SOS GIGO

This is what Peter Schiff said about the Keynesians eonomists, Garbage In Garbage Out.

Lets talk about the CAR, Capital Adequacy Ratio of the Banks.

Prior to the collapse of the financial crisis, most of the Big Banks in USA is above the CAR. Then suddenly all of them have problems in Sep 2009. Non of the auditors, regulators, rating agencies even raised a red flag of the financial health about the banking or housing sector.

Have anyone stop and think, why, why, why? If one investigate further one will find that there are limitation in the CAR's formula, and I am sure, there is limitation in the rating agencies formula to evaluate the health of the companies and there is even limitation of the formula to evaluate the economy as a whole.

Even US claims to be the most transparent economy in the world, and why didn't we see it? There are Harvard, MITs, Stanford, Harvards, and top notch universities in US, how come non of them sees it?

That is something INVINSIBLE, and everyone seems to overlook it, it is called DERIVATIVES.

It is worth about USD600 trillion, 1000% of world GDP of USD54 trillion. Say, if we tax 1%, it is worth USD6 trillion.

SOS USA

China, Japan, UK, Caribbean & Middle East hold about USD2.0 trillion US Debt.

USA reserve on gold is about USD225 billion @ USD900 per ounce.

USA total debt is about USD50 trillion, out of which Federal Debt is about USD10 trillion.

USA GDP is about USD14 trillion and Earnings of USD1.2 trillion.

It is doubtful if USA is able to repay its loans, not to mentioned that significant contribution to the Earnings is from financial and housing industries, which has since collapse.

USA derivatives, estimated to be around half of total world derivatives of USD600 trillion.

The mortgage market size is about USD20 trillion, not to mentioned the derivatives created from this market would be at least 5-10 times more.

MyView

Mathematically speaking, USA has overgeared 358% of GDP, over consumed at 70% of GDP. The next question is the GDP is highly inflated by the financial, housing and derivatives industries. Just take earnings after interest (private) , interest on private debt of about USD40trillion x 3% = 1.2 trillion, the interest cover about 1 time. This is not very healthy, especially there is so much to write down on toxic assets (4 big banks has a off balance sheet of derivatives of USD5.2trillion) and Roubini expect the write of of bad debts of about USD2 trillion.

Say a normalised GDP is USD10 trillion (adjust for sustainable gearing of 200% and consumption of say 50% of GDP), the earnings will drop to USD0.7 trillion.

SOS Pessimistic!

Most people call them Dr Doom or Mr Pessimistics when they predict about the market in 2008 and 2009 on the financial crisis:

1. Jim Rogers


2. Marc Faber


3. Peter Schiff


4. Ron Paul


5. George Soros


6. Dr Nouriel Roubini


7. Gerald Celente

They are not pessimistics, they are just realistic. They understand the facts and know how to analyse the economy and more importantly they got it right previously and they use the most important tools that others fail to understand or refuse to accept it, common sense.

Like what Jim Rogers said, Ben Bernanke has been wrong about the US economy for the past 7 years, and Timothy Geithner has been wrong about the economy for the past 15 years and the administration chooses them as their critical advisor. They are the elites, they only helps their own kind, and of course, the have to do something politically right but economically wrong.

It is sad to know that most people is influnce by what they listen from the media and other popular economists saying this crisis will be over by end of 2009 or early 2010, they haven't even sees the real thing yet!!

Please prepare yourself or you may regret it.

I believe the failure of most economists on the crisis is they may have studied the wrong type of economics and forgot about the most important tools, common sense, and of course influence by the media.

So, for learning economics, I would recommend we read more stuff written by this guys. They have been right and will be right on this one as well.

SOS Wake Up!

US economy is turning from bad to worst
Europe economies is turning from worst to disaster

Both Europe and US economies contributes >60% of world GDP

Why are they not doing well in the long run?

• Over borrowing


• Over spending


• Participate significantly in derivatives


• Government interventions, protections and bailouts


• Government is broke and continue to print money (spending money from more debt, as they do not has reserves or surplus like the Asian economies)

Is the Asian economies any better?

• in the short term no, because they over invest and over produce for the Europe and US


• in the long term, they are better off because they have strong reserve and surplus to reinvest into their own countries, and sell to their populations, esp China, which still has lots of room to grow


• they are rich in resources and commodities and that is what the mass population needs, infrastructure development and better food

So, for investment for LONG TERM (more than 5 years), what is the asset class should we be investing?

