The falling dollar

kat1 (Moderator) says on Apr 17, 2007, 09:55:

IT Is falling the pound just reach the 2 dollar mark!!
£1= $2 dollars, cheap to go to the USA at the moment

engage brain before opening mouth

Brians says on Apr 17, 2007, 10:05:

Elk this will turn unfortunately I am converting the last 25% of my apartment costs from Dollars to Pesos Monday. I should have just done the whole thing last fall like you did. I was able to convert 75% around 2390 so all in all not so bad. Anyway this Peso is going to start impacting exports and then we will see a reversal but I wouldn't bet against it see 2000 before it begins to turn. Hey where is GB our currency expert?

sweet160 says on Apr 18, 2007, 02:21:

What kind of appartment HEy Brian what kind of appartment did you buy and in which city? Was it expensive?

cheerz,

" its a dog eat dog world, and I will eat your dog! "

elk says on Apr 18, 2007, 04:40:

Apartments as an investment I purchased my apartment six months ago for 136,000,000 and the same unit is now selling for 160,200,000. (An increase of 24,200,000)

If you sold and converted the peso gain back to dollars at the current exchange it would net you approximately $1,883.00 USD per month on your investment. I however have no plans to sell. I've lived in Costa Rica and Panama and have witnessed the same kind of building boom and escalating prices.

I see the same thing happening here in Colombia. I remember my first drive from California to San Jose, Costa Rica in 1973. There were no tourists to speak of and you could purchase a beach front property for less than $10,000. That same property is currently selling for millions.

Apartments are still a bargain here in the Medellin, Envigado area.
I know of several people who purchased not one, but two or three apartments as investments.

CaptainHowdy says on Apr 18, 2007, 16:15:

Investment opportunities??? You guys make investing in Colombian properties sounds like a good idea. I guess you want the COP to get as high as possible before purchasing. Maybe I'll consider that...hhmmmmmm....

Teaching preteens the things they need to know!

Brians says on Apr 18, 2007, 18:21:

CaptainHowdy I bought mine when the Peso was 2400. Just send my last wire as it is new construction at 2140. The prolem I see is the Peso may continue it's rise against the dollar. Bubget defecits lead to inflation and that is the problem in the US. Man I hope it changes ut longer term I think people ned to get comforable with a sub 2,000 exchange rate. I need to have money ther for longer tem reasons and I do feel the same as ELK in that the trends are in place. Anyway if the peso pulls back I am on a plane down and buying another place. If you ever plan to live there you need to keep at least 25% of your assets in the country. Look at the ex-pats who just said rent and keep everything in dollars. They took a big haircut. Need to balance the risks of these currency moves.

poco says on Apr 18, 2007, 20:03:

Bring on the cash £1= $2 dollars, cheap to go to the USA at the moment

Yes, this is a GOOD thing. The flights are filled up with Brits eagerly buying things like iPod's for HALF PRICE. They need to get it past Customs in England because it seems they want the VAT tax if they see it. Wonder if the U.K. is putting on extra customs agents?

I'd suggest "declaring" a few goodie's you DON'T have when entering the U.S. and carry that expensive hand bag right through customs in the U.K.

I'd NOT have a suitcase full of cameras.

I can see now that MILLIONS of Chinese and a couple of U.S. citizens are eagerly awaiting the flood of Brits.

PS: I think you can get a few more peso's per dollar. Then again, one day does not make a trend.

"Violence is the first refuge of the incompetent" - Isaac Asimov

tomtom33 says on Apr 19, 2007, 06:04:

I keep no assets in Colombia other than my 2 apartments. Sure the US has deficits. But my money will be spent over the next 30 years if I live that long. Peso fluctuations over the next few years are meaningless to me. In the long term, my money is on the US economy.

I bought my first apartment in CTG in Dec. of 2003. I brought the money in at 2710 pesos to the dollar. My gain on the peso pales in comparison to my gain on the apartment - over 100%. I don't expect near that return on my MDE apartment. But I didn't buy for investment. I bought because I live here.

