The UAE Dhirham, Debt Re-evaluation, Real Estate Credit Line and Foreign Currency

Listeners’ Questions – August 25, 2011

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Iain from London, England
I have property in Dubau, which is valued in Dhirhams. They have done well, but the market is now sluggish. The UAE Dhirham is pegged to the US$ at a rate of about 3.64 Dhs per dollar. With the dollar declining, why would the UAE government continue the peg? If they were to float freely my assets, the rental income would be much higher.

David from Houston, TX
You’ve said that it is better to be a debtor than a lender in periods of high inflation. I’d think the government would not want large numbers of Americans paying off debts with cheaper dollars. Do you think there would be some kind of re-evaluation of debts on a large scale in an emergency situation? Your thoughts?

Jim from Auburn, AL
As a younger person with limited funds I do not have the savings to invest in gold. I do, however, own a condo (which is currently almost impossible to sell). Is it beneficial to own real estate in the current market or should I try to sell now. Also: I have a line of credit on my condo. Is it worth using to purchase gold and paying back the credit line as gold prices rise?

Martin from Wallington, NJ
I have about $50,000 in student loans, all in USD. How do I “convert” this debt to another currency, maybe the Chinese Yuan or either the Canadian or New Zealand Dollar? What’s my best option?

Yousseff from Newport Beach, CA
Would it also make sense to invest in the Yen because it is devalued? Because stocks that are devalued are usually a good investment, right?