Buy it Now, AUD headed for $0.60

[glend]

Most of the finance guys seem to be betting on a AUD of $ 0.60 USD by year end, in part due to the US Treasury stated policy of raising interest rates in the coming months. The ramification of the continuing devaluation is that all astro gear will get more expensive for us in the near future, just have to look at how quickly it dropped from USD parity to the current $0.70.

All the local retailers selling imported scopes and equipment will have to raise their prices. So regardless of who your buying from it could be a long time before your AUD is worth as much as it is today. If you have a scope on order, prepay what you can and maybe hold back 10%. Use currency hedging if your talking big $ - see your bank for how to do it.
Buy now from the local guys before their prices go up. Any local supplier that has his payment arrangement in USD is going to be impacted.

[Camelopardalis]

Glad I just bought my imaging scope then :question:

[MortonH]

Even the Japanese prices have gone up a fair bit. A$465 for the new Vixen SSW eyepieces is rather high.

[rustigsmed]

a nice heads up glen.

Russ

[Somnium]

I have been thinking about hedging my purchase with some USD, i may do it, but i am not sure if you are familiar with the research into the accuracy of predictions of these sought ... ultimately no one can tell the future, they are guessing

[bugeater]

In my experience currency predictions tend to just assume the current trend will continue - if it's going up, they assume it will continue, if it is going down, they assume it will continue to go down.

That all said, our economy isn't in the greatest of shape right now with the mining sector softening, plus the US economy seems to be on an upwards trajectory. That would suggest a weakening of the AUD vs USD, but the question is how far? It's already weakened a lot.

[Peter Ward]

I disagree.

The ASX all-ords will be back around 5900 by years end.

Many Oz stocks are already paying 6-8% fully franked......it won't take long for the market to realize the $A is oversold and there is intrinsic value in many Oz companies.

I suspect the current manipulation of the $A is to get these assets even cheaper.

[billdan]

The ABC news announced yesterday that Australia is now a Trillion dollars in debt for the first time. So that didn't help the poor Aussie dollar.

Looks like I'll have to delay my purchase of a MESU 200 mount again.

Bill

[Peter Ward]

Well...bless the Trotsky trash at Aunty. (..BTW the conservatives don't have a clue either...)

a) While close, it's not a trillion
b) ABS statistics (http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/5302.0/) indicate it's peaked and is falling

Lies, dammed lies, and statistics. Gotta love 'em. :lol:

[KenGee]

"Trotsky ABC" that's a very Boltish thing the say, don't let the facts get in the way of your insanity.:screwy:
http://www.abc.net.au/news/2015-09-01/account-deficit-collapses-as-net-debt-approaches-1-trillion/6740328

[billdan]

Sorry guys, I panicked when I saw the word Trillion, Peter is correct its only 976 Billion dollars.
Bill

[ThatGuy]

Thanks for the post Glen.

http://www.smh.com.au/business/markets/currencies/australian-dollar-hits-sixyear-low-on-china-fears-20150901-gjczj9.html

Sydney Morning Herald had an interesting read yesterday on the current slump.

And over on the west our resource sector is going south due to a few factors but I don't think the sliding AU dollar is helping... let's hope house prices don't take a dive...

[gregbradley]

I've followed Aussie dollar USD trends closely for years. Its not hard to predict. Its like the long term stock market but simpler. Currencies tend to be very trending type commodities

Once they establish a clear trend they tend to stay in it as the factors that shift them seem to be slow moving and changing.

So in our case with a diminishing resources sector, stronger US economy, turbulent world stock markets these all lead to weaker Aussie dollar.

60 cents may seem really low but it went to 46 cents under our fearless leader Paul Keating on its way to being a Banana Republic.

It was around 65 cents for a long time also. So there is clear history for a 60 to 65 cent trading band. The trend is clearly down for the last year and a half.

The resources mining party is over but that doesn't mean gloom and doom though. RBA wants a lower dollar as it makes our exports cheaper. Its the covert currency devaluation that is no longer an option.

So I would say its way better than 50/50 odds it will see lower numbers and 60 cents is well within realistic probability. Markets like these look for bad news as a reason to go down further. Bull markets pick any good sign as excuse to go up. Its a frame of mind.

So I would seriously consider accelerating any US dollar based purchase at the moment as even though 70 cents now seems rubbish it will seem amazing if the dollar goes to 62c later.

Greg.

