How Can You Protect Yourself From QE?

The affects of QE in the UK

We just came across some rather interesting information on the QE activities of the UK Central Bank, the Bank of England (BOE).  The UK government’s net public sector debt is currently £1022.5 billion. By now, approximately 30% of public sector debt is held by the Bank of England as asset purchases.  And that number only continues to grow!

Of course, the UK is not alone.  At present, US FED Chairman Bernanke has already been implementing QE3 in the States.  When QE 3 was announced, the Fed promised to buy $40 billion a month in mortgage-backed securities, and in Operation Twist, it vowed to exchange short-term Treasury securities for long-term securities.

QE seems really seems never ending, doesn't it?  The question is, how can you protect yourself and hedge against this never ending QE?  From our perspective, the answer is real asset investments, "stuff" that cannot be printed by central banks!  We would like to point you towards a couple of articles we recently wrote on the well known investment side Market Oracle in the UK.  The first article provides an overview of real assets, whilst the second article looks at alternatives to buying Gold as your hedge against inflation - i.e., finding assets that provide real economic value and produce actual INCOME!

http://www.marketoracle.co.uk/Article34230.html

http://www.marketoracle.co.uk/Article37515.html

If you are interested in learning more about various real assets such as forestry investments and farmland investments, please feel free to visit our website: www.greenworldbvi.com

QE May Go On Forever - Hedge Against Inflation with Alternative Investments

A tsunami of printed money from QE 

One of our favorite bloggers is ex Wall Street maven Bruce Krastings.  In his latest post, he looks at the concept of the ongoing programs of QE as being essentially "Forever + Unlimited".  He believes all of the central banks - from the BOE, to the FED, the Bank of Japan, the ECB and even the SNB (Swiss National Bank) - are essentially in a phase of unlimited QE.

Below is a great quote from Mr. Krastings:

"The major economies of the world are faced with Print or Die. So print it will be. I do wish the monetary overlords would acknowledge that what is being done is irreversible, and that the consequences will be felt for years. What was once unthinkable, is now permanent."

Unfortunately, Mr. Krastings is probably correct.  So, what can someone who fears the effects of QE and wants to hedge against inflation actually do?  In our view, the best thing you could do to protect yourself is to look at "real asset" alternative investments.  We consider real assets to be non-financial assets - "stuff" like forestry or farmland that have a real and inherent economic value and will hold up well in an inflationary environment once all of the printed cash from the unlimited QE starts its' tsunami into the economy.  Realistically, we cannot say for sure when this tsunami of QE funny money will hit us, but hit us it will, and if you want to protect your yourself against inflation, real asset alternative investments are the way to go.

To find out more about GreenWorld's forestry and farmland investments, please contact us at info@greenworldbvi.com.

If You Are Looking For a High Yield Alternative Investment, Consider Agarwood Forestry Investments

Agarwood - the ideal high yield investment

Some people have e-mailed us asking how the investment gains on GreenWorld's agarwood investment can be so high.  The reason is the price of agarwood itself.  It is literally one of the most expensive woods in the world.  For example, agarwood can be as high as US$10,000/kg for the highest quality wood chips, and easily averages around US$3,000-US$4,000.

If you are looking for an investment in agar wood as a real asset investment to hedge against inflation, GreenWorld's agarwood is ideal for you.  GreenWorld's agarwood investment is a purely passive investment, everything from the planting of the agarwood trees to the harvesting to the sale of the processed agar is done for you by the plantation company.  However, if you are looking to buy agarwood chips, or trees or agarwood seeds, that is not what GreenWorld BVI is involved with.  We just mention this because a couple of people have contacted us with the wrong idea.

If you are looking for the ideal highly profitable high yielding investment that is easily affordable by individuals, then please contact us at info@greenworldbvi.com

Hedge Against Inflation as BoE Takes QE and Printing Money to New Heights

The BoE's printing money accelerates!

We at GreenWorld just came across an extraordinary article in the UK's Daily Telegraph by Allister Heath.  Of the £100 billion in deficit financing raised by the UK Treasury this year, approximately £62 billion has been purchased by the UK's central bank, the Bank of England (BoE).  To note an even more incredible figure, the BoE has purchased £42 billion of the £34 billion raised by the government since August 1st.   Think about it - the BoE is literally financing the British Government!  

Many liberal economists tell us not to worry.  However, the risk is that once serious inflation, or even the fear of it, takes hold, it will probably already be too late for the BoE to address it.  We are relying on the same central banks who played such a big role in contributing to this crisis to act at just the right moment to drain the financial system of all this extra liquidity. Given central bankers' history of always being behind the curve, can we really count on them to get their timing right??

