Trending This Week

FX Markets

EURTRY
Trend bias: Bullish


The Euro continues to strengthen against Turkish Lira, According to our system Black Lion Falcon, The Trend should continue in favor of Euro. Signal = Buy EURTRY Current Price = 3.4498


Stock Markets
Trend Bias : Ranging

Black Lion Falcon System is indicating ranging Market conditions for World Stock Indexes. Therefore there is no clear trend as to what direction Global Stock Markets want to take.

Commodities
Trend Bias : Bearish

Black Lion Falcon System is indicating all commodities including OIL, Platinum, Gold, Etc will continue the down trend momentum. We will like to highlight Gold will be the worst performer, going forward. Despite Black Lion Falcon system indicating the collapse of the commodities complex, It has not yet given us a sell signal, waiting to conform the strength of the trend.  

How Every Decision You Make Can Make You Richer – or Poorer

How Every Decision You Make Can Make You Richer – or Poorer

By Mark Ford, wealth coach, The Palm Beach Letter

Tuesday, May 22, 2012 You go to lunch with a colleague. Everything is good. When the waiter puts the bill on the table, the total is $26. Do you pick it up? Do you wait and hope he does? Or do you suggest you split it?  On the surface, this is a minor decision. But in truth, it is one of a million chances you've had, have, and will have to become wealthier.A cheapskate might look at it this way:  If I pay the whole bill, I'll be $26 poorer. If we split the bill, I'll be $13 poorer. If I can get him to pay it, I'll be $13 richer. To the cheapskate, the best decision is obvious. So when the bill arrives, he gets up to "go to the bathroom," hoping he'll be $13 richer when he returns. But I have a different view. Wealth building, like quantum mechanics, often operates according to laws that seem contrary to what is "obvious."  Paying the tab, in other words, might actually make you richer. Because the $13 you spend on your lunch partner might give you a return of much more than $13. Your generosity might signal to him that you are the kind of person he can trust. It might tell him you are someone who is willing to give first without demanding recompense. If he sees you in that light, a relationship might be seeded by this small investment on your part. A year later – it is possible to imagine – he might recommend you for a promotion when he himself gets promoted to head up your department. It depends on your assessment of his character. If he impresses you as a person who believes – as you do – in reciprocity, you will know that the $13 is a wise investment. If, on the other hand, he shows you that he is a person who believes in exploiting others, the wise move might be to pay only your share of the bill and not develop the relationship any further. In either case, you are richer.In the first case, you are richer in a potentially lucrative business relationship. In the second case, you are richer in knowledge – knowledge about him that can help you avoid trouble or seize opportunity in the future. I am making two points: First, almost every event in your life is an opportunity for you to become richer. And second, by seeing every situation as a wealth-building opportunity, you can take the actions that will gradually make you very rich. The people I call "instinctive wealth builders" understand this on a gut level. They see every transaction – social, personal, or business – as a wealth-related opportunity. They are always angling, even subconsciously, to increase their wealth. Most of us aren't born with that instinct. For us, a casual conversation is just a casual conversation. And choosing to join a club or hire or fire an employee is that and nothing more. But the moment we put this principle into practice, we see the world very differently. Its potential is no longer limited. It is enormous, maybe even infinite. And we view every action we engage in as a chance – big or small – to increase or diminish our wealth. Train yourself to ask the following four questions – keeping in mind that every situation, big or small, is an opportunity for you to become richer… 1.   "In what way is this an opportunity for me to become more wealthy?" (Note: I don't ask, "Is this a wealth-building opportunity?" – because every situation is a wealth-building opportunity.)  2.   "What is the potential of this opportunity?"  3.   "What are the possible problems with this opportunity?"  4.   "What can I do to seize this opportunity?" Look at every situation you find yourself in as an opportunity to make yourself richer. And I do mean every situation, even the most mundane. This includes: •   The first thought you put in your mind when you wake up each morning. •   What you listen to on your commute to work. •   How you greet your boss and fellow workers. •   What you talk about at the coffee machine. •   The expression on your face and the firmness of your grip when you shake hands. •   The conversation you initiate with the person next to you on a plane. •   Whether you buy a brand-new car or a used one. •   How your voice sounds when you answer the phone. •   How you prepare for a meeting. •   Whether you buy your clothes at Saks or Marshalls. •   Whether you go out to lunch or eat at your desk. Some of your opportunities will be small and some large. But by asking yourself these four questions first, you will bring your batting average way up…If you make it a habit to approach every situation this way, it will soon become automatic. And before you know it, you will have seized hundreds – even thousands – of wealth-building opportunities… each one making you a littler richer. Regards,  Mark Ford Source: Daily Wealth

