Why the Aussie won't go down

[Auspm]

Agree.

But why won't the AUD go down

2 basic reasons IMHO.

1 - The Australian markets are not running on ZIRP/NIRP policies
2 - We're seen as a 'safe haven' because we're a resource rich nation.

Ultimately though, we're seen as the best of a bad bunch and externally, all you hear on Australia is how wonderful and safe it is by the MSM.

We have a huge amount of misallocated capital flooding into dead and risky asset classes in this country and an increasingly large proportion of foreign investment keeping propped up.

It's an illusion IMHO.

The moment the confidence is lost, our crash here will be catastrophic as not only are we sucked down the international vortex of defaults and bankruptcies at the top level, but a monster amount of investment dollars privately flees the country along with it.

WHO will be left to replace the gap?

Australia's younger working gens being crucified with debt and kept on the bottom rung of society?

Or perhaps the brighter, industrious and innovative Australians who... oh wait, they already got sick of being ass pounded and fled the country for Asia.


Like the entire global credit market, it's a shell game of confidence and illusion with NO real foundation or infrastructure to support it.

When push comes to shove, this country will fall over just like the rest of them and only then will we realise just how ridiculously over exposed to international markets our laughable 23 million people economy really is.

Being prepared for that eventuality is not 'doom and gloom' at all, but acknowledging the true reality of the situation we face.

Not being prepared, realistic and honest just means you're going to be equally as 'surprised' when it all goes to shit and standing around with the rest of our political leaders claiming 'we never saw it coming'.

 

[mmm....shiney!]

So in light of your comment auspm, and in light of the NZ Governor's comment, it's not that the RBA and the RBNZ can't devalue their currencies, it's that they won't because the high rate attracts capital which is used to support our housing debts and the property industry is seen as more important than the mining and agricultural and manufacturing.

There's more votes in keeping RE prices high, than keeping miners in work.

 

[renovator]

If anyone gets "bitchslapped " back to the dole queue is there anything they can do about it ?

You live in such a doom & gloom world .

It's not a question of Doom & Gloom as much as being realistic about the situation.

How could anybody in their right mind trust the assurances of our politicians or head of the RBA who are on record for being pathological liars?

I'm just saying that this country has a severe case of irrational exuberance and judging by what has pulled down this country's economy in the past, I'm lamenting the fact that this time anyone thinks it might be different.

We ride the coat tails of the industrial world. If they go down, we go down along with them.

Or doesn't anyone remember the all out panic in this country back in 2008?

Government of the day blew our entire surplus in a panic and now look where we sit.

Where's our manufacturing base gone?
Where's the future influx of trade coming from to reignite our flagging economy?
WHO is going to even be able to pay for it?

We have 20% of the populating moving from net tax payers to next tax takers in the next 5 years and absolutely nothing in our economy upcoming that will be able to account for this loss of public income (except maybe further propped up house prices?)

Meanwhile, we have politicians throwing cash at the most ridiculous public works programs whilst our core industries and infrastructure rot with the ONLY 'solution' on the table being more taxation!

Doesn't sound like a very secure economy to me at all... which is why so many international management funds are starting to short this country and it's banks I think.

I'd rather think for myself, regardless of what people might call me Reno and everything I've seen without the rose coloured glasses on tells me we might be very well living in a fantasy in this country, whilst some very serious storm clouds gather on the horizon.

Everytime someone comes out and proclaims 'it's different here' I seriously want to cringe...

My question was ...is there anything they can do about it ?

While i agree with some parts of your post the reality is we are different the $AUD is proof positive of that as shiney mentioned .

There is hundreds of thousands of immigrants & younger people joining the workforce to take up the slack left by retirees . Maybe not the same amount who knows ? i dont you dont . So the effects from that scenario will be much less than you anticipate . More like a slowing than a complete stop .

Theres plenty of countries that want our raw materials not just china so the resources boom is a long way from bust & it never will bust because of the need of those materials from the entire region . imo that is the reason the $AUD is where its at there really isnt any alternative suppliers that are feasible atm .There is some coming online but im not sure other countries will want to deal with them when they have an open & honest country like oz to deal with .

Also i think you underestimate the amount of foreign investors willing to spend money here, the amount of money the gov takes in taxes & revenue .

There is many things keeping us afloat & those things will soften any downturn for years to come .

So i say make hay while the sun shines.