• the banking system has collapse, new credits are shrinking, hence investment in mining, agriculture and other resources will be impeded, hence causing low inventories, and as the demand increases in the Asian countries esp, lack of credits will suffocate the supply, and demand will gradually increase when the Asian economies recovers, hence, causing an imbalance of demand exceeding supply for COMMODITIES. Hence, one class that is critical for LONG TERM investment is critical.


• with this crisis prolonging, and low interest rates regime, and printing of trillions of dollars without a strong reserve by Europe and US, it will cause hyper inflation, hence, the next logical asset class to invest is precious metals like GOLD, SILVER and PLATINUM.


• One more class that is hard to avoid is the EQUITIES. For LONG TERM, avoid equities in Europe and US, but there may be rebounds (25% to 50%) in a secular bear. Go for Equity in Asia or Resource rich countries like Australia or Canada. LONG TERM equity should focus on the fundamental that is not impaired by this crisis, i.e. in the LONG RUN, demand will exceed supply type of business. Some of the countries would be like China, Canada, Australia, Brazil, NZ. The equities in the resource rich countries and strong reserves will recover and do much better than their counter part in the Western countries.


• Last but not least is CURRENCIES as an asset class. This is a hard call as it very much depends on the government taking the correct actions. Some that we would like to consider is China's RMB, Canadian dollars, or Aussie dollars.


• The incentive to saving (for Asian countries) will not be advantagerous as inflation and low interest regime still in place.

SOS World GDP

GDP = consumption + gross investment+ govt. spending+ (export - import)

GDP = rent + interest + profits + wages + (corporate income tax+dividend+undistributed profits)

2007 - GDP = USD54.6 trillion

2008 - GDP = USD56.2 trillion (3% growth)

World (2007)

54,584,918[4]
—
European Union (expected to drop 6%)
16,905,620[4]
1
United States (expected to drop 6%)
13,840,000
2
Japan
4,381,576 (expected to drop 8%)
3
Germany (expected to drop 6%)
3,320,913
4
China (PRC) (expected to grow 7%)
3,280,224h
5
United Kingdom (expected to drop 6%)
2,804,437
6
France (expected to drop 6%)
2,593,779
7
Italy
2,104,666
8
Spain
1,439,983
9
Canada
1,436,086
10
Brazil
1,313,590

General calculation - World GDP drop 3% = 56.2 x 0.97 = USD54.5 trillion drop about USD1.7trillion

4th Quarter GDP for 2008

United States = - 6.2%

EU = -6%

Japan = -13%

Singapore = -17%

World Derivatives = USD600 trillion

MyView

Citigroup, Bank of America, JP Morgan and Wells Fargo off balance sheet assets is about USD5.2 trillion (based on 2008 filing).

The top 5 GDP countries need to normalise their GDP which is inflated by the US over consumption and US over gearing (and also Europe). Hence, there will be a severe adjustment in these countries.

This severe readjustment will cause volatility in currency, economy, social and political crisis. Get prepared. Learn about ETF in short selling.

SOS Fear

Fearful & Desperate = Bush + Media + Iraq War = Genocide

Fearful & Desperate = Obama + Media + Stimulus Package = Economy Collapse

When people are fearful and desperate they will hang on to HOPE, CHANGE & BELIEVE because they do not know what to do, they lose CONTROL.

The US economy is like a patient who are already brain dead, and the patient's relative HOPING, BELIEVING there would be a miracle to happen or hopes that there are "CHANGES" and "NEW DEVELOPMENT" in science that could save the patient. This is exactly what happen in the US and Europe.

MyView

If we look back to 911 and how George Bush and 90% American supporting the Iraq War, you will realised that 90% of the American being used and manipulated because they are fearful & desperate.

Similarly this round of mortgage & financial crisis 915 in 2008, 90% of American are fearful and desperate and will support whatever stimulus plan the US Government is providing because they are fearful & desperate.

It is ashame that so many Americans get sucked into this "mentality" that AIG or Citigroup is too big to fail. According to Jim Rogers, in the thousand years of history, big banks had failed before, big companies had failed before and there is nothing new to it, this is called capitalism, when during a crisis, the competent will take over the incompetent people. In this case, the incompetent are being bailout or helped, and the competent will be worst off because they are disadvantaged.

I suppose we cannot blame the American since they lose their control because they are fearful & desperate, hence, they have to go through a time called "DENIAL". If they sit down, with a calm mind, and find out all the facts and figures about the crisis, they will come to accept that the patient is "brain dead", the only way is to let it be and move on.

