Which, as you say, raises some questions about the (on-going) role of the USD. I wonder if the Yuan-USD peg isn't masking the Yuan's replacement of the USD in this regard. . . ?
Or how about this scenario. . . China discovers vast quantities of Coal and decimates the Australian resources industry. I reckon that might be a good instigator for a AUD correction. China's coal reserves 'will make it new Middle East', says energy chief http://www.guardian.co.uk/environment/2011/mar/08/china-coal-new-middle-east "Vast reserves of coal in the far west of China mean it is set to become the "new Middle East", a leading figure in the global coal industry has claimed. Fred Palmer, the chairman of the London-based World Coal Association and a key executive at Peabody Energy, the world's largest privately owned coal company, also said that China is leading the US in efforts to develop technology to "clean" coal of its carbon emissions by burying them underground." A$50 silver could happen in a heartbeat.
I've always thought that the whole carbon taxation scheme was a ploy of the western elite to bring China down to its knees, as it obviously wouldn't be able to comply and must therefore spend heaps buying credits from others. That said, I don't buy the whole east vs. west propaganda constantly being served up by the media either.
You think China will pay a carbon tax that is representative of its output? Too pragmatic. Gold backed international currency is as far as they'll play ball.
Well, the political and corporate elite in the U.S. have sold out their country. Who's to say the Chinese elite won't do the same.
Or China could develop more nuclear power stations and not pay as much for carbon credits. http://www.smh.com.au/business/china-uturn-lifts-extract-20110308-1bmj4.html This is on top of the thorium reactors they're developing and they've got loads of thorium already.
Only partially correct. Houses won't suddenly shrink in price by a third for example. And Aussie dollars haven't devalued by half in just over a year even though silver has doubled. And, no Silver IS NOT money! It hasn't been money for a long time and probably never will be again. Gold IS money.
When we speak of China, and it is usually when we are talking about economic growth, we not only refer to government owned corporations but mostly refer to its agricultural and manufacturing sector which generate a large portion of its GDP...they will obviously be subjected to carbon taxation if the Chinese government signs up to an international agreement. So the question posed here is whether the Chinese government will sign such an agreement in the same way that it pursued membership into the WTO (because it was concerned about being shut out of export markets if it didn't join).
AUD change depends on what the RBA will do when we have our next correction. Hold IRs high to avoid capital flight but the economy will hurt so you will lose some overseas capital and AUD will decline. Reduce IRs and you will get huge capital flight and we'll see 0.60 again. The problem is, when this correction happens it will hit commodities also so you won't get off unscathed.
It will be interesting to see if the RBA can manipulate the IR to keep speculators invested in Aussie markets when the next crisis hits. All that hot money is leveraged and as soon as something happens these days there are margin calls and capital flight to pay down debts. I don't like the idea of stocks or property with such reliance on international speculators keeping things afloat. The whole thing could turn pear shaped in about two shakes of a lamb's tail.
Can i point out something obvious lol, if AUD drops significantly sure silver will go up in value priced in AUD but our cost of living will go through the roof because our currency is not worth shit lol. In Melbourne the bubble is on the brink of bursting with our dollar at parity... imagine if our dollar dropped 50% all those nice imports would be double the price lol
This is the wild card that should have every person fighting hard to get out of debt. Come the day, and your mortage is 18 percent, power and food have doubled or tripled and you've taken an unpaid day off each week to keep your job afloat you'll think back on the green field days when you could have made a few changes easily. Research SHTF Ireland, Argentina, Iceland etc
I've seen this scenario get thrown around but i just don't believe this will happen. With today's house prices, at 18% IR you'll get an 80% default rate. Who here really thinks the Govt will let 80% of mortgage holders default? You won't get anywhere near 18% IR because that would mean a massive inflation rate seeing fuel at $5/L and at that price we'd all be out of a job. What we saw in 2008 was the ceiling that our economy can handle. You can't stick your head above the ceiling because when you hit it, you fall over.
Maybe but interest rates have been falling since the early eighties and can't get much lower in the western world. Eventually the market will force them up and the trend is most likely to rise for a long while baring another 2008 along the way.
