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If you live in Ecuador it’s a good idea to earn globally.

This site has always recommended not to have deposits in  Ecuadorian banks for more than your immediate needs.

The likely shutdown of Banco Territorial reenforces this advice.

banco territorial

Going… going… suspended.

Here is the latest report on the bank’s problems from Roberto Ribad who heads up ur Ateam Ecuador in Quito. Here wrote:

Gary, Banco Territorial  may not make it, which means that it will either be sold or liquidated. Since is a small bank there is no real risk for the depositors or other banks in Ecuador. What they are doing is two things right now, one for all the people that receive deposits from retirement or social security, the government is making those deposits at Banco del Pacifico, and second, for the people that need to pay (credit cards, loans, etc) the government created an account where they can make the deposits.

At this point people are waiting to see if the bank can be sold or it will be liquidated which should happen this or next week. Once that is decided the money that people had at the bank will be move to another one, probably Banco del Pacifico, which is owned by the government.

As far as I know there is nothing that depositors can do right now, because there is no news on what could happen to the bank. There should be something on the news by the end of this week.

All deposits have insurance so it is likely that depositors will get their money back.

When investing and doing business have a global view.  An excerpt from the 2013 update of my report “Running Risk – How to Profit from Risk”  shares ideas on how to gain an accurate vision of where to invest around the world.

Sunrise, walking through deep woods, about 50 miles from nowhere in the Wilderness of Canada.  I was heading toward Moose Lake in North British Columbia and surrounded by deep woods, spruce, lodge pole pine, swamps, bogs, shimmering yellow poplar and pristine lakes.

Here, in the deep wilderness, day after day, I hiked many miles with no one just me, the moose, wolves, bald eagles and my thoughts.


Moose Lake lodge… one of Merri’s and my favorite wilderness destinations.

These northern reaches of Canada are places of deep silence that evoke a lot of thoughts so one morning while riding a horse many miles from the lodge my mind wandered and soon I realized I was more than lost in thought. I was lost in the woods!   As the eve fell I knew I was in a grave situation.

I had made most of the stupid amateur mistakes any woodsman can make, wandering for hours off the trail leaving my horse, coat, compass and matches miles away.  Every protection was left behind!  Thinking about investing and the beauty of the woods instead of location suddenly found me bordered by deep woods and swamp, miles from anywhere or anyone and not knowing how to get back.

What should I do…  stay put, plow ahead or try to retrace my tracks?  The forest had nasty quirks.  There were grizzlies and just that morning the valley had erupted in mournful cries from a pack of wolves.  I had a gun but only three bullets.  Would shots attract my partner who was miles away?  Would he hear?  The wind had risen.  The weather was turning cold.  There was a chance my shots would not be heard.  Should I shoot to attract attention or save the bullets for protection during a night alone in the woods?

I decided to use the bullets to attract attention…I shot all 3 of them. It worked!  My guide appeared and I slept in a soft bed that night instead of tied high up in a pine tree listening for those wolves!

That era reminded me of a lesson which is to always be aware, wary and careful.  This incident can be used to help answer a question so many readers sent after the recent article about North Korean hacking being WWIV.

Many readers simply wrote “WWIV?”

Fundamentals of Global Economics

New readers often miss several basic foundations of the mindset we use at this site.  One foundation is the importance of conflict in the cyclical pattern that flows through the basic fundamentals of human nature.  These cycles have resulted in a series of industrial revolutions that have been directing stock markets, global economics and the world’s political and social interaction for over 1000 years.

Sn excerpt from the update of my report “Running Risk – How to Profit in Risky Times” may help clarifiy what I mean by WWIV and its importance to each of us in life, business and investing.

The cyclic suggestion in that article entitled WWIV is that there are struggles that create new disruptive technology.   Austrian economist Joseph Shumpeter wrote about this and it is a pretty accepted line of economics that disruption derived from war enhances productivity when it is moved from the military to the domestic realm.

To grasp this dilemma, let’s think about the history of modern society.  Several hundred years ago Europe was dominated by a feudal political system.  The economy was powered by agriculture based on manpower and domesticated livestock.  The limiting velocity of man, of his thoughts, ideas and commerce was the speed of a horse.  Fate, current and wind ruled marine travel.

