- BRICS wants a new world order –
At the Hamburg Exchange Day on 2 November, the US presidential election on 5 November was one of the defining topics of discussion. It was referred to as a kind of ‘fateful election’ that would also have a decisive influence on the geopolitical direction of the USA. Basically, however, both candidates want to make the USA great again and rule the world, only by different means.
However, the BRICS countries, which want to expand significantly next year, are opposed to this plan. Their goal is precisely to prevent the US from becoming dominant and to create a multi-polar world order. New investment opportunities are now opening up in the so-called BRICS Plus countries, with China and India being the most promising countries in the long term. Gold plays a special role in both countries. China is now looking to accelerate, which has led to a recent strong rise in Chinese equities.
In the run-up to the US elections on 5 November and the Fed’s interest rate decision on 7 November, where a further interest rate cut of 0.25 basis points is expected, the stock markets trended sideways. Gold and silver rose sharply, with gold even reaching a new all-time high. But the stock markets in Eastern Europe also continue to be a source of joy, especially in the Balkan region (Serbia +32%, Slovenia +30%), but also in Kazakhstan (+24%), which is a good alternative to Russian equities. Investors willing to take risks can purchase shares in Kazakhstan directly online from the broker Freedom Finance (Freedom Broker) in Cyprus, provided they open an account there first, which is easily done via the following link: https://freedom24.com/invite_from/2952896 .
Andreas Männicke also gives his assessments of the new opportunities in Eastern Europe in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 239 at www.YouTube.com. You can also register for free with the new BRICS TV channel on YouTube and subscribe to the new market letter BRICS Trends by emailing info@eaststock.de. You can watch the first BRICS TV video here: https://www.youtube.com/watch?v=FEKI72GKCzs&t=315s Please also register your interest if you would like to receive the new BRICS newsletter.
A choice between a rock and a hard place
In the US presidential election on 5 November, there is a neck-and-neck race between Trump and Harris, where once again the controversial postal votes in the swing states could tip the scales in favour of an election victory. If Harris is then declared the winner after the postal votes have been counted, there could be isolated riots in Washington or Texas.
A huge mountain of debt awaits both candidates
Not only are the two presidential candidates completely different in personality, but also in terms of their political programmes. The USA is now sitting on a mountain of debt of over USD 35 trillion, which is getting bigger and bigger. The budget and current account deficits each amount to USD 1 trillion. The budget balance deficit is far too high at 7 per cent of GDP. The still robust growth of 2.6 per cent was bought on credit, as it were. The relatively high interest rates are now also increasing the government’s debt service. This means that there is a lack of money in other areas.
While Harris wants to plug the huge financial hole by raising corporate taxes from 21 to 28 per cent, Trump wants to flush USD 300 billion into the empty treasury by increasing import duties by 10 per cent. Companies that do not produce in the US will have to pay an import duty of 100 per cent. Trump wants to use his low tax policy to attract more and more foreign companies to the US, which should strengthen the US dollar.
These very protectionist measures by Trump could bring world trade to a standstill. At the very least, the trade war between the US and China would intensify. Inflation in the US would then likely rise sharply again and weaken consumption in the US. But then growth in the US would also slow down. Either way, recessionary tendencies could emerge in the US next year and have a negative impact on earnings.
Crypto supporters hope for Trump
It is generally said that Trump is better for Wall Street than Harris with her left-wing election programme and, above all, better for Bitcoin. But here, too, Trump has previously made a 180-degree turn – not least due to the influence of Elon Musk, who sided with Trump politically in the election campaign. Trump used to call Bitcoin a fraud and unnecessary. Bitcoin is likely to rise if Trump wins the election. In particular, the cryptocurrency Solana, which, in one year, rose the most among the major cryptocurrencies, with a gain of 320 per cent (!) in one year, is likely to have a bull run if Trump wins.
According to the platform ‘Truth Social’ from the Trump Media & Technology Group, based in Palm Beach, which was founded on 21 February 2022, Trump now has a new cryptocurrency with its own token, which also serves to finance the election and to finance his high legal costs. The old platform ‘Truth Social’ has been a flop so far and is making heavy losses. The new Trump platform, which he runs together with his sons, is called World Liberty Financial (www.worldlibertyfinancial.com), which is a platform for borrowing and lending cryptocurrencies. The new Trump token is based on the Ethereum blockchain. Trump is working with the token scroll, which is very fast and offers free transactions. You can now purchase the token new through the platform for $0.015. Trump has also invested in NFTs, but has also invested in Bitcoin and Ethereum.
What will the FED do in the future?
The next Fed meeting on 7 November is also eagerly awaited, where another interest rate cut of 0.25 basis points will most likely be announced at 8:30 p.m. The US labour market data has recently been quite weak again. However, this did not necessarily lead to a fall in yields at the long end, with yields on 10-year bonds rising again to 4 per cent despite the Fed’s latest interest rate cut of 0.5 basis points. As a result, share prices have only recently stagnated near their new all-time highs.
The monetary policy of the FED and the ECB will continue to play a central role in the coming year. In Germany, inflation has recently risen slightly from 1.8 to 2 per cent, and in the USA, at 3.5 per cent, it is still far from the FED’s inflation target of 2 per cent. If recessionary trends were to emerge next year, virtually forced interest rate cuts could have a negative impact on the stock markets. At least that is what happened in the bear markets of 2000/2001 and 2007/8.
“BRICS Plus as a new challenge for the USA
Trump is considered more likely to end the two wars in Israel and Ukraine, and to end the war in Ukraine faster, by making a deal. If a diplomatic solution cannot be found soon, however, there is a danger that both wars could lead to a nuclear World War III, and the politicians involved should be aware of this danger.
