Dollar - Reasserting itself as the global safe haven?
People predicted dire consequences for the dollar during the height of the recession, most of which never materialized. Then again, history has taught us several times not to underestimate the incredible strength and resilience of the US economy.
Over the past two years the €/$ rate has varied from $1.24 - $1.59, with an average of $1.41. It is now $1.27, more or less the same as it was in Oct-Nov 2009 and in Feb-March 2010.
Falling currency - How does that affect an investment you are considering?
Despite the unpredictability of all this, our feeling is that the euro will continue to weaken against the dollar for some time. It´s difficult to think about how this can be used to your advantage in the abstract so let´s use a Mosaic property costing $75,000, which is priced 65% lower than its peak.
Three months ago it would have cost you €55,000 to purchase $75,000. Now it would cost €59,000. It´s tempting to think that you´ve missed the boat as the price has "gone up" by €4,000 and/or that you´re not getting a 65% discount anymore. Both are misleading.
Look at it the other way. You pay the €59,000 and in a few months time the US/EU exchange rate moves from $1.27 to $1.17 (very possible). If you convert your $75,000 back to euro you´ll get €64,000. Have you lost €4000 or gained €5000?
Put your money to work
There´s also the rental income you can earn (good luck getting 10% in an EU country from a €60,000 property), the capital appreciation potential (prices have still plenty of room to fall in most EU countries) and above all, the fact that your money is working hard in an appreciating asset in a recovering economy rather than languishing in a bank in a slow economy generating 1-2% interest. Isn´t it better to read positive news about the US economy when you have assets there?
Florida property provides a lower cost asset, at a higher yield and significantly better capital appreciation potential than anything comparable in Europe.
More importantly, it is vital that investors start thinking about diversifying away from euro assets and into income generating assets in other currencies. You do not want to have all your money in euros when the US market is thriving and the euro currency outlook is weak and uncertain due to rogue member states.
American Capitalism
The recession in the USA is coming to an end - economic indicators are positive and the dollar is rising. In short, try not to let economic stagnation and fear in the EU prevent you from taking advantage of exceptionally low prices in the wealthiest and most dynamic country in the world.
Invest in the USA - it is American capitalism that has allowed big developers and banks to fail and it is their blue chip assets that can still be purchased for cents on the dollar.
At Torcana we always do our best to bring a genuinely open and honest assessment of the investment environment and we position our product range accordingly. 
