OJO Zafado

Global Investing: Hitting a BRIC Wall

A foot note. For those wanting to have some kind of exposure to the Russian part of the BRIC, the MPYMX & deeply discounted CEE both dabble in Russia but are also invested in the other more civilized portions of Eastern Europe as well as Turkey. Ditto the FLATX. Alot of Brasil but the same diversification throughout Latin America including Mexico. The MAPTX in the China "region".

Global Investing: Hitting a BRIC Wall

I certainly agree with the thrust of what you say having owned Pan American Silver. The Russians rigged the "auction" for a defunct bankrupt silver mine. Pan America was the winning bidder. After investing a few million to get the property producing the Russians then revealed a second bidder that had not had their bid "properly allowed". They had no money! Once they were able to bid the same price on the vastly improved property they had no trouble getting financing. Pan American then had a new "partner" in the mine. Yet we see the same in Canada with the reform of the tax system on Royalty trusts comming in a few years. Unfortunately not all countries can be economic basket cases like the USA and still achieve steady positive Treasury TIC data reports. In many cases higher taxes in foriegn nations are just a repudiation of the Reformed Laffer Curve economic model. Only in America can you cut taxes and drastically increase spending to pander to the investor class without dire social and economic consequences. So far..... $4 gasoline and $5 heating oil & road diesel sure are working here! Now the trade deficit grows no worse even as the national debt tops $3.4 trillion and the stimulus checks are in the mail! The Fed cuts to 2% and Citigroup floats out the preferred M at 8.5% which promptly drops in price and goes to an 8.7% YLD. Emerging markets nations have alot larger middle class in terms of numbers than the US. But the numbers living in abject poverty are still unimaginable. As in all civilized societies taxes are going higher to fund the bread and rice. No one has forgotten what happened to the Ceaucescus in Romania, the Romanovs in Russia, and the Louis and Marie in France. It isn't their hunger that drives the masses into hysteria, it is watching their children starve to death that really pisses them off.