided crucial support to global markets by boosting distressed commodity related debt held by financial institutions, improved the projected earnings of U.S. multinational corporations and also bolstering banks’ holdings of dollar-denominated foreign debt.

The Fed is currently looking at just two interest rate hikes this year which should allow stocks to have a breather and even advance a bit but if the Fed decides that the U.S. economy and the threat of inflation warrant more increases the dollar could recover and stocks continue to sink. Unfortunately the stock market is in bubble territory and without a weakening dollar stocks are likely to correct dramatically. Thus we wonder will stocks or the dollar crash next.

Is This the Moment for Buying Gold?

When stocks and the dollar are both in trouble gold often rallies. Gold is up to $1,300 an ounce. The Financial Times suggests five factors to watch for gold.

Gold has enjoyed its best start to a year in three decades, climbing more than 20 per cent. The advance has attracted some of the world’s most sophisticated hedge funds but can it be sustained without a pick-up in physical demand from the world’s two biggest consumers – China and India? As gold trades around $1,300 a troy ounce, here are five things to watch for curious investors and gold bugs alike.

Their suggested factors to watch are the Fed and interest rates, the dollar, China and India because of their economies and because they a big gold buyers, investor demand in the West including hedge funds and a Brexit as gold might get a boost if the UK leaves the EU.

Will Stocks or the Dollar Crash Next? PPT

China’s total debt is about $28 trillion, larger than that of the United States or Germany.

Now the Chinese economy is slowing. But China hasn’t stopped adding more debt. About five years ago, Chinese debt levels began accelerating far faster than GDP was growing. In other words, as time goes by China adds more debt and becomes less and less able to pay it off.

A good portion of Chinese debt is in state owned enterprises or local government. The general consensus was that this debt was China’s problem and would affect anyone or anything else. However that has changed.

Yesterday the Chinese government again began buying stocks to prop up its plummeting stock market. No one thinks that is sustainable. And my colleague Linette Lopez noted yesterday that there is a capital-flight “doomsday scenario” being floated by BAML which suggests that China only has about a year to a year and a half of currency reserves on hand if it needs to defend a run against the yuan.

China’s debt is not just going to disappear by printing money as a lot of China’s business debt is denominated in dollars. So, what will $28 Trillion more debt do to China’s economy?

There Goes the Yuan

The Communist managers of China’s “managed capitalism” have enjoyed support of the Chinese people because of decades of economic growth. That growth threatens to come to an end and rather than deal with secondary social unrest as factories close and people lose their jobs, China is stimulating its economy at the expense of its currency. Bloomberg Business writes about the People’s Bank of China cutting its reserve ratio.

China’s latest easing move signals that shoring up growth is the government’s top priority even if doing so further weakens the yuan or adds to leverage that threatens the longer-term health of the world’s second-biggest economy.

The People’s Bank of China said Monday that it’s cutting the amount of cash the nation’s lenders must lock away. The move marked the first time in four months that the central bank has used one of its traditional monetary-easing tools, despite mounting signs of a weaker economy and a stock market in near-freefall.

The action came days before Premier Li Keqiang is expected to set the bar lower for gross domestic product with a 2016 target expansion range of 6.5 percent to 7 percent, compared with last year’s goal of around 7 percent. The renewed focus on growth could be at the expense of any effort to rein in ever-increasing debt: Chinese banks extended a record amount of new loans in January. Meantime, the yuan is down 3.6 percent against the dollar since October.

In short what $28 Trillion more debt is doing to the Chinese economy is causing more debt, slower growth and a cheaper Chinse currency. The rest of the world will enjoy cheaper Chinese products at the expense of a trade war among low cost producers! Read more in our article, Will Capital Flight Kill the Chinese Economic Miracle.

What Will $28 Trillion More Debt Do to China’s Economy? PPT

The Won as a Surrogate

Bloomberg Business reports that hedge funds are selling the Korean Won as a surrogate for betting against China.

Hedge funds and other large speculators turned bullish on the Australian dollar last week for the first time since May 2015, while Macquarie Bank Ltd. said selling South Korea’s won is now the favored way to bet against China.