What Financial Pros Do with Their Parents’ Money

What Financial Pros Do with Their Parents’ Money

BY PORTER STANSBERRY
Saturday, march 3, 2012

Over the course of a year, I end up hanging around dozens of professional traders, hedge-fund managers, newsletter writers, and financial advisors... people who control hundreds of millions – even billions – of dollars.

Every type of investment vehicle... and any type of research... is available to these folks at a moment's notice.

One question I always like to ask these guys is... What do you tell your mother and father to do with their money? Do you trade it for them? Do you tell them to stay away from stocks?

The nearly unanimous answer won't surprise you if you've been reading my company's letters for long:

"I tell my parents to invest for dividends in the biggest and most stable companies we can find."

Most people reading this essay will walk away and think, "That was a waste of time. I can't invest for dividends. I need to make money right now." Very few of these people will ever get rich.

It is nearly impossible to become wealthy overnight in the stock market. Many (if not most) of the approaches I urge readers to follow involve taking the smallest amount of risk and generating income over time.

Richard Russell is the greatest living financial writer. He is almost 90 years old now and has been writing about finance longer than most of the people reading this message have been alive. Here's what he says about the importance of "compounding" your income – that is, reinvesting the income you receive from your investments...

Compounding is the royal road to riches. Compounding is the safe road, the sure road, and fortunately, anybody can do it.

To compound successfully, you need the following: perseverance in order to keep you firmly on the savings path. You need intelligence in order to understand what you are doing and why. And you need a knowledge of the mathematics tables in order to comprehend the amazing rewards that will come to you if you faithfully follow the compounding road. And, of course, you need time, time to allow the power of compounding to work for you. Remember, compounding only works through time.

In a period of great financial uncertainty, dividends offer investors both shelter from the storm and solid total returns. But as Russell points out, this approach only works if you're rigorous, disciplined, and patient. (That's probably why it works... Few people display these emotional qualities when it comes to money.)

You have to be willing to allocate capital to these kinds of companies when they're cheap. That means when other folks don't want to buy them. You have to be able and willing to hold them for relatively long periods of time – like a decade or more.

Now... if I'm right about my audience, lots of people reading this will think, "Yes, that's what I should have done years ago. But now, it's too late." Nope. That's just not true.

It does take about a decade for the big benefits of compounding to kick in. But given the uncertainties in the world's markets, this approach is likely to beat the market right from the get-go.

If you've been making the wrong choices with money for decades, why not simply stop making those choices? You don't have to continue to be wrong. You can start being smart and doing the right thing today. All you have to do is make a few simple decisions... make a plan. And then follow it.

What does Richard Russell say about the folks who ignore this simple advice? Well, he knows most average investors won't follow a plan like this. It takes too much discipline...

But what about the little guy? This fellow always feels pressured to "make money." And in return, he's always pressuring the market to "do something" for him. But sadly, the market isn't interested... And because the little guy is trying to force the market to do something for him, he's a guaranteed loser.

The little guy doesn't understand values, so he constantly overpays. He doesn't comprehend the power of compounding, and he doesn't understand money. He's never heard the adage, "He who understands interest – earns it. He who doesn't understand interest – pays it."

