– Go “bargain hunting” in Russia now -.
The Ukraine war also led to a new world order, namely “BRICS” & Co, i.e. Brazil, Russia, India, China, South Africa and the partner countries against the G7 and one can be curious to see who will come out on top in the end. The “BRICS” Summit will take place in Johannesburg from 22 to 25 August. Rumour has it that a new partially gold-backed BRICS currency based on crypto will be launched there. It is possible that new peace proposals for the Ukraine war, which may now escalate further due to the use of cluster bombs, will also be forged there. The new “BRICS” currency is to compete with the US dollar in the long term. 40 partner countries want to join the BRICS currency. The US debt is now increasing more and more due to the rising interest burden.
Wall Street has not yet reacted to the coming threats. The S&P index even reached a new annual high in July. But now it depends on whether the FED raises interest rates again on 25/26 July and thus conjures up another banking crisis and recession in the USA. 11 Stock exchanges from Eastern Europe continue to be among the 30 best-performing stock exchanges in the world, above all the Warsaw Stock Exchange with a plus of 26 percent on the Polish PTX index, far better than the DAX with plus 15 percent since the beginning of the year. But new opportunities are also opening up in Kazakhstan or even in Russia if one takes advantage of the lucrative offers from the brokers Zerich Securities Ltd (https://trade.mind-money.eu) and Freedom Finance or Freedom Broker (https://freedom24.com/invite_from/2952896).
Andreas Männicke also gives his assessments of the new opportunities in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 215 at www.YouTube.com.
BRICS vs. G7 – who will win?
Due to the Ukraine war, a new world order has emerged very quickly, namely “BRICS” (Brazil, Russia. India, China and South Africa) against G 7. The BRICS countries all want to dismantle US dominance and come to their own economic strength. India and China are the most populous countries in the world with a combined population of almost 3 billion people, and they are also the fastest growing. The BRIICS countries account for 40 per cent of the world’s population and 25 per cent of global economic time. Above all, the BRICS countries have a great wealth of raw materials, which the G 7 do not have or even need. The G 7 are dependent on the BRICS in this respect.
Is a new gold-backed “BRICS currency” now coming?
From 22 to 24 August, the “BRICS” Summit, i.e. the joint meeting of the “BRICS” countries, will take place in Johannesburg. Putin will not be there because of his international arrest warrant, but will be present by video. The BRICS are a kind of counter-draft to the G7. At the BRICS Summit – according to a rumour – a new partially gold-backed currency based on crypto will possibly be presented to the astonished Western financial world, which is to serve as a trading currency among themselves and compete with the US dollar. The BRICS countries hope this will be a “game changer” that will push back US dominance. This is also an attack on the US dollar and the USA, which could become part of a new currency war. The new currency alliance will be joined by 40 other countries, including Turkey, Argentina, Venezuela, Thailand, Egypt, Saudi Arabia, Iran and the United Arab Emirates.
Attack on the US dollar has pitfalls
Commodity transactions in particular should then be settled in the BRICS currency. Sixty per cent of all international transactions are still settled in US dollars. But the BRICS countries all want to de-dollarise. However, India, which is the second largest BRICS country, has already declared that it is not in favour of a common BRICS currency. Moreover, India and China do not get along very well, so that the permanent existence of a BRICS currency would be problematic. Besides, the devil is in the detail. But if a partially gold-backed currency were to come, gold in particular should profit from it and reach new highs. However, gold recently weakened slightly to 1962 US dollars/ounce. The way up is only clear at 2080 US dollars/ounce.
Cryptocurrencies in waiting position – except for Ripple (XRP)!
Bitcoin, which was still trending sideways below 30,000 BTC/USD, could also benefit from this. Quite a few expect a new “bull run” on Bitcoin (BTC) soon. However, Ripple (XRP) rose the most recently due to the court battle with the SEC. This means that the SEC may no longer consider XRP a security in the future. XRP rose by 70 percent in a few days. Cryptocurrencies are now again among the top performers among all asset classes.
Will there be a buyers’ strike in US government bonds?
Already now, the BRICS countries prefer to settle among themselves bilaterally in their own currencies and not in US dollars as before. This could weaken the US dollar in the medium to long term and also harm the USA, which could only easily bear the enormous US current account deficits because almost the whole world settles in US dollars. This may change now. The question is who will still be buying US government bonds en masse. And what happens in the event of a buyers’ strike on US government bonds, which has already been the undoing of some US banks?
Rising interest burden becomes an increasing problem for the US budget
The interest burden in the USA rose to over 650 billion US dollars due to the increased interest rates and the budget deficit will again exceed 1 trillion US dollars this year. The otherwise obligatory setting of a debt ceiling, which last stood at 31.4 trillion US dollars, was this time postponed to January 20. This time it was postponed until January 2025, but by then there will be a new US president who will have to pay for the debt misery. If there is a buyers’ strike on US government bonds soon, the US will have major financial problems. This could already occur in the next few months but also if the FED raises interest rates again on 25/26 July. This could result in another US banking crisis, especially if the US slides into recession in the second half of the year. The total global exposure of all banks amounts to 25 trillion US dollars. US dollars. On top of this, there may be the imbalances in commercial real estate loans amounting to 5.4 trillion US dollars, which is a toxic mix. US dollars, which is a toxic mix.
