From Russia, With Fear

by Sara Nunnally Published on Monday, 02 April 2012, Inside Investing Daily

The BRICs are starting to show their power. As tensions with Iran rise, their economic fate is at risk.

When Russia’s worried, we all should be worried…   And when that worry concerns Iran and its nuclear program, it’s even scarier. Let me throw out a few words and phrases that Russian Deputy Foreign Minister Sergei Ryabkov said in an interview on Friday:

• Alarming
• Expanding
• Violation
• A new global economic crisis
• Strikes against Iran by… Israel
• An explosion of energy prices
• Escalation
• Worse than last year

Iran Feeling the Pressure

Economic sanctions are starting to have an effect on Iran. Reuters reports that the country has defaulted on its payments for rice to India.

Iranian buyers have defaulted on payments for about 200,000 tonnes of rice from their top supplier India, exporters and rice millers said on Tuesday, a sign of the mounting pressure on Tehran from a new wave of Western sanctions.

Now Iran can’t buy Indian rice on credit.

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:

Portuguese Power Grid for Sale

Any takers?

Portugal’s state-owned power-grid operator REN is selling 40% of itself to the private sector. Two suitors have already stepped up to the plate with significant offers: China wants to buy 25% of the company and Oman wants to buy 15%.

Both countries have put in bids with big premiums relative to yesterday’s closing price. China’s bid includes a 40% premium, while Oman’s bid is 30% higher than the previous closing price.

This is huge.

Euro Debt Crisis Moves East

From Bloomberg:

Production at factories, utilities and mines fell 5.1 percent from a year earlier in October, the government reported today. The slide exceeded the median of 24 estimates in a Bloomberg News survey for a 0.7 percent drop. Output was down 3.3 percent from September, the third decline in four months.

The slump reflects deepening fallout from Europe’s two-year sovereign-debt crisis, which has led policy makers across Asia to cut or hold borrowing costs in an attempt to protect their economies. Chinese export growth was the weakest since 2009 in November, giving officials at a work conference in Beijing this week more reason to shift policy focus toward boosting expansion next year, from curtailing inflation.

Big news for an economy that’s been humming hotter than China. We’ll keep an eye on this one.

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.”

If a Tree Falls in China…

If a tree falls in China, does it make a sound?

That’s what investors need to figure out… and fast. The news out of China should be enough to make most investors worried, if they’ve even been paying attention. From MarketWatch.com:

The bad news coming out of China’s economy in recent days has been more a series of thuds than a trickle. …

Following the move last week to ease the reserve ratio requirements (RRR) for twenty rural co-operative banks 50 basis points to 16%, expectations are growing this is the forerunner of a more general easing.

China’s Energy Shortage

China’s growing faster than its infrastructure can keep up… especially its power system. Here’s an article I wrote back in July detailing just how bad the situation is getting.

And where there’s a crisis, there’s also an opportunity. Read on…

Lights Out — The Opportunity in a China Blackout

You’ve got a perfect hand at the blackjack table… and you’ve got a lot of patacas in your bet pile.

The night’s been lucky for you at the Lisboa Macau, and you’ve got an upgrade coming your way if your luck holds out. The dealer’s showing 15, then 19, then bust! Looks like you’ll be smiling all the way to your luxury suite.

The dealer’s counting your winnings when the Lisboa suddenly goes dark…

China and Natural Gas

China imports a lot of energy, and it’s looking to buy up companies and development plots like a kid in a candy store. Except the stakes are much higher.

Here’s some background.

Is Natural Gas a Worthy Investment?

Over the past week and more, we’ve been talking about crude oil, crude oil and crude oil.

And for good reason. Oil prices jumped above $97 a barrel in after-hours trading on Friday. This industry is so important — and so riddled with corruption and greed — that Sandy Franks and I wrote a book about it. Barbarians of Oil is already on shelves, but you can get a big discount off the shelf price by visiting this link.

But while we’ve been talking about crude oil, natural gas has quietly crept back onto the investment scene. In fact, natural gas prices climbed six out of the past seven trading days.

So we’re asking, “Is natural gas a good investment right now?”