High Returns On Deposits

[JohnnyK]

Hmm...have you been here? I have lived/worked in many places in the world and there are far more "shitholes" than Georgia. By the way, the Habs blow. Go Wings....

No worries. Liverpool sucks, too.

[CheshireTom]

No worries. Liverpool sucks, too.

 

I bet Andy Carroll seemed a good investment at the time ....

[jacko]

I'm the one... the guy looked for me not a bullshitter.... at least he learnt to speak russian perfectly, what is a big effort to establish something... I met also his georgian staff looked OK.... ( we talked in russian and georgian... bet it.. I speak a bit georgian... ) OK.. I know, it is something really small thing...Until I can get 8% in Hungary i lament....but being an EU / USA member with the 1-2 % I would try their offer... OK... just with an amount I'm ready to lose.. High income, high risk... Georgia even for me is a big question....( despite of my local knowledge ) but however.... how many of you would invest in my hungarian local bank account I invested all of my money and I receive the 8 % and i count it safe... only because i'm hungarian and I feel myself safe and home... ... and I only hope I have some knowledge...and i may be wrong...

I would be careful sticking my neck out like that Gabor...... how well do you know the guy, how many times have you met him?

Have YOU invested money?

 

That is the problem with these emerging countries and their desperate interest rates, there is high risk and the money is based in a falling currency. Sure there is money to be made too....if the currency recovers.

Your 8% in Hungary, if based in the Hungarian Forint, currently worth £0.00, has cost you. Let us be relative to Thai baht, where you spend a lot of your money these days. Over the last 12 months, the forint has fallen from about 0.163 to 0.140 baht... that is a fall of 14% in baht relative value. Add on your 8% interest and you are still losing. Better to have bought Thai baht and got 2% interest and an appreciating currency. If your deposits are in $, well I apologise, I would certainly chase a US$ based account offering 8% p.a.

 

Right, we have one poster to support the claim...

Some of the other guys on the board know me

...anybody else, particularly investors. Edited March 31, 2012 by jacko

[davebuczek]

I would be careful sticking my neck out like that Gabor...... how well do you know the guy, how many times have you met him?

Have YOU invested money?

 

That is the problem with these emerging countries and their desperate interest rates, there is high risk and the money is based in a falling currency. Sure there is money to be made too....if the currency recovers.

Your 8% in Hungary, if based in the Hungarian Forint, currently worth £0.00, has cost you. Let us be relative to Thai baht, where you spend a lot of your money these days. Over the last 12 months, the forint has fallen from about 0.163 to 0.140 baht... that is a fall of 14% in baht relative value. Add on your 8% interest and you are still losing. Better to have bought Thai baht and got 2% interest and an appreciating currency. If your deposits are in $, well I apologise, I would certainly chase a US$ based account offering 8% p.a.

 

Right, we have one poster to support the claim......anybody else, particularly investors.

 

Actually the Georgian Lari (GEL) has been very strong the past 3 years. During 2011 it appreciated against the USD and other currencies (http://nbg.ge/?lng=eng). The investments can be in any currency you choose so there would be no currency risk to the investor, however we do not want currency risk and we will hedge this risk based on the deposits/loans received and loans given. Also most borrowers have a choice of what currency to borrow in.

 

As I have said many times, happy to discuss in person when I am there next week or on the phone to give more details.

Edited March 31, 2012 by davebuczek

[davebuczek]

No worries. Liverpool sucks, too.

 

Damn, I knew the support of a friend would get me in trouble some day. Don't really care for soccer, but put it up for a guy I met from Liverpool. Most know him as the best dancer on the FLB Board...

[davebuczek]

Q. What's the difference between Georgians and Nigerians?

A. Nigerians are slightly more trustworthy.

 

 

p.s. wasn't Stalin a Georgian?

 

Have never been to Nigeria, but Georgian's are very trustworthy people and good people (I wouldn't have stayed so long if it was different). Yes Stalin was Georgian, so I guess all Georgians are like him? Out of all of the former Soviet countries, Georgia is far ahead of most (if not all) in regards to democracy, corruption (I mean low), business environment etc. Come for a visit, I will be happy to show you around and your views will be different.

