Buy Junky Currencies  

Oleh:

Beller, Peter C.

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Forbes Asia vol. 5 no. 10 (Jun. 2009), page 40-41.
Topik: Devaluation; Investment; Financial Crisis; Interests; Annual Profit

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: FF5.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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If you can stomach the occasional devaluation, it makes sense to own an assortment of trashy-looking foreign exchange contracts. It's June 2006 and you're looking for a low-risk investment. The financial crisis isn't even a rumble on the horizon yet, but you're wary of anything connected to the easy-money-fueled run-up in real estate and stocks. You decide to borrow Japanese yen, exchange them for dollars and stick the proceeds into one-year U.S. Treasurys. The yen cost you less than 1% to borrow, while Treasurys are paying more than 5%. Since banks require you to put down only 20%, the four-percentage-point interest rate spread earns you a 20% annual profit. Bear markets, bankruptcies and changes in governments don't bother you. The only thing that can go wrong is if your dollars fall in value against the yen that you must repay.

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