The stimulus plan or "bailout" does not make economic sense. Like what Jim Rogers said, our mother or farther never thought us to throw money into a rat hole.

SOS US Currency

Eventually US Dollar will look like this. Copy from turtleinvestor's blog. Hopefully, it can buy a McDonald.

Facts and figures to ponder;

World GDP = USD60T
World Derivatives = USD600T (1000% of world GDP)
US GDP = USD14T (2008)
US Earnings = USD1.2T
US Debt = US50 T
US Market Capitalisation is about USD10T (end of 2008 or 71% of GDP)
US Earnings mainly contributed by over gearing (3.6 times of GDP) & over consumption (USD10T or 71% of GDP ). The long term gearing of US is 2 times of GDP.
US in the last few years, contributed mainly by the financial institutions i.e. investment banks like Lehman, Bear Stearn, Goldman Sach, JP Morgan, BoA etc, mortgate institutions like AIG, Fannie Mae and Freddie Mac.
World Toxic Asset = US3.6T (by Roubini, about USD2.0T from US)
Roubini predicted earnings will drop to USD50 to USD60 x PE of say 10 = S&P 500 = 500 - 600 points

Since the US Earnings are inflated by Gearing & Over Consumption, if we reduce the gearing to say 200% from 360% in order to go back to NORMACY, loan is expected to drop say 44%.

USD50T debt = US Earnings of USD1.2T
USD28T debt (dropped 44%) = USD Earnings = should dropped 44%x1.2T = USD0.5T

Consumption USD10T = US Earnings of USD1.2T
Reasonable consumption USD7T = US Earnings should dropped 30% x 1.2T = USD0.4T

Hence, a reasonable or NORMACY kind of earnings after adjustment of GEARING and CONSUMPTION

USD1.2T - USD0.5T - USD0.4T = USD0.3T x PE of 8.3 times = GDP of USD2.5T

Hence, the Normal GDP of USD is USD2.5T from the over inflated GDP of USD14.0T.

MyView

Just assumed the US as a Corporation making USD1.2 T with debt of USD50T and derivatives of USD300T, and a over inflated GDP of USD14T of which 71% or USD10T is consumption, what do we get?

Just use simple arithmatic calculation and you will soon realise the Corporation is a BANKRUPT.

SOS One Trillion

Fed Reserve is printing about USD1.1 trillion to bailout the financial and mortgage institutions.

Do we see the logic here?

1. China or Japan are no longer interested to buy out debt created by US Government, so the Fed replace them by taking up the USD1.1 trillion debt, issued by treasuries and buying up the mortgage backed securities.


2. Fed is bankrupted, and is still able to create USD1.1 trillion, anyone care to audit Fed Reserve? Under the law, they are not auditable. What do they have to hide?


3. Fed is creating or reflating the phony bubble, i.e. putting good money into bad investment, which is economically unproductive, and morally and ethically wrong.


4. The reason is to devalue the US dollar, so that when they pay back the lender, it only worth half the value. Is like example, US owe China about USD600 billion which is converted today (6.9) to RMB4.1 trillion, in the future, when US is devalued to (USD1=RMB3.45), when the Chinese sell their US Bonds in the future, they can only get back about RMB2.05 trillion, which is half the early value when US bought their imports from China.


5. Fed is also bailing out their elite cronies in the Wall Street.


6. By printing so much money, do we think it can solve the problems of a over geared and over consumed country, then wouldn't it be easy for BNM to purchase all the bonds issued by government and raised RM1 trillion, and the RM won't suffer as the consequence, and everyone will be rich in Malaysia.

SOS Politician

This is what Marc Faber said on his interviewed on 20th March 2009:

The American politicians are worst than mafia, steal the money from the average American and gave it to the elites, which in turn sponsor their campaign to win the election.

They are worst than scumbag, enriching the elites and poverised the average American.

The average American will soon realised that they are being con by the politician when their money is devalued, i.e. the cost of living will increased drastically as a result of the printing of money and it will cause civil unrest.

The Fact (what Jim Rogers said)

• it is not only economically insane to throw good money at bad investment, it is also morally and ethically wrong to do that.
• it is immoral to take the money from the average American and subsidise the incompetent elites in the Wall Street.
• no average American will benefits from the bailouts, other than a few elites.