If you want to have some security and protect yourself from QE, consider investing in real assets that central banks cannot print any more of.  Farmland and agriculture are great bets. If you want to look at how to invest in agriculture see what Jim Rogers is doing.  Jim Rogers has opened a number of farmland funds, and 
he believes we are only in the early innings of the farmland investing story.  Why consider farm land against inflation?  Because farmland is an excellent hedge as there is a finite quantity of it in the world.  If you want to explore options for farmland as an investment for small investors, please contact us at info@greenworldbvi.com.

Farmland Investments and Farmland Funds Should Soar in Value

As any of our blog readers know, we at GreenWorld are huge believers in investing according to global macro trends.  GreenWorld believes that it is best to identify global trends, and then ride the way as these trends develop.  One of these global macro trends is the continued high food prices.  If you look at the chart below, you can see that the food price index has more then doubled in the past 12 years.  This due to a number of reasons, one of which is clearly the shrinking arable land in the world.  Global population is increasing whilst arable farmland is decreasing, and supply and demand alone dicate that farmland should increase in value.

Smart investors such as a number of hedge funds as well as the legendary commodity investor Jim Rogers have taken advantage of this situation by establishing farmland funds.  There are a number of farmland funds focused on African farmland, where the low price of land provides the scope for both large dividend payments as well as plenty of opportunity for the long term increase in the value of the land. It is important emphasize that these farmland funds involve DIRECT OWNERSHIP OF FARMLAND, i.e. they are not financial funds in any sense of the world.   Of course, many individuals who recognize the opportunity in direct farmland investments will say to themselves, "this is all well and good, but these big farmland funds are just for institutional investors and the wealthy".  Luckily, this is no longer true!  GreenWorld is at the forefront of rolling out a number of investment opportunities that are focused on direct ownership of farmland and target retail investors due to the very low minimums they require.  Below are GreenWorld's two core farmland investments.  Please contact us at info@greenworldbvi.com if you are interested in further details:

Farmland investment in Africa

Farmland investment in Europe

Forestry Investments as a Hedge Against Inflation

If you are worried about inflation and/or are interested in an asset more stable then stocks, then forestry investments are one of the ideal alternatives available.  Forestry provides an excellent inflation hedge; the demand for wood is causing increasing shortages – especially in China as the graph below demonstrates; and the performance of forestry investments are uncorrelated to financial assets like stocks.  After all, trees do not care what the latest numbers from the DOW, FTSE or Nikkei are.  

One excellent forestry investment to consider is a teak investment.  When looking at a teak investments, consider that fully mature wood is the most valuable. Peak returns for teak are usually projected at 20-25 years, which is why GreenWorld and our forestry management partner have structured our teak investment on a 25-year plan.  However, one excellent feature of our investment in teak is that our investors can exit after just 5, 10, 15 or 20 years.  The project manager will buy back your land and trees at cost+5% per annum or you have the option to sell via our established trading platform or to a third party.  This gives you the option of a GUARANTEED exit strategy, or else if you have a longer-term time frame you can hold your teak investment to maturity.  Please visit our website to learn more about GreenWorld's investment in teak.

Forestry Investments - An excellent "China Play"!

Australian Farmland Investment To Benefit From High Wheat Prices

Australian wheat - unique farmland investment for retail investors

We at GreenWorld have long seen continued strong interest in our portfolio of farmland investments.  One of our most attractive projects is our farmland investment in Australia.  This project is quite attractive due to the extremely low price of farmland in Australia (approximately US$600/acre versus US$10,000/acre in England or the US).  The investment targets annual dividends of approximately 9%, plus any upside in the capital value of the land.  Finally, the political and economic stability of Australia makes this one of the more attractive alternative agriculture investments available to retail investors.

GreenWorld's Australian farmland project focuses on wheat farmland located in the western Australian wheat belt.  What is making this project particularly attractive now is that wheat prices have skyrocketed lately, and as this article notes, the Australian wheat crop has benefited greatly from this trend.  For investors in Australian farmland, this promises a year of very attractive annual dividend payments!

If you are interested in finding out more information on how you can participate in this project, please contact us at info@greenworldbvi.com.