[casstony]

Perhaps not a dive, but lets hope they recede to the long term trend so todays youngsters have some hope of buying a house for a fair price.

The whole financial system is sick with debt due to twisted central bank policies; things have to return to normal sooner or later and unfortunately the transition must be painful.

[gregbradley]

What twisted policies are you referring to? I thought the Reserve Bank Governor was actually pretty smart and doing a stellar job in a difficult and easy to criticise position.

One concern would be for the possibility of the Chinese economy melting down in a burst bubble as it has all the characteristics of those that have done just that. And also at the same point in its ascendancy just like the Japanese economy did back in the 90's when they were tipped to be the world's largest economy overtaking the US which never happened. If China bursts that would have massive downward pressure on our dollar and downward pressure on our economy.

Greg.

[casstony]

Doesn't make that much difference what our central bank does Greg; I was referring to the printing, borrowing and artificially low interest rates employed by the big northern hemisphere economies, producing mal-investment and bubbles in one asset or another, all the while amassing debt which necessitates reduced future economic activity while the loans are repaid. An alternative way of dealing with the debt is depression and default.
Modern governments and some individuals have forgotten how to live within their means and it will come back to bite us all.

[Allan]

The ASX won't be rallying 15% from here over the next 4 months, but typically what we see when the Aussie is low is an increase in company takeovers by well funded overseas entities looking at our cheap assets. That's an area where money can be made. Then spend the profits on Astro gear! ;)

Greg is very close to the money. Since the dollar was floated, you could throw a dart at it around 75 cents. It trends around that value, and often the trend goes further and lasts longer than anyone predicts.

[gregbradley]

Hi Tony,

Oh I see. Yes well the US has been living off the back of it being the international reserve currency for a long time (it gets cheaper interest rates because of that artificially higher demand for its currency).

Their Federal Rerseve ( Central Bank ) is not actually Govt Tony, its private if you can believe that. Its quite a story all by itself, hard to believe.

I agree I hope Australia (having one of the lowest amounts of Govt debt in the Western Countries) does not succumb to the lure of debt to solve budget and political pressures like the rest have.

Greg.

[Peter Ward]

I've seen too many a headline predicting the $A (up or down) that has turned out to be totally in incorrect.

It's the believing these soothsayer/analysts and their crystal balls that I find rather nuts.

BTW I'll happily take the cash difference between the actual number and a $ Trillion.......brown bags, and $100's will do :P :lol:

[glend]

I would agree with Greg's assessment on the trend of the currency. I am sure that anyone that made an expensive astro purchase earlier this year when the AUD was at $0.80USD would be feeling very pleased with themselves right now. Trends tend to be self-fullfilling and need a fair amount of momentum change to overcome, and good news for us maybe farther away than we would like.

[casstony]

I think of the Federal Reserve, Wall Street and US Government as one entity serving the interests of corporations, with the same people circulating through jobs in the different departments.

During the boom Australian politicians used first home buyer grants, low interest rates and easy loan terms to redistribute money from borrowers to the banks, terrible mismanagement, criminal almost. Real estate prices and bank profits should never have reached the levels they have today and the country would be in much better shape to face the economic downturn.

[AndrewJ]

Conversely, it makes all of our imports more expensive, and that has a direct ( and negative ) effect on our net trade deficit.
Now that the guts of our manufacturing is gone, we might be able to sell more food and milk etc, but will that really help balance our increasing trade deficit due to the loss of the myriad of other industries.

Andrew

[FlashDrive]

Your not wrong there.....just look at TeleVue prices now....hate to see where they'll go as the AU Dollar drops further.

Even buying from USA now is putting the breaks on me.
It will further be harder on our ' pockets ' when the GST kicks in around July '17

Col....

[bugeater]

If you can predict which way currencies will move, then make a call and make some money. Problem is, it really isn't that easy...

[FlashDrive]

I have read the ' history ' of the US Federal Reserve Bank and it is a ' shocker '
People need to read this story ( facts that is ) it will ' dumbfound ' anybody that such a thing could happen.

Read it .... it will open your eyes to the ' Deception ' of this Institution.

http://www.scionofzion.com/federalreserve.htm

Col...

[FlashDrive]

As you would .....:lol:

Col.....:D

[FlashDrive]

Quite right .... 'Aunty ' said on the news last night.....the ' medium ' house price in Sydney is now $1,000,000 ..... THAT'S OBSCENE.

