CNN:Singapore receives more investment than NYC,London,Frankfurt COMBINED.

Discussion in 'Economics' started by Grandluxe, May 25, 2012.

  1. CNNMoneyInvest May 24, 2012: 2:27 PM ET

    If traders would stop and look beyond the U.S. and Europe, they would see what legendary investor (and current Singapore resident) Jim Rogers sees: money is fleeing the West and heading East.

    Recently, I came across a statistic that confirmed my personal observations from living in Ho Chi Minh City and traveling around Southeast Asia. According to the Financial Times' fDiIntelligence division, Singapore (EWS) not only receives more financial foreign investment than any other major financial center in the world, it receives more than New York, London, Frankfurt and Switzerland....combined.

    This is because Singapore is actively courting new capital in response to the abuse that is being dished out to investors in the West.

    For example, Singapore's central bank, The Monetary Authority of Singapore, is moving to take advantage of the massive flows of gold and silver. It plans to treat them as currencies -- and not commodities -- by removing the 7% goods and services tax that was collected on all precious metals transactions.

    Another is the MAS' plan to create a clearing house system for over-the-counter derivatives, like credit default swaps.

    The trend of investors leaving the dysfunctional New York and London markets to ones where they are treated fairly will accelerate once this change goes into effect.

    On an open exchange, people legitimately interested in hedging their bond default risk will welcome this evolution like a man coming in from the desert.

    Understanding the evolution of the Southeast Asian markets like Singapore, Hong Kong and Shanghai is an important edge investors need to be aware of. Capital gains can only come from places where capital is being deployed, and not destroyed.