Series of Articles on Farmland Investing

GreenWorld have always believed that farmland and agriculture investments are an excellent alternative asset class that provides diversity from a traditional portfolio of stocks and bonds.  We recently have written a series of articles published on Technorati that provide an overview of agricultural land investing:

Farmland Investments:  A Unique Asset Class Becomes Available to Individuals

Arable Land Shortage and the Case for Farmland and Agriculture Investments

Farmland Set to Profit as Wheat Prices Soar

If you are interested in investing in farmland, please consider our two latest opportunities:

European Farmland Investment

African Farmland Investment

Both of these projects are directed at retail investors as they have low minimum requirements and are purely passive investments where the project manager handles everything from planting of the crop to harvesting to sale.  Investors are paid regular yearly dividend income, plus receive any appreciation in the value of the land when they sell their investments.

Contact us at info@greenworldbvi.com for more information

Forestry Investment in Bamboo Provides High Yield Dividends and a Hedge Against Inflation

Alternative Bamboo Investments for High Dividend Yields

As markets continue to gyrate and fear runs high over the fate of the Eurozone, it is natural that investors might want to consider alternative investments that are uncorrelated to stocks.  One excellent option to consider are alternative bamboo investments.   Bank savings rates are extremely low, and high dividend shares still still expose you to daily stock market risk.  However, if you invest in bamboo, you get the income of a dividend stock or high-yield bond, but without the daily fluctuations in the share price.   

Bamboo starts out paying a yearly income of approximately 5%, and it ends up growing to as high as 30% by the end of the 15 year term of the investment.  On current projections, it is quite possible that a bamboo investment could produce a total return of around 400%-500% over the 15 year term of the investment.  
Finally, the global market for bamboo products is expected to double from US$10 billion to US$20 billion  in the next five years alone, as bamboo is used in everything from flooring to hangars or coat racks, bamboo toys, and even in fiber.  For investors looking to diversify away from stocks, to obtain access to a rapidly growing global market, and to obtain extremely high dividend yields over a sustained period, bamboo as an investment is well worth considering.

To learn more about GreenWorld's bamboo investments, please contact us at info@greenworldbvi.com or ring us on  +44-20-3286-2975

New Article on the Dangers of QE and Hedging Against Inflation

Risk of High Inflation

We are quite pleased to note that we recently wrote an article published on the Market Oracle website in the UK.  The full article is here.  In the piece, we wrote about the dangers of QE and inflationary risks emanating from the QE policy, as well as how individuals can use "Real Asset" investments such as forestry and farmland to hedge against the risk of inflation.  Its worth noting that inflation in the UK has remained above 3pc for 28 months straight, and was recently at 3.7pc in the US.  Whilst central bankers have been worrying about the risks of deflation, it seems inevitable that some of the new money created by QE will eventually leak into the real economy and pose inflationary risks.  Perhaps the central bankers might at some point turn their attention to this danger?

Liam Halligan on the Dangers of Quantitative Easing ("QE")

Since its implementation by the BOE at the height of the financial crisis, QE has been a controversial policy to say the least. We at GreenWorld have always felt that QE has the potential to cause inflation - if not now, then down the road.  For those who share the same worry, there was a fantastic column by the Telegraph's Liam Halligan on the dangers of QE.  Mr. Halligan writes:

"Future inflation, not disinflation, is the problem the UK faces. For now, most of the QE “proceeds” are sitting on the balance sheets of banks pretending to be solvent...What happens to inflation when that massive increase in base money is leant out? What happens when the mask slips and the markets focus on “currency debasement”, which then pushes up imports prices as sterling falls?" 

Mr. Halligan is spot-on, the danger is indeed real.  If you are at all interested in this subject, do read the entire article here.  Once you read it, ask yourself, what type of investments would you want to protect against any inflation created by QE, whether in the UK or elsewhere?  As we noted in our previous post, the best kind of inflation hedge investments, are so-called "hard assets" that will rise in value along with inflation.  If you are interested in a hard asset that pays good current income, hedges against inflation and also has tremendous value, consider farmland investments.  We recently wrote an article on Technorati on how farmland investing is now increasingly accessible for individual retail investors. We would welcome the opportunity to discuss the following farmland investment options with you further - feel free to contact us at info@greenworldbvi.com.

Farmland investment in Europe

Farmland investment in Australia

Farmland investment in Africa

The Alternative Investor

Do You Need to Hedge Against Inflation with Your Investments? Consider "Hard Asset" Investments

There are two schools of thought on this question of inflation. Some believe that because economies are still weak, that there is no risk of inflation in the immediate future. The other view point is that because central banks have created so much new money through QE (Quantitative Easing) that some kind of inflation hedge is necessary in case inflation suddenly accelerates.

