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Ecuador Inflation Flies

There are growing Ecuador inflation concerns.


Ecuador flights may be down as Ecuador inflation flies.

Ecuador’s 2011 annual inflation rate closed at 5.4%.  This is 4.7%, higher than in Ecuador’s South American trade partner and more than 2% than in the U.S.

This is of special concern because the inflation is in US dollars and the Ecuadorian government has no way to control dollar rates and has little control over monetary supply to reign this inflation in.

This could spell trouble if the trend continues in 2012, especially if the US dollar sees a rebound against other Latin American currencies. This could put Ecuador at a trading disadvantage to Colombia, Peru and other Andean nations.

Yet at the end of 2011 due to political considerations, Ecuador’s government accelerated public spending.  This is an early indicator of even more inflation.  As long as the price of oil remains stable and high, the government will have revenue it can pump into the economy.

This inflation and a strong US dollar along with government induced salary increases, domestic market expansion and increased business regulation will not help Ecuador’s exports.

Since the government is most sensitive to the growing voting power and restlessness of the poor, it can be expected that wealthier residents of Ecuador will be expected to pay the costs of this inflation.  For example, President Correa decided that airlines flying into Quito, Guayaquil, Cuenca and Galapagos will have to pay international market price for kerosene i.e. about $3/gallon instead of the now subsidized $1/gallon.

For Tame or Aerogal Airlines, they will have a cost increase of about 60% and then they plan to add a gas surcharge on ticket price of about $50 for a one way trip. This means that the cost of internal fares in Ecuador will just about double.

The cost of a roundtrip ticket from Quito to Cuenca or Manta or Guayaquil might go from about $130 to $230 if the airlines pass on all the added costs. The airlines are assessing their strategies deciding whether to absorb some of the new added costs or not. Eventually passenger response will also impact the pricing.

Ecuador like some other countries like Costa Rica are trying to either cut costs of subsidies or increase revenue to balance their budgets, but pay attention to preserving first social peace by taxing the more affluent. In this case the thought is that the people who fly can afford to pay more.

Tourism could suffer as the the price of tickets rise but the thinking is that the impact will be on the wealthier segment of the population and that the masses who will no longer be able to afford the higher fares will travel by bus or car.

The one thing that would be suicidal and that no Ecuadorian president can afford to do is to increase gasoline prices as it would disrupt totally the whole economy that is solely based on car and trucks for the transport of goods.

Fortunately overall prices in Ecuador are still low and real estate prices still affordable. These facts will help Ecuador maintain it position as a best place to retire.

However this increased inflation and the government’s desire to aim them at the higher income brackets (ie you and me) reminds us of the importance of keeping our investments and savings out of Ecuador.

This is why we’ll look at seven common sense ways to diversify around the world at our upcoming Quantum Thinking + Investing and Business Seminar.

We need common sense investments in this Common Thought World that has been turned upside down by accelerating technology and change.

What 44 years of living, investing and doing business around the globe has taught me though is that common sense is never common thought!

Common Thought is what the thundering herd believes…based on what happened in the past.

Common Sense dictates that the good investments have never been made before.

I have been investing abroad for decades and I have enjoyed capturing seven common sense trends.

#1: 1970s. Gold & Silver.

#2: 1970s. Japan, Germany, Switzerland, England, Australia and Hong Kong .

#3: 1980s. The Tigers:  Taiwan, Singapore, Malaysia, South Korea & Turkey .

#4: 1990s. South America (which led me to Ecuador ).

#5: 2000s. China, India and Eastern Europe .

#6: Invest in Real Estate Throughout.

#7: Bet Against the US Dollar Throughout.

Yet  at the time these investments were spotted they made no sense at all IF… one was thinking Common Thought.

In the 1970s the idea of investing in Hong Kong was crazy. In the 1990s when I suggested investments in Ecuador… many laughed at Merri and me.

They are not laughing now because when the future becomes the past… Common Sense and Common Thought merge.  Common Thought is the common sense of the past.

Common Sense investing requires new thought!

Yet we cannot divorce ourselves totally from common thought because at times the thinking of the masses drives markets and economies rather than basics and fundamentals.

Let’s take betting against the US dollar as an example.  The dollar has fallen and fallen and fallen. Back when I began, a US dollar bought four Swiss francs.  Recently the greenback would only fetch about .75 francs.  (This is one reason we say not to invest in Swiss francs for safety now.)

There have been times… such as 1980 shown in this chart from Grandfather.com (below) when the dollar strengthened so much it took seven years before it dropped. That’s a terribly long time if you are speculating against the buck.  Long enough in fact to go broke!

The dollar had every reason to go down but economic concerns caused the thundering herd to rush back to the dollar… just as they did in 2008.


Here are seven ideas we’ll cover in the investing session.

Common Sense Investing Idea #1:  Expect a rebound in the US dollar in 2012.

A look at what we’ll cover in the investing session of our February 8-9-10, 2012 Quantum Thinking + Investing & Business Seminar in Mt. Dora will show how common sense can stray from common thought… but actually does make sense.  The road to profit in investing and business is to get ahead of the crowd.  Buy on the rumour… sell on the news.

Common Sense Investing Idea #2: Major Markets Now Offer Greater Value than Emerging Markets.

