Australian dollar backsliding again

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Australian dollar backsliding again

Postby Squire » 03 Oct 2017, 13:17

After a brief period of rising, the A$ seems to be backsliding.

Does this portend that there is economic bad news that has not been publicly released?

It is general knowledge that the US$ is over-priced but it is stubbornly tracking at its highs. When it corrects it should be a very sharp correction. Trumps efforts to name and shame countries with postive trade balances against US is unlikely to have any significant effect. Any action by Trump against other countries will induce negative reactions in those countries to the US$.

The real problem for the USA is that foreign money inflows are causing the US$ to be over-priced which adversely affects USA trade competitiveness. Currently, USA is benefiting from low oil prices which have a positive effect on the USA trade balance. If oil prices jump again there will be an instant shock to US trade balance and economy.
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Re: Australian dollar backsliding again

Postby HBS Guy » 03 Oct 2017, 13:22

Maybe the reserve raised rates a bit too quick?

I wish our RBA lifted rates, get some return on money I am putting away for my Tas. house.
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Re: Australian dollar backsliding again

Postby Squire » 03 Oct 2017, 13:32

HBS Guy wrote:Maybe the reserve raised rates a bit too quick?

I wish our RBA lifted rates, get some return on money I am putting away for my Tas. house.


Will you have to get a second head stitched on to live in Tasmania?
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Re: Australian dollar backsliding again

Postby HBS Guy » 03 Oct 2017, 13:35

What do you think the CT scan is for?
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Re: Australian dollar backsliding again

Postby johnsmith » 03 Oct 2017, 15:07

libs are lucky the dollar fell when it did. It improved our terms of trade immensely and the libs were able to claim the credit for the boost in exports.
Labor got in and got parity ... then everyone blamed labor for the drop in exports.
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Re: Australian dollar backsliding again

Postby greggerypeccary » 03 Oct 2017, 15:53

Squire wrote:
HBS Guy wrote:Maybe the reserve raised rates a bit too quick?

I wish our RBA lifted rates, get some return on money I am putting away for my Tas. house.


Will you have to get a second head stitched on to live in Tasmania?


Not necessarily.

Sleeping with one's sister (or brother, in Booby's case) also meets the minimum requirements for residency.
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Re: Australian dollar backsliding again

Postby johnsmith » 03 Oct 2017, 16:44

greggerypeccary wrote:Not necessarily.

Sleeping with one's sister (or brother, in Booby's case) also meets the minimum requirements for residency.


don't you live there? :b
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Re: Australian dollar backsliding again

Postby greggerypeccary » 03 Oct 2017, 16:50

johnsmith wrote:
greggerypeccary wrote:Not necessarily.

Sleeping with one's sister (or brother, in Booby's case) also meets the minimum requirements for residency.


don't you live there? :b


Not full time.

My sister is pretty hot, though.
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Re: Australian dollar backsliding again

Postby johnsmith » 03 Oct 2017, 20:49

greggerypeccary wrote:
johnsmith wrote:
greggerypeccary wrote:Not necessarily.

Sleeping with one's sister (or brother, in Booby's case) also meets the minimum requirements for residency.


don't you live there? :b


Not full time.

My sister is pretty hot, though.


that'll give booby something new to gossip about :giggle
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Re: Australian dollar backsliding again

Postby greggerypeccary » 03 Oct 2017, 20:55

johnsmith wrote:
greggerypeccary wrote:
johnsmith wrote:
greggerypeccary wrote:Not necessarily.

Sleeping with one's sister (or brother, in Booby's case) also meets the minimum requirements for residency.


don't you live there? :b


Not full time.

My sister is pretty hot, though.


that'll give booby something new to gossip about :giggle


Indeed, it will.

He's already sent me pics of his brother.

Not sure why, but I can take a wild guess.

Booby really needs to find a boyfriend, and settle down.
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Re: Australian dollar backsliding again

Postby Squire » 07 Oct 2017, 12:01

A$ still backsliding.

Cause must be Boby's transmission of naked pictures of his male family members on the internet.

Let's hope Bobby keeps his own member zippered. :WTF
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Re: Australian dollar backsliding again

Postby Lefty » 08 Oct 2017, 09:00

Haven't followed this stuff closely for some time, it can get disturbing and end up contributing to doing your head in. So I'm well out of the loop.

But last I looked, the fuckwittery of Abbot and Hockey is laid bare in their destruction of the Australian car making industry - with the fall back in the dollar after the long investment boom, it is once again competitive to build certain vehicles in Australia rather than import them. No matter, they're just about finished regardless because of the most monumentally stupid action by our former PM and treasurer and although it would probably be justifiable to accuse car companies of being somewhat parasitic, it would be stupid to deny the benfits of maintaining an increasingly high-tech engineering industry here, with all the jobs created in supporting industries (soon to be gone as well) and the spin-offs that tend to arise from R&D.

Now any practical broad scale direct vehicle engineering ability and knowledge will vanish from our shores, dumbing us down further. The industry will become totally import-based (except used cars I guess) and that money will flow offshore along with the jobs.

The high $AUSD was a temporary feature but our government did not waste the opportunity to fuck things by doing something I've not seen anyone else so willingly do - simply toss out an entire mechanical engineering manufacturing industry.

Perhaps they had bought the line that the dollar was going to stay high for decades because the China boom was supposed to last for decades. Well it didn't, it did what all booms do - it ended!

