Aussie dollar to drop below 66c - "benign" collapse ahead

Discussion in 'Currencies' started by SpacePete, Sep 11, 2014.

  1. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,970
    Likes Received:
    54
    Trophy Points:
    48
    You have been warned...

    Long term the Aussie$ has nowhere to go but down. The US will be raising rates while Australia is forced to keep rates on hold with the fall-off in mining investment hitting the economy hard and with the RBA trying to engineer a soft landing to prevent a huge calamity thanks to our massive level of personal debt that has been used to bid up house prices.

    Needless to say, if there are any hiccups with the Chinese economy then things will go from bad to worse very quickly for the AUD.

    With a growing population, increasing energy and food costs, a slowing economy, decaying infrastructure, accelerating unemployment and a critical lack of competitiveness against low cost and technologically progressive economies, we could see the quality of life in Australia begin to drop.

    Those of us with sufficient gold and silver, or offshore investments, should be relatively okay as long as things don't get too bad in the cities (or wherever we live). No guarantees though as social cohesion is lost and growing numbers of angry, disenfranchised, unemployed (and unemployable) residents decide to take what they believe they are entitled to.

    In the end, the piper will be paid for decades of economic ineptitude and greed.

     
  2. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    It's about bloody time!
     
  3. mmm....shiney!

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

    Joined:
    Nov 15, 2010
    Messages:
    19,243
    Likes Received:
    2,494
    Trophy Points:
    113
    Location:
    昆士蘭
    Will it?

    I have only a marginal contact with mining, but we are expecting bumper coal exports this year, and there appears to be a variable response from mining companies in regards to employment ie those mines where workers are overpaid and full of fat lazy bastards are getting laid off while those that employ contractors are hiring. Like I said, I don't have my finger on the pulse but it is not doom and gloom across the sector as the MSM would have everyone believe.

    Why wouldn't a Chinese hiccup affect the majority of Western economies? Why is Australia singled out?

    The growing population is not really an issue (it is easily managed by restricting new arrivals), the other issues you point to are significant problems when a government takes primary responsibility for the maintenance and provision of necessary services upon itself.
     
  4. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    http://trademinister.gov.au/releases/Pages/2014/ar_mr_140521.aspx

     
  5. Argentum

    Argentum Active Member

    Joined:
    Nov 7, 2010
    Messages:
    1,943
    Likes Received:
    12
    Trophy Points:
    38
    Location:
    Australia
    US wont be raising its rates; theyd be shooting themselves in the foot
     
  6. mmm....shiney!

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

    Joined:
    Nov 15, 2010
    Messages:
    19,243
    Likes Received:
    2,494
    Trophy Points:
    113
    Location:
    昆士蘭
    I'm lazy, find me the EU/Chinese figures please. :)
     
  7. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    I'm lazy too. That's why I didn't post them.
     
  8. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    Will this do?

    http://www.smh.com.au/comment/risky...-leaves-nation-vulnerable-20140310-34hkz.html
     
  9. mmm....shiney!

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

    Joined:
    Nov 15, 2010
    Messages:
    19,243
    Likes Received:
    2,494
    Trophy Points:
    113
    Location:
    昆士蘭
    No. Edit to add:
    You quoted SMH. ;)

    How about wikipedia?

    http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_China

    And this:

    [imgz=http://forums.silverstackers.com/uploads/753_screen_shot_2014-09-11_at_112504_pm.png][​IMG][/imgz]

    Basically Mongolia is fkd. We are 16th fkd.
     
  10. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,251
    Likes Received:
    2,483
    Trophy Points:
    113
    Location:
    Australia
    I read another fellow who said it was heading back to parity and above soon because of (insert reasons).

    No-one knows. The experiment currently underway has no precedent. It's like a dinner set laid out on the Titanic. The water is lifting the plates and bowls and the table is tilting. What isn't sinking is rattling around knocking chips off each other.
     
  11. Yendor

    Yendor Member

    Joined:
    Dec 29, 2013
    Messages:
    238
    Likes Received:
    1
    Trophy Points:
    18
    Location:
    Perth
    Unemployment rose from 6.0% to 6.4% last month, and was expected to fall slightly to 6.3% this month. But the figures released tonight say it's dropped to 6.1%, so better than expected. Presumably there should be a bit of a bounce back tomorrow.
     
  12. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    They can both be true. The EU may have the biggest trade volume with China, yet Australia has the largest percentage of GDP traded with China.
     
  13. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,970
    Likes Received:
    54
    Trophy Points:
    48
    Eventually yes. The key is that they will do it out of step with Australia which will be negative for the AUD.

    Next rates decision is imminent, but it's irrelevant if they raise them now or over the next several months and years. Longer term the probababilty is that the U.S. will be raising rates faster than Australia.

     
  14. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,970
    Likes Received:
    54
    Trophy Points:
    48
    The comment was specific to new mining investment, not short term exports. New investment is declining, and this is something the RBA takes into account when setting rates.

    Additionally, resources like iron are hitting multi-year lows which doesn't help.
     
  15. tolly_67

    tolly_67 Well-Known Member

    Joined:
    May 17, 2010
    Messages:
    1,861
    Likes Received:
    99
    Trophy Points:
    63
    I believe that we will see a fall for a period but in time we will surpass the u.s. Dollar.
    International capital will be attracted to Australia for the same reason it is attracted to the u.s., I.e. Far away from the trouble.
    As with the u.s. Domestic issues will be 2nd fiddle and factors in the economy will move contrary to what narrow minded economists insist it should.
    You need to look at the Aussie dollar compared to all currencies. I would not be surprised to find that we are also moving up but at a lesser rate than the u.s. Dollar.
    Comparing to one currency is not particularly smart.
     
  16. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
    [​IMG]
    Source: wikipedia

    [​IMG]

    [​IMG]

    Quarterly taxation revenue ($millions) since 1959.
    [​IMG]
     
  17. SpacePete

    SpacePete Well-Known Member Silver Stacker

    Joined:
    Mar 1, 2014
    Messages:
    12,970
    Likes Received:
    54
    Trophy Points:
    48
    ^^^ good charts ^^^

    Shows our heavy reliance on very low value-add exports at the expense of all other sectors. I notice in 2012 that at least vehicle exports stood out a little, something which we have now decided to kill which reduces again the few opportunities available in this nation to gain and to profit from engineering and high tech skills.

    It's slow motion economic suicide.
     
  18. Revils

    Revils Active Member Silver Stacker

    Joined:
    Jun 20, 2013
    Messages:
    906
    Likes Received:
    62
    Trophy Points:
    28
    Location:
    Australia
    The charts are missing key exports of tourism and education
     
  19. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,237
    Likes Received:
    1,164
    Trophy Points:
    113
  20. Holdfast

    Holdfast Well-Known Member Silver Stacker

    Joined:
    Oct 15, 2009
    Messages:
    9,086
    Likes Received:
    316
    Trophy Points:
    83
    Location:
    Australia

Share This Page