Three Currencies Ready for a HUGE Revaluation

 

Both the U.S. dollar and euro are doomed.
Why? Because in addition to being in slow-growth economies, saddled with debilitating debts, they’re the victims of an enormous increase in money supply.
The obvious result is serious inflation and the devaluation of both currencies in the coming years.
Even if the United States doesn’t add to its already bloated debt, the interest on it – coupled with massive money printing – virtually guarantees higher prices.
Same goes for Europe, as the region is printing money out of thin air to bail out its ailing countries and banks.
However, the euro and dollar’s pain could easily be your gain.
You see, the situation is rapidly creating a new currency world order. Specifically, three currencies are poised for a massive upward revaluation…
The Three “Super Currencies” of Tomorrow
There’s a trio of currencies that you must include in your portfolio today.
Backed by solid fundamentals in countries that rely on growth, not artificial monetary stimulation, these three currencies operate on an entirely different playing field than the dollar and euro.
And they’re set to undergo huge revaluations in the coming months. Without further ado…
Currency #1: Chinese Yuan
As the dollar and euro decline, the Chinese are busy plowing the yuan into assets that increase in value. Things like mines, factories, other currencies and natural resources.
At current levels, the yuan is a bargain. Of course, the Chinese government deliberately sets the exchange rate artificially low – rather than allowing it to float freely on world markets – in order to profit from Chinese goods and services.
With the world balking at this arrangement, the Chinese will have to revalue the yuan in a big way over the coming years. Why? Two reasons…

1. The Chinese aren’t just goods producers these days… they’re big consumers, too. This means reduced dollar reserves and more yuan will be invested abroad.
2. The Chinese will be forced to revalue the yuan more frequently and by greater amounts – something the country was unable to do as it was busy accumulating dollars.

As a tandem, these two catalysts will force the value of the yuan higher in the years ahead.
Where to Invest: The FOREX market is fraught with volatility and requires a special account to execute trades. In lieu of that, take advantage through the WisdomTree Chinese Yuan ETF (NYSE: CYB). Hold for the long term – two to five years – and look for 20% upside against the U.S. dollar in five years.
Currency #2: Indian Rupee
Having dropped by more than 20% against the dollar over the past couple of years, the rupee is an absolute steal right now.
The Indian Central Bank controls the rupee closely. And in an effort to combat the financial crisis and make Indian goods and services more competitive, it’s allowed the currency to depreciate.
The result? An artificially weak rupee that will appreciate due to the trend in global growth and money flow.
With Indian GDP growth set to outstrip all Western economies in the years ahead, the country will have to raise interest rates to quell inflation.
In the past, this wasn’t an issue, since India wasn’t a global player when it came to importing goods and services. It was a closed, insulated economy, where the majority of the population bought locally.
But with the Indian middle class approaching some 400 million people, the country is beginning to import more goods. Such a reality will lead to inflation, which will force the central bank to tighten monetary policy.
Where to Invest: You can buy the Indian rupee through the WisdomTree Indian Rupee ETF (NYSE: ICN). Again, plan to hold for two to five years. I project 25% growth against the U.S. dollar in five years.
Currency #3: Canadian Dollar
The Canadian dollar has a bright future. For starters, Canada is rich in natural resources like oil, timber and gold.
As the prospects for global growth pick up, all three are in huge demand from developed and developing economies alike – a trend that will remain for years.
Canada also has its fiscal house in good order. Its AAA credit rating is secure, as the country quickly tackled its debt issues in the early part of this century. As a result, the Canadian dollar has almost doubled against its U.S. counterpart in the past decade.
In addition, Canada didn’t have to bail out its banks or financial system because of lax lending practices. Quite the opposite, in fact. Thanks to their financial strength, Canadian banks are now expanding into the United States in record numbers.
In short, Canada has a lot going for it. It supplies emerging markets… it has a strong and fiscally responsible financial system and government… it will benefit from a U.S. economic recovery… and it maintains a transparent and trusted economy.
Where to Invest: Add the “loonie” to your portfolio through the CurrencyShares Canadian Dollar Trust (NYSE: FXC). Like the Chinese yuan and Indian rupee, this is a long-term holding, with a further 25% gain against the U.S. dollar in five years.
Bottom line: Remember that we’re talking currencies here, so a move of 10% to 15% would be huge. These three will represent the new world order in the currency market over the coming years – and the gains will reflect that.
The best way to buy the yuan, rupee and Canadian dollar is to make regular investments over time. Don’t pile in at once. Average your cost over the next few months as the U.S. economy strengthens. Such a strategy will allow you to buy the currencies at reasonable levels.