We ate Green World do not claim to be experts on broader macro-economics, but whatever your viewpoint on the risk of inflation one must admit that it is at least a distinct possibility. If you agree, then one good option is to invest in so-called "hard assets" or "real assets". These are assets that are not financial instruments like stocks and bonds, but assets that cannot be printed or created by central banks. Whilst many people look to Gold for this, Gold pays no income and has no inherent economic value. We prefer hard assets that pay regular income and also have an inherent economic value such as farmland investments or timber investments. On farmland investment, we believe that we are currently in an agricultural "supercycle" of a growing population and dwindling arable farmland which will make ag commodity prices continue to rise.

For farmland, it is well worth it to consider Australian farmland investments. Australian farmland is some of the cheapest in the developed world, it pays high current income and there is a ready made customer for its production in China. For those partial to forestry, bamboo investments pay very high current income and the market for bamboo markets is expected to double in size by 2015.

Either one of these options will give you both high current income as well as an excellent inflation hedge. Feel free to contact us at info@greenworldbvi.com for more information.

New Carbon Credit Investment in Australia

We just published this article on Technorati describing the new Australian carbon law and the resulting opportunity it has opened up for investors in carbon credit investments.

Farmland Investments for Retail Investors

Large investors around the world – from pension funds to hedge funds and sovereign wealth funds – are all increasingly focused on investment in farmland. This article is about one reason individual investors should also consider agricultural investments.

One of the major reasons for our bullishness on agriculture investments is the availability of quality farmland. As the graph below from the UN Food and Agriculture Organization (FAO) clearly demonstrates, the amount of arable farmland has already shrunk and will continue to do so.

To take a more specific example of this trend. China currently contains 20pc of the world’s population, but only 7pc of its arable farmland. Unfortunately for the Chinese, China has already been losing arable farmland at an alarming rate. According to this article from the English language China Daily, the amount of arable land available for farmland investment in China has fallen sharply:

“Acute shortages of reserve farmland and water resources are now the main restraints for the country to ensure its food security, Zhang Ping, minister of the National Development and Reform Commission, said on Thursday while making a report to the top legislature.

“The cultivable land in the country sharply decreased from 130.04 million hectares in 1996 to 121.72 million hectares in 2008 due to rapid urbanization and natural disasters, figures from the National Bureau of Statistics show.

“Also, the current per capita cultivated farmland is about 0.092 hectares, which is only about 40 percent of the global average. Less than 4.7 million hectares in the country can be considered reserve farmland," Zhang told the legislature.

According to a report from agricultural consultancy Colvin and Co., the Chinese government estimates they need to maintain 120 million hectares for crop production until 2020 in order to be self-sufficient in grain production. Bank of America estimates that China’s arable land has already fallen below the 120 million hectare threshold and could decrease to 117 million hectares by 2015. They further note that due to pollution and development new opportunities for farm land investment by Chinese state-owned agriculture investment companies is diminishing rapidly.

Already, China is becoming a net importer of food. China will import some 1.7 million tons of corn this year, 5.8 million tons next year and as much as 15 million tons in 2014-2015.

The point here is not to overwhelm the reader with facts and figures about China, but to have investors think about the big picture. With US$3.1 trillion of reserves, when China wants or needs something, it goes out and buys it. Food and farmland investing are no exception. China has already been hungrily eyeing farmland investments in a variety of countries and regions, including Australia, Argentina, Russia, Brazil, Ukraine and more.

How to play the Chinese agricultural trend? The best way to do this is simply to make a farm land investment directly. Whilst it is true that historically the farmland asset class has been limited to institutional investors only, new opportunities have recently emerged for individuals to make direct farmland investments as well.

There are now farmland investment options for retail investors with investment minimums starting as low as £1,950 per acre (approximately $3,100) for quality farmland investment in Africa, making it easily accessible by individuals and a great way to diversify. There are also direct farmland investments for retail investors in Europe and elsewhere. All of these target yearly income payments of between 9-15%, whilst also allowing investors to share in the upside of any capital gains as well.

There are, of course, risks with any investment. However, if individual investors perform the proper and due-diligence and invest in the right structure with the right people and institution, farmland investment can be both safe and profitable and could make a wonderful addition to individuals’ portfolios.

Inflation Hedge Investments

As the western economies continue to stagnate to stagnate, the UK's central bank has just unveiled plans to launch another round of “Quantitative Easing” of about US$ 80 billion. We at Green World believe that Quantitative Easing (“QE”) is simply a polite term for “printing money”. The US FED is actively contemplating QE3 asd well. In practice, much of this will simply end up causing inflation through price increases in staples such as energy and food. Legendary investor Mark Faber believes massive inflation is in the future. We at Green World therefore strongly advocate that you consider adding inflation hedge investments to your portfolio. Inflation investments will not protect you in day-to-day life, but at least allow your finances to be hedged.