Edited March 31, 2012 by davebuczek

[jacko]

Actually the Georgian Lari (GEL) has been very strong the past 3 years. During 2011 it appreciated against the USD and other currencies (http://nbg.ge/?lng=eng). The investments can be in any currency you choose so there would be no currency risk to the investor, however we do not want currency risk and we will hedge this risk based on the deposits/loans received and loans given. Also most borrowers have a choice of what currency to borrow in.

 

As I have said many times, happy to discuss in person when I am there next week or on the phone to give more details.

Well in Jan 11 it was around 1.78 and at the end of the year 1.66/$ so yes it has appreciated...... and it does seem to be holding there .

 

I had to get data from your link as Yahoo doesn't seem to be able to go back very far.

Are you proposing that I can open a Georgian bank account, in £STL, and it can attract interest at 10-15% p.a.?

[davebuczek]

Well in Jan 11 it was around 1.78 and at the end of the year 1.66/$ so yes it has appreciated...... and it does seem to be holding there .

 

I had to get data from your link as Yahoo doesn't seem to be able to go back very far.

Are you proposing that I can open a Georgian bank account, in £STL, and it can attract interest at 10-15% p.a.?

 

Yes, you can open the account in any currency you like. We would hedge this with loans given in £STL, purchasing option/future contracts, etc. as we don't want to be exposed to currency risk. I will leave that to the currency traders.

Edited March 31, 2012 by davebuczek

[Gabor]

I would be careful sticking my neck out like that Gabor...... how well do you know the guy, how many times have you met him?

Have YOU invested money?

 

That is the problem with these emerging countries and their desperate interest rates, there is high risk and the money is based in a falling currency. Sure there is money to be made too....if the currency recovers.

Your 8% in Hungary, if based in the Hungarian Forint, currently worth £0.00, has cost you. Let us be relative to Thai baht, where you spend a lot of your money these days. Over the last 12 months, the forint has fallen from about 0.163 to 0.140 baht... that is a fall of 14% in baht relative value. Add on your 8% interest and you are still losing. Better to have bought Thai baht and got 2% interest and an appreciating currency. If your deposits are in $, well I apologise, I would certainly chase a US$ based account offering 8% p.a.

 

Right, we have one poster to support the claim......anybody else, particularly investors.

 

As I mentioned I know a little the guys, but usually I can make a good profiling... usually, but not every times, see how I became the sad, lame loser when the smart guy stole my money last year... ( and even then I made a decision with an amount I can write down ) however I repeat what I wrote: " OK... just with an amount I'm ready to lose.. High income, high risk.."

 

No, I don't invested, the local ( hungarian ) 7-8 % is enough, for me not a big difference....

 

About the HUF... yes, it lost some worth... in the last summer it was 1THB = 6.+ baht, today 7.17 HUF... but what I lost on the weakening is less, than what I won on the %...as I use the % for the daily costs and not saving... Nothing like when I speculated on the GBP years ago... 1 GBP was 400 HUF and when it was fallen to 355 I stepped in...on the next few days 1 GBP was 298 HUF... I was sitting 3 years on this failed speculation and sold it with a huge loss...

[JohnnyK]

Damn, I knew the support of a friend would get me in trouble some day. Don't really care for soccer, but put it up for a guy I met from Liverpool. Most know him as the best dancer on the FLB Board...

Born in Liverpool but I'm not much of a soccer fan either. I know a shite team when I smell it.

[Grandpollo]

Yes, you can open the account in any currency you like. We would hedge this with loans given in £STL, purchasing option/future contracts, etc. as we don't want to be exposed to currency risk. I will leave that to the currency traders.

 

It would be interesting to see who is doing FRA's , Swaps or futures on Georgian funds against US, Euro or Stg. that is not as risky as this investment company is.

[jacko]

As I mentioned I know a little the guys, but usually I can make a good profiling... usually, but not every times, see how I became the sad, lame loser when the smart guy stole my money last year... ( and even then I made a decision with an amount I can write down ) however I repeat what I wrote: " OK... just with an amount I'm ready to lose.. High income, high risk.."

 

No, I don't invested, the local ( hungarian ) 7-8 % is enough, for me not a big difference....

 

About the HUF... yes, it lost some worth... in the last summer it was 1THB = 6.+ baht, today 7.17 HUF... but what I lost on the weakening is less, than what I won on the %...as I use the % for the daily costs and not saving... Nothing like when I speculated on the GBP years ago... 1 GBP was 400 HUF and when it was fallen to 355 I stepped in...on the next few days 1 GBP was 298 HUF... I was sitting 3 years on this failed speculation and sold it with a huge loss...

