Dollar

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Evolu

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Right... any thoughts on the Dollar and 'overseas property investment'?
 
Evolu said:
Right... any thoughts on the Dollar and 'overseas property investment'?
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Yes.






..... if you wished to start a discussion on these you really need to provide a bit of context.

I have thoughts on the dollar. I have thoughts on overseas property investment. I don't see these thoughts as being connected and I certianly don't see why they would be discussed in the same breath. I also don't see someone saying "Right, any thoughts..." as a motivation to share my personal views.
 
Dear Satanta,

Apologies for the lack of context... good point!

Overseas Property and the dollar not connected you say? The USA is overseas, there is property there and oh yea, the currency is the dollar... see the connection??

Anyway, with the shift in the dollar and esp potential further slip into the 1.40's (or so some commentators say???) where are there likely to be opportunities?

One of the key things all investors (I have ever studied... all be it limited reading) do is really prepare themselves for potential opportunities. (If the opportunities present or not that’s another thing!)

I guess where I am coming from is positioning myself for potential opportunities ahead. 6 mts time, property at a low (and out of vogue) and a dollar in the 1.40s... there would be many opportunities. I'd just like to know everyones thoughts?
 
Evolu said:
Apologies for the lack of context... good point!

Overseas Property and the dollar not connected you say? The USA is overseas, there is property there and oh yea, the currency is the dollar... see the connection??
Click to expand...
Ahhhh, amazing how having something in context changes things.

The point that all overseas property, in relation to your original post, is NOT in the USA, means without the context your retort is mute towards the original post.

I made the coments as a constructive criticism, not as having a go at you!

Had your post orginally raised the issues of potential opportunities in the US market, that post wouldn't have been needed.
 
...fair point Satanta!
 
Sounds a little too close to timing the market, but potentially yes there will be opportunities. The US has a cyclicial property (and economic) nature the same as the rest of us, and they do appear to have been on the slide both in property and general economic fortune for the last while. Whether this, or in six months time, will be the low? Again, purely timing the market.

Aiming for a market low is no substitute for proper research etc. (as mentioned by yourself on other threads sp preaching to the converted there). Whether you believe it's the right time or not, getting the right property in the right location is still the key. If you get that one right it shouldn't matter if you join at a peak or trough of the local trend, the longterm trend should provide gains (ignoring the more important issues of yield etc.).

Will oportunities arrise in the near future? Of course. Will oportunities always be available if someone can just find the right one (property)? Personally, I feel yes.
 
Definitely... it totally is timing the market... ie. if certain market conditions appear all at once then...!

Worth keeping an eye on these conditions all the same and if they do fall in line being ready to exercise a plan based on the conditions! If the property purchased stays in line with inflation only and the dollar moves back from a 1.40s to a 1.15 (which it will eventually with the cyclical nature... as you point out) then with the leverage, that in itself is a healthy gain. Throw in value buying (or should I say, undervalue buying) and... well, there is a double gain. (Anyway, with context clarified, you totally have got where I am coming from... )

Of course I am in total agreement about the right property in the right location. I have done all my buying in the UK over the last 3 years... so US exposure is non existant!
 
I note from recent commentary that there has been
  1. a marked rebalancing out for Far Eastern Central Banks away from USD denominated reserves,
  2. a switch of payment for the payments for Russian Oil/Gas into EUR to the extent of $5bio Vs $16Bio (equivalent) in Eur.
  3. the proportion of OPEC member Foreign Currency reserves dropping from 70% USD to approx 60ish %.
All these would lead me to believe that there is a serious chance of the redenomination of commodity prices (and hence payment) into EUR out of USD. If this were to continue, then one could see serious slippage in the USD. On each of the occassions in the last couple of years that the EUR/USD exchange rate has hit highs have been in instances were No.3 has occurred.

If you can denominate your borrowings for the US property investment in USD, then you may benefit from funding this USD borrowing with a strengthening EUR. But, on the downside, any property appreciation you get could be wiped by the weakening FX rate.

Final point - if you don't know exactly what you are doing, then don't do it. If you are planning to buy a Property where you could use it as a holiday home in say Florida, then at least you could use it as such. But there are easier and more local ways of doing that - such as Turkey or Cyprus.
 
If the weakness in the houseing market in the US bleeds into a general recession (or even a significant slowdown) this could force the Fed to cut interest rates next year. The bond markets are already betting that rates are going to be cut. This would be very bad for the dollar, especially in an environment where the ECB and BOE are raising rates.

This combined with the huge US deficits and the switch of commodities pricing out of dollars makes me wonder why you think that the dollar will get to 1.15 again any tiime soon.
 
Most likely scenario is that both house prices and dollar will fall further; how much, is anyone's guess.

Investors from this side of the pond are keeping out of the residential market in particular in the USA for this reason. Commercial that is funded in the USA and has good covenants is probably still an ok bet.
 


Very very hard to call.

In theory yes, but very risky as you are carrying two risks, fx and property.

Mortage default soaring
Mortage rates uncertain and unstable...Fed may need to cut rates but recent inflation figures not good.
Trade deficit is huge, shrinking but huge.
China holds too much dollar to let it slide too much....quickly that it.

Government mortage agencies, namely Fannie Mae et al have been releasing disturbing info.

Asset buble crunch coming.

This play is all about timing, and carries an unjust amount of risk for the prospective returns.
 
baby_tooth said:
Trade deficit is huge, shrinking but huge.
China holds too much dollar to let it slide too much....quickly that it.
Click to expand...

Trade deficit fell in the last few months from record highs and this is being trumpeted as some kind of policy success but it's all down to the fall in oil prices. The same massive imbalances are still there.

And China has stopped buying American securities.
 
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