The Chinese has build their economy on a uneven playing field ... pegging their currency to the US dollar.

What are the bonuses and negatives if Australia pegged our dollar to the Chinese Yuan.

A major kick start to Australian manufacturing ... an exporting boom ... helping the rural sector ... and a shift in our competitiveness with all our trading partners.

So should we consider pegging our dollar?

____ wrote on Oct 17^th, 2010 at 9:34am:

The Chinese has build their economy on a uneven playing field ... pegging their currency to the US dollar. What are the bonuses and negatives if Australia pegged our dollar to the Chinese Yuan. A major kick start to Australian manufacturing ... an exporting boom ... helping the rural sector ... and a shift in our competitiveness with all our trading partners. So should we consider pegging our dollar?

where do you get these stupid ideas! floating our dollar was probably the best thing we ever did economically since federation. and pegging it to a currency that is gorssly overvalued would be a disaster. this is why Greenies whould never be allowed anywhere near Treasury.

So should we consider pegging our dollar?
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What are the fors and against ?

A floating dollar has kept us out of the poo many times, so any talk of doing otherwise is crazy  :o

adelcrow wrote on Oct 17^th, 2010 at 4:09pm:

A floating dollar has kept us out of the poo many times, so any talk of doing otherwise is crazy  :o

I agree with Adelcrow.

The market finds the best place for a currency.

The market in fact should always be the key indicator of an intrinsic value of any service or commodity.

To try and buck the market and shackle it to a different currency always is disastrous.

Norman Lamont spent millions of pounds in one day trying to keep the pound pegged to the Deutche Mark before eventually giving up having spent our taxpayer money on a fruitless cause.

The Argentinians hopelessly tried to keep their Peso pegged to the USD.
It just doesn't work.

Currencies are bought, sold, forward traded based upon macroeconomic factors of global market demand, internal domestic interest rates, stability of government and processes, future economic prediction of demand and supply of resources etc.

The Australian is a free floating currency and if it's place is above 1/1 with the USD then so be it.

You work within the market economics, you don't try and hold them back.
If you do, you're in a losing battle from day one.

Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2.

 pass

Wind?

Andrei.Hicks wrote on Oct 17^th, 2010 at 4:19pm:

adelcrow wrote on Oct 17th, 2010 at 4:09pm: A floating dollar has kept us out of the poo many times, so any talk of doing otherwise is crazy  :o I agree with Adelcrow. The market finds the best place for a currency. The market in fact should always be the key indicator of an intrinsic value of any service or commodity. To try and buck the market and shackle it to a different currency always is disastrous. Norman Lamont spent millions of pounds in one day trying to keep the pound pegged to the Deutche Mark before eventually giving up having spent our taxpayer money on a fruitless cause. The Argentinians hopelessly tried to keep their Peso pegged to the USD. It just doesn't work. Currencies are bought, sold, forward traded based upon macroeconomic factors of global market demand, internal domestic interest rates, stability of government and processes, future economic prediction of demand and supply of resources etc. The Australian is a free floating currency and if it's place is above 1/1 with the USD then so be it. You work within the market economics, you don't try and hold them back. If you do, you're in a losing battle from day one.

The Chinese seem to be happy, so far, with their Yuan/US$ peg?

aussiefree2ride wrote on Oct 18^th, 2010 at 7:57am:

Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2.

Is that because of the long history & success of countries floating their currencies?

Why?

perceptions_now wrote on Oct 18^th, 2010 at 11:44am:

aussiefree2ride wrote on Oct 18th, 2010 at 7:57am: Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2. Is that because of the long history & success of countries floating their currencies? Why?

I think it`s largely due to the USA practice of printing unsecured currency.

aussiefree2ride wrote on Oct 18^th, 2010 at 1:18pm:

perceptions_now wrote on Oct 18th, 2010 at 11:44am: aussiefree2ride wrote on Oct 18th, 2010 at 7:57am: Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2. Is that because of the long history & success of countries floating their currencies? Why? I think it`s largely due to the USA practice of printing unsecured currency.

That could be argued, but the US abandoned the Gold Standard/backing of its currency, back in 1971 and the world currencies battled on quite well, until releatively recently.

I would look more to the building of Debt (official & unofficial), the reasons underscoring that Debt and that those reasons are continuing to build!

Btw, with or without currencies floating, there is still a capacity for massive intervention by sovereign governments, which we see happening again now! Also, the floating of currencies is a fairly new phenomenon.

perceptions_now wrote on Oct 18^th, 2010 at 5:10pm:

aussiefree2ride wrote on Oct 18th, 2010 at 1:18pm: perceptions_now wrote on Oct 18th, 2010 at 11:44am: aussiefree2ride wrote on Oct 18th, 2010 at 7:57am: Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2. Is that because of the long history & success of countries floating their currencies? Why? I think it`s largely due to the USA practice of printing unsecured currency. That could be argued, but the US abandoned the Gold Standard/backing of its currency, back in 1971 and the world currencies battled on quite well, until releatively recently. I would look more to the building of Debt (official & unofficial), the reasons underscoring that Debt and that those reasons are continuing to build! Btw, with or without currencies floating, there is still a capacity for massive intervention by sovereign governments, which we see happening again now! Also, the floating of currencies is a fairly new phenomenon.

So is the kinds of prosperity we have seen in the post war period.

longweekend58 wrote on Oct 18^th, 2010 at 5:13pm:

perceptions_now wrote on Oct 18th, 2010 at 5:10pm: aussiefree2ride wrote on Oct 18th, 2010 at 1:18pm: perceptions_now wrote on Oct 18th, 2010 at 11:44am: aussiefree2ride wrote on Oct 18th, 2010 at 7:57am: Currency is by nature a floating entity. While I appreciate the humor of the OP, I would comment that I believe the USD to be the most falsely valued currency since WW2. Is that because of the long history & success of countries floating their currencies? Why? I think it`s largely due to the USA practice of printing unsecured currency. That could be argued, but the US abandoned the Gold Standard/backing of its currency, back in 1971 and the world currencies battled on quite well, until releatively recently. I would look more to the building of Debt (official & unofficial), the reasons underscoring that Debt and that those reasons are continuing to build! Btw, with or without currencies floating, there is still a capacity for massive intervention by sovereign governments, which we see happening again now! Also, the floating of currencies is a fairly new phenomenon. So is the kinds of prosperity we have seen in the post war period.

Please explain?

If a floating currency is an important attribute, then why is the chinese economy booming?

Pegging The Aus Dollar to the Yuan would assist Australian manufacturing, Australian Businesses, Australian exports and Australian Jobs ; yes or no.

____ wrote on Oct 18^th, 2010 at 6:41pm:

If a floating currency is an important attribute, then why is the chinese economy booming? Pegging The Aus Dollar to the Yuan would assist Australian manufacturing, Australian Businesses, Australian exports and Australian Jobs ; yes or no.

'booming' is a RELATIVE term. after millenia of industrial stagnation their economy is rushing forward and has almost reached the stage where the west was 100 years ago.  by deciding to join the 20th century their economy has a long way to go and 'booming' was about the most natural and obvious experience. their currency is actually a RESTRAINING factor in their growth and they would be doing better by floating it.

That would make their exports more expensive, so decreasing demand for them. How is that good for the chinese economy?

____ wrote on Oct 18^th, 2010 at 6:41pm:

If a floating currency is an important attribute, then why is the chinese economy booming? Pegging The Aus Dollar to the Yuan would assist Australian manufacturing, Australian Businesses, Australian exports and Australian Jobs ; yes or no.

China`s "boom" has been a work in progress for around 40 yrs. Essentially, China has the key, human resource.