NovoPayment also works in Florida, Mexico, Colombia and launched a similar prepaid credit card program in Venezuela in 2005, MicroCapital reports.  NovoPayment is backed by US credit card companies (both Visa and Mastercard) and has partnered with micro finance institutions in order to provide this service.  Currently, it has over 1 million prepaid credit cards in operation, generating an annual transaction volume of USD 750 million.

New Payments Ecosystem in Peru

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This prepaid credit card is unique because one does not need a bank account to qualify or buy one, and the credit card can be reloaded in grocery stores and pharmacies.  In a May 31 press release, NovoPayment bills the first “general purpose reloadable program” (GPR) as the first of its kind for the “unbanked” in Peru, in line with its mission to develop a “new payments ecosystem.”

What this means is that Peruvians without bank accounts will now be able to enter “modern” markets and make “modern” transactions (i.e., online, auto-payments, direct deposit, etc.) with credit cards even if they don’t have a bank account established (which probably requires a fixed address and other information).  In other words, this would seem to be a type of sub-prime lending so to speak – but the LATODO card will provide users with the chance to build a credit history so that they can qualify for other credit products later on.

Financialization of Latin America

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Latin America has come a long way recently and I’ve written about some of their financial developments.  Latin America has proposed an alternate currency for trade, ETFs focusing on Latin America are popping up everywhere, Brazilian afforestation projects are increasingly attracting foreign investors, and many Latin American countries have the fastest projected GDP growth rates for 2012.

Modernization and infrastructural development happen unequally all over the globe.  As we know all too well, there are many parts of former so-called “Third World” countries that are 100x more modernized than much of the U.S. (airports, roads, network infrastructure).

Yet at the same time, every new structural development that appears to put power or mobility in the hands of its customers is always at the same time there solely because it can make a good profit.  This doesn’t necessarily make it a negative thing, but it is important to understand how technological development works.

Australian Gold Producers by Market Cap

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These are in order of descending market capitalization as of June 2012.  Not that bigger is better – it’s not – but it’s a handy way of sorting these that provides more information than alphabetization, which is all you’re getting when you look up lists of who’s listed on the ASX (Australian Stock Exchange).

1. Newcrest Mining (ASX: NCM) – Now the world’s 5th largest producer of gold after its Lihir Gold acquisition in 2010, Newcrest currently trades around $24.57 (with a 52-week range of 23.56-41.50).  $18.78 billion market cap.

2. Oz Minerals (ASX: OXR) – Formerly known as Oxiana, Oz Minerals is focused on copper and gold exploration and production. Currently trades around $8.49 (with a 52-week range of 7.99-14.45). $2.65 billion market cap.

3. Kingsgate Consolidated Ltd. (ASX: KCN) – Claiming to operate the “safest gold mine in the world” and in the lowest 20% of costs of all gold producers, Kingsgate is focused on Australia but also runs operations in Thailand. Currently trades around $5.61 (with a 52-week range of 4.92-9.50). $790.7 million market cap.

4. Evolution Mining Ltd. (ASX: EVN) – This gold and silver producer runs four mines in Australia and is also branching out into copper production in Queensland. The company was created in 2011 as a merger of Conquest and Catalpa Resources. Currently trades around $$1.71 (with a 52-week range of 1.25-2.18). $304.9 million market cap.

5. Norton Goldfields (ASX: NGF) – Norton is a mid-tier, unhedged gold producer focused on Western Australia with current projects possessing over 10 years of life and another 120 prospects in the pipeline.  Currently trades around $0.23 (with a 52-week range of 0.12-0.25). $195.4 million market cap.

6. Straits Resources (ASX: SRQ) - This is a gold and copper produced focused on Australia (NSW) and Indonesia, with additional exploration projects in South Australia. Currently trades around $ 0.45 (with a 52-week range of 0.45-0.83). $146.1 million market cap.

7. Unity Mining (ASX: UML) - Unity is a gold producer with operations in Tasmania and West Africa.  Currently trades around $0.13 (with a 52-week range of 0.10-0.17). $66.29 million market cap.

8. Citigold Corporation Ltd. (ASX: CTO) - Operating in Northeastern Australia, this company boasts one of the highest grade goldfields in Australia and has no hedging risk. Currently trades around $0.05 (with a 52-week range of 0.05-0.09). $55.3 million market cap.

