Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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From: THE ANT	3/2/2005 10:04:38 AM
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I can see why credit growth may slow down.I have about 100K out on six credit cards most on fixed rates at 3.9% which were offered to me about 2-3 years ago.Also had 100K in a HEL which was variable but I have since rolled into a 30 year fixed loan.I never wasted a cent of this and bought property in Brazil when the currency was around 3.5/$ vs 2.6/$ now.I would take out any money offered to me at a reasonable rate.I also closed some contracts on 3 properties in construction at fixed dollar payments over 2 1/2 years at 2.9/$.Usually when paying in Reals your monthly payment goes up monthly based on interst rates and a cost of civil construction index.The construction company was happy to contract based in dollars as they said that would more than make up for the interest and cost of construction issue.In one building my lawyer bought the unit next to mine.His payments were up as much as 7% one month as the cost of iron and steel rose so much.At the current currency rate and with inputs other than labour going up at world rates, that at some level negates the advantages of buying real estate in a country with high real interest rates and avery limited govt supported mortgage mkt.I feel that if there is a world wide deflationary colapse that the real will go down relative to the dollar and steel and cement prices will colapse.Thus I have much less enthusiasm to borrow and apply cash in the one place I felt was immune to the asset bubble.I will still look for property to buy to build on at a later time, but even there property on the ocean is going up as the Europeans are putting their bubble gains into ocean front property. One other note.A friend of mine is going to put me in touch with a website that teaches Ameicans to buy and develop Brazilian agricultural land.Almost 1000 Americans bought farmland in Brazil last year.A friend of his bought 2000 acres and set up 4 irrigation wheels for about 400K(land and equipment) I will be in Brazil next week in the mining region and will report anything interesting.

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