The big news over the past two months has been the vast shifts in currency values.
- The Japanese are much richer.
- The Americans are richer (though their economy is collapsing).
- The Europeans are chugging along, a little poorer.
- The Eastern Europeans are slightly poorer than them.
- The Brits are quite a lot poorer, so are most Latin Americans
- The Kiwis and the Australians are very much poorer
- The Icelanders - let us not speak of them.
The crisis means that the Americans and (particularly) the Japanese will be more visible as property buyers.
For you and me, it opens up opportunities in New Zealand and Australia, in South Africa, and in Latin America.
Moral: Every cloud has a silver lining.
Japan. Consider how much cheaper Australia is for Japanese. What used to cost Y105 now costs only Y58.
These last happy three months (from the Japanese perspective) should mean lots of Japanese looking for mansions with swimming pools! Double the money – nice.
In Latin America there are also some big losers. Countries with strong currency declines:
- Mexico
- Brazil
- Chile
- Uruguay
- Colombia
The Colombian peso (which is typical of this group) has fallen quite sharply:
Latin American countries with moderate currency declines:
- Peru
- Argentina
- Guatemala
Latin American countries currencies which are US$-pegged, so no movement -
- Venezuela
- Panama
- Ecuador
- Costa Rica
We were recommending Latin America before the crisis. It is even better value after the crisis, especially for American buyers. Rather than admitting we made a mistake, we’re going to redouble our recommendations!
Eastern Europe has suffered less in the recent crisis than might have been expected. The Bulgarian peg to the Euro has remained firm. The Baltic pegs to the Euro have all survived (so far), despite volatility.
The Hungarian Forint, Czech Koruna, and the Turkish New Lira have fallen, but not disastrously. Even the Russian Rouble hasn’t done so very badly.
Ukraine has been forced by the IMF to delink from the dollar, and the Hryvnia has fallen strongly against the dollar, somewhat against the Euro. But local economists wanted this to happen even before the crisis.
The disaster is the Icelandic Krona, which this year has lost half its value against the Euro.
Icelandic Koruna is to Euro, as Australian dollar is to Yen.
The South African Rand has fallen sharply.
However the Arab currencies have remained firm.
In Asia, the two major losers are the Indonesians and the South Koreans.
- The South Korean Won has nearly halved in value:
- The Indonesian Ruppiah has declined significantly:
The world’s press has concentrated on the losers in the crisis.
It may be worth remembering that there were winners too, relatively speaking - the Japanese.