ok. Let me try to explain better...
Today, let's say a lot in Belize is going for $100,000 USD. Today that is worth $200,000 BZD. If the value of the BZD drops by 50%, that would move the exchange from 2 to 1 to 3 to 1. If that happens then the same property which was purchased for $100,000 USD would now be worth 300,000 BZD. Because property is traded in USD, the worsening BZD seemingly made the value of the property increase, though it really didn't effect the value either way.
Now let’s take into account the economic impact that of a weaker BZD using the above scenario of a move from 2 to 1 to 3 to 1. A weaker dollar almost always attracts tourism from countries with stronger dollars. Why? …because it is now a dirt cheap place to visit. Canada border towns used to see this effect from the United States and the US is now seeing the effect from Europe. Wouldn’t you like a 50% discount on every hotel, restaurant, airplane ticket and cab ride?
Since Belize’s economy is hugely affected by the tourist dollar, with more tourists comes a stronger economy. That BZD would almost certainly rebound… so what happens to the property value when the BZD gets stronger.
Let's say the BZD rebounds back to its original 2 to 1. Did you lose $100,000 BZD in the value of the property you purchased? You might think so since when you originally spent $100,000 it was equal to $300,000 BZD but that same $100,000 is now only worth $200,000 BZD. However, regardless of the value of the Belize dollar, since property is traded in USD, the value of your property is still $100,000 USD, plus or minus the effect the economy has had on whatever you could sell the property for now. With all the new tourists that have found out about our lovely island, your property would be an easy sell at a hefty profit.
What would be a problem is if when they unlocked the BZD from the USD, they also converted to trading property in BZD. Then I'm with you 100%.
Edited by deadserious (03/20/08 02:29 AM)
Now back to your regularly scheduled drivel...