Why would they be shooting themselves in the foot? Please do not tell me it is because a rise in interest rates will make debt hard to pay. The fact of the matter is ,when the interest rates go up, so does the governments take from us,so it is mout. So please explain as i would love to understand. If you do not understand my view i would happily explain in more detail.
The flow of capital from the rest of the world is going to send the equities market to an all time high. The U.S. government will be under pressure to do something to cool the stockmarket and they will raise rates. If you read Martin Armstrong you will find out that the rest of the world are shitting their collective nappies in anticipation of such an event because of the amount of debt around the world that is priced in U.S. dollars. The dollar will rise even higher and crush the debt holders.....we are talking about trillions of dollars of debt...not U.S. government debt but private debt. This will send companies to the wall further exascerbating the economic decline.
America cares about America Higher USD means higher debt themselves, its a complicated web It truly is a currency war
Because they have a huge private bond market that is keeping the equity market floating. Many of their best sectors in terms of employment (particularly energy) are already struggling to raise money and service their debt/bonds. A failure in confidence in the private bond market in even a few bigger companies could be a disaster. Investors are already suspicious about their ability to service commitments with current energy prices and the high dollar, adding a quater to a half percent to every dollar they owe is going to be another nail img the coffin. For the most part they are still up and running because of hedging but there's only so much longer that can go on, you could see a run on the sector as hedges end that only 0% interest rates or bail outs can fix. It's not just about government debt.
PAIN! http://www.smh.com.au/business/mark...-in-canadianstyle-plunge-20150720-gifttg.html Gonna have to ask bossman for a pay rise because i real purchasing price is reduced. I am sure he will understand! (rolls eyes)
This is great for people that bought into US denominated investments, gaining money because of the incompetence of our political landscape...... Almost like hedging Tony
Please tell me you don't actually think the dollar decline has anything to do with our current, inept, government?
Interesting article on ZH and this comment stood out. www.zerohedge.com/news/2015-07-24/aussie-dollar-tests-long-term-trendline-china-contagion-spreads?page=1
For anyone interested in getting into USD, I use HSBC multi-currency Flexi-saver to hold USD while I sit back and watch the AUD fall into oblivion. They seem to have one of the best conversion rates for a bank account. Don't make the same mistake I did of starting out with one of the Big 4 banks for a USD account. They will rip you off... Up yours Commbank.
+1 for HSBC for having competitive FX rates, at least on account transfers, TTs and domestic payment orders etc. If you have HSBC bank accounts you may also qualify for preferential FX cash rates at the Travelex operations within their branches. Others have also provided decent feedback on Ozforex, but this is not an endorsement. Full disclosure: No positions or agent relationship at time of writing. I don't stand to make any monetary or other material gains from anyone's decision to use/not use these services. +1
Be very, very careful with HSBC. Reggie Middleton of Boom, Bust, Blog does serious analysis of world banks.....wayyyyyyyy before Bear Stearns ( remember them) failed, his analysis was screaming get out......wayyyyy before Lehmans failed, his analysis was screaming get out. HSBC, amongst many other European banks will be dead ducks when the bond market crashes.....it is only a matter of time....Check out his work . You will end up like the Cyprus bank depositors.
I'm not knowable in this area, but Australia being targeted should be of concern. Just like Greece who are now a basket case, a relatively small economy guttered and profits made, Australia may fit the model of taking out our currency valuation and turn it into a profitable bet for those sharks.
