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Very long, but also interesting. A nice find.
You know my thoughts already ... I hope that you, Melonie, are taking the appropriate action.





^^^ I already have in terms of assets. The problem that I'm having is on the liabilities side i.e. deliberately going into US dollar debt in order to invest the borrowed dollars overseas (i.e. a personal Yen carry trade ) !



You know I'm sure your life could be easier if you just thought a little less... Of course, I mean that in the nicest way possible.
There can't be many private investors that take the risks / positions that you do. And your annual tax returns must be a nightmare!!
You know my best friend has done this a few months ago. He is doing an MBA and is from Cape Cod / Boston but lives here in Belgium. He has borrowed the entire costs of his year out / tuition fees in US$ - at my urging I might add - on a low rate student loan, and is studying at of Europe's best 'B' schools. I also urged him to take the longest term possible to lower the payments and let inflation / dollar declines have a greater impact.
We joke that by the time he needs to clear the loan, he'll be able to use spare change that he finds in the sofa. A joke, but...





what can I say ... 3% cap gain on the Euro : US$ exchange rate on top of the interest earnings - not bad for one month's return



All good. I take it all back!!!
Not many can match 3% a month with the risk profile of what you are doing. Am very impressed.
I have exectued a few trades like this for clients in the past and over the course of a year we (we? I didn't seem to make much!) have made 80-90% for nearly risk free.
It's a great game isn't it???
Happy Easter.





^^^ yeah, well, eventually the current paradigm of very low risk premiums on investments that are actually quite risky is going to crash and burn. I suspect that this is already happening to some degree, which probably explains why another trend seems to be getting started re commodities and the Euro.
As to this being a great game, no in point of fact it sucks! The US tax accounting requirements that go along with such investments these days are a royal pain in the a$$ ! Of course this problem will go away once I retire to Malta or Belize LOL !



I figured the taxation woud be a pain. Not necessarily because the taxes are high, more that the average accountant wouldn't understand what you are doing and so therefore would find it very hard to offer accurate advice.
But, i guess you gotta do what you gotta do... Profits are profits are profits.
I'll keep my fingers crossed for a profitable April for you.





^^^ well, the way that the US dollar is starting to fall off a cliff, my Euro denominated investments and gold bars ought to be a no-brainer for the next few months !
Actually, I wish I had the confidence and the 'balls' to outright borrow lots of US dollars and invest the borrowed money in Euros. But with the way that US inflation is taking off and US bonds are dropping, I'm afraid that the future US dollar interest rates are going to rise big time and eat up my cap gains.
~
Last edited by Melonie; 04-07-2007 at 09:42 AM.
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