The war in Ukraine is also seen as a catalyst for the further development of the ‘BRICS’ states. At the BRICS meeting in Kazan from 22 to 24 October, it was clearly stated that Russia is not isolated. It was also stated that more and more countries want to join the BRICS countries and that there will be a major expansion next year, with Turkey also being a candidate for BRICS accession. In addition, the BRICS countries are working on their own payment processing system and a new, partially gold-backed BRICS currency, which is intended to compete with the US dollar in the long term.
G20 meeting on 18-19 November to set a new course
Many of the countries that are either already part of the BRICS alliance or want to join BRICS in the future will also meet in Canada on 18-19 November at the G20 summit. Joe Biden will represent the USA there for the last time. Putin, who is wanted as a ‘war criminal’ and is wanted by arrest warrant, will probably not travel, but his foreign minister Lavrov will. They will certainly discuss how to quickly end and resolve the conflicts in the Middle East and Ukraine, but also how to stop climate change. However, they should also discuss how conflicts in the world can be resolved without military action in general.
New ‘Maidan’ soon in Georgia after the election?
It will be interesting to see how things develop in Georgia after the election, now that the pro-Russian party ‘Georgian Dream’ has won, which does not sit well with the US and the EU. The opposition and the Georgian president are talking about election rigging. But even after a recount, the ruling party was declared the winner. It now remains to be seen whether there will be a second ‘Maidan’ initiated (also) by the US, which could be launched in the coming weeks by organising protests and demonstrations. Like the EU, the US interfered massively in the election in advance to protect its own interests. There, the US and the EU intervened massively to persuade the incumbent government to change its mind about the agents law.
Whoever becomes the new US president will have to face these new challenges for the next decade. However, the BRICS are creating new investment opportunities for investors. If you are interested, please subscribe to the new BRICS newsletter and the new BRICS stock market letter at www.eaststock.de or by email info@eaststock.de and the new BRICS TV channel at www.YouTube.com.
Some Eastern European stock markets clearly outperform the DAX
In addition to gold, equities from the Balkan region also performed well in this negative environment. Equities from Serbia have even risen by 32.5 per cent since the beginning of the year, and equities from Slovenia by 30 per cent. The CROX index for equities from Croatia rose by 21 per cent. But investors were also pleased with the 14 per cent increase in shares from Romania. The SETX index for shares from Southeast Europe is still up 18.7 per cent as of 1 November. The CECE bank index for banks from Eastern Europe is also up 16 per cent. The stocks of the Budapest Stock Exchange have also surprised with a year-to-date gain of 13 per cent in euros and 21 per cent in forints, outperforming the DAX by 14.8 per cent. 3 stock exchanges in Eastern Europe have already outperformed the DAX again.
Serbian stock exchange as top performer worldwide
But the biggest surprise was the Serbian stock exchange, with a gain of 32 per cent on the SRX index. But stocks from Kazakhstan also continue to be a source of joy, with a gain of 25 per cent on the KTX Local Index.
Freedom Broker offers market access to Kazakhstan
You can also buy shares from Kazakhstan directly online through the Cyprus-based broker Freedom Finance, which has the advantage of quickly crediting the sometimes very high dividends to your account. For example, Halyk Bank even has a dividend yield of 16% and a return on equity of 34%. At Freedom Broker, you can also get interest rates of over 8% on your USD savings account and over 6% on your euro account. It is easy to open a counter-account online using the following link: https://freedom24.com/invite_from/2952896 If you still need advice on exchanging Russian ADR for original shares, Freedom Broker, which also has a branch in Berlin, is also the right place to go.
Freedom Broker also allows investors to buy Russian ADR at discount prices on the OTC market. A similar service is available from the Cyprus-based broker Zerich Securities Ltd, where you can open an account via the following link: https://trade.mind-money .eu A list of tradable Russian ADRs is published in the EAST STOCK TRENDS stock market letter (www.eaststock.de). Both brokers also offer the opportunity to participate in lucrative IPOs on Wall Street, as well as high returns on overnight and fixed-term deposits.
Inform yourself first, then invest
Find out now in detail about the background and development of the Ukraine/Russia crisis, but also the future recovery potential of undervalued stocks from Eastern Europe. There are also new opportunities in the Baltic states, Southeastern Europe and the CIS republics (Kazakhstan, Georgia), with the respective stock indices all up in 2023. In 2023, 12 stock markets from Eastern Europe were among the 30 best-performing stock markets in the world, with 5 clearly outperforming the DAX. In 2024, 9 stock markets in Eastern Europe outperformed again with a strong plus. So it’s still worth taking a look beyond your own backyard to Eastern Europe.
So order a trial subscription now (3 issues by email for just €15) of the monthly market letter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan/Russia special and a dividend special, as well as a lot of background information and new investment suggestions such as the ‘share of the month’ and lucrative certificates at www.eaststock.de, there under Börsenbrief. The last EST appeared on 18 October 2024.
TV/radio references: On 5 February 2024, Andreas Männicke was interviewed by Carola Ferstl in Money Talk about gold, commodities and the new opportunities in Eastern Europe. All radio and TV interviews can be downloaded from the video archive at www.eaststock.de, including the latest video in EastStockTV, episode 239. By the way: Have you already subscribed to the new YouTube channel – BRICS-TV – in addition to the YouTube channel EastStockTV?
If you are interested in new Eastern Exchange seminars ‘Go East’ or a BRICS seminar in Frankfurt/M or other cities, then please contact the EST editorial team (www.eaststock.de ). If you are interested in Eastern Exchange webinars and BRICS webinars, please also contact us.
You can now also subscribe to Andreas Männicke’s free newsletter with the latest news about the world and Eastern stock markets and the BRICS at www.eaststock.de.