adelcrow wrote on Sep 19^th, 2013 at 11:28am:

It's largely outside the government's control. It's a short-term decline in the value of the US dollar that is mainly due to the US Treasury announcing that they will maintain economic stimulus for the time being.

We should watch what happens over the longer term.

Bam wrote on Sep 19^th, 2013 at 11:45am:


There are some things that the OZ government & the RBA can do, BUT there is also a lot that it can not do anything about!

The surge today is certainly against the US$, due to events in the US, however those events were instigated by the US Federal Reserve, which is a Private institution, not the US Treasury, which is a government body.

That said, there has already been movement, up from the $0.89 level, to $0.92, in recent times, probably because those in the know have had the privilege of knowing MORE about what is likely to be coming, from those with MORE Power?

I suspect, we are seeing a balancing act, with enormous amounts (don't worry about Billions, go straight to Trillions) involved in Stimulating certain parts, of certain Economies, READ MAINLY USA, but also some parts of Europe.

However, these efforts can not fix the unfixable (Demand Decline, due to Demographics & Supply & Pricing problems, arising from Energy, nor can it fix Climate Change related issues/problems) and whilst  the Share Markets (mainly the US) can't get enough of the vast sums involved, it is not, will not & can not boost, US Demand.

So whilst Share Markets temporarily will lap it up, Money Markets will start to mark down the US$, which has now started.

This is where, the balancing act starts getting a bit more difficult, because if the FedRes & US Government continue their Stimulus packages (FedRes - huge Money supply increases & US Government - huge official & Unofficial Deficits & Debt), then it MUST continue to drive the US$ down, thus affecting US currency exchange rates, US purchasing power & driving UP inflation, NONE OF WHICH WILL DO ANY GOOD, AS FAR AS INCREASING DEMAND FOR PRODUCTS & SERVICES IN THE USA!!!

Therefore, at some point, the Lower US$ must force the cessation of US Government & FedRes stimulus packages, which will in turn force the US Share Markets down!

When the process finally starts it will hit hard, as the Decline will serve to clarify that all the attempts at smoke screens & under-handed activity, did not work. In fact, it simply made the problems more intractable & bigger and as the saying goes, "the bigger they are, the harder they fall!

Finally, when these events do start to turn, there will be Global ramifications, which will certainly also include OZ!

So, Good Luck to us & to the Liberal Party, as we will all need some LUCK!