Dear rss free blog,


Just a few doors away from the bagel shop and Internet cafe of Prague from which I am writing, there is a large sign reading (more or less) Kapital Investment Zwindel. It is in Czech, a language I do not know. It probably does not mean what we think it means.

Actually the big deal in portfolios here is real estate, with restorations scattered around the Old Town and the outskirts skyline scarred by cranes putting up new high-rise apartment buildings.

As in many parts of the world, the property market froze in the credit crisis. Or to put it into Czech, Realisty has met reality. Realisty is real estate.

This is not the first time world economic messes have hurt the investors of Prague. Back in the 1920s, a well known pension fund investment manager got into trouble for being too heavily invested in US equities on behalf of his insurance company managed funds.

The pension fund investor was Franz Kafka. While his pension funds went sour his novels continue to sell well. 

Walking around this old city with its golden domes and incredible baroque Counter-Reformation gilded richness, I am relieved that in Czech crowns the price of gold has barely budged since my arrival, despite reaching new heights in the declining dollar. There will be enough crowns to continue gilding away as Prague restores its historic sites. 

All that assumes that the drooping dollar does not reverse, which frankly is a possibility after the rocketing gold price. Some other aspects of how foreign exchange rates have affected our portfolio are discussed for paid subscribers below.


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