9. Mutiny Gold (ASX: MYG) - Mutiny is a diversified resource company, (gold, nickel, copper) in Western Australia with a goal to become a significant gold producer.  It currently trades around $0.065 (with a 52-week range of 0.06-0.14). $30.16 million market cap.

10. Heemskirk (ASX: HSK) – Heemskirk runs four different business units, with projects in Australia, Canada and Europe. Some of these are production-based and others are investment- and financier-focused. Currently trades around $0.098 (with a 52-week range of 0.09-0.17). $15.46 million market cap.

11. Hill End Gold (ASX: HEG) - On track to become a mid-tier gold producer, Hill End is focused on New South Wales production but is also exploring in Laos. Currently trades around $0.023 (with a 52-week range of 0.02-0.05). $13.01 million market cap.

12. FE Limited (ASX: FEL) - Another diversified resource investment and production company, FE Limited produces iron, gold and nickel in over 300 projects in Western Australia. Currently trades around $0.035 (with a 52-week range of 0.04-0.12). $4.04 million market cap.

As you can see, many of the gold producers on the ASX are basically penny stocks – quite different from the much larger TSX, which sequesters the penny stocks to the TSX-V (TSX Ventures Exchange).  And of course, all price amounts are in Australian Dollars (AUD).  There are other Australian mining stocks, too – but these are some of the less well-known ones.

For something still a bit different, check out these Kenyan blue-chip stocks or think about investing in Brazilian forestry!

Over the weekend the World Bank sent out a tweet about Kenya’s “tipping point” – by 2020, Kenya will be a full-fledged middle-class country.  Since 2001, many gains have been made in areas like sending electricity to households and other political and economic reforms.  Transportation times between major centres are decreasing and there are still significant gains in access to water and proper sewage.

Coupled with the fact of being an English-speaking country with a long history of connections to the London Stock Exchange, and the fact that Kenya is not dependent on foreign aid - and Kenya is hardly akin to investing in Zimbawbwe or Sierra Leone.

The Really Emerging Markets in 2012-2013

Invest in Kenyan Growth

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All that said, there are still structural problems holding Kenya back, such as prohibiting a more active export market.  I would be ahead of this game if I were you and concentrate instead on the direction of individual Kenyan companies.

Although the World Bank cites a lingering amount of political and business corruption in the country (despite good overall economic governance), it should be noted that labor costs in Kenya are lower than they are in China.  Repeat that, folks.  And then think again about the massive Chinese presence in Africa right now.  China signed an oil exploration contract with Kenya already back in 2006.

Kenya’s biggest industries include tea, tourism and horticulture – with a lot of growth potential in textiles, chemicals and telecom.  The following companies all trade on the Nairobi Securities Exchange, which is Africa’s 4th largest in terms of market capitalization.  Take a look at the NSE-20 for a full list of Kenya’s blue-chips.

Are You in These Frontier Markets Replacing Emerging Markets?

Kenya’s Blue-Chip Companies

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1. KenGen (Kenya Electricity Generating Company) (NSE: KEGC) – A state-owned corporation that trades on the NSE, KenGen provides the country with over 80% of its electricity.  The company is well invested in alternate sources of energy, including wind farms and geothermal plants.  Don’t confuse this one with the Kenya Power and Lighting Company, which was split off from KenGen in 1998 (although it also still trades on the NSE).

2. Safaricom (NSE: SAFCOM) – Founded in 1997, Safaricom is the leading internet and mobile solutions provider in Kenya, with an urban subscriber base of over 12 million and a workforce of 1500.  Vodafone now has a 40% stake in the company.  Main competition is Airtel Kenya.

3. Kenya Commercial Bank (NSE: KNCB) – Quite a long history, founded in 1896. Part of KCB Group, which is the largest network of branches in Kenya, KNCB is one of the three largest financial banking divisions in the country.

4. East African Breweries (NSE: EABL) – Founded in 1922 and declaring its first dividend in 1926, this fully-integrated beverage company was the first Kenyan company to reach a USD market capitalization of over $1 billion.  The company trades on every exchange in the East African region.

5. Express Kenya (NSE: EXPL) – Founded in 1918, this integrated service management company controls most of the logistics for transport in Kenya – land, water, air terminals, ports, customs documentation, warehousing, packing and removals, etc.

