Farmfolio, Foreign Currencies & Real Assets
Long gone are the days of the gold and silver standards, which backed the US Dollar with precious metals. Today, precious minerals or tangible assets back very few currencies, most of which are backed only by reputation or more paper money. The major currencies of the world, such as the US Dollar and the Euro, are managed by a central bank, in these two cases the Federal Reserve and the European Central Bank (ECB). However, these two currencies float freely on the international foreign exchange market and they are backed solely by the strength of the economies that they represent. Meanwhile, currencies such as the Franc CFA, the Bahaman Dollar, and the Hong Kong Dollar are pegged or anchored to the US Dollar or the Euro by maintaining large amounts of foreign currency reserves. This circular dynamic can create speculative bubbles and large levels of inflation during times of national or international economic uncertainty. Furthermore, the fact that a currency’s legitimacy is based on the reputation and social value attributed to it has led to the emergence of alternative currencies, particularly cryptocurrencies such as Bitcoin.
Farmfolio, Foreign Currencies & Real Assets
Investors can and should take advantage of currency fluctuations to speculate and profit. However, a well-rounded portfolio should also incorporate tangible assets backed by real goods, such as real estate property. This is the premise upon which I conceptualized and created Farmfolio and its Farmshares program for international investors. Farmfolio allows individual investors to become owners of productive real estate and agricultural assets that generate a consistent cash flow. Furthermore, Farmshare owners can even visit and spend the night at their breathtaking asset in Colombia’s coastal plains.
By investing in Farmfolio’s Ganaderia Pietrasanta project, individuals can capitalize from the two market dynamics explained above. First, investors diversify with a tangible and profitable asset that is backed by real estate ownership. Simultaneously, investors from the United States and Europe can currently profit from a unique window of favorable foreign exchange rates against the Colombian Peso (COP). Given the prevailing low oil prices, which largely influence the value of the Colombian currency, the Peso (COP) has been at a favorable exchange rate of approximately 3.000 COP to US$1 throughout the last year. Investors willing to enter into the Colombian agricultural investment market during the next few months will benefit from a profitable foreign exchange rate as they secure a real and lasting asset for their individual portfolios!