Is a new US banking crisis coming?
At 700 banks in the USA, the debts are already higher than the equity capital due to the deficits in government bonds. However, due to the permitted balance sheet manipulation, this will only come to light if there is a bank run and the banks are forced to sell the government bonds at the lowest prices, as was the case with the First Republic Bank. But this can happen to any bank if customers run away from the bank and deposits are withdrawn.
Wall Street with new highs for the year – thanks to artificial intelligence
So far, the world’s stock markets have reacted very calmly to the coming challenges. On the contrary. Last week, the S&P index reached a new high for the year and a gain of over 18 percent since the beginning of the year, while the DAX still managed a gain of almost 15 percent. However, the NASDAQ Composite Index was the best performer with a gain of 35 per cent, whereby stocks with “AI fantasy”, i.e. artificial intelligence, such as Microsoft and Nvidia, were particularly pulled up. However, investors must be careful that the Fed does not take a little air out of the AI hype with another interest rate hike.
Eastern European Stock Exchanges as Outperformers – New Opportunities in Russia and Kazakhstan
11 stock exchanges from Eastern Europe are already again among the 30 best-performing stock exchanges in the world, led by the Warsaw Stock Exchange with a 27 percent increase in the Polish PTX index, far better than the DAX. But new opportunities are now also opening up in Kazakhstan, where the broker Freedom Finance (Freedom Broker) has now made market access to the stock exchanges in Kazakhstan possible. A “bargain” here is especially the gold and silver producer Polymetal, which you can now buy very cheaply in Kazakhstan at prices as low as USD 2.7. Polymetal is delisted from the London Stock Exchange. But first you have to open an account with Freedom Finance, which is easy to do online at the following link: https://freedom24.com/invite_from/2952896
Buy Russian discounters now at discount prices
Russian ADRs are now no longer tradable on Western stock exchanges because of the sanctions. Instead, investors can now buy Gazprom bonds at rock-bottom prices via the broker Zerich Securities Ltd. from Cyprus, for example, or purchase some Russian shares that are growing and profitable despite sanctions, such as the discounter Fix Price at a price of 1.95 US dollars. The company is growing with growth rates of up to 20 percent not only in Russia but in many CIS republics. The price already doubled recently on the OTC market, but has further doubling potential, especially if there are signs of a ceasefire in Ukraine, which the BRICS countries are now all aiming for as well.
But you can also buy other Russian shares on the OTC market at discount prices, such as Yandex, Ozon and TCS Group. If you want to go “bargain hunting” now, as in Kostolany style, despite the Ukraine war, you must, however, open an account with Zerich Securities beforehand, which is easy to do online at the link https://trade.mind-money.eu Both the broker will also give you information if you have questions about the Russian ADR and dividends. Those who have not yet exchanged the Russian ADRs for original shares may receive a small cash distribution towards the end of the year when the custodians then try to realise the ADRs. In addition, you can participate in IPOs and pre-IPOs on NASDAQ through the said brokers from Cyprus, which should always be worthwhile.
First inform, then invest
But there are also new opportunities in Eastern Europe in general, where there are always outperformance opportunities. Inform yourself now in detail about the background and the development of the Ukraine/Russia crisis but also about the future recovery potential of undervalued shares from Eastern Europe. There are also new opportunities in the Baltic States, Kazakhstan, Georgia and Ukraine.
The PTX index for shares from Poland has already risen by 27 percent this year, the BTX index for shares from Bulgaria by over 12 percent, the ROTX index for Romania by 13 percent and the CROX index for shares from Croatia by 20 percent. So even after the Ukraine war, it is still worth looking beyond the horizon to Eastern Europe.
Order now a trial subscription (3 issues by e-mail for only 15 €) of the monthly stock letter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan/Russia special and a dividend/bond special as well as with a lot of background information and new investment suggestions such as with the “Stock of the Month” and lucrative certificates at www.eaststock.de, there under Stock Letter. The next EST will appear in July 2023 with a special on Kazakhstan and Russian “bargains”.
TV/radio notes: The last radio interview was on 2 March 2023 and previously on 31 October on Börsen Radio Networks. The next radio interview is on 2 October 2023 Stock Exchange Radio Networks. Also watch the latest EastStockTV video on YouTube about the Ukraine war and the new outperformance opportunities for Eastern European stock markets. You can download the interviews and videos at www.eaststock.de, there under the heading “Interviews” as well as the videos of EastStockTV. By the way: have you already subscribed to the EastStockTV YouTube channel?