MyView

• The average Americans are doomed in a few years time
• Never in history that printing of money can resolve the recession, espeacially when one is already broke
• This is not only the American problem, it was exported to the Europeans as well, if not worst, making it a syncronized global depression
• some of the good ideas after listening to Marc Faber, Peter Schiff and Jim Rogers, any spare money should be invested into

1. high dividend yield stocks in economically sound countries like Canada, Australia, HK, NZ, Singapore and/or China (Peter Schiff)
2. invest in commodities index, ETFs which comprises Metals, Energy and Agriculture (Jim Rogers)
3. invest in agricultural stocks in China (via HK 'H' shares) and water treatment plants , which are not affected by the crisis
4. invest in GOLD (recommended by Peter Schiff, Jim Rogers and Marc Faber) to protect against inflation or if gold mining stocks (Marc Faber)

SOS Depresssion

Depression 1930 vs 2008

Hoover vs Bush
Rosevelt vs Obama

The 1930s
US Depression in 1930s mainly due to easy credit from early 20s to late 20s causing the stock bubble.
Hoover try to fixed the economy by government intervention to control the interest rate, protectionism, price control etc which make it worst.
Similarly, when Rosevelt came in, continue to intervent until the world war 2, when American spent lots of money in the war and cause inflation.

The 2008s
Bush junior became President in 2000, during his presidency, Alan Greenspan increase the interest rate during the Tech Bubble, and the equity dropped drastically, to prevent the economy to go further down, the Bush administration loosen the credit, and Greenspan starts reducing interest rate and encourages housing loan. Soon another bubble is created, now the housing bubble. Easy loan was given on the pretext that house price will never fall. Those who bought in the early 2001 makes tonnes of money in the early year of the housing bubble until it was burst in late 2007. On top of this, derivatives are created from the housing mortgage as well as other structured products, which does not has a fundamental underlying assets.

So, there is not much differences between 30s and 2008, only now the situation is worst because of high gearing and federal deficit, making the recession harder to fix. The printing of moneywill prolong the recession and cause a worst depression than the 30s.

MyView

So, be prepared.

SOS Bailout

1. Fed Reserve will buy up USD1.3 trillion - another bailout, this time, China or Japan is not buying them, Fed has to buy them with their bankrupted balance sheet



2. Citigroup issue USD3.0bil worth of consumer credit cards



3. Continue bailout of car suppliers

Impact:

1. Hyper inflation period

Action (ASAP):

1. Commodities - Energy, Precious Metals & Agriculture

SOS Deleveraging

1. Corporate Profits are mainly generated from Debt
2. Debt is healthy if it is within one's mean (which is not the case for US)
3. As a result of over consumption and over leveraging by US, the only save prediction is that US will need to reset their normality (i.e. deleverage back to a healthy level i.e. about 200% of GDP instead of 358%)
4. When US is resetting its new norm, consumption is expected to dropped as it is a fallacy consumption driven by debt and saving will gradually improve.
5. Similarly, this is the same that is happening in UK and Europe, GDP for last quarter for US is -6%, UK & Europe is -6%, Japan is -12%, Singapore is -16%, China is about +6%.

MyView

1. World GDP will be in negative mode for next few years due mainly to deleveraging in US and Europe, so set a new normacy from its over investment and over consumption party over the last 10-15 years.
2. Hyper inflation (mainly on food, medical, & education, less on property & equity) will set in over the next few years resulting from printing of money.
3. More importantly, knowing what the cause of the problem is important, it is far more important to be able to "predict" what will be the future so that our INVESTMENT is in the right sector to maintain or sustain its disposable value arising from this unprecedented crisis.

SOS Reality Check

It is difficult to convince someone especially they are very much influnced by the mass media.

Let me give you an anology:

US is laden with the following problems

1. Over gearing i.e. too much debt


2. Over consumptions i.e. more than what they earned with a view that their properties will make them good returns


3. Sub prime mortgage bubble created due to artificial low interest rate as a result of government intervention


4. CDOs, CLOs, MDS, CDS and other derivatives created arising from mortgages, credit cards and education loans


5. Banking sectors collapse due to derivatives which are not disclosed in the accounts and become a time bom

What the US Government doing about it?

1. Printing money i.e. encourage more spending and credit, which is the cause of the problems


2. Putting good money into bad investments like buying toxic assets


3. Force spending on alternate energy and infrastructure, which the intervention prevented good resources for other deserving sector and also the government is already broke and incurring more debt to finance all this spending will only deepen and lengthen the problem

What will happen next?

