hey guy hows it going? just wondering how the problems in the US will have an effect on Australia?? i dont need a detailed explanation a basic and simple explanation is fine but if u want to be detailed that'd be great!! I've been reading articles from Mike Maloney's site and learning slowly about how basically USA will be in deep crap and have bought silver but just wondering how it will be back home here in Australia. thanks
You ask a question that has many of us wondering. The amount of information about the good old USA is extreme. By comparison there is very little about Australia. You have to hunt Steve keens debt watch site is good, as is the who crashed the economy site. You really need to spend time reading, but you should get a bit of a sense for how things could go. Check out the following http://www.debtdeflation.com/blogs/ http://www.whocrashedtheeconomy.com/ http://www.unconventionaleconomist.com/ http://delusionaleconomics.blogspot.com/ Then once you've done the research, come on back and let us know what you think. You'll have as goodly an educated guess at getting it right as anybody else around here.
I missed the preview ( GFC1 ) through lack of understanding. I now have a reserved seat for the main event... with a good supply of pop corn for the show.
I'm sure people in England, Spain, Italy, Greece, Ireland etc were all asking the same question 12-18 months ago The US has the world's 'Reserve' currency. If the wheels fall off the US, there will be 'some' affect/effect (?) around the world... not all of it nessecarily bad. Perhaps the main question is what will YOU do if the US crumbles? Welcome aboard
Australian economy is roughly 30% ties with US economy. Just look at 2008 GFC when US market dropped, Australia followed dropping by 1/3 way down. The biggest effect will come from US dollar since every countries in the world including Australia have a portion of reserve in US dollar. We are bound to lose that reserve, it's only a matter of time.
They have made it one world interconnected. One bit goes down its bad for the rest. Less Chinese fridges exported to America,less import of iron to china so less exports of iron ore from Australia,less money in Australia to import,fridges:etc.etc
The financial ties have actually increased since GFC I. The biggest concern I have is how long it will take to cut global trade free of the USD so that things can get started again. If boats start getting held in port or at sea because of doubts / impossibility of acceptable payment, that is when the real problems start.
As the USA/world plunges into another major sell-off there is one thing you can bank on - demand for USD will increase and the carry trade on FX will unwind, both causing the AUD value against the USD to crumble just as it did in 2008.
Hello Primaticves, welcome to the Forum ! Well, for a start... the US$ is still the World Currency, so its demise (or whatever else) will affect Australia ! We also have strong military ties with the USA, albeit many countries could claim likewise. I know many of us here are often negative about certain aspects of 'American Power'... but I think it is safe to assume that most of us are NOT against the People of America. Once again, welcome and feel free to express your own thoughts on Australia.
thanks guys wonder why i didnt join earlier now I can ask questions to people who can actually answer my questions!! So far from what i've read is that in china they are building more houses than there is demand for and creating an oversupply and people aren't buying and there are ghost towns of new houses. I'm guessing with them building so many houses its keep Australia afloat. I have heard/read Australia sruvives on the export of metal to China. How China is linked to the US with the foreign money I'm unsure of but I've read that the chinese hold alot of US dollars so if the Us keep printing money or people lose faith in the US dollar then the chinese will be left with nothing ut worthless payper dollars????? am i on the right track? please correct me so I can learn!! Thanks guys
Can someone please explain this. My understanding is that when Zimbabwe dollar collapsed there WAS a demand for gold and USD, but if it is the USD that is "collapsing/losing confidence" I would think there would be a demand for currencies from countries that have a resources or manufacturing based economy. The only time I could see demand for the USD is if you are buying from the US because your (AUD) dollar is stronger. Cheers
i just think that nobody has any clue what's gonna happen anymore. China USA, whoever, it's all just gonna unfold in it's own way. The driver of this locomotive passed out in a drunken stupor 5 stations ago and the brakes are disconnected.
I actually saw a report the other day, about a city that the chinese built in the western part of china. The city has all the norms one would expect of a modern city. They even built things like an opera house, hotels etc etc. It looked very similar in size one would picture a Brisbane to be (just didnt appear to have the out lying suburbs etc), but as the report said, the city only had 20,000 people in it at the moment. Due to the central planning, and the pent up demand, They are able to build mega cities (not piece by piece, like the rest of the western world does) , with the full knowledge that they have 400 million people who would be quite happy move there. Once complete, they then move the people in. China is genuinely trying to get 99% of its citizens, a decent level of lifestyle and housing, and they have the two most important things to achieve it. A very centralised controlled economy, and cheap excessive labour force. Small blips like 5 percent growth rates (from the usual 10%) will just slow the growth for a while, only to rebound later on. As long as that happens, Australia is in a good position. Holding vast amounts of US dollars wont affect the chinese (whilst the pile keeps growing ie they arent spending it, they are still able to manage 10% growth. so it means nothing to their growth story). In fact thanks to the chinese exporting deflation, my family now has two cars, three tv's and my current family of 4 probably use 10 times more energy than my family of 8 did when i was growing up. The biggest problem for china (and they realise it due to some of their purchases) is resource scarcity. Try shipping 500 million tonnes of iron ore or coal to china, if their isnt any oil to power the ships. Or whats the point of making 20 million cars a year, if you cant fill them up. Unfortunately, the very fact that is making china successful, will be its very undoing. By trying to westernize, china has indeed doomed itself, and the rest of the world to a very scary future. $90 oil in the midst of bad economic times, spells a mere few years before the scary future is upon us.
After reading some of Benjamin previous posts, all ican say to explain it is, I think we all must accept that democracy and freedom, does have some short comings
Yeah, basically that is correct. China wants to keep its yuan low so that it attracts export dollars (usually USD). To do this, instead of converting the USD's it receives to Yuan (which would push up the demand for Yuan) the chinease banks buy US Treasuries. In the last decade this has amounted to over a trillion USD worth of treasuries. If china was to start selling these treasuries in large amounts this would reduce the value of treasuries still held. This may also start a panic from the other countries which hold US treasuries, which will reduce their value even further. So, during the past few years the chinease banks have been slowly getting out of US treasuries (at a rate of about 100-200 billion a year) and spending the money on gold and securing oil contracts. This may accelerate if the Benanke announces QE3 or an extended QE2. As for the housing issue, the chinease government is trying to keep up with the influx of villagers to the city. This influx is so largethat they have to build suburbs in advance, expecting them to full withing the year. If the did not do this the villagers would create slum like dwelling all over the city like you see in india. I have see the pic's of what look like empty cities too, but once they are opened for sale they usually fill withing the year. I would expect the ghost towns are the villages they are leaving behind. A chinease friend recently told my that there are about 160 cities in china with a population over 1 million, and this is growing monthly. Hope this helps.