Fwd: time-photo

Really… think about this and look at the numbers above.  What most of the establishment calls “emerging markets” have long since emerged.  Is China emerging with its 3.5 trillion in reserves and 7.5% per annum growth rate compared to the USA with $149 billion in reserves and a growth rate too low to even mention?

Although all three so called emerging regional indices advanced last quarter: Asia by 3.6 %, Europe, Middle East and Africa (EMEA) by 3.8 % and Latin America by 9.2 %, many of these markets emerged long ago.

It just took most investors an extra decade to catch onto this fact.

In our upside down world (which is the present old common thought that emerging markets are the best value) is outmoded.  The so called major markets now offer equal or better value than major markets.

The numbers below show the average Price to Book Value,  PE Ratio and Return on Earnings of the shares in four Morgan Stanley Capital Indexes.

major vs emerging mkts

For the past two decades emerging market shares have been considerably better value than major markets with lower prices to book and  much better price earnings ratios.   The numbers above show that this is no longer the case and recent scares in Europe have made the equity values in Europe look even better.

Plus the US stock market may now offer one of the best places to buy.  The USA is still by far the largest economy and its demographics are much more geared for growth than Europe or Japane.  Plus US companies are lean mean profit generating machines now… as attested to the 14.7% return on earnngs figure above.

Our February investing sessions will look at potential US stock winners in 2012.

We’ll also see that Europe offers the best value of all for equities.  Problems in Japan and Europe create extreme value in both areas. Our reveiws will pull apart the bargains  in the  top six “Buy”-rated markets: Austria, France, Germany, Italy, Japan and Norway at equal weights.

Which portfolio would you rather have?

An implicit projection by Keppler Asset Management shows how much we should expect the Equally-Weighted World Index to rise over the next three to five years, 17.6%.   Shares in the European index are available at a 10% discount over the World Index.


A look at the Irish Stock Exchange ISEQ General Index shows how shares can suddenly recover after investors panic.   The market turned gloomy over Ireland in mid 2011 and fled this market.


When this panic created over the top value in Irish equities, common sense finally prevailed… investors rushed back in and the market causing share prices to rapidly rise.

Irish ETF

iShares ETF managers offers the MSCI Ireland Capped Investable Market Index Fund (Symbol EIRL NYSE) U.S.-listed ETF which provides exposure to the Irish economy.

EIRL is linked to the MSCI Ireland Investable Market 25/50 Index, a benchmark that is designed to measure the performance of stocks in the top 99% by market capitalization of equity securities listed on stock exchanges in Ireland.  The index consisted of appx. 20 securities, with large allocations to the materials (25%), consumer staples (23%), and industrials (18%) sectors.  Large holdings include CRH PLC, an Irish building materials group, the food company Kerry Group (11%) and drug development firm Elan Corporation (9%).

That idea wasn’t too ahead of itself was it?  So let’s take the plunge and go right past the Vietnam .com bubble.  Let’s look at why we are starting to expand our internet marketing now in China and Singapore (we’ll look at Nhom-Mua and Muachung two of Groupon’s Vietnam clones as well as China’s Baidu and Tencent in the business sessions of the seminar) and go to three ideas that will get many laughing again.

Common Sense Investing Idea #3:  Three New Emerging Markets

We will not abandon the so called emerging markets mentioned above and will review the top value emerging markets:  Brazil, China, Czech Republic, Egypt, Hungary, Poland, Russia, Taiwan, Thailand, Turkey.

Then we’ll focus on three new emerging markets: Cuba, Scotland & North Korea!

Cuba: Almost a decade ago I wrote Ecuador was a great place to invest:


Our farm in Ecuador we bought in 1999.

One of my messages back then said: 60 million baby boomers will begin to retire in just a few years. Many of their pensions and social security will be severely squeezed by inflation, leaving these people with one of five options.

#1: Keep working
#2: Move to less expensive areas within the US
#3: Export their retirement
#4: Live in near poverty
#5: Die

This is why I also believe in Ecuador. Imagine this. 60 million boomers will retire over the next 20 years. We boomers are the most spoiled group of consumers as a demographic class that has ever existed on earth. We were promised the world. We were given the world. Now the magic is about to disappear.

Assume that 10% of these will decide to move to less expensive countries. That’s 6 million people. Where is the most likely place to go? Eastern Europe offers great potential but is a long distance from the US.

Canada is out…too expensive and too cold. Most people will head south.

Mexico stands to be #1, but prices there are rising quickly and there is a lot of anti-gringo sentiment. After all there have been numerous Mexican-American wars. The building of a fence across the border will not help either. Yet it’s still probably the place that will benefit the most due to location.

The low end Caribbean is also good except for those darn hurricanes that will put lots of people off…plus many water and transportation problems and the fact that few of the islands have a real infrastructure.

Panama is good…lots of English spoken, many Yanks already there, but weather is lousy if you want to be in town (hot and humid) and prices are no longer low. Ditto for Costa Rica. Central America lacks infrastructure though there are some nice gringo settlements though they are expensive. Colombia is the first nation with a progressive economy and full infrastructure after Panama and Mexico. This could be a wonderful place but security will stop most from going there. If the security/drug/crime issues are resolved and image cleans up…go buy in Colombia. This will be a great opportunity.

