Wiz'n'Ton

We changed our first bit of money at $2.76 to the pound in Jan last year. Now we have some more to change it is $2.40 to the pound with no sign of a change any time soon.

What are you lot doing with your moolah? Sitting on it in the UK in the hope of a change around, or swallowing the (admittedly perceived) loss and changing it now to get on with your lives?

Any seat of the pants, semi-informed, armchair money market dudes out there want to either piss on my chips or inflate my balloon of hope in this respect?

At the moment I am on the 'sit on it' side of the fence - is the grass greener over the other side d'ya think?

Tan0410

While we're at it can someone fill me in on this Capital Gains malarkey....

Rumour has it that (when moving to Oz) if you sell your house you have 6 months to import the money into the country otherwise you get stung for Capital Gains? Is this true and does it apply to NZ too?

Was thinking of stashing it all away offshore?

God when did I get so old that I have to worry about Capital Gains....still feel 20

p.s. Wiz 'n' Ton this is a link for some recent advice I was given on the forum. http://britishexpats.com/forum/showthread.php?t=517203

Wiz'n'Ton

Nice one I'll check it out.

From our experience, you can buy, sell and take the profit with impunity in lovely NZ! No capital gains here, and no restictions (as yet) on who can buy here. The only limitations are on who can get a mortgage, as you need 20% down if you are a non-resident, or to be a resident or citizen for anything more.

mcuddy1

Hi Big Guy

With a NZ election this year and the National party in pole position, I would sit tight as they have promised to do something about the over inflated NZD.

It cannot stay this high, someone will get the jitters and a sell off will start.

Cheers

Genesis

Hi there, we have money in the Uk and are currently flat skint. Don't want to bring said UK funds to NZ due to punative exchange rate. Thus we have set up a draw down mortgage with Westpac for about $75k to draw on as and when we need money. Hopefully whatever we use will be paid off in Oct. 2008 when a small investment matures. We think its worth paying 10.3 % calclated daily ( which is favourable apparently ) and it only cost us $120 to set up after Westpac paid $300 towards costs. There are no redemptions and nothing else to pay. If we take 5K out of it tomorrow we pay 10.3 % until we pay the 5k back, simple and sweet. Hopefully next year we can draw down some UK money at 2.7-2.8????????????????????????????????????

Wiz'n'Ton

Hey dude. I'm certainly hoping so - just like that blip late last year that saw it go from 2.6 to nearly 3.0 in a day. Another one of them please!

Wiz'n'Ton

Hmmmmm... that's pretty handy. I can see myself getting into loads of trouble with that though and would end up like most other Kiwi's and up to my ears in debt. 10.3% is a blimmin' good rate though for what is in effect a short term personal loan. Cheers for the tip.

Yotty

The high Kiwi exchange rate will only subside when the house prices have cooled off ! It looks even less likely now that uk interest rates are sliding ..

Genesis

Yes that's just what it is..an incredibly cheap personal loan, however they do have the house if I don't pay them back. So they have them selves well covered. The nice thing is the incredible flexibility and the daily interest. The money sits in our current account for nothing just waiting to be used. If I start using any of the 75k as soon as Kate's wages go into the account that knocks the loan down a bit..so on and so on. Undoubtedly the best way to borrow money..unless you don't pay them back and they sell your house!!!!!!!!!!!!!!!!

Yotty

http://tvnz.co.nz/view/page/1316907/1621372

Wiz'n'Ton

OK, so I've just read that link. My grandad always said 'if you don't know, ask' (and my grandma said 'better to be thought stupid and stay quiet, than to open your mouth and confirm the fact' but what did she know, eh? ) so could someone educate me with a quick 'what is inflation' 101 course. My questions are:

What is inflation?
Why is it a bad thing?
Why and how are interest rates used as a tool to control it?
What relation does this have to property prices?

I know it sounds stupid, but I am missing something pretty major here and it would be good to be filled in. Really simple explanations using sticklebricks or fuzzy felt as examples are more than welcome

Genesis

Inflation is a 'basket of goods and services' taken by the govt over a period of time, say 12 months, the difference in the increase of that price betwixt month 1 and month 12 is the rate of inflation. For example Germany's economy afore the 2nd world war went quite mad, the mark was vitually worthless a a result of spiralling inflation (things costing more), thus on Wednesday a loaf of bread cost 1 wheel barrow load of marks and the following Weds it was 3 barrow lots.

Inflation is a bad thing because more of our paypacket has to go on this ever increasing basket of 'goods'.

The reason interest rates are hiked by the government are to deter people from spending on their credit cards as that's how most of us live, (so I undertsand) to stop the economy becoming 'overheated' this in turn will affect the mortgage rate as the the rate that Dr Cullen choses to raise or lower is directly linked to the mortgage rate.

Thats what I think it is..please correct me where wrong. I am keen to learn too. I wish I knew how the money markets worked!!!!!!!!!!!!!!!!!!!!!!!!!!!

P2L

Think someone needs to go and check their 'shopping basket' then, cos from where I'm sitting, things have got a whole lot dearer in the 11 months we've been here :curse:

Kippers

Inflation: increase in the supply of money in an economy.
Deflation: decrease in the supply of money in an economy.

http://globaleconomicanalysis.blogsp...eck-is-it.html

Mistake to think inflation is necessarily only to do with CPI price rises, as at times (now for instance) you get increasing consumer prices at the same time as money supply dries up.

If you want to understand why inflation is a necessity and welcomed under our money system see:
http://video.google.com/videoplay?do...74362583451279

As good an explanation of what money really is as you will find.

Deflation (in the extreme, the 1930's depression) is the really big fear, especially for banks, financiers and the rich etc. as it destroys wealth.
Deflation is probably what we are getting now, as credit dries up around the world and investments are being wiped out (finance companies, property prices, hedge funds, bank assets etc all losing billions).

Kip

Wiz'n'Ton

Cheers Kip and Genesis - makes things a little clearer. Not really as simple an answer as I had expected. Saw that other vid when you posted it a while ago. Bloody amazing, eh?!

It has made me realise a few things I can tell ya.

Cheers folks