Col....:shrug:

[Peter Ward]

Might they have said "median" ? ;)

[Allan]

;) Thanks mate.

[stanlite]

As an economist I would have to agree that the dollar is more likely to settle in the mid to low 60's over the next 6 to 12 months. But this shouldn't come as a surprise the RBA has been pushing for this to happen for a long time. Read there publicly accessible minutes for the last year.

The bank has also had a tacit policy of driving up unemployment for more than 18 months as a means of controlling inflation in the economy during the end phases of the mining boom and so thus avoid stagflation, or no growth but increasing prices. This is because the RBA's first consideration is not growth or employment but price stability within the economy (eg. inflation). In this regard your or my job is nothing more than a meaningless number to Glen Stevens, who must and should only consider the good of the economy as a whole (within the permit of his legally bound job description).

The beauty and horror of economics is its requirement for emotionless analysis of the figures to generate an outcome that benefits the greatest number for the greatest good, according to the criteria you set yourself (this could be social, environmental or monetary it doesn't matter). Put another way Glen Stevens and the RBA has been engaged in a massive project of creative destruction within the Australian economy in the hope that what emerges in 1-3 years time is higher growth and stronger incomes for all.

25 years of continuous economic growth doesn't happen without some serious pain along the way.

[GrahamL]

dollar for dollar was even better,never could of bought an ethos otherwise :)

[rally]

Not sure that I would be jumping to any conclusions.

I worked for a large global merchant bank and every fortnight their local economist (who was regarded as one of Australias best) put out his forecast. This was then disseminated out to each state and to their key financial members of the community.

It got to the point where our division would start taking bets on odds and evens. Our reckoning was he was about right half the time in terms of Bulls and Bears !
Our local weather forecasters have slightly better odds than that !

I think local office sentiment was equally right about half the time too.

Every forecast is always so very reliable, based on impeccable historical evidence . . . until something from left field affects the world financial markets and its always something different, something unpredictable and the timing of which was equally as unpredictable.
Fortunes change quickly when the market is driven by supply and demand, by public sentiment and the irrational emotions of a jittery marketplace.

So no matter what happens its most probable that the world wont end soon, the markets will survive and the dollar will continue to fluctuate between about 50c and $1.00 like it has since we floated.

The average US conversion rate has probably been around US$0.75 - so we just have to ride the highs and lows.

Equally good advice might just as well be - dont buy anything until it rises again !
. . . or just get what you can afford at the time and be content in the knowledge that it could have been both cheaper and more expensive depending on when you bought it.

But I must admit I enjoyed buying stuff when we peaked over the $1.00.

Also bear in mind that not all of the stuff we buy is based solely in US$ - our currency may have dropped against the US$ but there is less shift between the Yen, Pound and Euro - so a Tak may not necessarily be that bad an option !

[glend]

I bought some gear from the UK and Germany (Teleskop-Express) last week and i'd agree that the exchange rate with the Euro and GBP has held up much better than the USD. In fact the Euro tanked badly during the Greek financial crisis but has recovered some now. It is highly likely that the Euro will go down again due to this massive refugee problem which is loading costs on all the Euro nations thus affecting their financial results, growth forecast, etc.

[el_draco]

And yet we've had a series of the "Worlds best treasurers". Wouldn't trust them with my piggy bank. :shrug:

[bugeater]

Ah misleading debt figures. Actually the scary $1 trillion number is mostly private debt, not government. Government debt is around a third of that. Plus there is nothing intrinsically wrong with debt if its used in a productive manner. Problem is when it is used to fund consumption.

[marc4darkskies]

Too many numbers describe the debt figures - very confusing and easily used to mislead. I like to refer to the debt clock for a reasonable approximation of all the different kinds of debt: http://www.australiandebtclock.com.au/

Note federal govt debt is 420-some billion so no clue where the just-under 1 trillion figure is coming from. But then, THANKFULLY, I'm NOT an economist!!

Also worth looking at government dept to GDP ratio - a more indicative figure of what constitutes too much debt. Greece over 170% (very bad), US over 100% (bad), Australia ~30% (not bad at all).