The little guy is the typical American, and he's deeply in debt. The little guy is in hock up to his ears. As a result, he's always sweating – sweating to make payments on his house, his refrigerator, his car, or his lawnmower. He's impatient, and he feels perpetually put upon. He tells himself that he has to make money – fast. And he dreams of those "big, juicy mega-bucks."

In the end, the little guy wastes his money in the market, or he loses his money gambling, or he dribbles it away on senseless schemes. In short, this "money-nerd" spends his life dashing up the financial down-escalator. But here's the ironic part of it. If, from the beginning, the little guy had adopted a strict policy of never spending more than he made, if he had taken his extra savings and compounded it in intelligent, income-producing securities, then in due time he'd have money coming in daily, weekly, monthly, just like the rich man. The little guy would have become a financial winner, instead of a pathetic loser.

If you're not generating income with your portfolio every month... stop being a loser. Move your investments into the world's best dividend-paying companies.

Good investing,

Porter Stansberry

Source: Stansberry Research

A Few Radical Ideas About Wealth

By Doug Casey, Chairman, Casey Research 

Friday, September 9, 2011

Now that more than 45 million Americans receive food stamps … and over half receive more in government benefits than they pay in taxes, it's clear things have gone horribly wrong in this country's attitude toward wealth.

I've spent a considerable amount of time thinking about wealth. Over the years, I've developed some radical ideas on wealth. You may find them valuable.

Mind you, these ideas weren't radical 200 years ago… But they are considered radical now. That's why it's important to keep them in mind. In the financial crisis I see coming, the right ideas might mean your life.

First, recognize that wealth is a high moral good. 

Don't feel guilty about having it or about wanting more.

If you've already accumulated and deployed enough capital to allow you to jump off the golden treadmill, congratulations: chances are high that you are an exceptional human being. I say that because the moral value of being wealthy is underrated. I don't mean that in a Calvinistic way, in that Calvin believed Yahweh rewarded the righteous by making them rich. But I do believe that productive people – people who work hard to provide goods and services for others – definitely tend to be wealthier than unproductive people. They deserve to be.

And since we don't live in a malevolent universe, people generally get what they deserve. So, yes, wealth is definitely one indicator of moral excellence.

Sure, some wealthy people got that way by lying, cheating, and stealing. But they're exceptions. It's much easier to become wealthy if (in addition to having virtues like diligence, competence, and judgment) you are known to be truthful and honest. Those who automatically think ill of the rich are, at best, paranoid fools. Put it this way: Rich people may lack some virtues, but they definitely have at least a few that made them rich. Poor people, on the other hand, will certainly lack some virtues, and they'll definitely have some vices that kept them poor.

I'm a fan of some aspects of Gurdjieff, the late-19th to mid-20th century Russian mystic, who was also a merchant adventurer at some points in his colorful life. He said that anyone who successfully employed at least 20 other people must be considered at least partially enlightened and a type of guru. That viewpoint always resonated with me. Self-made wealthy people may not be saints or mystics or intellectuals or even especially thoughtful or moral. But they've proven they're better than the average bear in at least one important way: they can create and conserve wealth. And they've thereby eased everyone's path to further accomplishments.

Second, figure out your purpose in having money. 

Sure, money makes life easier. And it's nice how it enables you to assist people you like with material things. But I strongly suggest that you not take too short a view on this matter.

Accelerating advances in medical science are not only lengthening human life expectancy, but new developments now in the works have the potential to vastly improve your capability and health, as well.

Is it possible to live to age 200, with all the wealth, knowledge, and wisdom that implies, while maintaining the body of a 30-year-old? Not yet. But the prospect is on the horizon. It will, however, be available only to those who can afford it.

Ray Kurzweil makes a case that the Singularity is near, and I buy his reasoning. It would be tragic indeed if anyone frittered away his wealth, thinking he wouldn't live very long, and then succumbed to a self-fulfilling prophecy, not because of medical difficulties, but because of financial difficulties.