Cuba. When this opens it will be the best.  A great place to buy when you can assume there will be no negative political circumstances.

Since that time I have been watching Cuba and the time to start is NOW.

Cuba is already Canada’s #1 tourist destination.  The US State department is already letting tour operators take Americans on tour in Cuba.  The Cuban government has started to open up capitalism and the ability to sell private goods and property.

Now is the time to start learning!

Scotland: Scotland’s first minister, Alex Salmond, announced plans to hold an independence referendum in the autumn of 2014.  This may seem surprising to many but certainly is not a new idea.  The origins of the independence movement in Scotland began almost as soon as the unification with England took place in 1707.

At the time, the view was that Scotland was in desperate need of financial support, but opponents of the move were outraged by claims that the Scots who put their names to the Act of Union were bribed.  Scotland’s Bard, Robert Burns, famously wrote: “We are bought and sold for English gold. Such a parcel of rogues in a nation.”

In 1934, the Scottish National Party (SNP) who supports independence began.

What makes these times different is that after decades of ups-and downs, the SNP won its first election in 2007 and then won again, in 2011.

Let me add here that Scotland is already a good place to invest.

Scotland provides educational excellence with top notch universities.  University of Edinburgh is regarded as one of the most prestigious universities in the world. The university is ranked 6th and 7th in Europe according to the 2011 QS and Times Higher Education Ranking.

Scotland is well known for scientific success.  Scotland has two of the top 10 best scientific institutions in the world for scientists to work in according to The Scientist, 2011 and a strong tradition of creativity, ingenuity and invention. Scots pioneered MRI scanning, the ATM, golf, Dolly the Sheep, television and penicillin.

Scotland offers higher returns.  Scotland is one of the most cost-effective regions in the UK…. 30 percent more cost-effective to set up and run a facility here.  Leading international companies, such as Amazon, Mitsubishi Power Systems, Barclays, Blackrock and Gamesa chose Scotland to expand their operations.

The difference is that there is a much higher chance of a yes vote for Scottish independence and no one knows  exactly how events would then unfold. The likely timescale from a “Yes” vote to full independence would be lengthy providing ripe opportunity for investors and business who stayed tuned to the change.

North Korea:  Perhaps the most laughable of all?  Laughing all the way to bank in ten or 15 years… yes.

North Korea’s population rose to 24.2 million in 2010 from 24.1 million in 2009, about half of South Korea. Inter-Korean trade rose 13.9 percent from a year earlier to $1.9 billion last year.

South Korea plans to set up a fund to raise as much as 55 trillion won to pay for eventual reunification with North Korea, Unification Minister Yu Woo Ik said in an interview with Bloomberg last October.

China’s trade with North Korea has more than doubled since 2006, and Beijing’s investment in North Korea and in Chinese border infrastructure has been rising.

North Korea sells commodities such as copper, coal and iron ore to China. By some estimates, China now accounts for more than 70% of North Korea’s foreign trade, with Russia believed to account for most of the rest.

China has been pouring money into the border area over the past two years in a bid to encourage North Korea to launch Chinese-style market reforms, analysts say.

North Korea’s trade expanded more than 20 percent in 2010 to $6.1 billion on growing business with China.

Chinese, South Korean and about 30 European companies are now operate in North Korea.  The first investments will be in these firms.

China agreed during senior-level talks last year to make investments totaling US$10 billion to build railways, housing and other infrastructure.

China and North Korea are now allowing Chinese group tours to North Korea.

China will invest 45 billion yuan ($7.1 billion) over the next five years to expand Dandong Port, a key trade link to isolated North Korea.

Dandong, which lies on the North Korean border, will be able to handle more than 100 million tonnes of freight annually once the expansion is complete, compared with 60 million tonnes at present, the report said, citing a government statement.

Firms in our Research Now

The International Passenger Transport Company of the Port of Dandong Group. Established in July 1998. It mainly transports the passengers and small pieces of goods from Dandong, China to Inchon, Korea. It is a key opening up the windows of Dandong City. Its annual passenger handling capacity and the economic benefit always rank top places among the 12 national routes to Korea.

Wanxiang Group Mining.  North Korea’s mineral reserves are valued at 6 trillion.

Yanbian Tianyu International Trade Company, special economic zones and casino in North Korea. They managed the  inaugural Yanji – Hunchun – North Korean Luoxian – Mount Kumgang tourism line and its maiden voyage with over 130 tourists.  This maiden voyage took place August 29 to September 2, 2012 from Yanji, via China’s Quanhe River Port and North Korea’s Yuantingli Port, to Luoxian City, and then rode North Korea’s Wanjingfeng Cruise straight to Mount Kumgang.  Then they visited Jiulong Yuan, Hai Jingang, Wanwu Xiang, Sanri Pu and other attractions in Mount Kumgang North Korea.

Orascom Telcom. Egypt’s phone company that is building a 3G mobile phone network.

France’s La Farge. Cement maker owns 30% of a North Korean cement factory with 3,000 employees.

German outsourcer, Nosotek does North Korean computer programming.

Swedish Noko makes jeans in North Korea.

Nine Mode… Men’s Shirts.