[glend]

Marcus the rest of it is private sector debt, which is the responsibility of the many various importers and borrowers using debt as part of their business operation. Nothing wrong with using debt in larger successful businesses - especially in low interest rate environments. What we don't want is to get ito a situation like Greece where the level of debt got to a ridiculous level of GDP and there was never any hope of paying it off, they just kept trying to roll it over while adding new debt on top to sustain a spending lifestyle with no stomach for the reforms necessary to pay it down. That is an extreme example of what can happen when countries (ie governments) cannot get the reforms through to control the debt. Allowing debt to continue to grow to unsustainable levels is criminal in my mind, and any government that just stacks on more debt to fund electoral promises to gain power or sustain power is mortgaging the future for their own selfish needs. Full credit to the current government for trying to do things to control deficit growth and not unexpectedly the people most responsible for the deficit growth don't want to see the current government succeed - but lack any plan of their own to stem the problem. In this status quo situation a crisis is required to facilitate change. This is the classic change manager's challenge - you have to break the system in order to fix it; and the vested interest in the present system will fight with all their power to hold on to the old way. People hate change but its coming.

[marc4darkskies]

Couldn't agree more Glen!

[multiweb]

If you want to tackle private debt you can make borrowing money harder. For one I can't wait for the interest rates to go back to normal levels. The RBA maintained them low on the assumption, I think, that borrowers would welcome the breather to get ahead on repayments but it seems it only triggered an influx of new loans and more borrowing. People borrow money to invest as if investing money you own outright wasn't risky enough. :shrug:

[gregbradley]

Note federal govt debt is 420-some billion so no clue where the just-under 1 trillion figure is coming from. But then, THANKFULLY, I'm NOT an economist!!

Also worth looking at government dept to GDP ratio - a more indicative figure of what constitutes too much debt. Greece over 170% (very bad), US over 100% (bad), Australia ~30% (not bad at all).[/QUOTE]

That's a cool graphic. There's a similar one in New York Times Square I think it is that shows US national debt and its flying up.

$420 billion is a big number but 30% debt to GDP is a low number. It just shows how poorly off a lot of western countries are. Also how many got suckered into debt over the GFC scare that made their deficit spending go through the roof funded by debt.

A good sales tactic.

Greg.

[FlashDrive]

Couldn't have been said better......they do that to obtain their own ' agenda ' by Deception ... in another words ' half truths' and lies to the people.

Remember the ' Core ' and ' Non Core ' promises......

Col...

[Peter Ward]

Oh dear.

It's probably my fault.

My new 'scope (soon arriving from Germany) has likely seriously blown out the balance of payments. I tried to get one made here...but seems we can't even make Zerodur glass.

Seriously...the lack of vision and policy has been breathtaking. There was a great piece in the SMH today (http://www.smh.com.au/comment/australian-budgets-jam-yesterday-risks-leaving-the-cupboard-bare-20150903-gje6tx.html)

..showing how countries like Norway have managed their mineral wealth. ...while we've literally pee'd it up the wall. (...again sorry, I was further increasing our foreign debt by traveling there early this year)

Their infrastructure is amazing.....meanwhile back in Oz...they don't see the value in building a rail link to Sydney's long overdue second airport.

The fix?

Have a long hard look in the mirror.

When did you last send a rocket to your local member???

[Camelopardalis]

The premium mirror that's now more expensive than last week :question: :lol:

[Peter Ward]

Well a tad more....Thankfully it's in Euros. :P :)

I fail to see how a low dollar helps one iota.

We hardly value-add to any resource, hence get even less foreign currency
for the oxide-dirt, coal and gas that we do export.

Companies like Google generate billions in revenue, yet pay less tax in Oz than many PAYE taxpayers (eg me!) ....yet the Pollies want the raise the GST???? :screwy:

[Camelopardalis]

Yeah, baffles me why we aren't using the copious sunshine we have on offer to power the foundries to turn the dirt into its more valuable form, and export that. Surely has to be more value (and jobs) in that :shrug:

[simmo]

I think it helps as most commodities are traded in American dollars. So for exporters they make more money as they convert back to Australian dollars. Eg gold at the moment is $1100+us per ounce. So at 70c the Gold miners are getting roughly $1600au. Better than 12 months ago when dollar for dollar.

[RickS]

My company employs a team of software and electrical engineers in Australia. We design products which are manufactured in China and assembled in the USA. We sell them in the USA and Europe.

The "low" dollar (more of a reversion to the mean?) helps a lot. It allows us to invest more in the dev team and increases the value of the company and dividends we pay to our Australian shareholders.

Not everybody is a miner or a farmer these days.

Of course, I still cringe when I pay for new astro gear :D

Cheers,
Rick.