Third, don't give your money to charity. 

Entirely apart from showing a lack of both imagination and foresight, it's a complete waste of good money, pure and simple. Contrary to popular opinion, it rarely does any good. It often does great harm. Here's an interview I gave on this subject.

The whole concept of charitable giving is corrupt and desperately in need of a complete rethinking.

Fourth, if you do care about posterity (who knows, you might be reincarnated), and on the chance you don't make it to the Singularity,carefully consider how to dispose of your estate. 

For one thing, there's no reason to automatically leave anything to your children – unless they deserve it. The notion that someone should inherit just because he shares your genes is flawed and thoughtless. The example of Marcus Aurelius leaving the Roman Empire to his worthless son, Commodus, should be instructive. Wealth should be left to someone who is most capable of increasing it – at least if you want to benefit humanity in general. And, yes, I'm quite aware that humanity in general may deserve absolutely nothing.

At a minimum, consider that memes are far more important than genes. It's wiser, therefore, to leave your wealth only to individuals (related to you or not) who will carry forth values you hold dear and are worthy of the wealth. If nothing else, make sure you disinherit the government.

Also consider that dividing wealth dissipates it and generally makes it less useful. If you have $1 million, you could leave $1,000 to each of 1,000 people. But apart from the fact that it's unlikely anyone knows 1,000 worthy people, that much money is only enough for a modest vacation or a few baubles.

The larger the pool of capital, the more ways it can be used, the more creative power it has, and the more likely it will be conserved and used creatively. I favor the Roman system, in which one could adopt children of any age – but always after you could see what their character was. You might want to do that if your own kids don't make the grade.

The bottom line is, if you want serious money, you have to get serious about money. You need to understand these fundamentals and never forget them. Don't let all the garbage reported in the financial media you read, see or hear confuse you about what money really is. Don't consume more than you make: save! Don't spend: invest!

Again, these are radical ideas in today's America, where bailouts and handouts are desired and expected. But these are timeless rules of wealth… and they always will be.

Regards,

Doug Casey

Source: Daily Wealth

6 Major Flaws in the Fed's Economic Model

The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.

The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in the world.

The Fed may have some legitimate role as an emergency lender of last resort and as a force to use liquidity to maintain price stability. But, the lender of last resort function has morphed into an all-purpose bailout facility, and the liquidity function has morphed into massive manipulation of interest rates.

The original sin with regard to Fed powers was the Humphrey-Hawkins Full Employment Act of 1978 signed by President Carter. This created the “dual mandate” which allowed the Fed to consider employment as well as price stability in setting policy. The dual mandate allows the Fed to manage the U.S. jobs market and, by extension, the economy as a whole, instead of confining itself to straightforward liquidity operations.

Janet Yellen, the Fed chairwoman, is a strong advocate of the dual mandate and has emphasized employment targets in the setting of Fed policy. Through the dual mandate and her embrace of it, and using the dollar’s unique role as leverage, she is a de facto central planner for the world.

Like all central planners, she will fail. Yellen’s greatest deficiency is that she does not use practical rules. Instead she uses esoteric economic models that do not correspond to reality. This approach is highlighted in two Yellen speeches. In June 2012 she described her “optimal control” model and in April 2013 she described her model of “communications policy.”

The theory of optimal control says that conventional monetary rules, such as the Taylor Rule or a commodity price standard, should be abandoned in current conditions in favor of a policy that will keep rates lower, longer than otherwise. Yellen favors use of communications policy to let individuals and markets know the Fed’s intentions under optimal control.

The idea is that over time, individuals will “get the message” and begin to make borrowing, investment and spending decisions based on the promise of lower rates. This will then lead to increased aggregate demand, higher employment and stronger economic growth. At that point, the Fed can begin to withdraw policy support in order to prevent an outbreak of inflation.