Common Sense Investing Idea #4:  Invest in Canada for Growth and Safety
You may not be laughing so much now, but be aware that taking early risks in new pioneer markets like this requires a balancing act with investments in safe economies like Canada as well.  So we’ll look at Canadian investment opportunities also.

Canada has economically outperformed most industrialized countries during these recent difficult years for the global economy.

Forbes magazine “ranks Canada as the best place on the planet for businesses to grow and create jobs.” The OECD and the IMF predict Canada’s economy will again be among the leaders of the industrialized world over the next two years.

For the fourth year in a row, this body, the World Economic Forum, says that Canadian bg anks are the soundest in the world.

Canada has sound fundamentals… the lowest overall tax rate on new business investment…. and the lowest net debt-to-GDP ratio in the G-7  by far.

Canada is also one of only two G-7 countries that has recouped all of the jobs lost during the 2007-2008 global recession.

The Upcoming February investing sessions will include Canadian bonds, shares and ETFs that invest in Canada.

Common Sense Investing Idea #5: Choose Bonds Over Shares Whenever You Can.

Long term readers at this site have known about the potential in bonds and value for many years and reviewing great bond deals is a major part of our seminars.

A January 5, 2012 USA Today article entitled: “Why are bonds outperforming stocks over long term?” by Matt Krantz confirms what we have shared when it said:  Despite a reputation for being a slow-growing alternative to stocks for the risk-averse, bonds just passed stocks’ long-term performance over the past 30 years.
Given the rally in bonds in 2011, it might not be surprising that the Ibbotson Associates SBBI bonds index, a broad bond measure, returned 28% last year, crushing the 2.1% return of the Standard & Poor’s 500 including dividends. The bond index also topped stocks for the past 10 and 20 years.

What’s more surprising, though, since it contradicts the widespread belief that stocks beat bonds, is that the Ibbotson Associates SBBI bond index has returned 11.03% a year on average over the past 30 years, edging out the 10.98% return of stocks.
Bonds’ impressive run is being powered by several factors, including:

•Distrust of the stock market’s future. An entire class of investors is rattled by a dismal decade for stocks, including double-digit losses in four separate years since 2000, says Bill Larkin of Cabot Money Management. “People are looking at the (stock market) and seeing the casino component,” he says. “They’ve taken big hits.”

•Search for investment income. Aging Americans nearing or in retirement are deciding they crave steady income and don’t have the stomach for stocks’ higher volatility, Winans says.

•Historic declines in interest rates and inflation. The continual movement down in interest rates and inflation the past 30 years has been a boon for bonds, which rise in price as interest rates fall, says Charles Crane of Douglass Winthrop Advisors.

It would be a mistake to assume that bonds’ strong run over the 30 years is destined to repeat, says Mark Hebner of Index Funds Advisors. Bonds have had stock-beating periods before, but stocks, over the very long term, still have beaten bonds, he says.

Choosing bonds over shares does not mean just invest in plain Jane bonds.  This means to look for bonds that perform like shares and the bonds to find now are long bonds. This once again upsets common thought which is… in risky times… get short term bonds.  Now times are so risky that short bonds have the greatest risk and no yield. Long bonds are more likely to weather any 2012 storms and pay really nice yields plus extra forex potential now.

Here are a few of the bond blocks we’ll review and update at the upcoming seminar:

HUF HUNGARYGOVT    6,500 24-06-2019 Ba1 BB+  8,76

TRY INTBKRECON&DEV 13,625  09-05-2017 Aaa AAA 7,61

RUB RUSSIA-EUROBOND 7,850 2 10-03-2018 Baa1 BBB+ 7,08

ZAR REPSOUTHAFRICA 10,500 21-12-2026 A3 A 8,21

BRL    BRAZIL REP 12,500 05-01-2022    Baa2 BBB    8,56

MXN MEXICANBONOS 10,000 05-12-2024 Baa1 A-  6,22

AUD EUROPEANINVTBK 6,125  23-01-2017 Aaa AAA 5,99

This portfolio yields 7.49%

USD INDONESIA(REP) 5,875  13-03-2020 Baa3 BB+  3,72

USD TURKEY REP OF 5,125  25-03-2022 Ba2    BB  7,66

USD SOUTH AFRICA 5,875 2 30-05-2022 A3 BBB+ 4,19

USD UKRAINE GOVT 7,950  23-02-2021 B2 B+ 9,45

This portfolio yields 5.14%

AUD EUROPEANINVTBK 6,125  23-01-2017 Aaa AAA 5,99

NZD KFW 6,375   17-02-2015 Aaa AAA 3,59

CAD CANADA-GOV’T 4,250  01-06-2018 Aaa AAA 1,55

USD UKRAINE GOVT 7,950  23-02-2021 B2 B+ 9,45

This portfolio yields 5.41%

EUR PORTUGUESEOT’S 4,750  14-06-2019 Ba2 BB 17,00

EUR IRISH GOVT 4,500  18-04-2020 Ba1 BBB+  6,75

EUR SPANISHGOV’T 4,000  30-04-2020 A1 A  4,49

This portfolio yields 9.41%

In the seminar we look at a mix and match bond tactic so investors can learn how to match the best combo to their own investing.  Then we examine Bond ETFs that allow even small investors to gain this added income.