Then in desperation over manpower shortages caused by a series of plagues, humanity took an economic evolutionary turn.  We made a giant step forward with new ideas about mechanical power.  These ideas gave rise to incredible inventions such as the steam engine and telegraph.

We have moved thru seven industrial eras.  The first era was feudal dominated by the stirrup and the Holy Roman Empire.

Then came five eras best described by Joseph Schumpeter, on how innovation creates industrial revolutions altering the way we live, work, earn and keep money. He described five great economic eras that began in the late 1700s:

Era #1: 1785-1845-fueled by water power-60 years. Textiles and iron works were the backbone of growth industries.

Era #2: 1845-1900-fueled by steam-55 years. Railways and steel provided the main growth in this era.

Era #3: 1900-1950-fueled by the internal engine-50 years. Electricity and chemicals provided the major growth.

Era #4: 1950-1990-fueled by electronics-40 years. Petrochemicals and aviation were the innovations which became mainstream in this period.

Era #5: 1990-current-fueled by digital networks- 30 years+ ? Software and new media create the growth elements in this era.

We are now moving into a new era called the Imagination Era bringing with it changes that may help resolve the many negative issues our global society faces now.

Each era   greatly empowered massive new numbers of individuals, an empowerment that led to entire new classes.  The working middle-class was born.  This empowerment allowed the working class to rise from feudal subservient positions to positions of economic and hence political influence.

Much of the world’s population became much richer, but these changes were accompanied by turmoil caused by periods when the old order had not let go and the new order had not taken hold.  Many forces came into play and there were struggles for dominance to establish order.

Forms of this turmoil were WWI, the massive economic recession of the 1930s, WWII and the Cold War.  Wars and recession are signals that the economic-social structural order is breaking down, but that a new order has not yet taken control.

Serious things go wrong. Such breakdowns lead to enormous conflicts that we call wars.  Major wars accompany great social, political and industrial change and bring out the most competitive aspects of society.  This speeds up change.   The key is that the struggle is so intense and the stakes so high that all concepts of return on investment for research and development are thrown out the window.

How can we know what’s next?

Dow chart at stockcharts.com

Cycles in the Dow at Stockcharts.com (see link below).

These cycles are one part of a compass to global economics that can help each of us determine our unique path of living, earning and investing.

This chart shows the relationship between a falling market… faltering economy and intense military struggles that create disruptive technology leading to increased productivity in mankind.

The question we have been asking at our site for several years is… what will cause WWIV?

This is one of many factors.  The Dow for example has decreased in importance as a global economic bellwether.  The NASADAQ investments for example became increasingly important in the 1990 to 2000 dot.com climb.

The US has also lost much importance in the global economy.  Synchronicity between US and other markets need extra understanding now.

However the charts below of the Dow Jones Industrial and Morgan Stanley MSCI World Index suggest there is still a very strong correlation.

DOW Chart

Dow Jones Industrial Index 2005 – 2013.

MSCI World Chart

Morgan Stanley Capital Index World Index 2005 – 2103.

Currency changes need to be accounted for.

This mobile scenario is then overlaid by the never ending search for value.

Most important the way every individual’s circumstances, wants, needs, desires and mission are the keys that fit a unique piece into this global puzzle.


To sum up the global fundamentals, two gigantic forces struggle one against the other.  The positive forces include added efficiency from shifting into a computer driven industrial revolution, which is opening a global economy.  Individuals are empowered to be more, be in more places, do more, make more and have more.

The negative force is the resistance, congestion, and pollution to and from this change.  Evolution takes place unequally and creates distortions.  As these distortions grow, the risks of a correction global rise.    The growing tensions are revealed in commerce and the rapidly changing art of war.

Man has always run risk.  Change brings risk.  Today we face change taking place at a faster and faster pace.  This means we run increased risk.   The fundamentals explained above help us see how to profit from running risk.


Save $57.  Get our updated Running Risk How to Profit from Risk when you order my report on multi currency investing “Borrow-Low Deposit High”.

How to Gain With Multi Currency Value Investments

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.


Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.


The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.


* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.


Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.




(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report





Moose Lake Lodge

See great stock charts at stockcharts.com/freecharts/historical/djia1900.html