Cashing In On the African Gold Rush

As East and Central Africa’s largest economy, Kenya has maintained good levels of inflation and has kept its debt under control.  Coupled with lower labor costs than China and I think you would agree that Kenya is a smart place to look at for some direct investment of your own.

Since China might still be too risky a play for many of you, and since I’ve already written quite a bit about Canadian resource companies, I thought it would be a good time to focus on Australia’s mining and resource sector.

What Does Australia Mine?

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You should already know that mining is one of the largest sectors in Australia (20% of the ASX by capitalization; one-third by companies listed).  Currently, much of that sector’s activity is undertaken on behalf of Chinese investments and purchases of Australian minerals and other mining products.

Like Canada, Australia also exports iron ore, silver, copper, lead, nickel, diamond, opal (the world’s largest producer of it), zinc, uranium (world’s third largest uranium producer after Russia and Canada) and, of course, gold – which was found in 1851.  So much so that during the 1850’s, 40% of world gold production came from Australia!

Interestingly, Australia is also the world’s largest exporter of coal.

Largest Global, Diversified Mining Companies

Top 5 Australian Mining Companies

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So if you want to get some exposure to Australia but you want to bypass the fees and index-tracking that go with ETFs, here are 5 great companies to take a look at and invest your money in for direct benefit.

BHP Billiton (ASX: BHP) -You’ve heard of BHP Billiton but did you know that it is now the world’s third-largest publicly traded company by market cap? That tells you how significant a role basic resources play in the global economy.  No growth is going to happen without moving through BHP first. Stock up.

Rio Tinto (ASX: RIO) - Technically British-Australian ownership, with headquarters in London and the management office in Melbourne.  Rio is the 4th largest publicly traded mining company in the world.

Newcrest Mining Ltd (ASX: NCM) -Newcrest is Australia’s leading gold miner, specializing in gold and gold-copper concentrate, most of which is exported to Japan.  It also now has operations in Indonesia, adding to its international profile (Papua New Guinea, Ivory Coast and Chile).  Canadians can invest in it directly via the TSX with the ticker of NM.

Oil Search Limited (ASX: OSH) – For something different, Oil Search Limited (founded in 1929) is Papua New Guinea’s largest oil production and exploration company, operating all of Papua New Guinea’s oilfields and alone represents a whopping 13% of Papua New Guinea’s gross domestic product. It also has a significant international portfolio which includes Egypt, Iraq, Yemen and Libya.

Alacer Gold Corp. (ASX: AQG) – This company was only listed in 2011, but already has a good market cap – much higher than the many penny mining stocks that populate the ASX.  Rapidly-growing Alacer has 80% ownership of some Turkish gold mines to fill out its international portfolio and is expected to grow almost 200% (organically) between 2011 and 2015.  Currently trades at $6.52 (ASX) and $6.92 (TSX).

Investing in Rare Earth Metals

For Americans (and Canadians), you’ll need to invest in these through the NYSE or TSX – just look up their names and you will get their ADR tickers (in the case of TSX-listings, it will be a direct investment). You will receive an ADR dividend where relevant, along with a withholding tax that will be taken out of the overall dividend.

Canadian oil stocks have also pulled off recently, but if you want to invest in a politically stable source of oil, an area with a huge amount of reserves (even without getting into unconventional sources such as the oil sands), then you should really look to Canada.  Canada’s oil stocks benefit from the exported inflation and money printing in the US, which raises oil prices and stimulates more production.

5 Smart Canadian Energy Stocks

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Suncor (TSX: SU) - Suncor is a blue chip oil stock with exposure to both conventional and unconventional (read: oil sands) sources.  Steady growth, a secure and growing dividend and good balance sheets keep Suncor a no-brainer for most analysts. The question is just how often can it go on sale.  Right now it’s sitting around $29.08, comfortably within its 52-week range.

Surge Energy (TSX: SGY) – Surge is a relative newcomer but has shown excellent growth in the past three years and has a great growth profile going ahead over 3-5 years.  A small to intermediate oil producer, Surge Energy has over 400 drilling locations, an excellent balance sheet and is exceeding all of its targets right now.

Imperial Oil (TSX: IMO) – Imperial is possibly the bluest blue chip of all Canadian oil stocks for sure.  The dividend has always been a bit thin, but that’s because of the huge amount of reinvestment in their own operations they are always committing to.  Investing in Imperial (for everyone outside of Canada) is like choosing Chevron or Exxon.  This is a stable company with impeccable balance sheets and cash reserves.

