 The Rude Awakening Wall Street, New York Tuesday, June 28, 2005
------------------------- - Justice's "violent evolutionary step toward sound
money",
- Making money off a coastline that even makes
Australians jealous and,
- The best burgers in Nicaragua.
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Yesterday afternoon, there would be no "cocktail cruise" around Baltimore harbor
no refreshing sea breezes
no brilliant sunshine
no Corona beers with lime squeezes
no acoustic guitars playing Eric Clapton's "Layla" or Bob Marley's "Three Little Birds"
Yesterday afternoon there would be no activities that even faintly resembled those of the prior day. Yesterday was all about business
the business of generating investment ideas. The leisurely cocktail cruise seemed a distant memory, as everyone present seemed eager to engage in the lively - and sometimes merciless - exchange of ideas. One colleague raved about a company that had invented a process to eliminate the risk of infection in transplant patients. Another sang the praises of buying "beaten-up" stocks. Another detailed a fascinating play on America's massive "hidden" oil deposits. Finally, Justice Litle, the editor of Outstanding Investments, took the floor. The articulate macro thinker presented an unnervingly plausible portrayal of the West's future monetary demise - a process he calls the "violent evolutionary step toward sound money." The rest of the world might recognize this event as a "gold bull market." "Asia's growing economic influence," Justice theorizes, "could force sound money policies on the West. If China, for example, were to introduce a gold standard, or quasi- gold standard, the fiat currencies of the West would become next to worthless and gold would sell for four digits, at least. In such an environment, the Western economies might find themselves up a creek without a paddle
or without even the means to buy a paddle." Justice's apocalyptic message is very clear: Only gold- buyers, or buyers of other tangible assets, will possess the means by which to survive the "violent evolution" toward sound money. Nicaraguan real estate is not gold. (But it is tangible
and it seems utterly golden at sunset). So maybe Nicaraguan real estate is not the best asset to buy to preserve one's savings, but it probably isn't the worst. And besides, while awaiting Armageddon, it's an awfully nice place to visit. Please allow us, therefore, to present the second installment of Lee Harrison's Nicaraguan Quest
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[The Nicaraguan Coastline] The beach here is fantastic. But what really makes this beachfront development unique is its beautiful golf course. Danish-born ex-pat Erik Struve is creating one of the most innovative properties on this stretch of coast: a small condominium community in a beach-oriented development with countryside and golf course views. Looking down the fairway, these three small (10-unit) condominium buildings sit just off the green of the first nine holes of the Iguana golf course. Each building has a golf course view and good proximity to the famous Iguana Beach, five minutes away. This is an overseas destination for retirement or vacation living that, for many, represents the best of both worlds: a golf course at your door and one of the country's best beaches just a few minutes away. Moreover, you can make a few extra bucks by renting your condo out when you're not in residence. Phase One of this three-phase project sold out in just 45 days, proving that Erik and his partners are on to something. At the time of this writing, Phase Two was about half sold. The remaining 30 condos should go quickly. Prices start at $129,000 for a condo of just over 1,000 square feet, and go up to $204,000 for the three-bedroom, two-bath luxury model of 1,800 square feet (the most popular seller to date). Furniture packages are also on offer - with several tasteful options available at reasonable prices. Moving down the coast from Iguana Beach, my next stop promised to be an enjoyable one: San Juan del Sur, once a sleepy fishing village and now the only hub for tourism on Nicaragua's southern Pacific coast. It's a place where everyone likes to hang out. Host to big surfing competitions, the town of San Juan del Sur boasts quiet, unspoiled beaches, and faces the brilliant Pacific sunsets. It's only half an hour from Costa Rica, and enjoys nicely paved roads back to the international airport in Managua. Here, you'll find beachfront bars and restaurants, hotels, shops, and Internet cafes. Residents and visitors are well-equipped with cellular and Internet service, boat docks, markets, and gas stations. Cruise ship lines now make San Juan del Sur one of their Central American stops. And while San Juan offers all of these amenities, it manages to keep its authentic charm. While hanging out in town, I found what I believe to be Nicaragua's best burger at Big Wave Dave's. Word around town has it that Dave's got the best food in San Juan del Sur. What's missing here, though, is a destination resort - or, for that matter, much in the way of comfortable lodging in an environment that doesn't feel like you're roughing it. That's what brought me to Villas de Palermo, just five minutes outside of town, overlooking the bay. Villas de Palermo is an ideal opportunity for anyone wanting to invest in the booming Nicaragua coast. It's also suitable for people who don't want to live here full time, don't want to undertake a building project by themselves in a foreign country. [Important Note: In the interest of full disclosure, Lee wants you to know that, International Living, receives commissions from sales at Villas de Palermo]. These condos are offered completely turnkey - to the point where you can get furniture, appliances, linens, silverware, and everything else you'd need to live in comfort. Plus, you enjoy the amenities of a restaurant, clubhouse, and pool. Each unit is a two-bedroom, two-bath model, with 1,600 square feet of living space. The current price is $169,000. Villas de Palermo is taking advantage of Nicaraguan Law 306, which was enacted to encourage investment in tourism. As such, you could get a 10-year tax holiday on your property. So far these units are appreciating nicely, and the first two phases are already sold out. In a couple of days, I'll be heading down to Rancho Santana, the last stop on my trip. I'll report back soon after I arrive. [Joel's Note: The description of the Nicaraguan coastline reminds your junior editor of life back home; surfing, golfing and great take-out. Of course, it's virtually impossible to get a reasonably priced place on the Gold Coast, Australia these days. Ten years ago, however, you could have picked up a little beachfront beauty for about the same price as a Nicaraguan haven. Start thinking about your own beachfront getaway here: http://www.agora-inc.com/reports/REL/WRELF906/ And the Markets
| Thursday | Wednesday | This week | Year-to-Date | DOW | 10,422 | 10,378 | 9 | -3.3% | S&P | 1,215 | 1,210 | 6 | 0.2% | NASDAQ | 2,111 | 2,107 | -19 | -3.0% | 10-year Treasury | 4.18 | 4.18 | 8.00 | 4.14 | 30-year Treasury | 4.46 | 4.46 | 14.00 | 4.41 | Russell 2000 | 651 | 650 | -3 | -0.1% | Gold | $465.35 | $472.05 | $33.95 | 6.3% | Silver | $7.35 | $7.42 | $0.61 | 7.9% | CRB | 328.29 | 327.04 | -2.90 | 15.6% | WTI NYMEX CRUDE | $66.78 | $67.32 | -$3.03 | 53.7% | Yen (YEN/USD) | JPY 111.71 | JPY 111.31 | -0.42 | -8.9% | Dollar (USD/EUR) | $1.2152 | $1.2216 | 66 | 10.3% | Dollar (USD/GBP) | $1.7902 | $1.8096 | -41 | 6.7% |
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