South Korea’s won has been February’s worst-performing major currency amid rising geopolitical risk from North Korea and speculation the central bank will cut interest rates. Bank of Korea Governor Lee Ju Yeol said last week that economic uncertainties are “higher than ever.”

The correlation between the won and yuan are higher than for other emerging-market currencies in Asia and the markets “clearly” see the Korean currency as a good proxy for the short China trade, wrote Jonathan Cavenagh, head of Asia emerging-market currency strategy at JPMorgan Chase in Singapore.

China is Korea’s third largest trading partner at well over $200 billion a year. As Chinese imports and exports fall, this affects South Korea’s economy. As the Yuan falls so does the Won as the highest correlated currency to the Yuan in Asia. The Won trades freely on international market unlike the Yuan which is still subject to Chinese Central bank controls.

Are There Confounding Factors?

Although the Won seems to move in lockstep with the Yuan and Korea’s economy is strongly linked to that of China there is another major factor in this case. North and South Korea are still at war! The USA has troops stationed in South Korea and routinely engages in exercises with South Korean forces in preparation for a potential renewal of hostilities. Reuters reports on North Korea’s warnings regarding military exercises in the south.

North Korea warned on Tuesday of harsh retaliation against South Korea and its ally the United States, which are preparing for annual joint military exercises next month amid heightened tensions following the North’s nuclear test and rocket launch.

This area is still a potential powder keg sixty-three years after cessation of hostilities in the Korean War. To the extent that North Korea does something really dumb like attacking the South all bets are off regarding Korea’s economy and currency closely tracking that of China.

Is the South Korean Won a Good Surrogate for Betting Against China? PPT

Is This a Good Idea or Am I Crazy?

Let’s say you have come upon a new and promising approach to trading the US dollar against the Euro. You can test it out in small trades or simply spend some time in simulation trading. OR, you can use the social networking function built into a platform such as WhoTrades.com. WhoTrades.com is a social network for traders across the world. Using a platform such as WhoTrades.com you can have easy access to other traders whom you otherwise would never have met. It provides up to date blogs from other traders, experts in their fields. If you are wondering if your new trading idea is good or crazy, network and learn from other traders.

An All in One Platform

Think of yourself texting another trader on Skype, checking the news on CNN and following the S&P 500 on a hectic day. Does this picture seem crazy and inefficient? It should! Now think of having social media functionality packaged with trading functionality in one platform. That is what WhoTrades.com offers. WhoTrades.com users can connect with full-fledged functionality for trading on stock and Forex markets while maintaining brisk and useful social media connections as well. This platform helps you learn from individual traders who are engaged in stock trading or Forex trading and connect to educational events. Use this platform to mirror the results of successful traders across the globe. Whether you are totally new to trading or a seasoned pro that is looking to network more broadly, take a look at WhoTrades.com and learn from other traders.

About WhoTrades.com

WhoTrades.com is a social network for traders. The platform is designed to educate, enhance communication, and provide an all in one platform for blogging and networking between traders. The focus of our members is trading, either equities or currencies.

• Use WhoTrades.com to interact in real time with traders in all corners of the globe, exchange ideas and pick up new skill sets.
• Visit WhoTrades.com to learn from other traders, either specific useful details about trading or personal advice about how to cope with the pressures of daily online day trading.
• Copy and paste the strategies and skill sets that you learn from other traders on WhoTrades.com.

This platform provides an interface with traders in nations across the globe and in twenty-one languages! Wondering about how Germans perceive the European Central Bank’s new quantitative easing program? Check it out on WhoTrades.com. Would you like a little more insight into how the collapsing housing market in China is affecting the Yuan? Ask on WhoTrades.com and translate your new found information into successful Forex trading the next minute!

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The USD COP Exchange Rate

As of early March, 2015 the USD COP exchange rate is just under 2,600 Colombian pesos (COP) to the dollar (USD). As a point of comparison the peso traded 1818 to a dollar two years ago and again around 1820 just 7 months ago. Go to ExchangeRates.org and pick the two year history for the USD COP exchange rate history.

Welcome to the USD COP history summary. This is the US Dollar (USD) to Colombian Peso (COP) exchange rate history summary page, detailing…

The point being that the peso has fallen dramatically over the last several months. Why is that? Colombia is an oil producer and the Colombian peso is closely tied to the price of oil.

