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Gabe,
Like every story, there are two sides to this one, as well.
First of all, the Indian Rupee is ever unlikely to get dearer (over long term),
against most major western currencies. The logic being: the Indian government
works overtime, to ensure the deliberate weakness of its currency.
Therefore, if you just hang on to your Pounds, Euros or Dollars, you'd more
likely come out a winner over long term basis - roughly, a ten year period. If
the British and Indian economies keep cranking at their respective current pace
and if you factor in, the expected Indian government's intervention to keep its
currency value lower, you could almost guarantee yourself that your Pound would
fetch 100 Rupees or more, for every Pound you sell in about 5 years.
This brings me to the other side of the story:
I have been drawing a quite chuckle, every time I read foreigner's are buying
land and other immovable assets in Goa. In my opinion, these guys have no idea
what they are getting into!
The expected gain in the value of their assets, would almost get wiped out, by
the devaluation of the Rupee. Moreover, its risky to purchase land/apartments
in Goa, specially, if they get caught up in legal hassles with the locals. Goan
courts are notoriously slow in dispensing off cases, should you get entangled
in one.
To drive my point home, let me explain this scenario with a personal experience:
I purchased an apartment in Candolim in the mid-nineties. For arguments sake,
lets says I paid 1 million (10 lakh) Rupees. I exchanged my dollars at that
time, for something like 32 Rupees to a USD - or a total value of $31,250.
Now fast forward to the year 2006 and compare the outcome:
The apartment is now valued at 1.5 million (15 lakhs) Rupees. If I sell it and
convert the amount back to US Dollars - what do I get back? A lousy $32,600 (at
46 Rupees to a Dollar). And this does not include other costs such as brokerage
fees, stamp duty, capital gains tax (if any), currency conversion costs and all
the other hassles, one has to go through. Also, note that the US Dollar, is
amongst the currencies that grew the least in value, versus the Indian Rupees
over that time. Thank god, the Rupee is only at 46 at the moment; had the Rupee
gone down to 55 against the USD, I would have gotten clobbered.
If I invested $30,000 ten years ago, into some stupid fund, I'd have doubled my
money by now. Considering I work on Wall Street and would admit, I am
reasonably good at investing on my own (instead of plowing the money in the
funds), I could have made much more!
So now, do the "defensive" Goans, see my point ?
Let the foreigner's buy as much properties as they want. They aren't going to
make much - actually, they would take on more risk and almost always loose.
A smart Britisher would be better off, investing his money at the London Stock
Exchange.
Jim Fernandes.
New York.
-------------- Original message ----------------------
From: "Gabe Menezes" <[EMAIL PROTECTED]>
> Sterling is riding high! In Margao you should get at least 87 Rupees
> to the Pound. Better still sell up and migrate to Goa!!
>
> Have a ball, your money will buy more, you will be helping the economy
> as well! Buy before its too late!!
>
> Sterling is high because of USD weakness!
> --
> DEV BOREM KORUM.
>
> Gabe Menezes.
> London, England
> _______________________________________________
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