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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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-------------------------

Eric Fry, From Baltimore

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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Because options profit from stock movement, in either
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To learn about the special tool he uses to do this, click
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-------------------------

SUNSETS, SURF AND NICURAGUA'S BEST BURGERS
By Lee Harrison

Leaving the coastal road, I parked the truck by the ocean
and looked out at what many say is Nicaragua's best surf
spot: Iguana Beach. It's home to the country's two best
surf breaks, including the famous Colorado break. I've been
to this property before, and still believe its wide, sandy
beaches are among the most attractive on Nicaragua's
Pacific Coast.

 

[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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