Foreign Exchange and Agribusiness Investment
In the 21st century, currencies are no longer backed by the gold and silver standards, which previously gave credence to international methods of payment like the US Dollar by backing them with precious metals. Currently, precious minerals or tangible assets back very few currencies. In fact, paper currency today is mainly backed only by the reputation of the issuing government, a regional institution, or another major currency. 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). Nevertheless, these two currencies float freely on the international foreign exchange (FOREX) market and are backed solely by the strength of the economies that they represent. Simultaneously, 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 or bonds in their respective central banks. This circular dynamic can create speculative bubbles and large levels of inflation during times of national or international economic uncertainty. Moreover, 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.
Foreign Exchange and Agribusiness Investment
Investors can and should take advantage of currency fluctuations to speculate, invest, and profit. At the same time, a well-rounded portfolio should also incorporate tangible assets backed by real goods, such as real estate property. This is the premise upon which Farmfolio’s investment model was conceptualized and how the Farmshares program for international investors was developed. Farmfolio allows individual investors to become owners of productive real estate and agricultural assets that manage an existent supply chain and generate a consistent cash flow. In fact, Farmshare owners can even visit and spend the night at their breathtaking asset in places like Panama’s Canal region and Colombia’s coastal plains.
Investing in Farmfolio’s different projects, individuals can capitalize from several of the market dynamics explained above. Firstly, investors diversify their portfolios by incorporating a tangible and profitable asset that is backed by real estate ownership. Likewise, investors from the United States and Europe can currently profit from a unique window of favorable foreign exchange rates against the Colombian Peso (COP) or other Latin American currencies. For instance, 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 2.900 COP to US$1 dollar throughout the last year. Thus, investors willing to join in Farmfolio’s investment opportunities 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.