Saltador says on Apr 19, 2007, 07:46:

BrianS Please explain more about the big haircut. Most of us expats are bald.
But seriously, if you didn't buy and just rented, where is the disaster? Rents don't seem to have gone up that much from what I've heard (I could be wrong, I'm not that connected to medellin).
Sure, as the dollar falls a little, it takes more dollars to pay the cheap rent in pesos, but I doubt anyone loses sleep over it.
The big mistake I see most people making is to think investing in real estate in colombia is a risk free sure thing. It's not. That doesn't mean people haven't made money in real estate, or that others won't make money on it in the future. It's just riskier than your average guy realizes.
To make a somewhat exaggerated analogy, it's kind of like if a guy took his life savings to vegas and walked up to the roulette wheel and put it on "red". Now, he might be telling himself that he's studied the trends, that red comes up more often than black, that he's got a gut feeling and his gut is always right, that he's seen other people put it all on red and double their money, etc.
Then they spin the wheel, and it comes up red!
Was the guy a smart and intelligent investor?
He thinks he is, it all ends up just the way he thought it would...

miamimike says on Apr 19, 2007, 08:03:

trouble is with buying Real Estate in any of those Latin American Countries they are but a Banana Slip away from having a Dictator type Leader. Happened in the past in Chile, Argentina, Panama, Honduras, Cuba, Guatemala, Dominican Republic,Haiti, Mexico and now again in Nicaragua with Daniel Ortega. I heard the Nicaraugans here in Miami tell me 5 years back "Never could happen again(ortega return)" and look what happened. Ortega is back! And he has renewed his friendships with Fidel and Hugo(some may consider that wrong)I could care less as long they don't set up "Shop" here in the USA and they keep the Oil flowing.LOL What happens now to all those US Investors who bought in Nicaragua??? I see International Living isn't pushing Nicaragua anymore,,,LOL BTW my money is on the Chinese Economy and their Currency as they are the Future, they, along with Japan, buy all the US Debt paper instruments,,,Saw in yesterday's Miami Herald the Drumbeat is getting louder as the Accusations are getting closer to Urribe's Doorstep on "Death Squads" said to be linked to Farms under the control of Urribe's Family and Financial Aid is being held up by some US Senators/Congress until Colombia resolves the Execution style Deaths by right wing Paras of Several Union Leaders in Colombia. This dilemma seems to be getting Legs and walking,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.,

miamimike says on Apr 19, 2007, 08:15:

In Mexico in the 80s many Retired Americans in my Ex-Wife's hometown of Guadalajara were invested in those Very High rate Mexican CDs paying 25-35% for 30-90 Day Notes. You could invest(open) in Dollars and take out the Interest in Pesos or Dollars. Then in the late 80s, President Salinos de Gatori changed the ground rules to "Peso Only" withdrawals. Mexican authorities Today are still looking for all the Loot(100s of Millions) he and his brother stole from the Mexican Treasury and stashed in hidden offshore accounts in the late 80s-20 YEARS Later!!! . A lot of Retirees took a real bath on the exchange from peso withdrwals to USD; Suddenly the Bloom was off the high paying CD accounts. A lot of Americans, prior to this, assumed that the Mexican ground rules on Investments would "Never" change. History proved them wrong and History will prove them(investors) to be wrong elsewhere in the world again in another place and time; Who knows where and when is the million dollar question,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.,

mecca says on Apr 19, 2007, 08:19:

Miamimike you're right about betting on China. They have surpassed the US as the 2nd largest exporter. They'll pass Germany in 08, it's scary though.

Saltador, exactly. Risky yes, though if you look through history, gov's typically protect land owners. If you don't keep the people happy the gov. has no power. Thus at least ownership rights would more than likely be protected. Now, unless the US completely falls on it's face, I don't see any way we are going to let Colombia go more red like some other south american countries. We've just got too much invested. So, if you by right and I mean only GANGAS and in the right area, it'll probably pan out.

Besides, where is the housing market in the US going. It ain't going up.

miamimike says on Apr 19, 2007, 08:27:

We had a lot more Invested in Mexico in the Late 80s when the Mexicans changed their Investment Rules and pulled out the Rug on US Investors. And we were right next door, a neighbor so to speak,,,China in the Future will surpass US investments in Colombia and what happens then. They(china) want and need those Raw Materials Latin America has in volume. Thats why they are busy now in latin america signing all those Trade and Investment deals! They(china) still are trading with Colombia with a Non Floating Currency as they do here in the USA. How do you fairly compete with a Country as large as China who won't float their currency???? We cannot and neither can Colombia,,,Wait 'til China enters the Cut Flower Market in a Big Way with Roses grown in China; they are working on it now, the transportation process to keep them Fresh on the long flights to the USA and other export countries,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.,

CaptainHowdy says on Apr 19, 2007, 08:32:

Thanks.. Thanks, Brians. I am of humble means but always on the lookout for a way to make money...preferably without having to work for it. So, you feel as though a sub 2000 COP is in the near future. If that is accurate, the time to buy would be now. This will be my first venture into Colombia so this is all new to me. Just out of curiosity, what could one buy with $8000 - $10000 dollars in the way of housing/real estate in Colombia? Is there a website that one could look at houses and/or real estate? This is a question of curiosity only as I try to get some idea of the real estate market in Colombia.

