You may never have heard of Comphania Energetica de Minas Gerais (NYSE ADR: CIG).
But this Brazil-based electric utilities company could be your key to unlocking profits – and income – at a time when much of the developed world is mired in stagflation.
So let’s buy Comphania Energetica de Minas Gerais (**).
It’s not a difficult decision when you look at the global market and see that there aren’t many trustworthy investments in the United States and Europe.
The non-stop news flow out of Europe has wrecked investor confidence. The market now is pricing in haircuts on European sovereign debt. And this process has driven down yields in Western developed nations, as investors fear government default.
You only have to look at what bond yields are in the United States and Germany, compared to other nations like Ireland or Greece, to see the real fear that exists in the world today. Two-year Greek debt is trading with a 35% yield — not that long ago it was below 10%.
Still, that doesn’t exactly make the dollar a safe-haven.
With so much acrimony over the debt ceiling, the U.S. is threatening a temporary default on its debt payments. The U.S. Federal Reserve meanwhile is keeping interest rates at artificially low levels in an effort to stimulate economic growth. That means the U.S. central bank is essentially punishing people who are retired and need to live off the cash flow from their savings and retirement funds.
Indeed, millions of retired people who rely on such fixed-income investments have been hurt by the actions taken by central banks – not just in the United States, but Japan and Europe, as well.
Of course, that’s not to say all investors have been punished.
There are global investors – with an eye toward maintaining their cash flow from investments – that have figured out how to meet their cash flow needs and escape from the real negative rates offered in the developed markets.
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