Quote:
Originally Posted by layback40
Dont know what the fuss is all about.
I wish I had borrowed $US 1M back a while ago when the $A was worth about 50c US.
Interest rates here have been between 6 & 7% every place. I have had $A 200K in my Biz account for the last couple of years at 7%.
$US 1M brought over here Would have started at $A2 M, earned $A 150K per year interest & now could transfer 1/2 it back as the exchange rate is now $US 1.02 = $A1. About a $US1.05 M profit allowing for interest charges. Easy money!!
Exchange rates fluctuate all the time.
You cant blame your banks for not lending in the USA when they can double their money other places.
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This is all based on a (somewhat irrational) fear that the US federal reserve is putting too much cash into circulation and will eventually cause the dollar to become devalued (inflation). In reality, the US economy has exactly the opposite problem at the moment; even with very low interest rates capital investment is very slow and job creation is suffering. It is possible that the fed could go too far, but that doesn't appear to be a concern in the short term (except to a very vocal minority of economists).