The Price of Oil Falls

Take a look at the chart on InvestmentMine.org for a five year crude oil price chart. The page lists the current price and 52 week highs and lows. Our interest is in the chart.

Crude Oil Price 59.24 USD/bbl (54.55 EUR/bbl) 09 Mar 2015 – 52 Week Low 46.18 USD/bbl 52 Week High 114.77 USD/bbl

The point is that oil was selling for around $110 a barrel in July of 2014 at the same time that the Colombian peso was trading 1800 to a dollar. Oversupply and the presence of threat of recession in Europe, China and Japan have reduced demand at the same time that two main producers, Saudi Arabia and the USA are pumping like mad. Colombia has been caught in this dilemma. Until the price of oil goes up the Colombian peso will be hurting. And what does this have to with currency exchange rates and investing offshore?

Investing in Colombia

Colombia is a democracy with a well-managed economy. The half century long civil war may well be drawing to an end as talks between the government and main rebel faction, FARC, continue in Havana. Colombia is a big energy exporter to the USA, has a free trade agreement with the USA as well as the Pacific Alliance of Chile, Colombia, Mexico and Peru. Direct foreign investment in the oil and gas sector peaked at $13 billion in 2013. Take a look at the CIA World Factbook page for Colombia and click the Economy tab.

Colombia’s consistently sound economic policies and aggressive promotion of free trade agreements in recent years have bolstered its ability to weather external shocks. Real GDP has grown more than 4% per year for the past three years, continuing almost a decade of strong economic performance. All three major ratings agencies have upgraded Colombia’s government debt to investment grade. Nevertheless, Colombia depends heavily on energy and mining exports, making it vulnerable to a drop in commodity prices. Colombia is the world’s fourth largest coal exporter and Latin America’s fourth largest oil producer.

The point is that there is a basis for profitable investment in Colombia and now is an ideal time because of the fall in value of the Colombian peso, property in Colombia and business investment in Colombia. There is vacation property in Cartagena on the Caribbean and business investments in the 8 million person city of Bogota. The coffee producing and agricultural region around Manizales, Pereira, Medellin and Cali is an often overlooked area for investment as well. Because the price of oil is cyclical we can expect to it rise from current lows and bring the value of the Colombian peso back up with it. Simply as a Forex play one might convert their dollars to COP and bank them in Colombia while waiting for an investment opportunity. If the opportunity does not occur one could wait for the expected return of the COP to the 1,600 to 1,800 to the dollar range and simply convert back to dollars with a fifty percent profit! That is our point about currency exchange rates and investing offshore.

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The Size and Shape of the Business Opportunity

Cell Tower Gold tells us that there are approximately 370,000 cell phone tower site leases appropriate for investment in the USA. Because of the prohibitive cost of buying land, cell phone companies only purchase a few percent of the sites that they need. Over ninety percent of cell phone tower sites are privately owned and leased to cell phone companies. Although many owners of cell phone tower site leases are perfectly happy with their situation, there are many who could be convinced to sell at a reasonable price. Find cell tower sites and talk to the owners. You will find out who might be interested in selling and why. Owners of distressed properties may want a cash infusion. Someone nearing retirement may simply want to get rid of his property lock stock and barrel. Find out who wants out and you will have the beginnings of a business dealing with cell phone tower site leases. If you want to make money on cell phone tower investing consider taking the short course offered by Cell Tower Gold. Like all business opportunities, picking good cell phone tower site leases requires a knowledge base, time, and effort, as well as a bit of creative thinking. Learn about this business opportunity and start on your way to handsome profits.

Where Do I Start?

Find cell sites and owners of cell phone tower site leases by driving around. Cell tower sites are on building tops, free standing towers, and hilltops. You can go online to sites like www.AntennaSearch.com for more info. Find a number of sites and then approach the owners. You will probably find a person or two who is interested in selling. At this time you will need to find a solution that works for all parties concerned. One profitable route is to find buyers for these sites first. Then, with money in your pocket or a line of credit, you can make profitable deals for cell phone tower site leases.

For more information about this amazing opportunity, please visit
http://www.celltowergold.com.

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