 

Why India is a hell of a place for SMEs to do business

Why India is a hell of a place for SMEs to do business

 

Governments that love red tape make it sheer hell for businesses, particularly small businesses, to operate. And governments in India, at every level from the Central to the States, appear to love weaving reams of red tape that constrain small businesses from realising their potential.
We've always known in a general sort of way that it takes sheer audacity to start a business in India. And given the maze of red tape that a SME businessman, in particular, needs to navigate, it's a wonder that private enterprise thrives in any shape or form at all.
The latest report on Doing Business 2013, from the World Bank and the IFC, establishes with quantitative data the subjective perception that India is a hell of a place for SMEs to do business. (Full report and rankings can be accessed here.)
Consider this: out of 185 economies around the world that were analysed for ease of doing business - measured across 10 indices (from starting a business to registering property to securing credit to enforcing contract to protecting investors, among others)- India ranks a lowly 132rd place!
That makes it a more business-unfriendly place than every other country in the subcontinent barring Bhutan (which ranks 148th). Pakistan (107), Bangladesh (129), Nepal (108) and Sri Lanka (81) fare higher up the ladder than India.
At the top of the rankings is Singapore, followed by Hong Kong. China comes in at 91st rank overall; at the bottom of the heap are Congo (rank183), Chad (184) and Central African Republic (185).
India fares particularly poorly on some of the subindices that go to define its overall ranking. For instance, in the matter of enforcing contracts it ranks 184th and in dealing with construction permits, it ranks 182nd, putting it at the bottom of the table of notoriety.
Only on two counts - getting credit (23rd rank) and protecting investors (49th rank) does India fare in the top 50.
On the other counts, India's ranking varies between middling (Ranked 94th on ease of registering property) and abysmal (ranked 105th in getting electricity; 116th in resolving insolvency; 127th in trading across borders; 152nd in paying taxes; and 173rd in ease of starting business).
The factors that trip up the Indian SME business environment are the extensive number of procedures that need to be complied with, which delay the start of business operations and push up costs for securing the approvals.
Indicatively, to start a business in New Zealand, SMEs need comply with only one procedure, which takes only one day. Indicatively, in India, SMEs need to comply with 12 procedures that take, on average 27 days.
When it comes to dealing with construction permits, it gets worse for India. In Hong Kong, which tops the ranking on this subindex, SMEs need to comply with only six procedures, but in India, the corresponding number is 34 procdrues, which take 196 days!
But these anodyne narration of facts and figures do little justice to the enormity of the hell world that businesses and project executioners face on the ground in India
Illustratively, in his book Governance and the Scleroris that has set in, Arun Shourie, who served as disinvestment minister in the NDA government, recounts the experience of a Singapore Minister who had directed the execution of projects in both India and China. The difference in his experience, the Minister recalled, was 'focus': Chinese officials had it, and the Indians didn't.
"In China, I was met by two officials," the minister explained. "They had all the answers they took all the decisions. And what they decided got done." In India, on the other hand, he was directed to the land department, where he met three officers, each of who had his own version of the regulations. "And then for a year and a half, the whole thing got stopped because a gentleman who had a small plot behind the proposed site went to court: he was rearing bees for honey and argued that his activities would be impeded, and that the land should have been acquired under one Act rather than the other."
The whole thing would be funny if it were not so tragic.