Teaching preteens the things they need to know!

mecca says on Apr 19, 2007, 08:38:

Miamimike What exactly happened in Mexico? I'm just not too up on this type of thing. Were land owners rights revoked? Did the coastline 30mile leasehold system fail? Were people put out of their homes? Thanks,M

miamimike says on Apr 19, 2007, 08:47:

As I explained, the Currency rules were Changed in the Middle of the Game. US investors(retirees) were allowed to open their CD and stock accounts in USD and at the onset and withdraw their Interest in Dollars or Pesos monthly. Many small US investors (retirees)then were living off their monthly interest very nicely until this happened! Later in the game, Mexico simply decided to only allow the Interest to be taken back out in Pesos. The conversion back to dollars skimmed off 20% of the gain is what happened. If you wanted to keep withdrawing in Pesos, no problem but sooner or later, when the Day came to close the account, you eventually had to deal with the Conversion fee and take a loss.

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.,

Saltador says on Apr 19, 2007, 08:51:

mecca You're right about the US real estate prices, at least short term. I have two good friends in the miami area that bought at the height of the buying frenzy there and are now feeling the pain. Up until they bought, everyone before them made easy money.
But that could never happen in Colombia, right? It's different because blah blah blah fill in the blank blah.

mecca says on Apr 19, 2007, 08:59:

I've got your point now Mike You were referring to liquid investment within the country. I was just talking about real estate. Well, it would be difficult to trust Colombia for large summs. But for just homes it's not that bad.

Saltador, whew....i know all about the US market, ugggggg. lol. Other than Cart. there has not been any type of bubble that i know of (medellin or cali specifically). Thus, buy only super gangas and in the best area possible. That's if you want to live there, there are tons of better investments if that's all you're looking for. IMHO

CaptainHowdy says on Apr 19, 2007, 09:13:

Don't invest??? So, what I'm sieving from this thread is NOT to invest in real estate in Colombia???

Teaching preteens the things they need to know!

aztec says on Apr 19, 2007, 09:27:

miamimike, Don't forget... ..those poor Americans who had build homes on the Mexican coast South of California. The contracts and titles were wiped out by the Mexican courts with support from the government.

If they wanted to stay in their homes they had to repurchase them from new title holders. Amazing thing is that the purchases were in accordance with the legal procedures in effect at that time.

I have to agree with you about the safety of investments anywhere in Central and South America. It is a crap shoot if you are doing it solely as an investment. There are simple too many socialist and communists there preying on the uneducated masses.

elmodefoque says on Apr 19, 2007, 09:35:

where the hell is dongringo, he has the answers to this most diturbing down spiral . What happend to the good ol days of almost 3 mil for a buck?


life is a bitch, then you marry one, then she takes all your fokin money, then you die a broke ass modefoque!

over 5 million colombianos in USA and only 27 barranquilleros, i'm one.Curramba, el mejor vividero del mundo!

miamimike says on Apr 19, 2007, 09:45:

Aztec Yes I forgot about what you mentioned,,, on the Coastal Property as most of my travels at the time were to Jalisco State where Guadalajara is located. A person can still find some good deals in Guadalajara within typical Mexican Neighborhoods. If a buyer was to listen to those International Living Folks on Mexico you would think the Only Real Estate to buy is in Pricey Lake Chapalo or Ajiic where homes sell for $300K+ in all American Neighborhoods. They don't want to tell you about the Good deals in inner city Guadalajara for $18K-$25K ! Not much of a Commission to made off these small sales but they certainly exist in this day and age! Aztec at the Time, Mexican Presdent Salinos was well regarded here in the USA(he was Harvard educated btw)as well as in International Circles. Boy were the Pundits and so called experts wrong on that call-he turned out to be one of the biggest crooks of all times, along with his brother Raul. He eventually ended up in Cuba in Exile for a Long time while his brother Raul was tossed in Jail! Thats why I take these Opinions of great a President Uribe is with a grain of salt! I hope he continues to do well for Colombia but who knows what the Future will bring, looking at the past history as the Ultimate Teacher,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? ... That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.,

tomtom33 says on Apr 19, 2007, 14:02:

You got the answer, CH. In my book there is no place like a well-diversified US stock investment. I hold Vanguard's Total Stock Market Index Fund. The added benefit of tax-efficiancy really helps long-term.