1. longer recession and deepen recessions


2. hyper inflation as can be seen now in the education, food and medical expenditure


3. gold price will double or triple


4. agricutural prices will go up the roof due to shortage of food (inventories is 50 years low)


5. credit will collapse

SOS Harvard

1. Harvard has the biggest endownment fund in the world.
2. Sadly in late 2008, it has invested about USD7.2 billion in commodities, and foreign equities, which later tanked in Oct to Dec 2008. Doing at 15.7% for the last 15 years. Then came the margin call and Harvard is fully invested!
3. Harvard has to raise USD2.0 billion IOUs at 6% while its investment is having a negative return.

MyView

Everyone thought that they are the brightest kid in town until they lose their pants. The moral here is "Greed", "Ego", "Pride" and "Stupidity"

With all combined, you will have a Harvard graduate. That is why, in the ancient time in China, morality is cultivated before a student are thought. Morality comes first, education comes second.

SOS Fed

Jim Rogers said Fed is a bankrupt

Marc Faber said Fed is a bankrupt

Peter Schiff said Fed is a bankrupt

Roubini said Fed is a bankrupt

Matthias Chang said Fed is a bankrupt

It is important to note that the experts above speaks based on hard facts and figures, not rumours or hear say.

So is Bank of England

MyView

1. First and foremost, get out of US dollars and UK sterling. Go to Yuan or Yen. Or go to resourse rich countries like Australia, Canada or high reserve countries like Singapore, Hong Kong.
2. Invest in precious metal or mining companies of precious metals like gold, silver or platinum as save haven when currencies are in the tail spin
3. Invest in crude oil related companies, at about USD40 per barrel, in gold terms it is very attractive because gold is USD900 per oz. During the peak, USD900 per oz of gold is equivalent to crude oil at USD100 per barrel
4. Invest in Agricultural related stocks
5. Invest in high dividend yield stocks

For Malaysian, looking at the politicians, it is quite save to said that it will lose its competitive advantage after this crisis as non of the politicians border about the economy or know how to handle the crisis. In short, Malaysia economy will be in deep trouble, which will eventually, the currency willl lose its competitiveness. Foreign investment will come to a halt, export will halt as well, and so will our foreign reserve in USD which eventually become toilet paper.

Hence, proper planning is critical, just to maintain the "disposable" value of Ringgit Malaysia as this crisis is much worst than the Asian crisis in 1997 as it was isolated mainly on Asian currency problem.

SOS Bargain?

Oil Companies Are Trading As If Their Oil Reserves Are Worth As Little As 15 cents on the Dollar!
Consider …

Anadarko Petroleum with 2.4 billion barrels of proven oil reserves that are now trading at a mere 15 cents on the dollar when compared to the company's current market value.
Occidental Petroleum with over 2.8 billion barrels of oil, valued at just 33 cents on the dollar .
ExxonMobil whose share price currently values the company's oil reserves at just $2.54 a barrel . That's a 94% discount from the current market price of oil!
Major Oil Company Values are Dirt Cheap Compared to the Value of their Reserves!

1. Name & Ticker
2. Recent Price
3. Market Cap (billions)
4. P/E Ratio
5. Oil Reserves millions of barrels of oil equivalent)
6. Market Value of Oil Reserves @ $44 oil (billions $)
7. Based on Market Cap, Oil Effectively Valued at (cents on the dollar)
1. Anadarko Petroleum Corp (APC)
2. $35.00
3. $16
4. 7.18
5. 2,431
6. $106,979
7. 15 cents

1. Chevron Corp (CVX)
2. $78.08
3. $159
4. 6.56
5. 10,777
6. $474,188
7. 34 cents

1. ConocoPhillips (COP)
2. $51.49
3. $76
4. 4.22
5. 10,560
6. $464,625
7. 16 cents

1. Exxon Mobil Corp (XOM)
$79.30
$403
8.79
21,757
$957,308
42 cents

Hess Corp (HES)
$44.04
$14
4.72
1,330
$58,505
24 cents

Marathon Oil Corp (MRO)
$24.82
$18
4.38
1,225
$53,900
33 cents

Occidental Petroleum Corp (OXY)
$52.10
$42
5.52
2,865
$126,038
33 cents

Are these companies bargains?
Just based on the valuations of their oil reserves, I think they are an absolute steal. Factor in the following and they're even greater bargains …
Anadarko is trading at 7.18 times earnings
Occidental at just 5.52 times earnings
ExxonMobil trading at just 8.79 times earnings
Or how about ConocoPhillips … trading at just over 4 times earnings?