If it was 6/baht, then became 7.17, in say a year, that is a loss of 15% in baht terms.... you would be losing by making 8% interest. I grasp that you have expenditures in Hungary, but so far this year you have needed Thai baht. I too lost the value of a small car or two, when I gambled on a falling £ and bought US$ some years ago, currency speculation is not for the faint hearted. Anyhow, this thread is about Georgia, which seems economically more steady..... and I wished to establish how well you know the OP, after all, people with something to sell generally are affable!

[davebuczek]

It would be interesting to see who is doing FRA's , Swaps or futures on Georgian funds against US, Euro or Stg. that is not as risky as this investment company is.

 

Sorry, not sure I understand what you mean. What I meant by "leaving that to the currency traders" was that I do not want to be in the business of trading currencies and taking currency risk. I am sure there are many people that are successful at doing that, but FOREX speculation is not something I am comfortable with. I want as little currency risk as possible and don't plan on having huge gains/losses on FOREX.

Edited April 1, 2012 by davebuczek

[Gabor]

If it was 6/baht, then became 7.17, in say a year, that is a loss of 15% in baht terms.... you would be losing by making 8% interest. I grasp that you have expenditures in Hungary, but so far this year you have needed Thai baht. I too lost the value of a small car or two, when I gambled on a falling £ and bought US$ some years ago, currency speculation is not for the faint hearted. Anyhow, this thread is about Georgia, which seems economically more steady..... and I wished to establish how well you know the OP, after all, people with something to sell generally are affable!

 

I don't need the capital, ( it will fluctuate anyway, today's good currecy will be the bed decision for tomorrow and back again, unless something dramatic happens, like the Soros manipulation against the GBP ) I don't touch it, I need only the % for personal use....

 

Let see an example how it works with a hypothetic 10.000 EUR bill:

 

 

10.000 EUR % 2 = 200 EUR = 8000 THB

 

As today ( stll not bad ):

 

10.000 EUR X 294 = 2.940.000 HUF % 7 =205.800 HUF / 7.14 = 28702 THB

 

As at the summertime:

 

10.000 EUR X 265 = 2.650.000 HUF % 7 = 185.500 HUF / 6.10 = 30327 THB

 

I lost cca 2000 baht annualy on the devaluation of the HUF, but still earn 20.000 baht more, than on the EUR bill with 2%.

[jacko]

I don't need the capital, ( it will fluctuate anyway, today's good currecy will be the bed decision for tomorrow and back again, unless something dramatic happens, like the Soros manipulation against the GBP ) I don't touch it, I need only the % for personal use....

 

Let see an example how it works with a hypothetic 10.000 EUR bill:

 

 

10.000 EUR % 2 = 200 EUR = 8000 THB

 

As today ( stll not bad ):

 

10.000 EUR X 294 = 2.940.000 HUF % 7 =205.800 HUF / 7.14 = 28702 THB

 

As at the summertime:

 

10.000 EUR X 265 = 2.650.000 HUF % 7 = 185.500 HUF / 6.10 = 30327 THB

 

I lost cca 2000 baht annualy on the devaluation of the HUF, but still earn 20.000 baht more, than on the EUR bill with 2%.

Why have you invoked Euros into the calculation? I presumed you held HUF... if you are holding Euros, you are protecting yourself against HUF devaluation.

If not, your principal is devaluing. You have also double invoked the exchange rates.

The way I see it, you had 2,650,000 HUF in the summertime (worth 434k baht), now you have 2, 650,000 HUF (worth 371k baht...) You lost 63,000 baht on the principal and took out the interest, 30,000 baht. You are losing in baht terms!

[Gabor]

I don't lost at all. I got higher amount baht to use, whilst true, my capital worth much less at tis moment. The worth of my capital in baht not important as long as I get 20.000 baht more from the HUF compare to the 10.000 EU %. The worth of the capital always can change up and down in any currency. The volatility is my friend, sometimes to lose the worth of the capital, sometimes to win... and if lucky change it in the good moment... The worst step IMO to leave now the HUF : lost the capital worth and lost the good % The HUF climbed up to 320 / EUR in december... still was worth to hold it in HUF.... Your logic is right if I wanted to use the capital...but I don't want to touch it, only the % I can get.. We are both right, just from different views....

