Clear and Present Danger: Australia to be hit as Chinese economy unravels; The iron ore price will continue to tumble, causing significant issues for Australia
Foreigners seek to accumulate AUD assets - that sets the FX rate above the level required to clear trade (much to Glenn Stevens anguish). That is why was have a CAD which is the other side of the accounting entry. Not much we can do about it if we want a floating FX rate.
and if our assets were not for sale (specifically talking RE and property related assets including productive assets such as mining, ports, rail etc) would our dollar then fall, and if so how significantly?
It's the investment cycle which we (Australia) have to manage. The iron ore price is pretty irrelevant unless you are a shareholder of the mining companies.
and if our assets were not for sale (specifically talking RE and property related assets including productive assets such as mining, ports, rail etc) would our dollar then fall, and if so how significantly?
That is the prop under the AUD.
When the GFC hit, the AUD plunged like a stone on the back of the old "Australia is a resources economy and if resources are down, so is the AUD algorithm".
I did very well by buying AUD when everyone else was selling.
So why are we not seeing the same thing happening today?
Why can IO drop $10 and the AUD not budge a millimetre?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
When the GFC hit, the AUD plunged like a stone on the back of the old "Australia is a resources economy and if resources are down, so is the AUD algorithm".
I did very well by buying AUD when everyone else was selling.
So why are we not seeing the same thing happening today?
Why can IO drop $10 and the AUD not budge a millimetre?
if i were to sound a bit like BP - a transmuatation of perception perhaps? my gut feeling is the world post 2009/2010 perceives australia as some magical economy with great resilience to international dramatics and forgotten the AUD is usually pretty closely tied to commodity runs which are now all heading south. Ive noticed that general vibe when talking to foreigners on mainland and while travelling.
one would think that pattern will resume, but maybe it will take a while to kick in ?
if i were to sound a bit like BP - a transmuatation of perception perhaps? my gut feeling is the world post 2009/2010 perceives australia as some magical economy with great resilience to international dramatics and forgotten the AUD is usually pretty closely tied to commodity runs which are now all heading south. ?
I think that a lot of us have had that thought. If it's right the correction will be savage and it will probably overcorrect more than expected.
Any expressed market opinion is my own and is not to be taken as financial advice
if i were to sound a bit like BP - a transmuatation of perception perhaps? my gut feeling is the world post 2009/2010 perceives australia as some magical economy with great resilience to international dramatics and forgotten the AUD is usually pretty closely tied to commodity runs which are now all heading south. Ive noticed that general vibe when talking to foreigners on mainland and while travelling.
one would think that pattern will resume, but maybe it will take a while to kick in ?
I do believe also that there is a perception of stability here and also during the GFC crisis the AUD became a reserve currency and this will also increase stability. This may not be a good thing as the floating dollar may not continue to work the way it has done since the Keating days.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
It is because when TSHTF, the very basics of economics come into play.
Australia has one of the lowest population densities in the world measured by both area and coastline per head.
It is also one of the most resource rich and politically stable countries on the planet.
Australia is no longer viewed as a dustbowl where IO is mined. It is seen as a lifestyle destination and we have spent the last 30 years spruiking that to the world with our Bondi Rescue, Neighbours, Crocodile Dundee etc.
If you want to hang on to your hot blonde wife, don't show her off to your mates.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
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