Essential Energy (TSX: ESN) – Here’s another out-of-the-mainstream play that you should know about.  Essential is now an oil-oriented service company (servicing wells that have already been drilled). It dominates its field in Canada and has recently instated a nice dividend.  It also has small exposure to natural gas and just opened up a small division in Colombia.  The company itself engages in no fracking or drilling.

Talisman Energy (TSX: TLM) – Talisman is good for those looking for leverage to natural gas as it is able to explore more in the shale areas in the United States.  Long a favorite Canadian energy stock, Talisman

Don’t wait too long, though – oil stocks are on a multi-day rise at the moment, extending gains as the US reported its first inventories declines in over 11 weeks.  It is also the beginning of driving season, when North Americans begin gassing up more frequently for summer road trips and vacations.

First Rate Cut Since Lehman

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Yes, China is cutting interest rates for the first time since the Lehman Brothers fiasco in September 2008.  So much for the global engine of growth, right?

The rate cut of 25 basis points initially pushed U.S. markets higher, but one head of a Chinese consulting firm believes it is going to take one more rate cut to spur continued Chinese growth amid current global headwinds.  And Chinese sentiment clearly matters – the head of China’s largest sovereign wealth fund, the China Investment Corp., sees the likelihood of a breakup of the Euro zone.  As a result, China has lowered its European exposure, and this is hurting Spanish banks.

China has also recently cut back on exposure to the USD by implementing direct trade between the yuan and yen – a historic move.

In light of this unexpected interest rate cut, however, all Asian markets reacted quickly by sinking past the prior day’s lows.  Meanwhile, the yuan made slight gains against the USD.

Who Cares About the Rate Cut?

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What does this mean for you and your portfolio?  Well, if China is the commodities engine of the world, and commodities fuel global trade, it means less growth globally all the way on up to housing starts and building in central Africa.  It means it is an especially good time to buy gold.  It means it is time to learn Mandarin (to the extent that the Chinese rate cut is having serious ripple effects).

Ahead of a 2 billion Euro bond auction, Spanish yields soared after ratings agency Fitch downgraded Spanish debt in light of a failure of the ECB to properly handle the debt crisis and acknowledgement that the size of the bailout Spain actually needs is much higher than previously thought (now sitting at 100 billion Euros instead of 60).

Nevertheless, the bond auction of Spanish Treasuries was successful and helped buoy European stocks to end higher for the day.

Full-Blown Debt Crisis, Contagion Fears

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Aside from other banking problems (and negative yields on German bunds), just look at the Spanish yields.  The Spanish 10-yr bond yield has risen over 10% in just two months.  Two-year bond yields, however, have risen 25% since similar auctions in April.  4-yr note yields have risen a similar 24% in the same time period.

On Twitter, you can follow the crisis using the hashtag #spanic (Spanish panic), which itself is modeled after #grexit (Greece exit from Euro).

Fitch has issued a three-notch (!) downgrade apparently for an absence of ECB monetary policy vision and decision-making, which has led to the near-collapse of Spain’s sovereign wealth profile via capital flight from its banking system.  It was also announced that China’s biggest sovereign wealth fund, China Investment Corp., was cutting its exposure to Europe. Hardly surprising – China is fast cutting exposure to the USD as well.

Spanish banks are now the largest purchaser of Spanish debt (this should also recall for readers close parallels with the Fed, which is now the largest holder of US debt).  As the Telegraph notes, Spain’s debt has now dropped from A to BBB – a horrible affair leaving Europe’s fourth-largest economy sitting just above junk status.

All this notwithstanding, readers should still take note that Spain’s debt to GDP ratio is still only expected to reach 95% by 2015.  Dear readers, please note that the debt-to-GDP ratio of the US is already at 100%.  Keep things in perspective.  This is an interconnected global crisis.

What is worse, however, is that Fitch warns the rating could drop further if we see a #grexit or other erosion of the monetary union.  However, there is the growing possibility that Merkel will allow a central bank rescue of Spain.

Now more than ever in the past six months it seems it would be prudent to become a gold bug and buy gold for security in your portfolio.

