Borrowing money from overseas

Since interest rates are dropping in the US, is there a way to borrow money from the US at their rates?

 

What about when the USD starts going the other way?

Back in the '80 a lot of people went bankrupt from doing exactly this but in the case mainly swiss franks.

Cheers

 

Hi CRC,

The other day I stumbled across Prosper: The online marketplace for people-to-people lending - Prosper
I'm not sure if you can borrow from them but the rates aren't actually that cheap...

Cheers,

Dan

PS the above is general information. Do not borrow or lend before speaking to a registered financial professional.

 

PPSS I think Japan has lower rates, if you know anyone that lives in Japan

 

I don't think Japan actually charges interest does it? lol

 

Lol.

Neither did I until I googled it!

0.25% is there Official rate, imagine borrowing a couple mil a 0.25% interest! Awesome!

BBC NEWS | Business | Q&A: Japanese interest rates

 

Yes but none of them were hedged. Hedging would be alot eaiser in todays market places than back in the 80s....

Why do you think Rams were doing so well. They borrowed cheap in US and sold it here at 3% + margins. Shame their cash rate when up and it has caused the end of them...

 

The hedging might be true for the 'Rams' of the world but for you to venture out and organize it yourself (which is the only way your going to get the 3%) and then organizing the hedge yourself (and continually monitoring it) is a little beyond the average IP investor.

Mind you I would be quite happy to have some lesson in the process for a $3 mil loan secured against MF's.

Cheers

 

Buying a currency hedge shouldn't be any harder than buying a option or a futures contract.. so I don't think it should be hard for a private investor.. however would a overseas bank deal with a australian citizen? Since the margin is getting larger and larger, it may be worth while looking into it.. as before the margin was small, so probably not worth it..

 

So, has anyone known where to borrow money from overseas yet?

 

How about these hedges then?

I have an offer to lend me money from a private investor in the US, and I'd like to learn how to use hedging to protect both his investment and my repaying.

Can someone please point me to a website where I can learn how to do this?

Thanks

 

A Beginner's Guide To Hedging

ALSO : Profiting From Carry Trade Candidates

 

Thanks Tropo.

Clearly a lot to learn, but necessity pushes me, so, on and upward!

 

Yep....learn as much as you can...but do not be pushed by necessities.

A bit of history....
Brit pound lost 15% of its value within days in Sep 1992, and 25% in about two months. 18 months later, the currency was quoted at the same level.
In Sep 1985, the US$ was exchanged for 3 deutsche marks.
In the long term - 10 years later the US$ could fetch only 1.34 deutsche marks, or less than 50% of its old value.
Hedging is like double edge sword. Should be considered along with the type of currency and the view of the specific currency. Used alone, and the time factor may be unreliable.
Good reading = “Trading in the Global Currency Markets “ by Cornelius Luca.

 

If you are going to consider borrowing money from the US you also have to consider the exchange rate, which could have a positive effect or negative effect to the overall picture. I would stick to Australia and fix for the next 2 - 3 years.

Take care
Pascali
MediLend

 

Lending off shore

Did anyone,find out how to ,get a foriegn currence loan?(sort of hope you didn`t,with the change in exchange rate)
I`m picking soon ,will be a good time to take a USD,or Yen loan.
But i`m not having much luck,finding a lendor.Any Suggeations,please email me

 

Most international loan providers seem to require that you earn an income in the loan currency, ie if you don't earn your money in USD then they are not willing to give you a USD loan.

St.George Brokers - Foreign Currency Home Loan

 

Would they lead it to you if it was used to purchase a cash flow positive investment in the respective country?

 

Well most of the ones I have looked into really were only offering to lend for the purchase of property.

 

With the @rse having fallen out of the US property market, wouldn't there be an opportunity to pick up a cash flow positive property over there?

In addition, I also recall reading somewhere that the US also allows loans to be fixed for much longer periods than are available here...

[I think I have just convinced myself to look into this further...]