The RBA’s monthly foreign transactions data is out today, and nup, still no hand on the head of the battler:
I’m still waiting for unemployment to shoot up and the economy to implode due to the high AUD.
It’s been 2 years with the AUDUSD near parity and businesses are still doing it tough because they will never adapt to a strong currency.
I dare you to put your name on such an extraordinarily stupid comment.
You have my name. Now tell me how protecting Australian industry from a strong currency is not pandering to the special interests? Or how any currency intervention will not be inflationary or result in balance sheet risk for the RBA.
Keeping in mind the average person benefits from lower import prices with most products manufactured overseas.
All that international capital seeking a home and bidding up the dollar is allowing Mr Swan to run up cheap (for now) public debts and the RBA to run a low interest rate strategy.
They are hoping the littler battler stays on the tips of his toes.
Of course that is pure short term thinking and will do plenty of long term damage to several sectors of the Australian economy.
But as we discovered yesterday any questioning of the low interest rate strategy and using household debt to drive the economy is the province of driveling Utopians, socialists and the naive.
If you want to control the dollar you have to be prepared to relax your white knuckle grip on the precious interest rate / debt lever.
Which of course would be no problem provided you are prepared to let fiscal policy do any ‘stimulation’ work that needs to be done and leave the job of monetary policy to stomping on inflation.
With 5.4% unemployment there probably remains some room for the need for any stimulation to be debated.
Come on, Mr Sensitive.
I was actually quite impressed that I could argue against centralised state manipulation of the economy and the redistribution of income using interest rates and debt AND still be a Utopian socialist.
Next week I will be rejoining the vegetarian collective with a leg of lamb tucked under my arm.
I think you might have taken on some comments aimed at others…
Yes – but I liked them…..
RBA still not selling the Australian Dollar?
They’re hoarding – far too valuable to sell.
You are in an unenviable position.
With Mr Swan and the RBA are clinging to a high dollar (bar some crocodile tears) to get them through to the election, I hope you have a good peg handy.
If the RBA sells the AUD, what are they going to buy with it?
Euro’s? USD? Pounds? Renminbi?
Nope, nope, nope, maybe?
“According to the World Gold Council, since first becoming a net purchaser in Q2 2009, central banks have added almost 1,100 tonnes to global gold reserves, almost reversing the 1,143 tonnes net sales conducted over the preceding three years.”
I would think (from a man with no knowledge of anything) that they can buy the foreign currency, then purchase assets with them, that will make profits when the dollar goes back down.
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