Dollar & Sterling set yo plunge ?

[mickthepropertyguru]

Just out of interest, does anybody else believe that the dollar/Pound is in a perilous position ? What will happen if investors stop buying bonds ?

People may realize that American Government bonds are risky due to America's trillion dollar promises to different sectors over the years and Americans may become wary of buying bonds. I think America may have to start increasing the interest on Bonds to keep people interested. Fear may take over leading to an exodus, leaving the dollar in free fall.
Thats what i think, Obama's plan may lead to a huge hangover which has a many implications with currencies that are linked to it and different countries ?
God I'm getting very pessimistic. Could America default........its possible.
Foreign investors that invested in American and English bonds will be getting very worried so as sterling starts to free fall.
Also the pound will fall a lot further as Britain will decrease interest rates again and again in the near future . Also i believe that people will stop buying Government bonds, which will kill the pound and drive it further.
This is my basic view. Can anybody else offer so more science or technical information to it ?

 

[georgihh]

Just out of interest, does anybody else believe that the dollar/Pound is in a perilous position ? What will happen if investors stop buying bonds ?

People may realize that American Government bonds are risky due to America's trillion dollar promises to different sectors over the years and Americans may become wary of buying bonds. I think America may have to start increasing the interest on Bonds to keep people interested. Fear may take over leading to an exodus, leaving the dollar in free fall.
Thats what i think, Obama's plan may lead to a huge hangover which has a many implications with currencies that are linked to it and different countries ?
God I'm getting very pessimistic. Could America default........its possible.
Foreign investors that invested in American and English bonds will be getting very worried so as sterling starts to free fall.
Also the pound will fall a lot further as Britain will decrease interest rates again and again in the near future . Also i believe that people will stop buying Government bonds, which will kill the pound and drive it further.
This is my basic view. Can anybody else offer so more science or technical information to it ?

This is exactly what is happening the pound is sinking day after day and will not exist next year as will join the euro.
The $ is still number 1 and is more protected

 

[rowlandsbb]

All part of the boom and bust economic cycle we have always had
As they say ' what goes up must come down' and vice versa
So whilst we are in for a rough 2009 and into 2010 it is not the end of the world !
Following a storm comes opportunity!!
£ and € parity....£ and $ parity looks a long way off if ever, but has happened before...both will recover
With low interest rates [ 0% on US Treasury bonds]-investors start to look for a better return for their cash and as the world economy improves shares and property will again offer better returns
Increasing cash circulation put into the economy by governments starts the inflation moving again .....and in simple terms the cycle starts again!!
People start buying shares, companies and property whilst they are cheap and demand for these start to push up prices again
In the world economy all the pension/ insurance funds have massive income flows everyday and they can not for long just leave it earning 0 or 1% return or so!..they have to produce returns to attract more business...and so on
Banks clear out the mess and again have to lend to make money

Now this is a property forum so that is our main concern

During a storm money flows to quality and relative security so that cuts out a lot of the former emerging markets
Finance for solid buyers is cheap and it is the life style buyers who underpin the market
So Spain and France, which are two of the most popular countries for Uk and northern buyers , will perhaps offer some good opportunities in 2009

Buyers who go out and look for the good buys in good locations and who can afford to buy will end up with an excellent medium term to long term investment.....with a bit of enjoyment along the way
OK low exchange rate but to a degree more than compensated for by the price you pay
Private investors now earning circa 3.5% in UK and less next year for their cash will start to re evaluate what to do with their spare cash...and so on

So whilst it is bad it is not all doom and gloom for the future.....just have to get through the next 2 years or so
So if you own property and do not have to sell...sit tight [ and that of course includes UK] and if you want to own a property stick to the established economies and go out there and look for a bargain in 2009

Accepting that 'it is going to get worse before it gets better' but it is not the end of the world

Simplistic view based on experience of all the recessions since the 70's...and this is now just as bad

 

[mickthepropertyguru]

I think currency rates are one of the most important things to consider when buying a property.

This is a thread on currencies, one of the core issues of investing and it's vital that investors have a grounding in it.
Anybody in the Uk would be mad to invest anywhere now or in the near future for the mid to long term.
God help the people paying mortgages for investments in America or Europe in the last 6 months.

Every country wants to have a weak currency as to improve their exports. America and England are not probably to worried about this as if they had a strong currency right now, they would be in a world of trouble !!
It has been said that America many times over have artificially lowered their currencies to help their economy.
The euro currency has underlining strength as there are so many countries that have it and EU countries that export to EU aren't as badly hit as EU countries exporting to the Uk and America.
As i see it the pound and the Dollar will fall a lot more making it a terrible time for anybody in the UK to buy. Rentals return will be effected also in a huge way.

Example: Investor bought property for €200K @ (€1 = 95p) Price : £190 K
Sold 5 years later for for €250K @ (€1 = 70p) Price : £175K

Bit of a disaster...............
Always buy when your currency is strong or face disaster ! If you buy when your currency is weak and the wheel turns and your currency gets stronger, you're losing money.
Are my calculations right as i keep thinking they are wrong !!!!!!!!!!1

 

[Prop-erty]

Just out of interest, does anybody else believe that the dollar/Pound is in a perilous position ? What will happen if investors stop buying bonds ?

People may realize that American Government bonds are risky due to America's trillion dollar promises to different sectors over the years and Americans may become wary of buying bonds. I think America may have to start increasing the interest on Bonds to keep people interested. Fear may take over leading to an exodus, leaving the dollar in free fall.
Thats what i think, Obama's plan may lead to a huge hangover which has a many implications with currencies that are linked to it and different countries ?
God I'm getting very pessimistic. Could America default........its possible.
Foreign investors that invested in American and English bonds will be getting very worried so as sterling starts to free fall.
Also the pound will fall a lot further as Britain will decrease interest rates again and again in the near future . Also i believe that people will stop buying Government bonds, which will kill the pound and drive it further.
This is my basic view. Can anybody else offer so more science or technical information to it ?

Maybe the pound will remain relatively strong as the rest of the world goes into recession too. However, I have noticed that the dollar has become a bit stronger after the Obama victory. What do you think?

 

[rowlandsbb]

Today it appears that the German Banks take the view that the £1 > 1.20 € or circa will be the rate late 2009

As the EU economy follows us down...they may be the last in and last out!!!

 

[Prop-erty]

Very interesting. So where is the ideal place for a Brit to invest at the moment? And what about Africa? Any predictions on the currency in South Africa, to be exact?

 

[rowlandsbb]

If just an investor then for a Brit there is no need to go overseas, plenty of opportunities in UK
You know the property laws [ or should do!], safe economy medium to long term and the UK property is either close to or moving close to the bottom of the cycle
Well located Uk property for an investor is hard to beat

For a life style buyer then the two most popular locations are Spain and France and again in 2009 there are good deals which will provide a good medium to long return at the same time as you are enjoying you life style
South of Spain or South of France......depends on the culture you want and how much you can afford....the sun shines on both....perhaps a bit more in Spain in the winter.....and in Spain you can get more for your money

But even for life style buyers there will be good deals in UK....when money gets tight it is often the holiday home that gets sold!!

2009 looks like being a good year for property buyers if you have the funds!