See more about why bonds have performed better than shares at Buy Better Bonds

Common Sense Investing Idea #6:  Bet Against the Swiss franc

Are most investors 52 days from disaster?

Fed charts

The peak in this chart… shows a risk that could come this year… by March 20, 2012… 52 from now.  See more at Are we 52 days from Disaster?

Common Sense Investing Idea #7: Invest in the Green Revolution, Water, Agriculture and Food.

This idea stems from where does one store value in this time when so many traditional stores of value are at risk?

At this upcoming seminar, we’ll see why necessity is always a good place to store value… food clothing and shelter.

Invest in Water

We’ll look at eleven multi currency investments in water because the root of all three of our basics  is water.  Water investments offer great potential. This does not negate the need to suit such investments to your needs.

While the world’s population tripled in the 20th century, the use of renewable water resources has grown six-fold. Within the next fifty years, the world population will increase by another 40% to 50%.  This population growth – coupled with added water demand per person from industrialization and urbanization – will result in an increasing demand for water.

Yet the world may be entering an era of less water!

An August 22, 2011 article in Time Magazine  entitled “Parched Earth” by Bryan Walsh says:  Hurricanes announce themselves on radar screens before slamming into an unlucky coast. Tornadoes strike with little warning, but no one can doubt what’s going on the moment a black funnel cloud touches down. If we’re lucky, a tsunami offers a brief tip-off — the unnatural sight of the ocean swiftly retreating from the beach — before it cuts a swath of death and destruction.

But a drought is different. It begins with a few dry weeks strung end to end, cloudless skies and hot weather. Lawns brown as if toasted, and river and lake levels drop, like puddles drying after the rain. Farmers worry over wilting crops as soil turns to useless dust. But for most of us, life goes on as normal, the dry days in the background — until one moment we wake up and realize we’re living through a natural crisis.

This summer the python has gripped much of the southern U.S., from the burned fringes of Arizona — singed by massive wildfires — to usually swampy Georgia. Hardest hit is Texas, which is suffering through the worst one-year drought on record, receiving an average of just 6.53 in. (17 cm) of rain so far this year, well off the 34 in. (86 cm) it receives over a normal 12 months. At the end of July, a record-breaking 12% of the continental U.S. was in a state of “exceptional drought” — the most severe ranking given by the National Drought Mitigation Center. More than 2 million acres (809,000 hectares) of farmland in Texas have been abandoned, and streets are cracking as trees desperately draw the remaining moisture from the ground. Taps are dry in one North Texas town.

And there’s evidence — when it comes to rainfall, at least — that the good years we’ve enjoyed in the past may have been more of an aberration than we realize. The Southwest in particular has a history over the past two millennia of severe droughts that lasted for decades; deeper in the geologic past, dust bowls endured for centuries. Just as worrying, climate change is expected to further dry out much of the region, multiplying the impact of population growth and expanding demand for water. What the South is facing may be not just a drought but the first signs of a permanent dry, one to which we’ll need to adapt — if we can.

This article was accompanied by a 17 Photo Essay “Picturing the American Drought” by George Steinmet

dry lake

This, one of 17, photo entitled “The Island,” shows a resort on Lake Travis, that is normally a peninsula surrounded almost completely by water. All the photos are linked below.

One More Vital point About Investments and Water.

The United Nations Water agency UNwater.org says:  A Drought in Your Portfolio?

The World Water Assessment Programme (WWAP) participated in the EIRIS conference on global water risk research. The conference explored the investment case for considering the risks and opportunities arising from water scarcity as part of a wider sustainable investment strategy, and heralded the launch of the EIRIS’ Global Water Risk report.

The report shows that out of the 2000 global companies analysed 54% are exposed to water risks but take little or no action to mitigate them, and approximately half show no evidence of any management response to water risks whatsoever.

So when thinking about any investment, look at the water element… this is becoming a necessity that can help your future from becoming all wet!

At our next International Investing & Business Seminar, we will look at eleven ways to profit from investing and business in water agriculture and food.

What an incredible place we are in!  The present screaming so quickly from the past and dragging us often screaming and stressed into the future.  Join Merri and me and our host of expert speakers as we examine ways to make the here and now and our future not only exciting but prosperous and safe by simply applying Common Sense.

Join us for our Quantum Thinking + Investing & Business Seminar February 10, 11, 12, 2012 Mt. Dora, Florida.


Better yet join our seminars all year long free as an International Club member.

Learn About Ecuador in the International Club

Please join Merri and me.  Spread an epidemic of success… in health… wealth…. service to the community and personal fulfillment.   Be infected with positive purpose…. enthusiasm… fulfillment… extra income, profits and fun.  Inoculate negativity.

gary scott & Ma

An invitation from Gary Scott.

Malcolm Gladwell shared “Three Rules of Epidemics” in his book “The Tipping Point”.  One of these three rules was “The Law of the Few”.

Gladwell wrote:  The 80/20 Principle states that in any situation roughly 80 percent of the ‘work’ will be done by 20 percent of the participants. This idea is central to the Law of the Few theory where a tiny percentage of people do the majority of work. But say you took those 20 people who do all the “work” away, would changes or epidemics never occur or would the next 20 people step into that role and assume the position of “workers”? Is one born an exceptional person, a ‘one of the few,’ or could someone eventually learn how to become a member of this exceptional group?

