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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 366.51+1.2%Nov 5 4:00 PM EST
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To: Elroy Jetson who wrote (109798)1/18/2015 7:41:35 PM
From: Maurice Winn  Read Replies (1) of 217549
 
The same sort of thing happens elsewhere. <everyone seems to have thought that the Swiss Franc was a guaranteed one-way trade, borrow a billion Francs at nearly zero percent interest and buy almost anything else.>

Hordes of Mrs Watanabes sell yen to buy NZ$ to lend to people in NZ to bid the price of their houses higher [doubled over a decade in Auckland, the main city]. Mrs Watanabe can get 0% interest in yen, but 4% in $NZ. It was higher a decade ago.

It has been a good bet for decades.

So far, it has been a good bet for NZ house owners too, and the banks that have loaned Mrs Watanabe's money to the house buyers. Yes, there have been ups and downs but overall, a winner.

But there is no double your money back guarantee. Tomorrow, the NZ$ could drop to US40c from US80c and a similar fall in yen. House prices could take a big tumble too. Auckland house prices are at historic highs in relation to incomes. But people go on borrowing as they are keen to get on the no-lose property investment game.

There was a hiatus in 2008 for a couple of years as the world financial mess reverberated around town, with many losers who borrowed big to join the game a couple of years before that. But that's long ago now, with all time highs reached daily.

Mqurice
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