Australian Dollar 2018

Discussion in 'Property Market Economics' started by MTR, 8th Jan, 2018.

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  1. MTR

    MTR Well-Known Member

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    AUD going to hell atm

    No overseas trips ..... 71
     
  2. Kangabanga

    Kangabanga Well-Known Member

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    More importantly US 10yr is now getting above 3.2%!!!

    We should see AUD easily hit 65c once the carry trades all unwind.
    I reckon trade wars+High oil price+rate rising is gonna kill emerging economies especially China in the coming months and indirectly impact Aus. We might even get a recession started before the end of the year....
     
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  3. MTR

    MTR Well-Known Member

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    Recession really???
     
  4. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    For a country with huge trade surplus, biggest forex reserves, worlds manufacturing hub with amazing execution capability, Does having a huge debt in local currency that big a deal?
    Countries fall in debt trap if debt is in foreign currency never if its local currency, for it can be, at worse, monetised :)

    Neither supply of oil nor its price an issue for china thanks to the willy nilly sanctions on both Russia and Iran.
     
  5. MTR

    MTR Well-Known Member

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    Looks like it may hit 65
     
  6. Duck1234

    Duck1234 Well-Known Member

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    Emerging markets yes like Indonesia. Given Chinas debt denominated in USD aid fairly small, and their oil reserves. China will be reasonably ok
     
  7. Kangabanga

    Kangabanga Well-Known Member

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    Japan has had a load of national debt and felt the same way three LOST decades ago before their big recession. Their economy has been pretty crappy since. Sure the country might not default but it will still have effects on the local economy. So it can be quite a big deal.

    On the topic of monetization of national debt, monetization will cause increase supply of money, when that happens u get low rates and big capital outflows and big currency devaluation which will then need defending via selling forex reserves.

    IMO China is just Japan 2.0 waiting to happen. Their gov has managed to slow down debt growth but it still increasing at a slower pace. At some point credit creation won't be enough to sustain debt and trade wars might just be the trigger to get there quicker.
     
    Last edited: 5th Oct, 2018
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  8. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Compared to japan,
    China has little external debt
    China's government debts are quite low (leaving fiscal options if need be)
    china has substantially high domestic savings
    China has been proactive rather then reactive by seeking to reduce its debt pile, by converting short-term bank debt into long-term bonds and redirecting credit to the private sector and households.

    but we are missing the big picture,
    This is how I see it,
    China is challenging the status quo by asking why US is able to
    • Borrow from the world and repay it by printing?
    • Willy-nilly threaten sanctions, break deals with no consequence?
    Its offering alternate via road belt and CPEC initiatives in SEAsia, Africa and ME
    Instead of financial aids(IMF) its offering productive capacity building to the nations which it feels are strategic to its long term interest both in terms of location and resources.

    Its has a 50 yr commited vision and the game is not about debt ...
    its about power, its about new world order, its about De-dollarization.
     
    Last edited: 5th Oct, 2018
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  9. PandS

    PandS Well-Known Member

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    on the bright side Japan Nikkei going gang buster breaking out of their decade long doldrum, anyone betting on resurgent of Japanese market last 2 years is on the winning run, 1992 until now the break out man that is a long long time
     
  10. Kangabanga

    Kangabanga Well-Known Member

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    Unfortunately much of that is from easy money from abenomics which has ended up in asset bubbles like stocks. Their GDP growth has been very spotty and they are unable to raise NEGATIVE interest rate without slowing down the economy badly. That just shows the effects of what happens when u have too much debt and too much spending.
     
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  11. Dean Collins

    Dean Collins Well-Known Member

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    .....for those of us with mortgages back in Australia and send money back to Australia regularly..... today was a good day to send it with the jump for the $US to $A1.419 (got $1.4115 with www.OFX.com )
    :)

    Basically the recent Fed movement, bond rate increasing due to job numbers, golden week in China etc etc have all had an effect for a pretty good rate.
    - Markets Today: Aussie down and staying there | Business Research and Insights

    Dont get me wrong the Fed will add at least 0.25% in Dec meeting....so rate is going to "probably" get even better but bird in the hand/two in the bush etc meant a good time to pay down some offset accounts affected by those recent St George/Westpac rate increases.
     
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  12. MTR

    MTR Well-Known Member

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    Yes, I am always bringing money home from US, its effectively 40% on top on AUD... very nice bonus
     
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  13. BoatArrival

    BoatArrival Well-Known Member

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    Japan doesn't have external debt either. Seriously, stop thinking China is that different. If anything it's very similar.

    High Wages Versus High Savings in a Globalized World

    I like reading this guy. The last paragraph is very illuminating:

    The trade intervention process begun under the Trump administration is likely to spread to Europe and continue long after the Trump administration has been replaced. This is because as the problem of income inequality becomes an increasingly important political issue, especially in democracies, attempts to reverse income inequality will be undermined by the requirements of a globalized world economy. Democracies will face two options: either ignore income inequality and allow it to get worse, or begin to impose constraints on trade and capital flows so that reforms aimed at reversing income inequality do not lead simply to higher unemployment.
     
  14. MTR

    MTR Well-Known Member

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  15. marmot

    marmot Well-Known Member

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    A lower AUD also pushes up fuel prices , so there might be more pain in the next few months as fuel prices increase , not helped by OPEC and the US sanctions against Iran
    Some are even saying fuel might hit $2 a litre , and then the flow on costs from transport companies facing a hit to their bottom line , or increasing costs.
     
    Last edited: 9th Oct, 2018
  16. Blacky

    Blacky Well-Known Member

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    I always thought fuel in Australia was expensive.
    We just spent a month driving throu Europe and it was between 1.5-2euros/liter for diesel!

    That hurts
     
  17. Casteller

    Casteller Well-Known Member

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    I'm always pleasantly surprised filling up in Australia, it's much cheaper than here in Barcelona but I notice basic unleaded is usually octane 91 not 95 like here maybe that's something to do with it (as well as tax)
     
  18. gman65

    gman65 Well-Known Member

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    Much shorter distances involved though, and they don't drive stupidly large cars like we do here so economy is probably better... I went through about 3 countries on about 1 tank of diesel :cool:
     
  19. MTR

    MTR Well-Known Member

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    I am calling 65..... AUD continuing to trend south
     
  20. Kangabanga

    Kangabanga Well-Known Member

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    Hey that was my call months ago! :p

    #market crashing
     
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