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Global Markets

The Scramble for Africa: Profiting From World's Largest Cache of Commodities

In the quarter century stretching from the late-1880s to the First World War, there was a mad rush by the world's leading powers to occupy and annex African territory. Now, 100 years later, the world's elite again are scrambling to make their respective marks on the continent.

The methods of extraction have changed, but the end goal remains the same – to gain access to Africa's coveted bounty of commodities.

Most notably, Chinese interests have swarmed Africa, constructing roads, rail lines, municipal buildings, schools, ports, and pipelines in exchange for access to natural resources.

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What's In Store for U.S. Stocks in Light of Greece's Tragedy?

The recent month of February was quite interesting for U.S. stocks, because while the Dow Jones Industrial Average rose 2.6%, it didn't exactly take a direct route to those gains: There were eight separate triple-digit moves in the Dow, both up and down.

At the root of that volatility were political and economic developments that challenged the rationale for the huge rally out of the March 2009 low. Bulls were basically rethinking their beliefs that the home-price plunge had abated, employment was on the verge of a big turnaround, governments could cut taxes and boost spending without end, and that interest rates would remain at zero for years.

I had prepared subscribers for much of this turmoil. Back in early November, I highlighted signs of trouble in the market for government debt well before the troubles in Dubai and Greece came to a head. In December, we started a dialogue on what to expect as the U.S. Federal Reserve withdrew liquidity from the economy and lifted interest rates. The upshot was a series of letters detailing why you should expect the first nine months of the year to trade flattish with a lot of volatility.

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European Bailout Fund Proposal … Just Another Bad Idea

Has bailout mania finally reached Europe?

The 16 nations that make up the Eurozone are seriously exploring the creation of a "European Monetary Fund," a bailout fund that would help euro-member countries that can't pay their debts.

This has the potential to be a pretty good idea. If structured correctly, the EMF could provide the discipline and stability that the euro needs.

However, I'm not holding my breath: Given the EU's track record, the EMF bailout plan will most likely evolve into yet another slush fund for politicians – as well as a drag on the European economy.

History proves Europe's bailout-fund proposal is unworkable. Read on to see why…

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A Year After the Bear-Market Bottom, Investors Must Still Pursue Profits – Without Ignoring Risk

With the Standard & Poor's 500 Index up nearly 70% from the post-financial-crash low it set on March 9, 2009, U.S. stocks on Tuesday recorded their second-strongest showing ever for the first 12 months of a bull market.

But that near-record-setting performance brings to light two key issues.

  • First, despite the numbers that stand as evidence of the market's stunning surge, many still-shell-shocked investors refuse to label this as a true "bull market."
  • And second, no matter how great a market's performance has been, the real question to answer is "where do we go from here … and how do I position myself to maximize possible returns while mitigating risk as much as possible?"

Money Morning turned to several experts – including Money Morning Chief Investment Strategist Keith Fitz-Gerald, and respected market researcher Bespoke Investment Group LLC – for some perspective on both these topics.

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Germany: The "Must-Invest" Economy

If you're a U.S. investor, you can't be happy about the prospects for your portfolio. After all, you're mostly trapped in an economy with a gigantic and dangerous financial-services sector, a central bank that can't stop itself from printing money and a government that overspends wildly.

But there is an answer: You should consider allocating some of that "at-risk" capital to a country that has none of those problems – Germany.

Germany has a banking system, of course, but that banking system is not the overgrown financial-services monster that we have here in the United States (or, for that matter, in Great Britain). It's impossible to get a subprime mortgage in Germany: Even now – and even after mortgage levels have crept up in recent years – the average down payment for the purchase of a new home in this key Eurozone nation is 50%. As a result, the homeownership rate in Germany is only 43%, the lowest rate in the European Union.

That's actually healthy; far less of Germany's capital is tied up in unproductive housing and the savings rate is correspondingly higher. (Let's face it, most Americans don't accumulate 50% of the cost of a house in savings over their lifetimes – unless forced to do so in a company pension scheme).

To find out how to profit from Germany's promise, read on...

Plummeting British Pound Leads to Worries of Another Currency Market "Black Wednesday"

Outside of the earthquake rescue efforts in Chile and the Greek-rescue efforts in Brussels, the big news in the world economy last week occurred in currencies.

As you can see in the chart below, the plummeting British pound sterling has dropped even more than the beleaguered euro in the past month and a half, while the good old U.S. dollar has been as good as gold. (That last bit was a bit of currency irony; the dollar has actually been much better than gold, which has flat-lined in the past six weeks.)

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Dubai World May Ask Banks to Take 20% "Haircut," Delay Payments to Solve its Debt Bomb

Dubai World may ask banks to take a so-called 20% "haircut" from the face values on their loans and stretch out loan maturities when it presents a restructuring plan this month. The banks may be able to avoid the haircut if they allow the state-owned investment firm to stretch payments for as long as 10 […]

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How to Profit From the "Fertilizer Wars"

There's nothing like scarcity and supply disruptions to fuel violent price spikes. And there's nothing like the basic human needs for food and water to light that fuse.

Today's world food supplies run on razor-thin inventories.

While the food riots of 2008 have all but disappeared from our short-term memories, the threat of them returning grows stronger with every passing day.

According to the World Bank, food prices increased 83% between February 2005 and February 2008. In April 2008, when the United Nation's World Food Programme warned that a "silent tsunami" of hunger was sweeping the globe because of soaring food prices, it was more than just a clever sound bite tossed off by a bureaucrat: It was a warning that the world's poor were being squeezed as increasingly higher portions of their family incomes were being spent on the food they required for their very survival.

Improved fertilizers will be a key to the solution of this problem. And they won't just promote crop growth – savvy investors who fertilize their portfolios will be pleased with their profit harvest.

Let me explain …

To discover how to profit from zooming fertilizer prices, please read on….

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China Draws Plan to Reduce Risk While Continuing Economic Growth

Chinese Premier Wen Jiabao on Friday pledged to maintain economic growth of at least 8% in 2010, while gradually drawing down government spending and taking measures to guard against inflation and potentially devastating asset bubbles.

The remarks came during Wen's annual report to the National People's Congress in Beijing – which is the equivalent of the United States' State of the Union speech – and they highlight the central government's determination to promote responsible levels of growth.

The call for 8% annual economic growth is the same goal that has been maintained since 2005 – and one that was easily passed last year with the implementation of a sprawling $586 billion stimulus package.

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Six Ways to Profit as Brazil's Economy Takes Off

In many ways, Brazil offers some of the best prospects among emerging markets and deserves to be a core holding in any international portfolio.

Brazil's economy had only a shallow recession and is now recovering nicely. Its market has been one of the best performing since Dec. 31, 2008, and both inflation and the budget deficit remain under control.

Yet one can be only moderately bullish – and I'll explain why.

To find out how to profit from Brazil's bullish prospects, read on...