The flaws in Yellen’s models are numerous. Here are a few:

1) Under Yellen’s own model, saying she will keep rates “lower, longer” is designed to improve the economy sooner than alternative policies. But if the economy improves sooner under her policy, she will raise rates sooner. So, the entire approach is a lie. Somehow people are supposed to play along with Yellen’s low rate promise even though they intuitively understand that if things get better the promise will be rescinded. This produces confusion.

2) People are not automatons who mindlessly do what Yellen wants. In the face of the embedded contradictions of Yellen’s model, people prefer to hoard cash, stay on the sidelines and not get suckered by the bait-and-switch promise of optimal control theory. The resulting lack of investment and consumption is what is really hurting the economy. Economists call this “regime uncertainty” and it was a leading cause of the length, if not the origin, of the Great Depression of 1929-1941.

3) In order to make money under the Fed’s zero interest rate policy, banks are engaging in hidden off-balance sheet transactions, including asset swaps, which substantially increase systemic risk. In an asset swap, a bank with weak collateral will “swap” that for good collateral with an institutional investor in a transaction that will be reversed at some point. The bank then takes the good collateral and uses it for margin in another swap with another bank. In effect, a two-party deal has been turned into a three-party deal with greater risk and credit exposure all around.

4) Yellen’s zero interest rate policy constitutes massive theft from savers. Applying a normalized interest rate of about 2% to the entire savings pool in the U.S. banking system compared to the actual rate of zero, reveals a $400 billion per year wealth transfer from savers to the banks from the zero rates. This has continued for five years, so the cumulative subsidy to the banking system at the expense of everyday Americans is now over $2 trillion. This hurts investment, penalizes savers and forces retirees into inappropriate risk investments such as the stock market. Yellen supports this bank subsidy and theft from savers.

5) The Fed is now insolvent. By buying highly volatile long-term Treasury notes instead of safe short-term treasury bills, the Fed has wiped out its capital on a mark-to-market basis. Of course, the Fed carries these notes on its balance sheet “at cost” and does not mark to market, but if they did they would be broke. This fact will be more difficult to hide as interest rates are allowed to rise. The insolvency of the Fed will become a major political issue in the years ahead and may necessitate a financial bail-out of the Fed by taxpayers. Yellen is a leading advocate of the policies that have resulted in the Fed’s insolvency.

6) Market participants and policymakers rely on market prices to make decisions about economic policy. What happens when the price signals upon which policymakers rely are themselves distorted by prior policy manipulation? First you distort the price signal by market manipulation, then you rely on the “price” to guide your policy going forward. This is the blind leading the blind.

The Fed is trying to tip the psychology of the consumer toward spending through its communication policy and low rates. This is extremely difficult to do in the short run. But once you change the psychology, it is extremely difficult to change it back again.

If the Fed succeeds in raising inflationary expectations, those expectations may quickly get out of control as they did in the 1970’s. This means that instead of inflation leveling off at 3%, inflation may quickly jump to 7% or higher. The Fed believes they can dial-down the thermostat if this happens, but they will discover that the psychology is not easy to reverse and inflation will run out of control.

The solution is for Congress to repeal the dual mandate and return the Fed to its original purpose as lender of last resort and short-term liquidity provider. Central planning failed for Stalin and Mao Zedong and it will fail for Janet Yellen too.

Regards,

Jim Rickards
for The Daily Reckoning

Ed. Note: Along the way, this failure could present a handful of unique profit opportunities. And the FREE Daily Reckoning email edition will be giving readers a chance to discover several of them first hand. Sign up for FREE, right here, and never miss a single one.

Source: The Daily Reckoning

Nightmare Of OPEC. Could Oil Prices Be Heading Further Down?

It has been a while since we wrote on this page. Maybe its because, the script hasn't changed, since the great recession that shocked the world in the years of 2007/2008. As you may or may not know, the developed worlds response to the crisis was to attack deflation by never seen weapons before. You maybe thinking of ballistic missiles, or some type of new nuclear war head. This is a different kind of battle, instead of Generals giving soldiers orders, its economist firing formulas, and suggesting central banks, do the experiment.