I have done very well in Colombian real estate, but I never did it as an investment. Things are just too fucked up here. And the future is a roll of the dice.

aztec says on Apr 19, 2007, 15:41:

tomtom33 I am also in Vanguard. Have you ever heard of the Independent Adviser for Vanguard Investors? I followed his advice and more than doubled my investment.

Of course there was considerable risk involved and I have since pulled in my horns. We are approaching the end of the economic cycle. We are in the longest and most robust expansion ever and that can't last.

tomtom33 says on Apr 19, 2007, 16:57:

Never heard of the Independent Advisor. They have a service whereby they will do a portfolio analysis for you for a fee(or free if you have nough money). I don't know if that is similar to the IA. I had them do an analysis for me.

But I have becaome such a believer in broad-based indexing that I have virtually all of my money in VTSIF. I think I have read every book that John Bogle has written. I never was bright enough to figure bonds out. So I just stay 100% in stocks. Maybe in 10 or 15 years I might go to 25% bonds.

I'm not buying any more Colombian real estate. The only thing easy here is getting laid.

poco says on Apr 19, 2007, 20:27:

Maybe but those Germans a smart puckers. They'll pass Germany in 08, it's scary though.

It'll take a lots of Chinese. Germans have dedicated their best and brightest to develop inexpensive equipment to paint the lips on Bratz Dolls.

"Violence is the first refuge of the incompetent" - Isaac Asimov

Brians says on Apr 20, 2007, 05:45:

Tomtom You are doing what I would suggest because you have two apartments in Colombia. The people here are a little jaded from the past. I have been a Senior VP of Investments at a Large Investment company for 18 years. I have seen everything that people like Poco mentions. There are risks everywhere and short term things change but face facts the US has lived off a credit card (not just budget def. but really trade def.) this is a longer term issue that will play out over years. Tomtom your Vanguard portfolio in terms of average worldwide purchasing power has only appreciated about 1/2 as much as you think over the last three years but at least you have that balanced that with your Colombia real estate. What I am trying to tell everyone is that if you plan to life in a foreign country you need to secure a % of your assets in that country to hedge against these things. Would a person living in the US have all his money in Colombia? No not smart and either is it to have the reverse. Now I am not speculating I have a dollar figure that I need in Colombia which would then cover my fixed costs. Real estate is the safest play from my experience as rents will increase with inflation. My wife is Colombian so if hell breaks loss and they change the constitution and take foreigner's real estate then my Colombian real estate will not have my name on it. They will not take a citizens real estate. The amount I will keep in Colombia is only about 25% of my investment portfolio when everything is done but this will go a long way to securing me against my greatest fear. The fact is the US will have to endure a long term decline in it's standard of living (dollar value) in order to every become compeative. This is not based on gut feelings like some on here. It is based much research. Now Colombia could blow up to and there is no cure all to this only people need to stop being jaded with personal experiences in Mexico that reminds me of the person who got hurt in the 1987 crash and never got back in. Don't leverage on speculate!

CaptainHowdy says on Apr 20, 2007, 07:53:

Good Post! Good Post Brians...I don't follow investments, stock markets, or try to keep up with the Jones'. I just would like to invest and make enough money to retire comfortably and possibly early...I figure if I can get roughly $250,000, I could live off the interest and my teaching retirement relatively well. But how to make that much money in a short period of time is the question. All I know is I need to get in on the ground floor of something profitable...Real estate sounds pretty secure because come rain, flood, tornado, earthquake, tsunami, or whatever, when it's all said and done, you'll still have the real estate...and God isn't making any more! So, to me, that sounds like a sound investment, especially if Colombia is going to boom like some of these other "South of the States" countries...

Teaching preteens the things they need to know!

aztec says on Apr 20, 2007, 09:28:

"They will not take a citizens real estate." Brians Want to bet on that? Just look around at other countries in Central and South America. Much evidence to the contrary.