Do you think oil and gas companies are the only ones that are dirt-cheap right now?
Think again …
Gold Miners Are an Outright Steal, Too …
Goldcorp whose 43 million ounces of gold is currently valued by the market at a mere 55 cents on the dollar when compared to gold's current price.
Newmont Mining with over 93 million ounces of gold, valued at just 21 cents on the dollar!
Gold Companies are also Dirt Cheap

1. Name & Ticker
2. Recent Price
3. Market Cap (billions)
4. Proven & Probable Gold Reserves (millions of ounces)
5. Market Value of Gold Reserves @ $765 an ounce (millions of $)
6. Market Cap of Gold Reserves Effectively Valued at (cents on the dollar)

1. Barrick Gold Corp (ABX)
2. $28.14
3. $25
4. 124.6
5. $95,319
6. 26 cents

1. Freeport-McMoRan Copper & Gold Inc (FCX)
$20.68
$7.78
41
$31,365
25 cents

Goldcorp Inc (GG)
$25.21
$18
43
$32,895
55 cents

Kinross Gold Corp (KGC)
$15.16
$9.98
46
$35,190
28 cents

Newmont Mining Corp (NEM)
$32.27
$15
93
$71,145
21 cents

And it's not just energy companies and gold miners that are trading at such incredible bargain basement levels …
Almost All Natural Resource Companies Are Grossly Undervalued!

Consider the two largest in the world …
BHP Billiton , sitting on over $1 TRILLION worth of aluminum, tin, oil, bauxite, gold, silver, and industrial diamonds. Yet its share price is valuing those reserves at less than 12 cents on the dollar!

Rio Tinto , with more than $2 TRILLION of natural resources that are currently valued at less than 2 cents on the dollar , making Rio one of the best bargains on the planet, in my opinion.
Now, let's widen the scope even further, because there are a lot more companies that are dirt cheap …

Companies of all kinds from all over the world are ON SALE — trading at valuations that are less than the cash they have on hand.

Put another way, they are trading as if their profits today and earnings tomorrow don't even exist. Is that amazing, or what?

Consider …

The Cogo Group, serving China's wireless telecom sector, is trading at just $3.40 a share. Yet the company has almost $3.30 of cash per share … zero debt … and $.49 a share in earnings.

South Korea-based Namyang Dairy is another debt-free company. Plus it has a $270 million pile of cash that is 44% greater than the market value of its shares.

Italian-based machinery manufacturer Danieli has $1.49 billion in cash on hand, 40% more than the value of its publicly traded shares.

The Bank of New York Mellon has $45 billion in cash in its piggy bank, $12 billion more than its $33 billion market cap.

In fact, according to a recent Bloomberg report, there are now 2,267 companies around the world that are effectively offering their profits to the public for free!

Compare that to the low in the 2002 stock market, when according to the same Bloomberg formula, there were just 276 publicly traded companies in the world that were valued so cheaply.
Do you know what those companies' share prices did in the ensuing 12 months? They soared an average of 112%!

Bottom line: There are bargains and profits galore in these markets.
So get ready to make some real money in the weeks and months ahead.

MyView

1. Calculation above is inaccurate. The cost of extraction and marketing and transportation are not included.


2. Calculation above has ignored time value of money (inflation) - we must include the discounted rate of return on the future cash flow


3. Calculation must also plus the net cash balances at time of investment as a value to the said investment

SOS Where to Invest

The continuity uncertainty in the global economy has cause HAVOC to many countries, not only in UK, US or Eastern Europe, but also to a certain extent the BRIC countries as well as Asia Pacific countries.

First we have to do a comparison of your own country currency and others in the long term, then if you think your country currency may not be able to withstand the financial tsunami, start diversify into other currency, the country where they are financially or economically stronger for the next 3 to 5 years.

Where to Invest?

1. HIGH DIVIDEND stocks as recommended by Peter Schiff (go to his website, he recommended 5 stocks, in Canada, HK, Singapore and Australia.
2. GOLD or gold mining stocks.
3. AGRICULTURAL STOCKS in China but listed in HKSE.
4. ENERGY STOCKS - crude oil related or natural gas stocks for long term recovery

The crisis is unprecedented, so one has to diversify into various asset class to protect our hard earned net worth.