U.S. a Hot Destination for EM Tourists

Would you believe me if I told you that Chinese and Brazilian tourists could inject $850 billion into our economy by 2020?

That’s what the National Retail Federation is saying. This kind of dough will only come if more Visas were issued to Chinese and Brazilian tourists.

Obama signed an executive order on Jan. 19, calling on the Dept. of Homeland Security and the Dept. of State to come up with a plan in the next two months that will boost Visa processing by 40% in the next year.

From Bloomberg:

The resulting increase in U.S. tourism could create 1.3 million jobs and add $850 billion to the economy by 2020, the National Retail Federation said in a Jan. 19 report, citing the U.S. Travel Association.

With slumping U.S. consumer spending and a weak dollar, tourists can make a big impact… even in luxury items. Saks and Bloomingdale’s are looking for big boosts in sales to tourists.

“We’re expecting an enormous uptick in growth,” Bloomingdale’s Chief Executive Officer Michael Gould told Bloomberg. “We have the kind of brands that are highly respected by these visitors, and the faster they can get here the better.”

The Growth Map

I’ve just started reading Jim O’Neill’s new book, The Growth Map: Economic Opportunity in the BRICs and Beyond.

This guy’s most known for coining the term BRIC for the grouping of Brazil, Russia, India and China. It’s been an investor’s boon for the past ten years, and everyone thought he was crazy at first. This new book highlights eleven new countries that are about to hit center stage.

The Growth Map has already got me hooked… From Page 5:

God Helps Those Who Help Themselves

“God helps those who help themselves.” Lots of folks think this phrase comes from the bible, but it doesn’t.

That doesn’t make it any less true – especially when “God” is the International Monetary Fund (IMF). The IMF was established to foster global monetary cooperation and greater fiscal stability. It makes loans to countries caught between a rock and a hard place.

And Europe’s been looking for some help from this organization.

But the IMF’s funds come from country contributions.in the form of something like “membership dues,” except these dues are measured according to the size of the country’s economy. Bigger economy equals larger “dues.”

Police Take Slum in Brazil

Anyone catch this article from the Associated Press?

3,000 Brazilian police seize Rio’s biggest slum

More than 3,000 police and soldiers backed by armored personnel carriers raced into Brazil’s biggest slum before dawn Sunday, quickly gaining control of a shantytown ruled for decades by a heavily armed drug gang.

The takeover of the Rocinha neighborhood was the most ambitious operation yet in an effort to increase security before Rio hosts the final matches of the 2014 World Cup and the 2016 Olympics. Officials are counting on those events to signal Brazil’s arrival as a global economic, political and cultural power.

VISTAs not BRICs?

When people were first introduced to emerging markets on a large scale, some of the most promising countries for investors were Brazil, Russia, India, and China – or BRIC nations.

With China looking like it’s topping out, rampant inflation in Brazil, and underperformance in Russia and some could argue India, are BRICs where investors should still be putting their emerging market money? Maybe not, though I would say I still like India of the four.

Interestingly, some analysts are starting to lump South Africa in with the BRICs

Well, I travelled to South Africa a few years ago, and got to sit with a businessman (and VIP subscriber) to talk about the South African economy and why he just sold his business to an Indian company. The S.A. rand was killing exports – plain and simple – and the government wasn’t doing much about it.

The government wasn’t doing much about the infrastructure and power needs, either, or the soaring unemployment. Official statistics had put unemployment at between 16% and 20%, but unofficially that figure could be as high as 40%.

Latin America in a Blender?

One of the reasons I love our annual summit conferences is hearing questions from our attendees.

This year, I presented the idea of using emerging markets as a financial survival bunker. I had enough time to answer some great questions from the audience.

None of the countries I talked about in my presentation were in Latin America. A couple people were wondering why I didn’t pick a stable market like Chile, or a growth powerhouse like Brazil. There wasn’t one answer… These two countries are very different.

Chile has been an economic anchor in the best sense of the word. It has handled its balance sheet really well compared to other Latin American countries. In fact, Chile is the only South American country to be a member of the OECD, which it joined in May 2010.

GDP growth has averaged 4% a year since 1999. A major contributor is exports — they make up about 25% of the country’s growth.

But we’re starting to see some trouble in the political sector.

Double-Digit Gains in “Emerging” Markets

I want to tell you how to invest in emerging markets without investing in emerging markets.

Emerging markets are hotbeds of growth, but that’s not always reflected in country-based ETFs. How do you capture the gains of foreign direct investment? It can sometimes take years before that money translates to investment opportunities.

And it’s a “risk off” environment right now. With the markets struggling to find support, fear is driving investors back into gold. This precious metal was up more than 2% as the major U.S. indexes were down more than 2%.

Europe and Asia didn’t fare much better.

That means investment money may be flowing out of emerging markets and into investors’ mattresses. But some up-and-coming economies have cash of their own, and they have lots of projects in the works.