First the central banks of the developed world began their fight, by using traditional tools, such as cutting interest rates, when the general economy was not doing well. And, later they noticed, that wasn't working, so they kept cutting, until, interest rates went to zero or close to zero. Yes, we said zero, nada! All of a sudden, money didn't cost anything. Forget, the idea of saving money. Money, generally heads to places, where it generally, earns more money, relative to where it could have been, such as savings account. Could it be, why stocks are doing well, despite, where the economy is? We aren't sure, but maybe. We will never for sure know anything, that's for sure. When what they always knew wasn't working, central banks deployed, money printing schemes, and gave it different names, such as operation twist, and, quantitative easing. Sorry, if we digressed a little, here is our argument, as to why oil prices, could further drop in prices.

Lets start with, what the world revolves around with everyday, Money. So, what are the interest rates central banks of the developed world, have been charging, and is currently charging?

As, the above charts show us, key lending rates by the major economies of the world, is nill. What this tells us is that, the quantity demanded for money is basically non-existent. Our apologies, if nothing we have said so far isn't making any sense. We ourselves aren't sure, if what we have said so far makes any sense. We are just trying our best to connect the dots of this complex world. When we thought, just the fact, that there was no demand for money, could be one of the sole reasons, why oil prices have come down dramatically, and probably continue to do so, we saw the following charts.

From the late 80's, we see that consumption of oil per day rising, that's until it peaked in the middle of the 2000's.

Oil reserves are the amount of technically and economically recoverable oil. What the above chart tell us, in simple terms, is that basically there is more oil available, than the demanded amount.

As consumption peaked, something else emerged. Total production of oil by the United States per day began rising at a fast pace. What we recall, that is if our memory is sharp, the last decade, we witnessed, prices at the pump reaching $5 per gallon. If we could refer, to the chart above, that was also when the United States, biggest consumer of oil, was producing less and less of the stuff.

Today, the story is different, even the experts are saying, the United States is producing more oil, than the sheik kingdom. The script has changed, by the invisible hand of the mighty market. By now, its most likely, you have forgotten, what we said about interest rates. Remember, the cost of money, the thing one has to pay to borrow money? We knew, you would recall. If you truly remember, interest rates in the developed world have been on a downward spiral, since the great recession, or depression, depending on your perception of the world around you. In short, there isn't much demand for money, neither. What we are trying to understand is, if there is no demand for money, how could there be demand for oil? Does it not take money to buy oil?

Regards,

Eskinder Haile

Why Devalue Now?

"The more a person has been educated, the greater the likelihood, he is an idiot"  Friedrich Hayek

You are probably wondering why, Mr Hayek, a leading economist of the 20th century, would say something like that. If you happen to be an engineer or scientist, please do not be offended. But if your discipline happens to be economics, we feel sorry for you.

We are writing today, because we are assuming you are aware of the rumors of the street. In case you were not aware of the rumors, here is the script from, Africareview.com

"A new Ethiopian economic report by the World Bank (WB) has advised the government to devalue its currency to speed up the growth of exports.

The report focused on export performance in Ethiopia.

"Ethiopia's real exchange rate is overvalued. Empirical evidence presented in the report suggests that a 10 per cent lower real exchange rate could increase export growth in Ethiopia by more than 5 percentage points per year and increase economic growth by more than 2 percentage points," said, the report, titled 3rd Ethiopian Economic Update: Strengthening Export Performance Through Improved Competitiveness'."

Few years ago, you might recall, the IMF, which is a branch of the world bank, was suggesting Ethiopia was growing at X percent, while the Ethiopian Government was claiming double digits growth. While both sides were agreeing on inflation numbers. It is as if, a single patient, who is diagnosed with some type of sickness, is advised to take three different type of medicine, because the doctors can't agree on what the sickness is; imagine that!

