EU Banks and Investors Seek Low Risk Alternative Investments

In the last three years, the euro zone crisis has battered investors’ confidence. In that time we have seen Greece, Ireland, Portugal, Spain and Cyprus needing a bailout from the other euro zone countries (and the International Monetary Fund), in order to keep paying their sovereign debts; and covering their budget deficits.

The simple fact is that European banks would rather put the money that is given to them, back into the ECB for higher and safer returns, than to lend it to the businesses and consumers; who need it the most. Let's face it. All the previous rate cuts by the ECB achieved nothing meaningful, and as the euro zone finds itself embroiled in bailouts; it continues to experience weak growth. By the safe token, investors are shying away from traditional investments, in favour of alternative investments; that will strengthen their portfolio and incur less risk.

After numerous previous cuts, the ECB has now taken interest rates to historic lows. And yet, not only are the banks in the euro zone not lending to businesses or consumers, but they are not lending to each other; either.  This is simply because the interest rates given by the ECB, although extremely low, are more attractive and guaranteed; much like an investor's high interest account. Furthermore, banks see little reason to take on more debt, at this uncertain time.

Rather than opting for bailouts, the ECB must do more to stimulate the European banking sector. For example, the ECB could make it easier for banks to borrow from it, by accepting a wider range of collateral. The ECB must provide other alternatives, that will give relief to banks by lowering the amount they pay on their debts, instead of just cutting interest rates.

Investors Love Brazil- From Doom to Boom Within a Decade

Brazil, the world's fifth largest country in the world, now boasts the world's sixth largest economy surpassing the UK. Brazil is the leading global producer of coffee, orange juice, tobacco, soy beans, sugar and iron ore, and since the turn of the century, Brazil has been experiencing a commodity boom that has encouraged the growth of it's exports; increasing them 400% from $50 billion to over $200 billion.

International investors agree, that it is time for Brazil to live up to it's promising future. They have come a long way from the days of out-of-control inflation in the early 1990's, when many people thought Brazil would never recover. Now it is living up to it's potential, and is forecast to continue it's strong growth, over the next two decades. This move could place Brazil as high as fourth in the world, for GDP.

Brazil knows that there will continue to be a need for their commodities, and that international investors are expecting that the demand; will continue to rise. Certainly no surprise to most, Chinese investors have positioned themselves as Brazil's largest partner in this commodity boom, and the relationship appears to be producing enormous benefits; for both countries.