[Peter Ward]

Sure I can see merit in a low $AUD for those that actually make tangibles...but RBA stats indicate that manufacturing contributes about 7% to GDP (and mining just 8%)

Most of us (57%) are employed in "Services" and simply don't get paid in $USD. I suspect generations of depleting resources or re-arranging the pieces of a pie, rather than making more pies will see Oz sadly end up like Nauru.

[RickS]

We're making intangible pies (product designs) in Australia and taking advantage of scalability and the size of international markets vs our own. For better or worse, manufacturing is increasingly done in countries with low labour costs or by robots.

Cheers,
Rick.

[gregbradley]

Manufacturing being done by overseas is normal hence China's boom.

Mining being such a small amount I find hard to believe. The scale of mining in Australia is absolutely enormous. The scale of the Hammersley Ranges Iron Ore deposits is absolutely enormous.

Some mining infrastructure projects are $12billion all by themselves.

Last I heard mining was 1/3rd the economy not under 10%. I am sure there is a lot of other sideways business that works off it as well.

Doom and gloom talk is cheap.

Greg.

[Peter Ward]

What your Company does is great ( I'd worry too much, China is not very respectful of intellectual property... I digress) but I don't subscribe to the latter mantra.

Mittelstand companies in Germany have very expensive labour yet are "highly focused, achieving unprecedented efficiencies" via excellent products (i.e. not everyone wants cheap and often crappy goods ) and great management.

Australian management are often bleating "high cost of labour". Yet workers given the right structures and products, as the Germans have shown, can be very productive without being in sweatshops.

If I were to put this in a nutshell: selling a tonne of iron for $50 and getting a few grams of it back from foreign shores, in the form of say, a $5000 Rolex
is not a national road to prosperity :shrug:

[Peter Ward]

'tis true, ABS official figures are:

"The mining sector currently contributes around 8.5% to Australia’s GDP (total output), and employs around 2% of the workforce (about 220,000 people)"

But it does contribute massively to export earnings: around 50%....and without value-adding, therein lies the problem.

[AndrewJ]

Only problem is we aren't making enough pies, and the pie shops are closing faster than they are opening.
I'm just a dumb engineer, but when i look at the general trend of our trade deficit/economy ( as say a freebody diagram ), i see more money leaving the country than coming in, and it appears to be accelerating. That doesnt give me a warm feeling.

Andrew

[Slawomir]

Getting back to the original topic, I looked into a magic crystal ball and made a hand-drawn prediction in PS in regards to the value of AUD vs US currency...;)

[Somnium]

sorry to dig this thread up, but i just thought it was funny that a few weeks later, with a slight turn around in trends, some economists are now predicting an exchange rate of 80c ... i stand by my first comment, no one can predict the future in this regard, they are guessing!

http://www.smh.com.au/business/markets/currencies/australian-dollar-could-hit-us80-if-fed-chooses-qe-over-hike-20151019-gkdaix.html

[Steffen]

Except of course, the future is today. Welcome to the future!
:D

[LewisM]

Bought a Tak 7x50 finder with bracket and illuminator the other day, second hand. THOUGHT it was a good deal until I paid... and the conversion put it exactly at what Claude charges NEW for the scope itself (no brcket or illuminator). OUCH!

Look at the price of NEW Tak finders in the USA like Optcorp, TNR - the US price is the same numerical figure as Claudes, UNTIL you convert the US to AUD... then you see a $100 difference!

[Somnium]

Haha, nice one

[RB]

PM sent, Re: Tak 7x50 finder
Might as well get in early.

RB
:lol:

[Octane]

^ lmao.

H

[Allan_L]

^ +1

a

[LewisM]

Hey, I have kept this FSQ-106N for a record time now, so maybe, just maybe, I have changed.

Maybe...though I have been lured by another Tak Siren...

Φοβοῦ τοὺς Δαναοὺς καὶ δῶρα φέροντας :P

[LewisM]

H, I am going to sell your a$$ when it falls off from laughing...:P

[RB]

Yeah..... {In my best Clint Eastwood voice}

[LewisM]

Go ahead punk... a man has to know his limitations (of finances)

[Kunama]

My guess is that Alesia found your stash of astro goodies !!!!:lol:

[LewisM]

Nah, not yet. She never looks in my Man Hole - she's too scared like most people.

[FlashDrive]

errrrr :face:

You left yourself open for that one.....:D

Col.....:lol:

[LewisM]

Deliberately. :P I know the mind of Andrew :D