Martin Weiss, Ph.D. takes a closer look at Brazil and China and the forces causing their continual growth. Dr. Weiss examines China and Brazil and the reasons behind their booming economies.

"Brazil and China are leaving the Dow in the dust. Just in the past four months the ETF representing China's leading 25 stocks (FXI) has surged 40.9%, three and a half times better than the Dow. The ETF tracking Brazil's blue chips (EWZ) is up 44.1%, nearly four times more than the Dow," says Dr. Weiss.

The same pattern that's been prevalent in the past four months is evident over the last 30 months. These markets greatly outperformed the Dow in 2005 and 2006. And they're doing it again right now. Brazil's economy is expanding nearly seven times faster than ours. China's is expanding fifteen times faster.

The news pouring out of Brazil and China signals continuation and even acceleration. In Brazil the ethanol and sugar cane industries are taking off. Brazil's largest construction giant, Construtora Norberto Odebrecht, just announced plans last week to invest some $2.6 billion in ethanol, following a host of other local and international investors that are flocking to this fast growing sector.

Even Archer-Daniels-Midland, America's largest ethanol producer, says it's getting ready to jump into Brazil, a resounding endorsement of Brazil's sugar-cane based ethanol. Demand for Brazil's natural resources, like nickel and iron ore, is rising at a quicker pace. As a result, the earnings of Brazilian resource companies, like Companhia Vale do Rio Doce, have exploded higher. Last month, Vale announced that its first quarter profits jumped 85%.

And Brazil's consumer interest rates are coming down from their previous lofty heights. As a result, retail sales surged up 11.6% in March and 7.5% in April.

Millions more are taking to the road. New vehicle registration was up a dramatic 29% in May. Brazil's trade surplus this year is already $19.6 billion, thanks to a 20.8% surge in exports from last year.
Brazil's currency, the real, has jumped 19% in the past year alone, the best single performance among the 16 most actively traded currencies in the world today.

Brazil's economy is in a sweet spot. And it's now on a rapid growth trajectory to overtake Italy by 2025 and France by 2031. Even the International Monetary Fund says it's "proud of the performance of Brazil," applauding the country's strong currency and high growth.

In China, the trade surplus is unstoppable. In May it reached $22.5 billion, up by an astounding of 73% from the previous year. The reasons include momentum and diversity. Exports to the U.S. alone rose from just $51.5 billion in 1996 to a staggering $287.7 billion in 2006. And about four-fifths of China's exports are shipped to other countries. Demand for Chinese products is continuing to rise in Japan, Australia, Brazil, the European Union and every one of the world's largest consuming nations.

Hundreds of millions of Chinese citizens are earning more, buying more, traveling more, and investing more. That's why China's auto sales surged by 25.3% in May, compared to the year earlier. Also in May, China's 20 airline carriers sold more seats, filled more cargo space, and made the most money in their history.

It's why China Mobile added a record number of subscribers for the eighth month in a row, 5.5 million new users in May alone; 5.3 million in April. And it's why Chinese investors have opened an astounding 27 million brokerage accounts so far this year, five times the number opened in ALL of 2006.

Brazil and China are worlds apart. But when walking the streets of their cities or traveling the roads in their countryside, what's seen is that they are both mobilizing the same forces at approximately the same time.

"There is a similar pattern everywhere: Expanding demand from burgeoning middle classes; bustling activity in newly opened markets; and surging sales, profits and asset values," says Dr. Weiss.

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http://www.moneyandmarkets.com/press.asp?rls_id=840&cat_id=6&

About Martin Weiss & Money and Markets
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.