Fucking cretins.
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Re: Australian dollar backsliding again

Postby Squire » 08 Oct 2017, 17:25

Lefty wrote:Haven't followed this stuff closely for some time, it can get disturbing and end up contributing to doing your head in. So I'm well out of the loop.

But last I looked, the fuckwittery of Abbot and Hockey is laid bare in their destruction of the Australian car making industry - with the fall back in the dollar after the long investment boom, it is once again competitive to build certain vehicles in Australia rather than import them. No matter, they're just about finished regardless because of the most monumentally stupid action by our former PM and treasurer and although it would probably be justifiable to accuse car companies of being somewhat parasitic, it would be stupid to deny the benfits of maintaining an increasingly high-tech engineering industry here, with all the jobs created in supporting industries (soon to be gone as well) and the spin-offs that tend to arise from R&D.

Now any practical broad scale direct vehicle engineering ability and knowledge will vanish from our shores, dumbing us down further. The industry will become totally import-based (except used cars I guess) and that money will flow offshore along with the jobs.

The high $AUSD was a temporary feature but our government did not waste the opportunity to fuck things by doing something I've not seen anyone else so willingly do - simply toss out an entire mechanical engineering manufacturing industry.

Perhaps they had bought the line that the dollar was going to stay high for decades because the China boom was supposed to last for decades. Well it didn't, it did what all booms do - it ended!

Fucking cretins.


The Australian government is only indirectly responsible for the loss of manufacturing jobs insofar as the government has the means to exert some control over the factors that cause a high A$. The high A$ which at one stage reached ~ US$ 1.1 in 2014 was the cause of loss of manufacturing jobs as the high A$ caused Australian labor prices to be much higher than that of competitors which caused a decline in demand for Australian goods and services.

It takes many decades to create the industrial supply networks of components and parts for input to manufacturing. All these are now gone and will not return in the foreseeable future.

Australians will have to be content with building houses, agriculture and digging stuff out of the ground. However in the long term strategic horizons, even digging stuff out of the ground may wither as China develops new sources of minerals and hydrocarbons in Africa, Asia and South America. China is improving it's agriculture which is a real threat to Australia.
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Re: Australian dollar backsliding again

Postby HBS Guy » 08 Oct 2017, 17:29

With the idiotic copper internet the Libs inflicted on us forget about innovative/high tech/high value manufacturing.

They have really stuffed us!
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Re: Australian dollar backsliding again

Postby Squire » 08 Oct 2017, 18:22

The royalty and tax bonanza from the LNG and mining boom hasn't emerged as hydrocarbon and mineral prices are down and most of the earnings are paying off the foreign creditors.

The punters will have to bear the burden of tax shortfalls.

Australian manufacturing wages are 25% higher than US, UK, and Europe.
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Re: Australian dollar backsliding again

Postby Lefty » 08 Oct 2017, 19:22

The Australian government is only indirectly responsible for the loss of manufacturing jobs


The current Australian government is directly responsable for the loss of the particular manufacturing sector I mentioned - there was nothing indirect about that one, not from my recollection at least.
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Re: Australian dollar backsliding again

Postby HBS Guy » 08 Oct 2017, 19:29

US wages are very low: journo I know through the net, experienced, senior, $11/hour. Can’t really get ahead on $11/hour.

And I guess wages here are slowly falling since wages are so static.
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Re: Australian dollar backsliding again

Postby Squire » 10 Oct 2017, 12:46

A$ has temporarily leveled out at ~US$ 0.778. Perhaps the government intervened for political reasons.

Intervention by governments in currency values can lead to unfortunate events like George Soros making $ 1 billion from a raid on the GBP which had long been over-priced by UK government support.

http://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp

How did George Soros break the Bank of England? By Andrew Beattie | Updated May 12, 2017 — 6:10 PM EDT
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A: In Britain, Black Wednesday (September 16, 1992) is known as the day that speculators broke the pound. They didn't actually break it, but they forced the British government to pull it from the European Exchange Rate Mechanism (ERM). Joining the ERM was part of Britain's effort to help along the unification of the European economies. However, in the imperialistic style of old, she had tried to stack the deck.

Although it stood apart from European currencies, the British pound had shadowed the German mark in the period leading up to the 1990s. Unfortunately, the desire to "keep up with the Joneses" left Britain with low interest rates and high inflation. Britain entered the ERM with the express desire to keep its currency above 2.7 marks to the pound. This was fundamentally unsound because Britain's inflation rate was many times that of Germany's. (Keep reading about this in Stop Keeping Up With The Joneses - They're Broke.)

Compounding the underlying problems inherent in the pound's inclusion into the ERM was the economic strain of reunification that Germany found itself under, which put pressure on the mark as the core currency for the ERM. The drive for European unification also hit bumps during the passage of the Maastricht Treaty, which was meant to bring about the euro. Speculators began to eye the ERM and wondered how long fixed exchange rates could fight natural market forces.

Spotting the writing on the wall, Britain upped its interest rates to the teens to attract people to the pound, but speculators, George Soros among them, began heavy shorting of the currency.

The British government gave in and withdrew from the ERM as it became clear that it was losing billions trying to buoy its currency artificially. Although it was a bitter pill to swallow, the pound came back stronger because the excess interest and high inflation were forced out of the British economy following the beating. Soros pocketed $1 billion on the deal and cemented his reputation as the premier currency speculator in the world.

For more on Soros' feat against the British pound read these enlightening articles - The Greatest Currency Trades Ever Made and The Greatest Investors: George Soros...
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