Just sumbled upon this, maybe someone finds it interesting: Source: Google translated http://translate.google.de/translat...ndesbank-will-umschichten-article6489136.html According to that article, ~"at the end of 2011, from the accumulated value of 29.433 billion euros, 93.1 percent was attributable to U.S. assets (government bonds etc). ... If the Bundesbank discovers the Australian dollar as reserve currency, would open up the big four banks in the country, which dominate the foreign exchange market, a lucrative new business" Probably a good sign. (Not for Europe, of course, but hey... )
good news only if our politicians are smart enough not to screw it up by trying to devalue the currency thinking it will help the country. Swiss Central Bankers don't see it as a gift horse but a curse and trying to devalue their currency
I wouldn't think there'd be enough capacity in our economy to support the Aussie as a reserve currency. Furthermore, our safe haven status only extends as far as the commodity boom will allow.
It's entirely possible that our government is too inept to actually succeed at devaluing the currency if they tried.
Don't bother timing it. A lot of things can happen within 9 months. AUD is overvalued at this time. Will it correct? Maybe. Can the valuation increase? If china is successful in its bid to re-ignite property bubble, maybe.
Only that our dollar would be so hideously expensive that what is left of manufacturing and our farmers will be driven to the wall. What is left of our uncompetitive retail would also suffer which they may deserve, but that means less people employed. But at least Australians will be able to get their hair braided in Bali at a cheaper rate. In a race to debase, having an expensive currency is the wooden spoon. As someone mentioned - our government probably isn't competent enough to debase even if they tried.
Our whole economy is about as deep as a kiddies' wading pool. We don't offer the 'depth' of activity for a reserve currency.
Former Securency bosses arrested Federal police have charged two Reserve Bank of Australia currency firms, Securency and Note Printing Australia, along with several of the company's former senior managers with paying massive bribes to foreign officials in order to win banknote supply contracts. In a series of dawn raids, AFP agents swooped on houses across Melbourne, arresting six former senior executives of Securency and Note Printing Australia, companies which are respectively half and fully owned and overseen by the Reserve Bank of Australia Read more: http://www.smh.com.au/business/former-securency-bosses-arrested-20110701-1gtr8.html#ixzz1xwLdozZb Oh we got "depth" .....
They don't need the depth or anything. They just need a country that is wealthy enough and at the same time least likely to devalue their own currency. Thanks to our lack of manufacturing, we actually love high AUD, so we can import (give money to everyone else) cheaper. But high aud = death of local manufacturing.
