Been there, done that. Ok, you get paid a higher rate, but because its going to weaken their economy going forward, the NZ dollar is going to drop after its pop that you already missed, and so your gains from the high rate will get paid in cheaper NZ dollars, and so will the bonds when you get out. And if they rate the rates again while you own them, any gain from the currency pop is negated by the drp in value of the bonds. Net effect? Gains you thought you'd get are lost, and you end up no better off than just leaving the money in a money market account here. The exception to that would be if there was a US dollar collapse, but not a NZ dollar collapse, in which case you would do well.
Thriftybob, Thanks for your answer. I also want to know how one could go about buying a foreign country's T-bills. I've never tried before, and just want to know how it is done. Is it as simple as buying through one's broker. I couldn't find anything listed at my brokers website.
i wonder how much of Yen Carr yTrade is in NZ bonds? if the Yen goes on a tear & soemone in the NZ bonds blinks, bond prices might rally come under pressure? no?
better to take the pain now than later. when the fed ecb and boe realise they provided too much cheap money and real interest rates are still too low it will all be too late. no one can even get their head round the fact that rates in the usa and europe will have to go up substantially in the long run to kill off inflation. how about rates around 8 percent in the states. no one would even think about it. well if goldman is so smart how comes they came out yesterday and said no rate cuts this year or next? they were calling 6 months ago for 75 basis points of cuts