This rule is to know the Pareto principle (named after the Italian economist, Vilfredo Pareto).  The 80–20 rule is based on the universal principle of factor sparsity.  In short… “roughly 80% of effects come from 20% of causes”.

Pareto, noted this law when he realized that 80% of the land in Italy was owned by 20% of the population.  Then he saw that 20% of the pea pods in his garden contained 80% of the peas.

This law seems to apply over a good segment (perhaps all) of reality.  80% of business sales will be made from 20% of the sales efforts. 80% of a company’s sales come from 20% of the  clients.  80% of the profits will come from 20% of those sales, and on.

If you look at the ten wealthiest people in the world, the top three (Carlos Slim Helú, Warren Buffett, and Bill Gates) own as much as the next seven combined.

Almost two decades ago Merri and I noticed that about 20% of our readers were thinking about leaving the USA.

In thinking this through and contacting thousands of our readers we found seven problems that made Americans feel let down.  These concerns were the backbone of why 20% of Americans were leaving.

#1: America’s long-term economic crisis and transformation.

#2: High levels of joblessness.

#3: Significant and growing inequality.

#4: Comparatively high levels of crime and violence.

#5: Growing inflation of basic costs of living… food and gas especially.

#6: Political dysfunction in Washington.

#7: Growing interference by Big Brother in every aspect of life.

Those answers refocused our business and life.

We developed two ideas around this:  EcuadorLiving.com.  Today this is one of the largest and most read websites for expats living in or moving to Ecuador.

We also developed Smalltown USA, micro business and self publishing site because our minds were asking… “How can we also serve the other 80%?”

We knew that a large percentage would move to Smalltown USA.

In 2013 our purpose is to help readers young and old move:

* Abroad

* To Smalltown USA

* Into their own high earning micro business in writing – self publishing – or online.

Merri and I feel very privileged to be invited into your home or office (albeit virtually).

To enhance the process we say “Come on into our home” as well.

To make this easier here is a new monthly plan for our annual International Club. 

Plus we added two more courses to be conducted in our small home towns… Super Thinking + Spanish, March 18-19-20 in Mt. Dora, Florida and an extra June 14, 15, 16 Writer’s Camp  in North Carolina.


Join us at our Florida home.

In a moment I’ll outline the monthly plan and invite you to join us as many times as you wish in January, February, March,  June, August-September, October and November in 2013.

First, let me share this story.

We and our readers gain so much from meeting personally… especially multiple times. “Life changing” are the words we often hear… so I want to share how you can meet with us and numerous experts on investing, pensions, health, writing, and micro business in January or February and March and over the entire year plus gain some huge savings in the process.

On New Year’s Eve, a reader whom we have known for more than 2o years asked about the new community magazine franchise.

I wished this reader a Happy New Year and explained… The community magazine system is not a franchise.  In a way it is the opposite as franchises aim to make each business a similar model.  Hyper community magazines need to be unique to the community.

Our program provides basic training and a business plan based around our existing success that earns up to $17,000 a month.  A publisher can use the training to run the business on their own.

Positive Community Magazine (PCM is the venture) will then provide a variety of services.

Magazine design
Article archives
Ad creation
Web site development
Additional marketing support & training
Consultations +

Each publisher can choose which of these services they want to use ranging from none… to all of them.

The reader replied:  Happy New Year to you Two too. I spent some time today wondering what YOUR resolutions are for 2013. Thanks for your responses. I thought I might be getting a bit ahead of myself with some of the questions. But your orientation was very helpful. With that we are better able to wrap our minds around the “upside down” ideas. This helps prepare us for the conference.

I like the way you have shaped your model.  It is just like you to empower your clients then provide a menu of services they may choose from or not. No strings attached. Your price structure seems very affordable.  It seems to me you have developed yet another great model. I tip my hat to you.

You are the ultimate existentialist Gary.  Believing everybody is responsible for their own happiness and success. The influence you have had on me thru the years has been very positive.  Happy New Year

I replied:  Thanks.  I have to be honest… we did not make any resolutions. I just went to work instead.  Answered my first email at 6:39 and had my first sale of 2013 at 9:18.

I think this comes from feeling settled in the right place, on the right track, at the right time, so no big changes or big new promises are needed.

No big celebrations are required since every day is a celebration of gratitude, abundance and life.

Look forward to being with you two again in January.  Gary

This reader of course belongs to the International Club where we help members develop your ability to make their own happiness and success.

I invite you to join the club.  Save as much as $7,239 for as little as $177 a month.

As a club member you gain $7,792 of seminars, courses, online courses plus Spanish lessons and Ecuador tour discounts.

Join Merri and me  for seven courses and seminars that we’ll conduct in 2013 FREE.  Gain positive solutions to economic, financial and lifestyle developments.

Here are the courses you can attend at no cost.

January 11-12-13 Super Thinking Spanish, Mt. Dora, Fl.

February 1-2-3 Super Thinking International Investing & Business Seminar, Mt. Dora Fl.

March 15-16-17 Super Thinking Writer’s Camp, Mt. Dora Fl.

March 18-19-20 Super Thinking Spanish Mt. Dora, Fl.  (Taught by Mark Frakes – $175 extra)

June 14, 15, 16 Super Thinking Writer’s Camp, West Jefferson, NC.

