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International Currency Investing in Trinidad and Tobago

Written By | Nov 18, 2015

WASHINGTON, November 18, 2015 —When capital investment is your daily bread, it pays to discover all the new and exciting currency trends the principles of economics never taught you. Helpful economic policies based on realistic economic statistics can help to stabilize a country’s business environment, benefiting overall investment portfolio growth while helping to aise net income.

The ultimate investing test, if we meet it at the end of the day, is to pit our investment decisions against someone else’s decision. For that reason, it pays to do our home work as frequently and thoroughly as possible, especially if investing in emerging markets is your thing.

Developing nations and their economies stand to gain a lot of momentum. Likewise, investors stand to expend a lot of capital in the Information Age because access to business mechanisms and capital investment is now virtually limitless.

The marketing and finance eyes in every industry watch and wait for any particular sector movement to gain extra coverage and diversification. Not surprisingly, one way to accomplish this is to investigate opportunities in a given U.S. industry that are also becoming available in emerging tropical markets. Opportunities exist because international sector competition and pricing intensifies with the advent of new competitors, especially when it involves competition for technology and people with the right technological know-how and resources.

These facts are even truer in the service sector. Air travel, for example, offers bargain discounts based on a variety of factors such as travel dates, fuel costs and load factors.

The investment industry has also evolved and changed. Today, one can easily work from home, invest in the stock market and video chat with relatives from almost any region in the world. Investing internationally, once a rather exotic pursuit of the few, is now becoming available for everyone. The enterprise of the future is making this an increasingly accepted reality.

Over a century ago when it was still a developing, emerging nation, the U.S. confronted many of the same problems that today bedevil newer nations that were gradually freed from colonial domination in the years following World War II. Managing policy and investment decisions in a new and still developing country and economy is challenging but certainly not impossible.

To examine the approach and effectiveness of an emerging market economy, as a starting point need only to look at similarities in governance structure of a specific country to get a fundamental view of where they are structurally.

Next, we need to ascertain what implementation plans will make the country’s economy more sustainable in the future. The independent country Trinidad and Tobago–a two-island nation located only a few miles from the northern shore of Venezuela–offers a case in point.

Already a growing economy blessed by significant oil and natural gas resources, Trinidad and Tobago, looks to establish a path toward creating a dedicated fund for existing and future surplus oil-revenue in order to stabilize and maintain a constant stream of positive cash flow.

To speed necessary economic transformation though diversification, Trinidad and Tobago, formed “InvesTT Trinidad and Tobago” in 2012. Aligned with the Ministry of Trade, Industry, Investment and Communications it is the be driving force behind the country’s effort to grow its non-oil and gas sectors in a major way in the coming years.

As part of a global economy, individuals in Trinidad and Tobago as elsewhere have discontinued the practice of valuing money in assets. Countries and individuals have since reversed themselves, now valuing assets primarily in money. Using relative surplus functions, we have learned that the appropriate level of surplus, harvested at the point of production ensures further economic viability and long-term future growth.

Surplus is derived from labor or hours of operation, not from assets. Balance sheet items can contain surplus items, although the line item descriptions are not generators of wealth or growth themselves, only acting as stores of planned but not-yet-produced work product.

Valuing money in hours of operation – 24-hour money 48-hour money, for example–is an alternative worth exploring, as it makes your money more widely available to you in more facets of daily commerce.

Going even further, we can fortify the economic stability we hope to achieve if we measure the national currency in a premium market for energy, which has a sound quantifiable basis. Then all value would be equal to premium cost and no profit would be associated with the transaction in the currency, because the currency assumes the value of the economy is constantly at a premium.

When it comes to issuing and trading bonds, bonds valued at a premium accumulate less basis overtime -from an income tax perspective-when they are eventually converted.

Setting currency trends involves confronting the competitive advantage of transaction efficiency. There are 180 legal currencies in the world, with billions of transactions in each one. If Trinidad and Tobago Central Bank officials take advantage of the obligation and opportunity to increase the growth of transactions between their currency- the Trinidadian Dollar (TTD or TT$, currently pegged at around 0.15 U.S. dollars) – and others, growth spurts will scatter diagonally from the initial point point of transaction, revealing less disparity than if frequent transactions occurred within the single currency. Currencies that move in and out of these developed economies will appreciate significantly quicker than those that just simply move interest rates.

Individuals who follow quantitative investment strategies begin to view money as a commodity and re-arrange investment opportunities that enhance the the inherent leverage a currency holds, evaluating decisions on a continual basis.

What are the advantages of using TT$ in such strategies, and how do we adjust the for the time value of the currency’s use to record a profit? Answer: The Central Bank will have to create and support such methodologies. Doing so would be as simple as establishing the safety of conducting TT$ transactions from a remote location in a way that makes this safer, faster and easier, because the currency is not a major cyber target.

The international push for on-line commerce coupled with increased demand for custom products over mass merchandised products provides a promising opportunity for developing and soon-to-be-developed nations. From an accounting perspective there is no limit to the premiums that a national currency can acquire through volume purchases of crypto-currencies that facilitate direct on-line purchases. Examples range from purchasing groceries on-line for in-store pick-up, to buying auto insurance via the Internet, or even obtaining on-line medical diagnosis and treatment.

All possibilities should be contemplated at this juncture in otder to keep pace with the constant march of  innovation. Any opportunity to move a purchase ahead of the goods shipped or the service exchanged provides a system of future value that is recordable and, in real income  terms, providing equity for trade on each transaction. Job creation that stems from system upgrades, updated equipment design and increased network bandwidth will transform these “virtual reality” transactions into an economic driver.

Neither crypto-currencies nor surplus budgeting are new in the world of international finance. What is new is the implementation of direct plans to classify these opportunities as a competitive economic advantage, moving the global economy along the trend line of greater transactional efficiency by better integrating bedrock, knowledge-based techniques with the various economies that they serve.

Kerry Baynes

Kerry Baynes is currently a Msc University West Indies, Financial Economics. As a research assistant for the New Jersey State Senate, he was responsible for research on economic, budget/fiscal issues, and the impact of tax policy. He served as a Media Strategist for Garry Cobb For Congress, in 2014 and Giordano for Assembly, in 2015. Since 2006, he acted as Manager of Alpha Strategy Group, an Urban Media Company. Currently an Associate at World Financial Group (WFG), he works to build and protect wealth for families and individuals from all walks of life.