Still, I agree it would be nice to also have an apartment in Colombia. Never can tell when the bombs are going to start dropping on Iran. Might be safer in Bogotá than in the States.

Brians says on Apr 20, 2007, 09:49:

Aztec of course they can do anything but outside of the FARC taking control I think my real estate postion is pretty secure. Captain I would tell you that Real Estate in Colombia is not something that I would tell you is not a goldmine by any stech. You are looking at 6%-5% returns. Forget trying to sell and buy. I look at it as only a currency hedge against the dollar.

Ctg Bound says on Apr 20, 2007, 09:59:

aztec Yes Colombia is a hell of a lot safer on the international terrosist front than most US or European Cities.

Brians says on Apr 20, 2007, 10:11:

IGBC is far too risky for me Too illiquid and accounting standards are a concern to me. If my real estate halfs in value at least it is paying me a rent.

goin_south says on Apr 20, 2007, 11:40:

don't I remember someone saying something on here a few weeks ago about the stock market crashing???

Imagine...

y, un mil gracias.

mecca says on Apr 20, 2007, 17:58:

Well anything could happen but i don't think we're going to see holders or real estate in colombia (be it citizen or NA) having their ownership papers tossed out. If that's keeping you from buying, that's probably not a good reason.

aztec says on Apr 20, 2007, 19:04:

mecca Are you suggesting we should not hold title to Colombian property in our name if we are North Americans? Please advise.

mecca says on Apr 20, 2007, 20:54:

Hi Aztec, We could talk offline, as I think this is a very limited subject.

utopiacowboy says on Apr 21, 2007, 09:49:

You know I read this thread about everything coming crashing down in the US economy and how it's time to get out etc etc but in the meantime the Dow is setting new records. Is there a disconnect between PBH posters and reality?

Disclaimer: any comment I make is inane and is not to be taken seriously, and is so patently ridiculous that no one should take it seriously, even as an insult.

jay1234 says on Apr 21, 2007, 13:07:

UTC Ummm...Yeah. As to China overtaking the US. Well, just food for thought, but why do folks think the Chinese are buying US Debt? Because we are more attractive than anything else. Including investing in their own country.
https://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html. China is almost 25% behind US. They lack a lot of infrastructure. And they have big energy requirements that they are having a hard time meeting. Don't get me wrong, they are number 3, which ain't too shabby. But let's not kid ourselves, they are not the US.

mecca says on Apr 21, 2007, 13:24:

Jay, I think china will be the single largest exporter, producer and economic power in the next 10 years. They will need to keep the US strong, as we are their market. They make it cheap and sell it to us. If the US does have economic problems (i've got no idea if we will or not), then China's problems will compound quickly.

jay1234 says on Apr 21, 2007, 14:23:

mecca I don't know if it will happen, but I can see China becoming top dog in the export arena. What I have doubts about is the producer and the economic power area. Producer of goods? Maybe, but as the US has found, technology, information services, etc., are big money makers and do not rely on natural resources to produce. So, that battle could go lots of ways. India is a good example of a country that could be poised to challenge. They have tons of educated folks, and can pay very little to their workers. They also have good infrastructure for technology. I think China may or may not lead here, but, yeah, on manufacturing, they are very strong. On them being top economic power, I still don't see anyone overtaking the USA. Not for a long time (I am talking hundreds of years...and by then who knows what technology will bring). I whole heartedly agreee about a strong US being in China's best interest. Overall, I would point out that this is good for world peace and stability. A war or instability is bad for business. Unless you are a defense contractor.

mecca says on Apr 22, 2007, 07:53:

Yep Jay It's tough to say and i'm definately no expert. Something just feels wrong when you go to all the stores which sell to the masses (walmart, kmart, target) and practically EVERY product is made in India or China.

I just start to wonder, we're supporting jobs out of the country so we can buy stuff cheap (i'm all for buying cheap). So, i think look at the people buying at walmart, many of them are in some type of mfg. jobs.

They mfg. things in the US for their job and those things sell, great. They take their paycheck to Walmart, great. They basically cycle their money back out of the US by purchasing at Walmart.ummmmmmmmmm

Then comes the day when the things they mgf. in the US can be made in China or India at 1/5 the cost. They lose their job cause the owners have everything mgf. in China or India.

It's a cycle that seems to have only 1 logical conclusion. I'm sure my simple mind is not grasping the whole picture, I'd like to know more and at the same time i'm not sure i could sleep at night if i knew more...lol