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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Condor who wrote (20113)	10/17/2004 4:22:57 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

Mish, when you refer to "do well" do you mean in repsect of their currency vs. the $ US or in regards to interest rate returns? It is actually a complex question. With foreign govt bonds you have two risks 1) currency risk 2) interest rate risk If one expects foreign currencies to rise then obviously currency risk is minimal. OTOH if foreign interest rates are rising you will lose on interest rate risk. The question on the latter is by how much. Will it offset the currency gain. Then again, if I am correct and the world does head into a recession, there will be less demand for copper, wool, steel, etc etc. Perhaps these currencies do not do as well as one might expect. Perhaps these countries stop hiking and start cutting as they lose business to the US because of the weakened US$. If they start cutting you have an interest rate gain. Perhaps you have a currency gain or perhaps not. When I said well, I meant a good chance for gains in one or more ways, and also as a good hedge against an outright currency play. A well managed international bond/currency fund if there is such a combined thing might be a very good choice. Let someone experienced handle the complications of trying to manage those risks in multiple simultaneous countries. Mish

To: Condor who wrote (20113)	10/17/2004 7:16:49 PM
From: Michael Collings	Read Replies (2) \| Respond to of 110194

Condor: About a year and a half ago I opened a bank account online with the Bank of New Zealand. The bank 6 mo term deposit yielded 5.625% Currently they are paying over 6% on their term deposits. In addition I have made around 20% on the exchange rate. I am not sure whether you can still open accounts over the internet, I do remember that I had to fax two picture id's also, but if you can it is well worth it. They made it quite easy to open the account at the time and I had my local bank wire transfer the funds. Later, I tried to open an account at ANZ Bank (based in Australia) but they would not accept it over the internet and required you to open the account in person. On the interest, they require foreigners to pay a 10% tax. If you report the income to IRS you can then be credited for the 10% foreign tax. Interestingly though, the foreign bank does not report the income to the IRS. Besides the fact that NZ is the most beautiful country in the world, their economy is very strong.