$2200 Gold.

Discussion in 'General Precious Metals Discussion' started by ozcopper, Feb 17, 2021.

  1. betterinvestmentthanshare

    betterinvestmentthanshare Active Member

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    Let me help PM Collector

    Economics is the study of human behaviour.

    The fear of missing out plays a huge factor in human behaviour as can be seen in a particular market as we speak.
     
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  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    The AUD is going to be a bit of a problem going forward for us.
     
  3. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    ^^^
    What goes up must come down..... the problem is when?
     
  4. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    In the currency devaluation game the US are clear champions. The AUD is at the mercy of the USD, so there may not necessarily be a down for us.
     
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  5. jultorsk

    jultorsk Well-Known Member Silver Stacker

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  6. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Yep. But I think the RBA is powerless in the currency wars so I wouldn’t expect them to be able to devalue the AUD.

    Unless they intervene directly in the FOREX market, I’m not sure how that works, but Lowe has repeatedly said that they won’t do it.
     
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  7. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Stonk markets will love this... :eek::eek:

    Screen Shot 2021-02-25 at 11.27.10 am.png
     
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  8. JulieW

    JulieW Well-Known Member Silver Stacker

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    Helpful commentary, and more on the link.


    https://www.abc.net.au/news/2021-02...llar-pointer-to-higher-mortgage-rate/13187510

    The Australian dollar is on the move, now hovering around 80 US cents.

    Over February alone it's gained roughly 5 cents against the US dollar. That's quite a move for any currency.

    The Australian dollar is increasing in value for several reasons, and one of those reasons is also tied to how much you'll be paying on your monthly mortgage repayments — potentially as soon as later this year.

    Before we look at that link, let's explore what's pushing the dollar higher.

    A stronger economy means a higher dollar
    The Australian dollar is what's called a commodities currency, meaning its value against the US dollar, for example, rises and falls as commodities prices move.

    The price of Australia's biggest export commodity, iron ore, has been roaring ahead in recent months as China ramps up steel production.
    It's currently north of $170 US/tonne — an enormous increase on where it was this time last year at around $90 US/tonne.

    This is the main driver of the Australian dollar at present.

    The arrival of a COVID vaccine in Australia, and what that means for consumer and business confidence, is also pushing the Australian dollar higher.

    More than that, though, the economy is improving.

    Australia's unemployment rate is falling, tens of thousands of jobs are being created, and low to no coronavirus case numbers mean shoppers are once again loosening their purse strings (by and large).

    We're not out of the woods yet, but we're moving out of recession, not into one.​
     
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  9. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    The RBA isn't shy re intervening when it comes trying to push the AUD one way or another. Post the float of the AUD, the RBA has intervened several times over the decades but given the size of the RBA balance sheet I'm not sure how effective the little old RBA would be at slugging it out with G7 central banks and the global banks. It'd be like a bantam weight boxer going up against Iron Mike in his prime. The link to the RBA doc outlines the history..

    https://www.rba.gov.au/publications/bulletin/2011/dec/pdf/bu-1211-7.pdf

    Philip Lowe...the George Costanza of central bankers...always does the opposite to what he thinks and says.

    Lowe only said last July 2020 that the RBA wouldn't crank up the printing presses to drop $ into the economy or buy Govt debt.........that didn't age well.....Well guess Phil can add some more zero's to the RBA balance sheet and get the RBA FX phone jockeys to start selling buying USD and selling AUD like mad at discount prices or whatever combo depending and what he wants to achieve.

    https://www.smh.com.au/politics/fed...-down-push-to-print-cash-20200721-p55e2x.html
     
  10. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    And if he does this we won't know until it has happened unfortunately for us. I reckon they've done a couple of shady incursions into the FOREX in the past couple ion years, Lowe just blew it off as something or other or something. You know, the usual story. @leo25 made comment about an unusual spike in some data on this forum.

    That will be the only way they can drive down the $, hopefully we'll get some nice little hints in the fine print before it happens.
     
  11. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    Almost there... $2200 boys and girls!
     
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  12. Ag bullet

    Ag bullet Well-Known Member

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    So how will the trillions in recent currency creation manifest itself?

    So just create currency and the recession goes away? Sounds all too easy.
     
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  13. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    I follow this fellow on Twitter, he's a professor of economics and very vocally against the EU "rescue fund". His worst case scenario is we're sliding towards gosplanisation, where central banks run the show by allocating lending to pretty much zombified businesses. Back to USSR.
    https://www.zerohedge.com/economics/hyperinflation-horizon
     
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  14. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    What they've been trying to do is inject money into the financial system. And it's not working.

    You probably know this bit so apologies: the government sells bonds (debt), the banks buy the bonds then the RBA buys the bonds off the banks. But the banks don't get the money from the RBA, instead the funds are credited to the banks as reserves and held by the RBA so that there is enough cash available for overnight settlements between banks of the daily transactions made each day by customers.

    Now the rules are that banks have to keep a portion of their total balance sheet as equity to safeguard against shocks. If the RBA goes about buying more bonds from the banks then the amount of cash that banks hold as reserves in the RBA rises, which means the banks can lend more money as their equity is higher.

    Trouble is that the banks have been reluctant or unable to lend as much as the pollies and RBA want them too, either because some of those wanting to borrow could end up being potentially bad borrowers, or those that would be considered good borrowers are reluctant to borrow because of the current economic conditions.

    As far as I understand, whilst the RBA exists, only banks can create money. What the government is now being encouraged to do is to sell even more debt and then finance public spending directly through stimulus packages without having to rely on the banks to create money in the form of loans to the private sector.

    The government is struggling to come to terms with this.
     
    Last edited: Feb 25, 2021 at 10:42 PM
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  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Sorry, this should really be in the MMT thread.
     
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  16. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    DJ RBA Mobilizes Its QE Firepower -- Market Talk
    01 Mar 2021 14:30:38

    0330 GMT - The RBA has reacted to recent bond-market volatility by announcing that it will buy A$4 billion of government bonds on Monday as part of its quantitative-easing program, as opposed to its usual A$2 billion of purchases. ANZ's head of Australian economics, David Plank, says the intent of the RBA's actions last week and again on Monday is to demonstrate to the market it can step up with considerable firepower if it feels the need. This is important for the credibility of its policy framework, he adds. But questions remain, such as whether the added buying implies an expanded QE program or just the bringing forward of expected buying, Plank says. ([email protected]; @JamesGlynnWSJ)
     
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  17. 66rounds

    66rounds Well-Known Member Silver Stacker

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    What will Fed do this Thursday? Extend SLR relief or not?
     
  18. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    ^^^
    already released 1.9B USD... they’ll just sit and wait... cause US has no more cash to splurge...
     
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  19. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    Aussie will hit $0.78 tonight
     
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  20. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Alright fellas, time to dust up and reopen the $2100 gold thread today...?

    Screen Shot 2021-03-02 at 9.33.32 am.png
     
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