MONEY matters

I don’t know about you, but I’m disgusted with the politics surrounding the increase of the debt limit. This is routine housekeeping work that has turned into hostage taking. Republicans seem to have lost any interest in the belief that we’re all in this together and that we should be looking out for the common good of all and not just the few at the top.

Burn the village to save the village. Let the country default on its debt. The rhetoric being touted by Republicans is dangerous and corrosive to our society as a whole. Those of us in the silent majority that are fed up with this lack of compromise and putting our country first need to let our voices be heard.

When it comes to investing in Asia, China still gets most of the attention. China continues to attract more investors that any region in Asia, yet, there’s a hidden gem in Asia, namely South Korea, that I believe warrants your attention.

Economic growth remains strong. South Korea’s exports are expected to grow by 11.9%. This is also one of the most wired nations in the world - 95% of homes have broadband, compared with 58% in Germany. South Korea’s economic partnership with China is strong and growing stronger. China now accounts for about 25% of South Korea’s exports.

If all goes well, next month traders on the stock markets of Chile, Columbia and Peru (proposed as the Pacific Common Market) will be able to seamlessly buy and sell the shares of companies listed with each other. After two years of negotiation, the Integrated Latin American Market will instantly become Latin America’s second largest stock market, after Brazil’s.

Next on the list is talk of an impending ‘free-trade’ agreement between the U.S and South Korea, Panama and Columbia. There’s wide spread belief, but by no means certainty, that a deal will be struck in Congress approving these agreements before the August recess. With so much rancor in D.C these days, it’s hard to imagine any deal getting done, but the odds are high this one will go through.

Back in October of 2009, I wrote a blogpost about Brazil I called Blame it on Rio. I felt Brazil was a country on the rise and one worth investing in. With President Obama’s recent visit to Brazil, it’s clear we are watching this emerging economy take its rightful place on the world stage.

In 2010, Brazil’s economy grew by a blistering 7.5%, a rate unmatched since 1986. This meant that Brazil overtook Italy to rank as the world’s seventh-biggest economy. Their new President, Dilma Rousseff, is already receiving high marks for her early performance.

If the US debt clock unnerves you, it should. Take action by visiting Harvard Professor Lawrence Lessig’s site: fix congress first for political reform we desperately need.

How do other American states compare with other countries? The Economist takes the nearest equivalent country from 2009 data and reveals some surprises.

So, which countries match the GDP and population of America's states?

Strict financial regulations and a new commodity boom have turned “boring” Canada into an economic star. Many economists believe Canada’s “boring” financial system has much to do with its success. Due to much more conservative lending than American banks, and much tighter regulations, the banking system in Canada has made it through the Great Recession relatively unscathed.

The combination of commodity revenues and investors seeking safety in Canadian assets has caused the currency to take off. After falling as low as 77 cents to the U.S. Dollar during the recession, the Canadian Dollar, also known as the loonie, has now returned to rough parity with the greenback. If the loonie continues to rise, there could be problems on the horizon, especially where exports are concerned, but for now, the economic outlook is very bright. (more…)

15 Best Performing Stock Markets in 2009 (local currency terms)*