[jacko]

I don't lost at all. I got higher amount baht to use, whilst true, my capital worth much less at tis moment. The worth of my capital in baht not important as long as I get 20.000 baht more from the HUF compare to the 10.000 EU %. The worth of the capital always can change up and down in any currency. The volatility is my friend, sometimes to lose the worth of the capital, sometimes to win... and if lucky change it in the good moment... The worst step IMO to leave now the HUF : lost the capital worth and lost the good % The HUF climbed up to 320 / EUR in december... still was worth to hold it in HUF.... Your logic is right if I wanted to use the capital...but I don't want to touch it, only the % I can get.. We are both right, just from different views....

Enjoy the downhill slalom....

[Gabor]

Enjoy the downhill slalom....

 

 

true... I rember when the THB was 4.5 HUF....( just like the EUR 50 baht, the GBP 70 baht and the USD 40 baht ) then I had no big plans in Thailand so I missed the chance to move a bigger amount to my thai account... Easy to be wise afterward....OK.... just for fun...play a game and check our results in 6 months... let's make a higher bid... let's play with a hypothetic 100.000 EUR... the money now in HUF in the very bad 294 exchange rate to compare with the past, but still easily may drop down dramatically to the 320 ( as it happened in december ) or maybe to the worst...

 

My bet is to hold it in HUF, maybe change to EUR IF there will be around 270 and waiting for an other drop IF will happen...

 

Remember, our game goes about the possible % to squeeze out per month, not about the worth of the capital...

 

What is your bet ???

 

Just a game....

 

And as a game, any other bets, opinions are welcomed...and appreciated...

 

( Admin please: Can you split our debate with Jacko to an other thread to not threadfuck Davebuczek's thread ?? Under the name maybe HUF vs EUR and the % to squeeze out ... or what you see the proper one...)

Edited April 1, 2012 by Gabor

[Grandpollo]

Sorry, not sure I understand what you mean. What I meant by "leaving that to the currency traders" was that I do not want to be in the business of trading currencies and taking currency risk. I am sure there are many people that are successful at doing that, but FOREX speculation is not something I am comfortable with. I want as little currency risk as possible and don't plan on having huge gains/losses on FOREX.

 

What I meant is larger and more reputable banks won't participate in derivative contracts with some (many, actually) illiquid currencies (mainly because at the end of the day they don't want to be stuck with them). Even India rupees are frequently on the no trade list so I cannot imagine Georgia.

 

I'd put the Georgian local currency in that pot which means the hedging you depend on to pay my US$ income and return my money is backed up by a no-name bank that might default, too.

 

All in all the original observation stands. Unknown counterparty (you, nothing personal) with sky high returns in a dodgy country with sketchy hedging all translates into something people should avoid.

 

Add to that soliciting deposits from Thailand mongers on the internet and that's a ribbon and bow wrapped around it all.

[jacko]

true... I rember when the THB was 4.5 HUF....( just like the EUR 50 baht, the GBP 70 baht and the USD 40 baht ) then I had no big plans in Thailand so I missed the chance to move a bigger amount to my thai account... Easy to be wise afterward....OK.... just for fun...play a game and check our results in 6 months... let's make a higher bid... let's play with a hypothetic 100.000 EUR... the money now in HUF in the very bad 294 exchange rate to compare with the past, but still easily may drop down dramatically to the 320 ( as it happened in december ) or maybe to the worst...

 

My bet is to hold it in HUF, maybe change to EUR IF there will be around 270 and waiting for an other drop IF will happen...

 

Remember, our game goes about the possible % to squeeze out per month, not about the worth of the capital...

 

What is your bet ???

 

Just a game....

 

And as a game, any other bets, opinions are welcomed...and appreciated...

 

( Admin please: Can you split our debate with Jacko to an other thread to not threadfuck Davebuczek's thread ?? Under the name maybe HUF vs EUR and the % to squeeze out ... or what you see the proper one...)