August 31- Sept 1-2 Super Thinking Writer’s Camp West Jefferson, NC.

October 4-5-6 Super Thinking International Investing & Business Seminar, West Jefferson, NC.

November 15-16-17 Super Thinking Writer’s Camp, Mt. Dora, Fl.

In addition members receive discounts on Ecuador farm tours and Spanish courses conducted by our Ateam Ecuador and Super Spanish teachers.  For example Super Spanish courses that are normally $699 are $175.  Ecuador real estate tours are reduced 20%.

Part of the courses we conduct are held on the New River in Ashe County, North Carolina.


New River

We’ll conduct three of the courses either at our farm or in this forest lodge.


50 delegates joined us.


The seminar in action.

After the seminar, International Club members join us at our home to talk with the speakers.


International Club members meeting in our home after a North Carolina seminar.

Four courses are in historic Mt. Dora, Florida.

Please join us this year through in Florida, and North Carolina FREE as an international club member… plus gain access to the agricultural tours and Spanish courses conducted by the Ateam Ecuador at a discount.


Super Thinking Spanish course at the historic train station in Mt. Dora.

There are many benefits of membership.

You (and a guest of your choice) can attend all eight of the seminars we have already set for 2013 plus any others we decide to conduct in the year ahead FREE.

As a club member you also receive seven online reports, courses and workshops worth $1,246 FREE.

The first of these seven online courses is “Tangled Web – How to Have an Internet Business,” normally sold at $299.

The second is our online course “Self Fulfilled – How to be a Self Publisher”, which has a $299 value. I am sending you this extra course free as I think it will help you have greater success. This is an extra $299 savings.

The third is our online course “International Business Made EZ” sold at $299.

You also receive fourth the 50 minute video by our webmaster David Cross on “How to Get Your Web Business Started”.

Your fifth course is the 50+ lesson course “How to Create your Own Website Using Sitesell” by Michelle Toole. (We are proud that this course was written by a student of our courses showing how well the 43 years of knowledge that Merri and I have accumulated and put into these programs can help you start your own global micro business.)

Sixth, you become a beta member in our newest online course “Event – Full Business – How to have a Seminar and Tour Business” currently offered at $349.

Seventh, you are entitled to attend “How to Earn from Positive Community Publishing” workshops FREE.

When you enroll, we’ll send you a password that makes the online courses easy to access at the Club website.  You can reserve as many seminars as you desire.

Five Positive Steps

Join Merri and me as we look at positive ways to prosper during 2013. Here are five ways to gain from the forces of change that can raise havoc with many.

#1: Having your own micro business for extra earnings, freedom, fulfillment and fun.

#2: Living and prospering in lower cost countries or small towns.

#3: Multi currency investing through US brokers and bankers abroad.

#4: Commodities that rise with inflation.

#5: Good value real estate…. especially multi dimensional and agricultural property.

We have specialized for over four decades in helping our readers excel in these five inflation beating opportunities.

The big benefits of belonging to the International Club are the power of repetition, updates and international friendships.  As a club member, you become friends with other members as you meet again and again.

Your first saving is on waived seminar fees for the seminars over the next year.

As you will see above and below you can attend Florida & North Carolina seminars.  If you attend just two of these seminars, the $1,799 membership fee will have already created a savings for you.

Yet there is more.  Much more.


International Club members meeting in West Jefferson for a reception after the North Carolina seminar.

Enough…. Enough with the Bad News.

Our 2013 mantra is BE POSITIVE in this negative world.  There is nothing as valuable as rarity but we need to remember that bad news sells. This means the mainstream media has slipped into offering information with an adrenaline rush.  Mayhem, murder and natural disasters.   These negative events will happen…. globally. We cannot do much about this.  Dwelling on insolvable negativity is not good for our health or wealth.

A recent quote from the Abraham Hicks website explains why nicely.

Continuing to tell stories of shortage only continues to contradict your desire for abundance, and you cannot have it both ways: You cannot focus upon unwanted and receive wanted. You cannot focus upon stories about money that make you feel uncomfortable and allow into your experience what makes you feel comfortable. A different story will bring different results: My thoughts are the basis for the attraction of all things that I consider to be good, which includes enough money, and health, for my comfort and joy.

Make 2013 Your Best Year Ever

What we can do is make ourselves Friendlier, More Compassionate, Happier, Stronger, More Energetic with greater intellect.  The way to start is to surround ourselves with successful, friendly, compassionate, happy, stronger, smarter, positive people who think as you do.

The International Club brings together experienced, like minded souls, who take a positive view and think outside the box… in constructive, thoughtful, doable ways.

Being in the club surrounds you with successful… positive… like minded souls.  This benefit alone is truly powerful stuff!

The courses you can attend free integrate Super Thinking with business and investing ideas and experience that enhance your health and wealth.

Focus on Ecuador & Smalltown USA & Canada

Learn how to create a BIG INCOME by thinking SMALL.   At the seminars you meet speakers who are attorneys and real estate experts for both Ecuador and small town USA.   You’ll rub shoulders with experts on global investing and pensions who can help you increase and protect your savings and pensions also how to increase the income you earn in positive ways you enjoy as you help your community.

