But our other big national deficit is creating a different problem, as well as the potential for one low-risk, high-return investment opportunity. Here’s the bottom line…

Because the United States has run such a large and persistent trade deficit for so many years, other countries – like China – have been able to run up large current account surpluses. These surpluses, in turn, have enabled them to accumulate substantial foreign exchange reserves.

For years, this money was invested in the world’s safest securities: U.S. Treasuries. But the returns from these securities haven’t been so hot lately. Especially when you’re a foreign investor watching the greenback wilt like last week’s roses.

Many world governments are now putting their money to work elsewhere. (Can you blame them?) Sovereign Wealth Funds are their vehicle.

Sovereign Wealth Funds are the financial assets of a country – usually part of the national savings – that are owned and organized into a state-controlled fund. These funds are increasingly moving money into global equity markets. And the sums involved are fairly staggering.

Current assets controlled by Sovereign Wealth Funds are estimated to be $3 trillion. They are expected to reach at least three times this amount over the next five years.

This is a bit scary to some investors, because these funds are entirely secretive. There is no world body to which they have to disclose what they are buying or when.

But here’s a common sense insight. They aren’t buying small or mid-cap companies. There isn’t enough liquidity in these to allow them to enter or exit their positions efficiently.

No, these funds must invest in the world’s biggest companies. As an individual investor, you might benefit from picking up giant companies like General Electric or British Petroleum or HSBC.

Or you can do it the easy way, by plunking for a few shares of the Dow Jones Global Titans Fund (AMEX: DGT).

This exchange-traded fund (ETF) holds 30 of the world’s largest publicly traded companies. It also pays a 2.5% dividend, 25% more than the average money market is paying right now.

Its major holdings include the companies I mentioned above, plus other market bellwethers like AT&T, Johnson & Johnson, Nestle, Microsoft and Proctor & Gamble.

The Global Titans Fund has several advantages. It is well diversified, liquid, and gives you instant foreign currency diversification. (60% of the holdings are in the United States, the rest are in international markets.)

It also uses a passive indexing approach, so it is both cost-effective and highly tax-efficient. Annual expenses are only one half of one percent.

This fund was originally brought to my attention by Eric Roseman, the Sovereign Society’s savvy Investment Director. (To read Eric’s views and learn more about international money flows, global investing and financial privacy, I suggest you check out the Sovereign Society’s Off Shore A-Letter. It’s quite good – and it’s free.)

In sum, the Dow Jones Global Titans Fund is holding exactly the mega-cap global companies that Sovereign Wealth Funds are likely to plow money into for many years to come.

My suggestion? Pick up a few shares now. And let the world’s most powerful creditors push your shares higher in the weeks and months ahead.

Good investing,

Alex

Source: How to Turn Sovereign Wealth Into Personal Wealth

Now things have changed and the country is coming into its own. As the world beats a path to Brazil’s door, for everything from soybeans to sugarcane to base metals — and soon oil and gas — the cash is pouring in.

Better still, a recent event has opened the doors to even more opportunity in Brazil. Taipan’s executive publisher, Sandy Franks, has the details.

Enjoy your weekend,

JL

Brazil Receives S&P Credit Rating, Becomes New Opportunity for Investors

Would you like to grow your “safe money” by 225% over the next three years while collecting 9% annual dividends? Here’s how to do it… by Sandy Franks, Executive Publisher, Taipan

In a shocking move, Standard & Poor’s has upgraded Brazil’s credit rating, lifting the country to “investment grade” for the first time in history.

The upgrade sparked a 6.3% rise in the index of the Sao Paulo stock exchange, or Bovespa, which soared to an all-time high of 67,868 points.

President Luiz Inacio Lula da Silva, basking in the investment upgrade, said it was a “magical moment” for Latin America’s largest country.

While the upgrade is good news for Brazil’s economy, it also presents YOU with a remarkable opportunity.

In fact, if you’d like to grow your “safe money” by 225% over the next three years while collecting 9% annual dividends… then please pay special attention to this “ground floor” investment opportunity.

Let me bring you up to date on the situation. Until Brazil received its recent credit rating, the country was considered a high-risk investment only for the brave and the bold.

The South American nation was strapped with billions in debt, and many investors believed the new leftist president would ramp up already-high government spending.

Consequently, many of the big institutional investors waited on the sidelines. But not anymore…

The ongoing commodity boom has flooded Brazil with cash. The economy is growing leaps and bonds.

An estimated 20 million Brazilians have emerged from poverty on cheap credit, welfare checks and tax breaks, helping to forge a new middle class that in turn is fueling strong consumer demand.