U.S. inflation targets of 2%, apparently, are not quite being met, and unemployment levels have not improved sufficiently.  This, coupled with ongoing and worsening uncertainty in Europe’s banking system have led James Bullard to call for more quantitative easing in order to keep the Euro mess from “washing up on U.S. shores.”  Analysts have pointed to Australia – where inflation is right on target and unemployment is low – which is still lowering its own interest rates in order to enable such good growth rates to continue in the face of global headwinds.

For his part, Lockhart has said that the problems facing the US continue to be a weak housing market, develeraging in the financial sector, a shrinking government sector and the uncertainty with Europe.  Lockhart also cited a slowdown in emerging markets as another risk facing the US economy.  And of course, he suggests that the Fed needs to be ready to respond to any major form of global financial uncertainty and stability by being prepared to take the necessary monetary measures – aka, stimulus.

All in all, their reports tell us nothing new – we know more stimulus is coming – but they leave out the question of when, letting that depend on actions taken by Europe.

The 2-yr German bund yield has turned negative.

German Debt Near Record Highs

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This means that German debt is near record highs.  Yields turned negative for the first time on Friday, June 1, 2012.  How is this possible?  Simple.  Demand becomes higher than supply, and no yields are needed to attract investors.  This causes the prices of the bonds themselves to soar.  Meanwhile, 10-year yields fell down to a historic low of 1.14% on Friday as well.

The European Central Bank is holding an emergency conference on Wednesday, coming out of a long holiday weekend in Britain.  G7 finance ministers and central bank governors are expected to meet to determine what monetary and fiscal decisions should be made to take care of the sovereign debt and banking crisis quickly spreading throughout the Eurozone.

Rumor has it that Spain will not be able to bail out its banks, especially given that foreign investors have all left and it is dependent on its domestic banks to buy its debt – and the yields on Spanish bonds are at historic highs.  In addition, Spanish depositors are shifting money abroad at the fastest historical rate ever. Greece, meanwhile, will see an election in two weeks that might make the #Grexit a reality.  Some expect the ECB to respond by lowering rates, but these analysts are in the minority.

Folks, coupled with the situation in Italy, this is not good at all.  The Euro is on shaky ground indeed.

Soros has come out recently noting that the European financial system is fragmenting; while Jim Rogers, of Quantum Fund and Adventure Capitalist fame, admits that he is quite worried about what will happen post-election in 2013.

Probability of US Decline = 100%

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Marc Faber said back on May 25th that the probability of a US downturn in 2013 is “100%.” Marc Faber is known for hyperbolic statements generally, but predicting 100%? You’d have to have a fair bit of confidence in your estimates for some value so boldly precise and certain.

But even Peter Schiff is behind this pronouncement. Rogers brings up the important set of likelihoods that this is, after all, an election year, and markets tend to do well in election years (a basic fact of seasonal investing).  More money will be spent and more promises will be made ahead of November.  But once post-election hits and bills need to be paid, financial realities will set in and the possibility of interest rate hikes on US sovereign debt will increase.

If interest rates climb on Treasuries, “conditions and data” are going to change.  And this time around it’s going to hurt all the more because the US debt load is now so staggeringly high.  It is projected to be more than 16 trillion dollars (”IOU’s” is more accurate) for fiscal 2012.

As it turns out, 61% of all sovereign wealth reserves are kept in US dollars; and another 28% are kept in Euros.  See the potential problem here?

Commodities The Only Solution

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The only safe space ahead of the coming storm, for Rogers and Faber and Schiff and Soros, is, unsurprisingly, commodities.  When money is printed and it forces other nations to inflate their own currencies in order to stay competitive for exports (the exploration of inflation).

When this much inflation occurs, commodities everywhere become more relatively expensive.  Their prices will go up.  Especially the basics as oil, gold and silver.  So one way to hedge against the coming inflation is to buy commodities as these when they are “on sale.”  Right now, gold prices are cheap.  Right now, oil is cheap at only $83/barrel.

So look for gold and oil producers for your portfolio.  And look at other producers, such as Freeport McMoRan (NYSE: FCX) (copper), Alcoa (NYSE: AA) (aluminum), Potash Corp (TSX: POT), and Silver Wheaton (TSX: SLW).

When you look at all the clear warning signs coming out of Europe, you would be brain-dead to not realize that at least something more economically serious and high-stakes lies ahead.