Jun

2

BurjMy sister just called me with an update of the property market in Dubai, where she has been living for the past six years. Her property has increased in price by around 2.5x in just as many years. It's astonishing, especially when contrasted with what's happening here in the UK. However, she says that prices are now equivalent to London prices in the area where she lives. With general prices still rising rapidly in Dubai, I imagine the cost of living is no longer the great selling point it once was. Are we near the top? I've no idea, but I'm paying a visit to Dubai at the end of the year and it will interesting to compare with my last visit some five years ago.

Whilst too much inflation is thought by many to be a bad thing for stocks, bonds, and life in general, I keep wondering whether there are some tasty investment treats out there in countries with fixed exchanged rate regimes, especially as many are pegged to the USD, and are thus importing a relaxed monetary policy and weak exchange rate. If you invest in these countries, whether there is true growth or not, can you simply convert the inflationary pressure into profit by investing in real assets on the ground?


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