What does a devalued currency have to do with exports? We are glad you are asking dear reader, neither did we know, it is why, we are trying to see, if what the mighty bank is advising, makes any sense. Since we are curious about devaluation. Is a depreciating currency bad?

Not if you are an exporting nation, such as Kazakhstan, which happen to be the largest uranium producer in the world. The Tenge, which is Kazakhstan's currency has depreciated by almost 20%, since the beginning of the year. Kazakhstan being strategically aligned with mother Russia,  the recent geopolitical tensions seem to be the reason why, currency traders are dumping the Tenge. According to recent data, this past quarter alone, the Kazakhs have produced almost 15 million pounds of uranium, and now they are close to producing 60 million pounds for the year. Which accounts for 40% of the worlds uranium production.

In other words, the Kazakhs are now making almost 20% more for every pound of uranium they sell. We are certain, president Vladmir Putin is even more thankful for the sanctions, the west has imposed on him, as mother Russia controls, all of Kazakhstan's uranium production. And of course the west will keep buying as their stock of uranium has depleted and need the nuclear power plants to generate electricity to keep the lights on.

We apologize, dear reader if we have deviated a little, but you might be wondering how is all this related, to mother Ethiopia? We knew you would ask, it is why we are asking, what is Ethiopia's biggest export?

  Ethiopian Became the Largest African Carrier by Revenue and Profit, According To IATA - 09 June, 2014

Ethiopian Airlines, the fastest growing and most profitable airline in Africa, wishes to extend its appreciation to its esteemed customers for their vote of confidence, which has enabled the airline to become for the first time in its 69 years history the largest African carrier with revenue topping 2.3 billion $ in 2013 and profit, according to the airlines ranking of the International Air Transport Association (IATA) published in the 58^thedition of World Air Transport Statistics.
According to IATA annual airlines ranking, Ethiopian is first in Africa and 37^th in the world in revenue as well as first in Africa and 18^th in the world in operating profit.

It seems to us, Ethiopian airlines is a top earner of foreign currency, and next seems to be our traditional commodity export.

The above two chart show the prices of the commodities in the international market, which means we Ethiopians don't have any control of the price, since it fluctuates based on supply and demand. If we were the largest producer of the commodities, and had a large market share of the worlds supply, as the Kazakhs are for uranium, then devaluation would not be a bad idea. 

We are as confused as you are, dear reader, we must be missing something, somewhere. Other wise, the unintended consequences seem to outweigh the benefits of devaluation equation. How about the manufacturing sector? Looking at the most recent available data, manufactured goods aren't a significant contributor of exports, then we wonder if the rumor of devaluation becomes true, who benefits? We do not know, do you, dear reader?

It is why we have a simple advise for the authorities, as if they would listen to us. Do the opposite of what the World Bank, and IMF, suggest to do. In our perspective, it is necessary to have all the industrial zones, the dams, railways, roads, and other basic foundations to be built first, then import all the necessary machines, that will be needed to produce goods for export, since a currency that is over valued make imports cheap, and last but not least have a work force, that is efficient, and faster, than your average Vietnamese at the least. Then devalue all you want, since that is one thing governments are efficient and good at, is trashing a currency. 

We have patiently been waiting for a currency crisis in Ethiopia for a while now, dear reader. It is a question of when, not how or why, if history could be any guide. Countries that  grew at the speed, that Ethiopia is growing at currently, eventually had their currency collapse. Don't be surprised or quick to blame the government, when the chaos comes, remember they are trying to manage 90 million poor souls. It is up to the individual to protect his or her assets and savings. In what should you invest? You are asking us too much, but here is our take, your savings should be, 25% in foreign currency, if possible the Australian dollar, 25% in Gold, 25% in real estate, and last but not least 25% in agricultural land, that you can lease or farm on. This should protect you, should the rumors come true, and from future currency depreciation, as the recommendations are a hedge from inflationary pressures, and economic chaos. 

Regards,

Eskinder Haile