Hello Fellow Readers

In my research last week we decided to look at the inflation rates for every country in the world . When we reviewed it .It was very clear which countries had not growing and which ones are. the lower the inflation number believe it or not means there is very little growth in those countries .So do not invest there. If you want double digit returns you need higher inflation figures . If you look back in the past when we had the roaring 80’s and 90’s we had 5% inflation on average the same as China now.

So using inflation as an indicator of growth or recession is another tool in the tool box. While doing that research I decided to take on the devil .We now have on hand the debt of every country in the world .Which also show the debt level to GDP .Everybody knows that in The U.S. the debt level is close to 95 % of the GDP per year which is why U.S. are now only double A bonds.

But compare this to Eurozone and I can not see all the fuss about Italy when the U.K is 400% to the GDP and owes almost $9 trillion.Once I got into it Germany and France are also a lot higher than Italy.

Anyway that’s what I was research last week.This week its Gold demand and who owns it and also assets of every country in the world to see if these countries can sell assets to pay down debt.

Meanwhile still predicting the only way to save Europe is for the Chinese to come in and buy the debt as they did with the U.S.

So talking about the Chinese I have added two positive articles to give you further guidance on how to make money the next decade.

Read and Learn

China Changing the Global Gold MarketNovember 22, 2011

While many investors have been distracted by the goings on in Europe, China has been making a dent in the global gold market by making it easier for investors to buy and invest in the yellow metal. The goal: To dominate the global gold market and carve out a new role for its currency, the yuan. China and other developing nations like India have been encouraging citizens to buy and hold physical gold, in forms ranging from jewelry and coins to bullion bars. China's aggressive promotion has pushed Chinese consumer demand for gold up 25% overall this year - much higher than the 7% global average. World Gold Council (WGC) Far East Managing Director Albert Cheng, who predicted in March 2010 that Chinese gold demand would double by 2020, noted: "We now believe this doubling may, in fact, be achieved far sooner." China is pushing gold because it wants the government and citizens to build financial reserves in assets stronger than the U.S. dollar, euro, and other weakening currencies. It also increases China's role in the precious metals market. But there's another effect of this push for gold ownership: it's dislodging the dollar as the world's main reserve currency. China's Gold Push Efforts China's push for private gold ownership represents a major policy shift. Chinese citizens were barred from owning physical gold under penalty of imprisonment until 2002. Since that policy was dropped and the Shanghai Gold Exchange opened, China has steadily stepped up efforts to encourage precious metal ownership. The government now airs news programs on state-owned China Central Television describing how easy it is to buy and sell gold and silver. It also started its first gold vending machine, letting Chinese customers easily buy gold coins and bars using cash, debit cards and credit cards. Current plans call for an additional 2,000 gold vending machines to come on line in the next two years. If they prove as successful as they did in Germany, where metals vending machines were first introduced, China's consumer gold demand will surge. Chinese consumers turned off by the vending machines' high price mark-ups have another option - official government-operated "Mint Stores." Structured like a typical jewelry store, they feature specially minted bars in a variety of sizes. Mark-ups are minimal since each store has a Bloomberg screen tracking the current spot gold price, usually quoted in renminbi based on Shanghai trading, rather than in dollars on the London or New York market. China also has encouraged more gold investment through new exchanges and yuan-denominated products. The country on June 28 opened its first precious metals spot exchange. The South Rare Precious Metals Spot Exchange offers spot trading - as well as deferred and long-term electronic trades - in gold, silver, bismuth, indium and tellurium, with plans to add 13 other metal-related products. Chinese citizens can trade the metals through either direct margin accounts with the exchange, or through their banks and brokerage firms. These efforts have increased Chinese consumers' gold interest, but it's the next development that will make China a major global player in gold trading.