(See a list of speakers you’ll meet at the club meetings along with other club members below).

Absorb  through  Osmosis

Merri and I are in our 45th year of organizing courses, seminars and newsletters about international and Super Thinking  lifestyles. The importance of this sharing… by like minded souls… was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group. You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon. You made us all feel so welcome and cared about. You were so kind to make arrangements for a ride with the other delegates from the Charlotte Airport. They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it. Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.  Thanks to you I now have new hope and a new direction to move forward in my life.  I know by attending your classes and conferences that through education and due diligence I will make the right choices.

This delegate’s comments about “belonging and feeling like a brother” to the other delegates is a wonderful refrain we have heard from our readers, year after year.

24 years ago Merri and I created a way that readers can join us to be immersed in a year-long learning program through our International Club.

The ideas behind this program began all those years ago in Vienna, Austria while we were conducting a course there.  One of our older delegates, had some sort of attack. The first fear was heart trouble. Several delegates took him to the hospital.  Others stayed with him there. I don’t think that delegate was alone for a minute!

What impressed Merri and me was that no one asked the delegates to help this man.

The friendships of delegates sharing many courses had just grown so strong that it was a natural reaction, just as if a family member was ill. Fortunately, it was only travel fatigue and the delegate didn’t miss a session of the course!

When you join our International Club 2013 you become part of a special family. The very first member to join the club all those years ago wrote, Thank you for the enjoyable and informative courses. I am pleased to be part of your international family and look forward to continuing my education at the next course.

His feeling struck a familiar chord. It has always been one of my greatest satisfactions to see how much fun delegates have getting together, sharing information and making friendships as we learn how to improve our health and increase our wealth.

The courses draw like-minded souls.  For this reason some delegates come back again and again. They come to learn, but also to be with their many friends made at the courses. When like-minded souls get together again and again to discuss a common purpose, magic happens! I can’t explain it in any other way-but it is true.

In a way our meetings are almost like family reunions. Perhaps it is getting together and reflecting on what has been said and what has been happening.

Learning with those who are also interested in the world creates thoughts that multiply the value of what we gain.  This is hard to describe but results are most powerful and wonderful!  This is to me is as important as the great financial benefit of attending many of our courses.

See the 2013 seminars in detail  below.

We started and have continued the International Club for 24 years because there are wonderful benefits from having repeat delegates at courses. Having repeat delegates makes the whole course somehow more exciting for all. Being a repeat delegate makes it easier to make and keep wealth and to lock in the knowledge you gain. It’s an exciting lifestyle. We have fun, gain adventure, discovery and friendships and share ways to improve our health and wealth!

You can see from the schedule above a very busy schedule for 2013. Very few club members actually attend every seminar.  Many  attend almost all of them!  Of course we hope you be with us for all of them, but even if you attend just two of the seminars, you gain considerable savings.

Another savings: Lifestyle for Two.

We want couples! As a member of the program, you are entitled to bring another person to every single course or tour. The cost for that extra person will be ZERO! You can bring whomever you wish. Bring your spouse, a friend, son or daughter, partner, accountant, adviser. You can bring the same person each time or a different person, whomever you choose to accompany you. (Accommodations and air fares relating to the courses are not included for members, delegates or their guests.)

The International Club fee of $1,799 is less than the price of two seminars.

You can pay $177 a month or $457 a quarter.

Take for example if you plan to attend our Super Thinking + Spanish, $899 for a couple and a couple for the International Investing and Business program, the normal cost would be $999 or $1,898. International Club members attending just these two programs would already save… plus they can attend all the other Florida and North Carolina seminars plus receive $1,265 worth of emailed courses at no further cost.

I invite you to be a member of the International Club which allows you and your guest of your choice to attend all of these courses and tours.

Let’s prosper in these times of change. Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year? Join us at our farms and visit Ecuador. We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!


You gain $7,792 of seminars, courses online courses and more in Spanish and Ecuador discounts plus $1,246 of online value.  Club membership is $1,799. You save $7,239.

Become an International Club  Member $1,799 annual.

Become an International Club Member $457 a quarter.

Become an International Club Member for $177 a month.

Attend as many of the courses below as you desire.

March 15-16-17, 2013 Super Thinking & Writer’s Camp Mt. Dora. Fl.

March 18-19-20, 2013 Super Thinking + Spanish Mt. Dora, Fl.  (Taught by Mark Frakes – $175 extra)

June 14, 15, 16 2013  Super Thinking & Writer’s Camp West Jefferson, NC.

August 31- September 1-2 Super Thinking & Writers Camp at Merrily Farms, NC.

October 4-5-6 Super Thinking + International Investing & Business Seminar West Jefferson, NC

November 15-16-17, 2013 Super Thinking & Writer’s Camp Mt. Dora. Fl.

In additional Super Spanish courses will be scheduled in Canada, Mexico. and the US throughout the year.

(Dates subject to change).

Join us in 2013 and learn how to take advantage of the fact that the Sun Always Shines Somewhere

Yes, I want to become an International Club Member. 

Annual membership $1,799. Click  here.

Become an International Club Member $457 a quarter.

Become an International Club Member for $177 a month.

Click here to see 13 of the speakers you’ll meet at the International Club in 2013.