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Perth house prices at three-year low after ‘surprise’ 4.26% fall in June quarter: Residex; Quick, someone get Black Panther a drink.
Topic Started: 18 Jul 2012, 04:53 PM (7,934 Views)
audas
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newjez
20 Jul 2012, 12:01 PM
Iron ore spot price is down to $125. Not long before if falls under $100.

But more interestingly - the Aussie dollar is showing strength.

The dollar should be falling to enable other areas of the economy to recover. But it's not, even with the crisis continuing in Europe.

This is a very strange turn of events.
This has been addressed on another thread - however to explain why here as well - foreign reserves and central banks are expanding into Australian denominated assets and currency - specially Germany which has set up new trading desks and will start in two weeks.


This means the Aussie dollar is going not going to be able to fall naturally with demand - it's both good and very, very bad.

Short term it will continue to hurt our non-mining tiered economy, meaning more and ongoing job losses - however since there will be a limited decline in the currency devalued exchange will not impact our inflationary position which will stave off the wolves somewhat. However it will also maintain our high dollar and decrease competitiveness in the mining sector which is taking a battering. South Africa increased YOY production by 30% last month, Vale, and other Brazillians are also ramping up production with their Vale class super carriers about to start shipping after their accident and approval from Beijing. In other words - Ore is about to get absolutely smashed and a high dollar means contracts are going to move to spot and Australian Ore on a demand destruction curve is an a high way to hell. Screwed.

I am surprised that there is a continuation of demand for Aus assets - I think there might be a rethink on this. China is doing the same.

If Ore hits $100 then this is the mark at which things start to look un profitable - ( I know the figure of $57 is bandied about but its bullshit - the investment and carry over costs mean it is $100) - so small players are going to get severely smashed by this.

Coal is also taking an absolute reaming.

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dave289
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audas
20 Jul 2012, 05:52 PM
This has been addressed on another thread - however to explain why here as well - foreign reserves and central banks are expanding into Australian denominated assets and currency - specially Germany which has set up new trading desks and will start in two weeks.


This means the Aussie dollar is going not going to be able to fall naturally with demand - it's both good and very, very bad.

Short term it will continue to hurt our non-mining tiered economy, meaning more and ongoing job losses - however since there will be a limited decline in the currency devalued exchange will not impact our inflationary position which will stave off the wolves somewhat. However it will also maintain our high dollar and decrease competitiveness in the mining sector which is taking a battering. South Africa increased YOY production by 30% last month, Vale, and other Brazillians are also ramping up production with their Vale class super carriers about to start shipping after their accident and approval from Beijing. In other words - Ore is about to get absolutely smashed and a high dollar means contracts are going to move to spot and Australian Ore on a demand destruction curve is an a high way to hell. Screwed.

I am surprised that there is a continuation of demand for Aus assets - I think there might be a rethink on this. China is doing the same.

If Ore hits $100 then this is the mark at which things start to look un profitable - ( I know the figure of $57 is bandied about but its bullshit - the investment and carry over costs mean it is $100) - so small players are going to get severely smashed by this.

Coal is also taking an absolute reaming.
I feel sorry for all those retirees that have bought these bluechips like bhp and rio and have been hammered not to mention most peoples superfund and banks who also buy up big in these companies , not that I feel sorry for the banks .
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BubbleBoy
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dave289
20 Jul 2012, 06:06 PM
I feel sorry for all those retirees that have bought these bluechips like bhp and rio and have been hammered not to mention most peoples superfund and banks who also buy up big in these companies , not that I feel sorry for the banks .
I don't think banks are into buying resource company shares - except in their capacity as fund managers.
My name is based on a Seinfeld character, not on a belief of a housing bubble.
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Trojan
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WestAussie
20 Jul 2012, 05:26 PM
or at least let us rate people or ignore peoples posts.
Click on the person's name
Click on Profile Options
Click Ignore
Edited by Trojan, 20 Jul 2012, 06:24 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Enjoy The Ride
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I thought the recent strength in the AUD reflected the fact it was backed by Swanny.

Seriously, its 3am your drunk and the AUD is the best looking thing in the bar. Probably regret it in the morning.





Enjoy The Ride!
Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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miw
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Enjoy The Ride
20 Jul 2012, 06:40 PM
Seriously, its 3am your drunk and the AUD is the best looking thing in the bar. Probably regret it in the morning.

Best explanation so far. I will take the "beer goggles index adjuster" to the bloggers and I will go to the mat on that one.

:lol
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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WestAussie
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Perthite
20 Jul 2012, 05:35 PM
Damn I enjoyed Mike's comments on Perthnow.
Love him trying to spell 'try'as 'trie'? Haha or 'so' as 'show' Not even close mistype but words sounded out. Dozens of examples in his posts.
Or the thousand other comments he leaves under other names with words he must be sounding out. Yer it's great. Fk how do you not let trolls and bulls not piss you off? I get so angry seeing them abuse people for using their brains. I think they spread fear most not the bears by trying to get everyone to buy all the time because they might 'miss out' but if you save all your income and rent you can just buy a house outright.

I think reality is setting in for a new generation. They know it only costs 100k to build a house and they won't pay 750k for it. Dam and here I was thinking this Aussie mentality would keep powering on but looks like people are waking up and saying hey... This is bs. Lol
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WestAussie
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Trojan
20 Jul 2012, 06:24 PM
Click on the person's name
Click on Profile Options
Click Ignore
O...m...g .... YES! Thanks sooooo much. Goodbye mike, nf, bp, cat.
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newjez
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miw
20 Jul 2012, 07:19 PM

Best explanation so far. I will take the "beer goggles index adjuster" to the bloggers and I will go to the mat on that one.

:lol
There have been instances where people have bought German bunds with interest rates which mean they are paying Germany for the privaledge of looking after their money. I don't know if the german bunds came with a whip and thigh high boots :)
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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newjez
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audas
20 Jul 2012, 05:52 PM
If Ore hits $100 then this is the mark at which things start to look un profitable - ( I know the figure of $57 is bandied about but its bullshit - the investment and carry over costs mean it is $100) - so small players are going to get severely smashed by this.

Coal is also taking an absolute reaming.
Hi Audus - can you back up this $100 claim? I'm not being critical - as I've seen no one justify the £57 claim either, but I would be interested if you had links to economic articles, or your own calculations which could justify your claims. $100 could be hit this year, and I would be interested to know what the repercusions would be.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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