What's your prediction on the Australian Dollar?

Gettin back to the topic at hand...


IMHO the Aussie dollar is around its long-term sweet spot.


just why interest rates matter in all that is a very macro-economic view but it doesn't address the real world behaviours. Eg credit card interest rates of 20-22%.....

we are a low population first world country with by worldwide standards high employee wages and CEO bonuses and gas-guzzling individual transport choices (and even our stock market is used to realise cold hard cash into private shareholders bank accounts via stock bonuses, options, buybacks held by people who provided venture capital or led the IPO and the company - of course after the statutory retention period)

the A $ needs a world-wide rate that recognises that we are a first world country not a backwater plaything of international investors.
 
RAM said:
Conventional wisdom is more often than not wrong.

Remember:
  • The Japan century?
  • "Germany and Japan are the only economies that can spend their way out of their slow-down."
  • The value of Greater Tokyo's property is worth more than the continental US property. (Well sold Paul Keating!)
  • "No post-war economy will ever see negative interest rates - central bankers are too experienced and have heeded the errors of the past."
  • The NAFTA signing will lead to a massive rebirth in Australian Manufacturing.
  • Australian interest rates will never fall into single digits again due to our persistent Current Account Deficit.
  • The Commonwealth Govt can never generate a multi-year surplus (oft-repeated statement from 1980s through to mid 1990s).
  • State Govts are better at judging which companies in their states will become world beaters than the stock market (prelude to all State Banks 'directing lending; and subsequently being bailed out),
  • Prime office property never falls in value (head of Aust's then largest commercial RE group) in Australia, never has and never will (unfortunately head of fund mgmt operation he was presenting to had started life in the early 60s as a property analyst and had kept his charts since then...)
  • "The oil price has permanently shifted to above USD 100 a barrel." - so many international strategists and stock brokers

Japan went to ZIRP and effectively -ve interest rates nearly two decades before the next major economy. The lessons on the adverse impact (pushing on a piece of string) were there for all to see. Zombie companies kept alive as the banks could not afford to bankrupt them as the banks did not have the capital to cover the losses - so the loans keep growing and growing.
Japan - with the world's highest savings rate saw Japan Inc decide to eliminate the income for households from their savings at the very time that the demographics were tipping a huge increase in the ratio of retired to workers. The ratio of children to workers ALSO fell to around 1/3rd the level of 25 years earlier.
So, the global ponzi scheme continues until finally someone declares the 'central bankers have no clothes.'

Remember the rules for bubbles!
Click to expand...

I just love how we let the Chinese and Indians to invest in our own property investment scheme. I guess a few will be upset when we change the rules.
 
RAM said:
So, the global ponzi scheme continues until finally someone declares the 'central bankers have no clothes.'

Remember the rules for bubbles!
Click to expand...
Brilliant way of describing the current situation. People don't have what they think they've got. Especially when everyone goes to cash out.
 
interesting ride to catch up on this thread. It seems so obvious that there is a need to cut back the largesse of government concessions built up during the boom. The current government seems to lack the courage. Everyone needs to take a hair cut. We're much better off that most of the rest of the world. But perhaps our cycle is just about to bottom while everyone seems to be on the mend. Not sure what that means for the A$ but without pain and courage we're stuffed..

deflation on in the March quarter! Dollar down as a result
 
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marki said:
Noticed that 0.6869 at the mo
Click to expand...

01461785643.jpg

Totally pissed off now and the low inflation in Oz and the fact about 53%! Probability of a rate cut :rolleyes:
 
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The RBA cut interest rate, on budget day, to 1.75%.

The AUD pulled back to well below 0.76 USD.
 
Foreigner said:
The RBA cut interest rate, on budget day, to 1.75%.

The AUD pulled back to well below 0.76 USD.
Click to expand...

Happy for it to stay around this mark.

However I'm not pleased they've cut rates to be hones.t. it really is a sign of the times.
 
NAB already announced full cut to be passed through. Remember banks are brokers. They make "commissions". Off loading the cost onto depositors. Who surprise surprise are predominantly retirees who then get extra age pension from the Govt to "compensate"
 
hummel said:
Happy for it to stay around this mark.

However I'm not pleased they've cut rates to be hones.t. it really is a sign of the times.
Click to expand...
Which times? Where we prop up private enterprise? Time to think of retirees. The corporates need to lighten the fat salaries and prepare for smaller profits.

The person earning $1,000,000+ a year doesn't need help in retirement but the person earning $70,000 a year needs all the help they can get including higher interest rates not be encouraged to spend their savings.
 
Will it go lower because if it doesn't the dollar is destined to rise as the next move is up
 
I know but !!!! A big butt is whether it's staying at this level or falling more !!
 

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