And S&P’s investment upgrade is a signal that Brazil’s stock market is off to the races.

The upgrade will make it possible for a wider universe of international investors, including massive U.S. pension funds, to plunge into the Brazilian stock market.

This means that Brazilian stocks will see an influx of cash. For investors, this is an opportunity to get in on the ground floor of some of the amazing opportunities you’ll see coming from Brazilian companies in the coming months.

It’s really simple: Because of S&P’s upgrade, one of the most lucrative stock markets on the planet is now also one of the safest!

If you’re looking for a safe, simple way to grow your money – and collect great income – Brazil is an essential addition to your investment portfolio.

Not only that, but investing in Brazil is a great way to PROTECT YOUR MONEY against the falling U.S. dollar, the slumping U.S. economy, and the risky U.S. stock markets.

And because Brazil’s economy is growing leaps and bounds, a modest investment today could grow fivefold in the coming years.

Let me put it this way: To ignore investment opportunities in Brazil would be a horrendous mistake that could cost you dearly.

Of course, the best time to invest in Brazil is right now. While the news of Brazil being an attractive investment opportunity is just now making headlines, our team of editors has already alerted readers to the situation.

In fact, Sally Limantour, editor of Taipan, our flagship publication, has isolated the single best stock to own in Brazil. Not only that but it’s just about one of the safest stocks you could own.

The company is Brazil’s largest utility company. It is big, strong, and offers a rock-solid way to grow your money and collect great income.

During the next decade, Brazil will experience massive growth. Its people, businesses and government will need power.

This company is in perfect position to supply most of the country’s power needs. It has returned over 225% over the last three years. Sally expects it to generate similar gains for years to come.

The best part: It pays a whopping 9% annual dividend, and you can buy shares without sending one single dime overseas.

Already, Brazilian stocks have awarded smart American investors.

Potash is a mineral form of potassium, and a key ingredient in fertilizer. For the last 20 years, farmers have bought potash for about $125 a ton. But the BPC started the year selling potash for $270 a ton. It quickly raised the benchmark price to $450 a ton. In March, it raised the benchmark to $650 a ton. Last week, the BPC announced its latest price hike. On June 1, it will begin selling potash for $1,010 a ton. That’s a 274% price increase in six months… and a 709% leap from its 20-year norm.

Prices for potash are rising so fast, stock analysts can’t maintain their spreadsheets. They update their models on Monday. By Friday, the models are obsolete…

And the stock prices of potash producers are arcing into the sky like fireworks, too. Take the Potash Corporation of Saskatchewan, for example. The largest potash producer in the world, its stock price has risen 1,000% in the last five years and 620% since June 2006. It’s now the second-largest company in Canada, ahead of EnCana and the Royal Bank of Canada. It trades for 10 times book value and more than 46 times earnings.

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Uralkali, a large Russian producer, has seen its shares rise 1,984% in the last three years.

Intrepid Potash, the only American producer, floated shares on the stock market for the first time last week. Its shares rose 58% on the first day of trading.

You couldn’t make me invest in the big potash producers if you put a gun to my head. This is a classic investment mania. Commodity producers have huge capital expenses and nearly no competitive advantages. They should not sell for 46 times earnings.

Here’s the thing: While I wouldn’t touch the major potash stocks, I still think potash, the commodity, could go much higher.

China is the world’s largest consumer of potash. In 2007, it bought 2.5 million tons in a contract with the BPC. The supply crunch is so serious, this year the BPC could only sell China 1 million tons. My point is, even at $1,000 a ton, potash supplies still cannot meet demand.

So potash prices can keep rising. How far? Consider this: Before potash was discovered in New Mexico, Germany was the world’s only supplier. In December 1915, when World War I cut trade between the United States and Germany, potash prices jumped from $35 per ton to more than $500. In today’s money, that’s the equivalent of more than $10,571 per ton.

My advice: Don’t buy the major potash stocks. The upside is already “priced in.” If potash doesn’t rise, these stocks could collapse.

If you want to invest in potash, buy the potash “juniors” and use a stop loss to limit your exposure. These small potash companies are building mines in risky countries. They’re risky, but you get a big discount on the potash in the ground. If potash keeps rising, you’ll multiply your money. If it doesn’t, you’ll lose only as much as you’ve put at risk.

Good investing,

Tom

P.S. In my newsletter International Strategist, we’re getting into the potash business. I’ve found a potash mine that I think is worth $2 billion. And because it’s in a third-world country, you can buy this mine today for just $520 million. To learn about a trial subscription to International Strategist, click here.