Not really a sensible way to look at it, it isn't even an annuity, your principal may be holding it's value in HUF, but you are too heavily tied in to a falling currency.. You also fail to address when the interest in HUF, is insufficient for your needs in Thai baht. In fact it is closer to what was my original aim on retirement. Which was to spend the interest and a small percentage of the principal, with the ultimate aim of having little left when I no longer needed it (my demise or my dementia!). The demise of the financial world put paid to that, interest rates became near zero!

 

But surely your game can be taken to the past, 12 months ago, and you spend all your interest which let us say is 7% on the HUF, and 1st April 2011, you had your 100,000 Euros.You banked it in HUF, getting 265/Euro, a balance of about 26.5 Million HUF. At 7% you would get 154,600 HUF/month.

On the 1st May 2011 you took out the interest, 25,800 baht(at 5.9531 HUF/baht)...not bad.

On 1st April 2012, you took out the interest, 154,600 HUF, (at 7.164), 21500 baht, oops, 4 less LTs.

Plus you now only have 90,000 Euros in the bank.........

Had you put the Euros in the Thai bank, 4.3 million baht, take out 25kbaht/month, residue, 4.0 million baht, which is 97.000 Euros, without adding any Thai interest whatsoever (2.65% a year go).

You should put your money with davebuczek!

 

Sorry about this thread fuck OP, but in the end I recommended you!

Edited April 2, 2012 by jacko

[davebuczek]

What I meant is larger and more reputable banks won't participate in derivative contracts with some (many, actually) illiquid currencies (mainly because at the end of the day they don't want to be stuck with them). Even India rupees are frequently on the no trade list so I cannot imagine Georgia.

 

I'd put the Georgian local currency in that pot which means the hedging you depend on to pay my US$ income and return my money is backed up by a no-name bank that might default, too.

 

All in all the original observation stands. Unknown counterparty (you, nothing personal) with sky high returns in a dodgy country with sketchy hedging all translates into something people should avoid.

 

Add to that soliciting deposits from Thailand mongers on the internet and that's a ribbon and bow wrapped around it all.

 

Rick, our functional currency will be the USD, not the Georgian Currency (Lari). The GEL is very liquid within Georgia and surrounding countries. I would only use derivatives to hedge (i.e as insurance to protect against currency risk). But, most of the deposits I get and loans given out will be in USD, GBP or EUR which are not illiquid (at least the last time I checked).

 

If you would do some research you would see that many banks in Georgia have very good ratings and the largest bank (Bank of Georgia) is premium listed on the London Stock Exchange. Would that be some no name bank? There are also large banks from France (Societe Generale) and Germany (ProCreditBank) with good ratings that have been here many years. Also HSBC is here, ever heard of them?

 

Please stop being so critical before you do a little research. Georgia is a very stable country, has democratic elections and has very low corruption (not dodgy as you say). Again I invite you to come and I will show you around and I think you will have a much different picture.

Edited April 2, 2012 by davebuczek

[gaijin]

Right, hand over my money to a complete stranger on the internet. Claims he will meet you in person to try and put you at ease that his will not try and screw you out of your money by just disappearing one day. Anyone who falls for this probably deserves to have his money stolen.

[MM]

Right, hand over my money to a complete stranger on the internet. Claims he will meet you in person to try and put you at ease that his will not try and screw you out of your money by just disappearing one day. Anyone who falls for this probably deserves to have his money stolen.

 

Quite a few of us know him, gaijin, though of course you don't. The point being that he isn't a complete stranger to many.

The idea actually sounds like it might have some merit for some.

[jacko]

Quite a few of us know him, gaijin, though of course you don't. The point being that he isn't a complete stranger to many.

The idea actually sounds like it might have some merit for some.

Agreed.... I think we need to see a few more people to come forth admitting to knowing the OP.... so far only Gabor, (and MM, but it seemed 'oblique'?).

 

But it is a step from knowing someone, to endorsing him as a trustworthy recipient of one's hard earned.

 

I can understand, as I have had things come my way like this, and due to past issues, I was unwilling to move forward. When I did, I was pleased for once, but it was a year later before I would consider recommending myself.

[Grandpollo]

Something of interest is the OECD financial country risk rating for Georgia is 6. This is on a 7 point scale. USA UK Germany are 0. Afghanistan is 7. Thailand is 3.

 

Moody's rates it Ba3 or non investment grade speculative. UK is Aaa as is Germany or "prime". S&P have similar ratings.

 

Best wishes with the business but this is a risky way for non residents to invest.