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Money and Markets: Jack Crooks Examines Booming Countries That Are Making Major Changes to the Way they Invest
Jupiter, Fla. (PRWEB) October 28, 2007
Jack Crooks takes a closer look at booming countries that are making major changes to the way they invest. Mr. Crooks explains further what these changes mean for the dollar and foreign currencies.
It’s often been said that when the U.S. sneezes, economies around the world catch a cold. But even as health warnings of a ‘superbug’ staph infection spread across the U.S., it’s weakened economy appears much less contagious to the outside world than it has in years past.
There are two reasons for this:
First, economic power continues to shift from the West to the East.
Second, foreign powers are now more willing to inoculate themselves from weakness in the U.S. They’re doing this by establishing government-sponsored investment companies.
Together, these two forces are going to reshape the investing landscape. Specifically, they’re going to push the dollar lower and currencies like the yen higher.
Globalization is the medicine the world’s been searching for. It’s what keeps a U.S. economic virus from infecting everybody else. And, this cure is finally becoming a reality.
There are strong, healthy economies springing up around the globe, and, they’re acting as the antidote to the slowdown happening in the U.S. At the forefront is China; the country notched an 11.5% rate of growth for the three months ending in September, the third quarter in a row of above 11% expansion.
Meanwhile, China has brought a lot of other economies along for the ride. Singapore, Thailand, and Malaysia are injecting the world with newfound growth.
All of these countries are exporting more goods, and receiving substantial cash in return. Plus, they are creating tremendous demand for all sorts of commodities. Prices are rising across the board, and countries rich with natural resources are raking in big money.
End result: New trade relationships are being forged, and economies around the world are gaining immunity from weakness in the U.S.
According to the International Monetary Fund, financial flows into emerging markets in the first half of 2007 surpassed the total financial flows for all of last year. In fact, emerging market economies have doubled their reserves since 2004 to an estimated $ 4.1 trillion.
Booming countries are going to make major changes to the way they invest. These wealthy foreign countries are looking to get away from greenbacks. One way is by using government-owned investment corporations to invest in surplus reserves. They’re rapidly becoming a popular way for central banks to get rid of their U.S. dollar investments, which are plunging in value on an almost daily basis.
Already, we’ve seen these investment funds move money into other more stable currencies such as euros and British pounds. But they could get even more aggressive, which means currencies of other nations will get bid up in the process.
“For some countries, it will amount to investing in their home region. For others, it will simply be going where the growth is. But all of them are likely to gravitate toward Japan, which is the second-largest economy in the world. End result: The U.S. will see more dollars being converted into the yen and other Asian currencies,” explains Mr. Crooks.
To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1130
About JACK CROOKS & MONEY AND MARKETS
John (Jack) Crooks is the founder and president of Black Swan Capital, an independent advisory firm specializing in foreign exchange and currency markets investing for retail and institutional clients. A seasoned financial advisory with nearly 20 years of investment experience, Mr. Crooks uses both quantitative and qualitative approaches to determine the fundamental driving force(s) behind the movement of the currency, capital, and commodities markets. He is the editor of Weiss Research’s latest investment offerings, World Currency Alert and World Currency Options, which were launched in August 2007.
Prior to entering the investment arena, Mr. Crooks held various corporate finance positions. He has written extensively on the subject of global currencies and international economics and has been published in Asian Times, Futures Magazine, Barron’s, Bloomberg, Dow Jones Newswire, and across many financial websites. He has also appeared on Bloomberg TV and CNBC.
Mr. Crooks holds a bachelor’s degree in finance from Florida State University and a master’s in business administration from the University of North Texas.
Money and Markets (http://www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit http://www.moneyandmarkets.com.
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