Australian Dollar

Is it that bad?

 

It's probably not that bad, but I do understand the sentiment. Significant opportunities wasted by short termed visions of quick n easy mining $ especially by politicians of all sides. not much reinvestment of those $ to develop new industry, rather to support welfare, thereby feeding a welfare class who are dependant on govt handouts. When commodity prices collapse what happens then? Your still left with moochers and don't have the royalties to feed them. Yep, then unemployment goes up, dollar takes a dive, generally uncompetitive in global labour markets etc ..You are essentially 'put in your place' on the world stage.

 

For the vast majority of Australians the impact will only be felt in the cost of consumer goods (TV's, clothing etc). While they will be impacted by the economy as a whole - which the exchange rate has an impact on - there are also other factors at play.
Individual net worth for those who earn AUD, spend AUD, borrow AUD and invest AUD the value of the AUD has little relevance. The only exception being the cost of those overseas flights.

Australia has a very long way to go before even coming close to addressing this. It requires a complete overhaul of everything we understand to be true - which isn't going to happen any time soon.

Blacky

 

For those investing in ETFs like the bogglehead approach, there's a focus on balancing the port-folio with local and international exposure. For those of us who plan a bit of time outside Australia when financially free, I think having a bit of focus on this is a good thing as well.

 

Definitely Blacky. The world is becoming a much more global place though so I wonder if this will change. For me personally, I think I'll need to focus more on having exposure to other currencies in my investments.

 

Unemployment has been steady at around 6-6.1% for the last couple months. The dollar diving also makes us more competitive, thats kind of how it works, we get relatively cheaper. Tourism and education become a lot more cheaper to foreigners and our manufacturing...and yeah we do have a manufacturing sector sector is also cheaper. Look up the ABS stats sometime, Australia is far far more than a one horse mining town.

 

I'm not fully disagreeing with you. I said in the start of my post that it's not that bad and balanced the argument by illustrating a commonly held sentiment...

 

Hopefully AUD$ will be back to the support level of nearly $1 per USD. or at least $0.9 would be ideal.

 

Not for business, exporting and manufacturing.

 

Yes, let's hope so.

 

Wash your mouths out with soap!

We don't appreciate those views on this thread!

 

I imagine this will be a good time for people to work OS again. Before the resources boom, working in the U.S., UK, Singapore etc was all the rage. I imagine a lot of people will begin considering it again.

 

combination of high AUD and the changes the gillard govt brought in re who was and wasnt considered an australian resident for tax purposes certainly made working overseas less attractive

 

Fixed it for you

I think ultimately the changes in tax regulations will limit the number of people heading overseas for work. There will, naturally, still be some who are motivated to, but they are probably the ones who would leave regardless.
We might see a 'brain drain' of the younger generation who don't have a family. But the new laws make it that much harder if you do have a family - its just not worth while.

Blacky

 

Definitely agree with brain drain

A sibling and 2 friends of mine are off to work in London

Now that things are recovering and Australia conceivably slowing down theres a trend of more opportunity developing offshore

 

What changes have they made exactly to dissuade people from heading OS? I'm not aware of them.

 

Someone asked at meetup last night about holding USD in Australia to make some money on falling AUD.

Here is a one way I know;

• Open HSBC multi currency account

(Their currency conversion rate may not be best in market,but product is good for ease of use)

• Use ozforex to convert aud to USD and deposit money in to HSBC multi currency account.

• Watch AUD fall

• Make money!

Disclaimer; not a financial advice!

 

USD is the ultimate world reserve currency even the Chinese and Russians stockpile trillions of this stuff.

A huge majority of Global Trade is denominated in USD. Oil, iron ore, gold and most other commodities are priced in USD.

And that's other than the fact it's backed by the most powerful economic and military force in the world.

 

Get an interactive broker account. Much better rates and set up for doing this. if you get it in the name of a corporate trustee you will be able to access the margin loans as well at if you want some extra leverage, rates are extremely competitive.

 

US Shares ETFs are traded on ASX. Much easier and more transparent set up.