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Re: Interest rate differentials
I think that that type of leverage has its uses in the spot trade in real estate.
My suggestion albeit untested would be something more like 2 to 1 on a governmet secured bond of some sort in the UK. Skip the forex broker do the real deal through a bank. Then again I dont have any contacts at the bank of Japan so I cant help there.
When you use a broker youre buying a contract not the actual currency. When you have the actual currency on a bank wire things go sour with the exchange rate. You will still have your real sterling to look for a new investment in the FTSE or some other method inside the UK.
EhhHem...in short...keep your currency real for longer term investments. If you get caught in a position where your cable cant leave the UK without losing value. You can still find an alternative cable denominated investmet to continue to grow with.
I like your thinking a lot. It is the stuff that wealthy people are made of. Find a cheap source of money combine it with moderate returns. Warren Buffett started his fortune by harassing his family friends to give him money to invest then split the profit 20/80. The friends family spent the 80 he reinvested the 20...the rest is history.
If foerx isnt the way to make it happen. Its not the end of the world just the start of the search for a new source.
Keep us posted.
Regards
PSY
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