Buy it Now, AUD headed for $0.60

[casstony]

Originally Posted by gregbradley

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.

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]

RBA wants a lower dollar as it makes our exports cheaper.

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 (Poppy)]

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 (Marty)]

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 (Poppy)]

Originally Posted by gregbradley

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.

Greg.

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 (Poppy)]

Originally Posted by glend

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.

As you would .....

Col.....

[FlashDrive (Poppy)]

Originally Posted by casstony

Real estate prices and bank profits should never have reached the levels they have today .

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

Col....

[Peter Ward]

Originally Posted by 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....

Might they have said "median" ?

[Allan]

Originally Posted by 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.

Thanks mate.

[stanlite (Grady)]

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 (Glen)]

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 (Rom)]

Originally Posted by 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

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

[bugeater (Marty)]

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 (Marcus)]

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 (Glen)]

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 (Marcus)]

Originally Posted by glend

...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. ..

Couldn't agree more Glen!

[multiweb (Marc)]

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.

[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.