A Global Gold Market Game-Changer China plans to open the Pan Asia Gold Exchange (PAGE) in June 2012. PAGE will feature a market-driven pricing system and offer both physical gold purchases, including distribution or storage, and derivative products based on physical gold. It will be open to anyone, either directly or through an agreement with The Agricultural Bank of China (ABC). Customer information for the exchange and the bank will be fully integrated, giving PAGE direct access to the accounts of 320 million retail customers and 2.7 million corporate clients in roughly 24,000 branches. The partnership makes gold buying incredibly easy for customers, who will be able to buy gold and silver online, with payment coming right out of their bank accounts. Analysts expect the impact of this arrangement to be enormous, perhaps even changing the way global gold prices are established. Currently, the futures market in London - overseen by the London Bullion Market Association (LBMA) - "fixes" the spot price of gold each morning and afternoon, based on trading action in London and on America's COMEX market. However, the LBMA and COMEX contracts are backed by just 10% of face value in physical gold, while the PAGE derivatives will be backed by a much larger percentage - meaning trading volume there could change worldwide supply-and-demand dynamics for the yellow metal. This means the focus of global gold trading could shift quickly to China, where ABC and five other major Chinese banks will fix the gold price each morning at 8 a.m. local time - well ahead of the opening of European and U.S. metals markets. If the link between PAGE and ABC accounts is a success, other small Chinese banks are already poised to offer over-the-counter (literally) and online gold sales to their customers. This will push up prices as consumer demand climbs even higher. And, since the price fix will be in yuan, the currency will gain significant international legitimacy as a result. A Bigger Role for the Yuan China's efforts to encourage gold ownership haven't just put upward pressure on gold prices. They've given the yuan a bigger role in global trade. In fact, one of China's new gold-related investment products is considered "really less a development for gold than another step in the yuan's internationalization," Adrian Ash, head of research at BullionVault.com, told MarketWatch. The new "Renminbi Kilobar Gold" is the world's first offshore yuan-denominated spot gold contract. It started trading in mid-October on Hong Kong's Chinese Gold & Silver Exchange. This is the exchange's first product that's open to individual Chinese investors and is denominated in something other than Hong Kong dollars. The contract is designed to appeal to Chinese retail investors while also attracting foreign private and institutional investors who prefer yuan-denominated products "as an alternative reserve currency to the embattled dollar and euro," according analysts at GoldCore. This will increase the yuan's role in global investment, something China has been working on for years. "For Westerners who are struggling to come to terms with the notion of a disarrayed dollar, the thought of oil, gold or other commodities being priced in yuan instead of dollars has to seem about as likely as having another country put a man on the moon," Money Morning Chief Investment Strategist Keith Fitz-Gerald wrote in May 2009. "But the Chinese yuan is already well on its way to becoming that globally accepted standard unit of exchange, and the proverbial genie, as they say, is out of the bottle."

China's push for increased gold investment and a bigger role for the yuan will likely irritate U.S. and European economic officials who have long called for letting the yuan appreciate relative to other currencies. Beijing is unlikely to let its currency rise and devalue gold investments now that more of its citizens are holding the precious metal. The yuan has appreciated about 3.7% this year against the dollar, but isn't expected to gain more. It fell 0.7% yesterday (Monday) to 6.36 per dollar in Shanghai, according to the China Foreign Exchange Trade System.

Despite the recent downturn in China's stock market, investors need to remain focused on the profit-generating long-term growth potential of the Asian powerhouse. The Shanghai Composite Index is down about 10% on the year, compared to a drop of less than 1% year-to-date for the Standard & Poor's 500 Index. Chinese exchange-traded funds (ETFs), a popular way for U.S. investors to dip their toes into the Chinese stock markets, are off an average of more than 21% for 2011. That's a big shift from 2010, when the average China fund gained 13%, or 2009, when the average gain was an eye-popping 64.5%. Anthony Bolton, one of the United Kingdom's most respected fund managers, called the end of the third quarter "a brutal period for Asian markets - as difficult a time to be running money as I can remember." Bolton's U.K.-based Fidelity China Special Solutions Fund dropped 28.9% in six months. A recent bounce up from lows reached in October has some experts wondering if China's stock markets hit a bottom or if they might slip still lower, but in any case investors mustn't abandon China, said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "Long-term, you can't afford to be without Chinese stocks," Fitz-Gerald said. "Timing is not what you should be focused on. You need to be focused on growth, and who has the money." Fitz-Gerald pointed to the debt-crippled economies of the United States and Europe. "That's not where the money is," he said. "It's in the emerging economies like China." Controlled Slowdown Several factors have combined to rock the Chinese stock market this year. The Chinese government has attacked inflation by raising interest rates five times over the past 12 months, but at the cost of slowing economic growth. Even so, the Chinese central bank has projected the country's gross domestic product (GDP) will grow at a 9.2% rate in 2011 and an 8.5% clip next year. That's still more than triple the growth of the U.S. economy. The Philadelphia Fed's quarterly survey yesterday (Monday) lowered its projected U.S. GDP for 2012 to 2.4%. China's exports have slumped as a result of the sagging U.S. economy as well as the turmoil generated by the Eurozone debt crisis. The Eurozone is China's biggest customer. In addition to hiking interest rates, China's government also has increased the reserve requirements for its banks, which reduced the amount of money available for lending, restricting capital. "The Chinese government wants to prevent excessive speculation," Fitz-Gerald said. "So they're keeping a lid on interest rates and doing what they can to curb the inappropriate use of capital." Fear Not The Chinese stock market's recent stumbles, combined with questionable accounting practices among some "reverse merger" companies, which buy the shares of defunct public companies in order to use their tickers,has created the perception among some investors that China is just too risky right now. Not so, says Fitz-Gerald. "When everyone else has had the stink scared out of them, that's when you go in," he said. Fitz-Gerald is not alone. Fidelity's Bolton, despite the damage to his fund, also sees China as a good investment over the long haul.