Invest in Israeli New Shekel?

[Deleted member 4644]

I see their rates hover around 10%... what do you all think about thowing some USD into an Israeli bank and earning that sort of interest rate... what are the potential problems? (Other than fluctuating exchange rates?)

 

[chiwawa626]

Prolly woulda made tons more by importing iraqi dinar and ebaying it rite when the war started

 

[Zim Hosein]

W/ the way the economy is now, I'm not about to put any money in a foreign bank, just my opinion

 

[Deleted member 4644]

Also, lets assume that there wont be a major Arab invasion hehe.. is that safe to assume?

 

[Deleted member 4644]

Originally posted by: Zim Hosein
W/ the way the economy is now, I'm not about to put any money in a foreign bank, just my opinion

What would be the main reasons for that?

 

[flamingelephant]

Originally posted by: LordSegan
Also, lets assume that there wont be a major Arab invasion hehe.. is that safe to assume?

When Israel has nukes? thats a given!

 

[0roo0roo]

Originally posted by: chiwawa626
Prolly woulda made tons more by importing iraqi dinar and ebaying it rite when the war started

lol yea, wish i had a dinar

 

[Zim Hosein]

Originally posted by: LordSegan

Originally posted by: Zim Hosein
W/ the way the economy is now, I'm not about to put any money in a foreign bank, just my opinion

What would be the main reasons for that?

Fluctuating exchange rates like you posted would be #1 on my list as well as not knowing enough of how the banking system in Israel works, for example is it insured.

 

[Shantanu]

Bank's in India pay high rates of interest too. But the inflation in India is very high. The real rate of interest is equal to nominal interest minus inflation. The Israeli bank is not going to pay you 10% on U.S. dollars. Your U.S. dollars are converted into Israel's currency, and then when you draw the money out, they convert it back into U.S. dollars at the exchange rate at that time.

Your best bet is to invest in a diversified portfolio of small cap stocks. They have averaged an 18% return in the last 100 years. And avoid tech stocks which are still ridiculously overpriced.

 

[Miramonti]

Originally posted by: Shantanu
Bank's in India pay high rates of interest too. But the inflation in India is very high. The real rate of interest is equal to nominal interest minus inflation. The Israeli bank is not going to pay you 10% on U.S. dollars. Your U.S. dollars are converted into Israel's currency, and then when you draw the money out, they convert it back into U.S. dollars at the exchange rate at that time. Your best bet is to invest in a diversified portfolio of small cap stocks. They have averaged an 18% return in the last 100 years. And avoid tech stocks which are still ridiculously overpriced.

Good answer regarding the inflation. It doesn't help to get 10% interest if you lose 5% on the exchange rate.

I'd seriously suggest the euro if you're a risk taker. The euro is continuing to gain strength on the dollar and will continue to gain solid economic leverage for many years to come. This is where its at for currencies.