Australia “manipulating currency”

Awesome, from the SMH comes Cliffs Natural Resources chief executive Lourenco Goncalves:

…Mr Goncalves said the situation had started to “smell bad” in Australia.

“The Australians have very little do at this time beyond continuing to manipulating their currency. Despite that we are already seeing lay-offs and mines shutting down throughout the entire Australian iron ore mining landscape,” he said.

…”They want to help BHP, they want to help Rio Tinto, they want to help that lady over there, Gina whatever.

“They are going to continue to help Fortescue Metals Group and they will believe that they will always crush Chinese producers. Big mistake, but it is what it is.”

Yes it is, but competing with the US isn’t, king of the currency manipulators. I guess Cliff’s has given up on selling its local assets but they will close soon enough.

Houses and Holes
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  1. i read this twice and for some reason my mind automatically inserted ‘help that FAT lady over there’
    both times.

    might be time for a coffee

      • dave_comments_1

        SQM also reckons rents in Perth are rising.

        “On one hand vacancy rates are high (for Perth) and continue to trend higher. On the other, asking rents have recently trended up again. It’s unclear why rents would do this.”

        They’re not.

        Walk around Perth for 5 minutes. A 45% increase? Lowball.

  2. That CEO is exactly right.

    It is quite clear that while the RBA are refusing to admit it the interest rate change yesterday was about nothing more than currency manipulation.

    It is bad enough that they are doing that but doing it in secret compounds the sin.

    We have a floating exchange rate for a reason and that is because second guessing it is a game for mugs.

    Now before you all fall off your stools let me be clear.

    Adopting regulations that limit unproductive capital flows will affect the currency but only as an indirect result of preventing the importation of financial bugs and vermin.

    No different to the indirect impact on the price of bananas of preventing the import of bananas from regions afflicted by banana VD (or whatever it is they get).

    The RBA are keeping their currency manipulations secret because they are grubby and below board and when people realise the ponzi asset and debt bubbles are taking off yet again they know they will cop the blame.

    So Australia becomes a “hush secret” currency manipulator because the obsessional belief in unregulated unproductive capital flows is not open to question or serious debate.

    Flawse – time for some of those angry words you do so well !!

    • Even StevenMEMBER

      PFH – agree that preventing unproductive capital flows should be the target. However, I’m not sure that I’d characterise the RBA’s actions as currency manipulation.

      Limited inflation on the horizon, slowing economy – they are just doing what they do in these circumstances (although no doubt not exactly displeased it puts downward pressure on currency)

      • Yes,

        My preference is that they are not talking about currency simply because the objective of the cuts remains the Debt Machine and the RBA would state if the objective of the cuts was to influence the exchange rate. Afterall it is not as though market in Fx by a CB is anything weird.

        Mainly just illustrating that if one accepts, as many seem eager to, that the rate cuts are all about softening the dollar then it is an exercise in currency manipulation and one without an explicit acknowledgment of that objective by the RBA.

  3. Even StevenMEMBER

    PFH – As you say, no need for the RBA to hide intervention in the currency. The unfortunate truth, I believe, is that the RBA is sticking to their broken thinking that lower interest rates will stimulate the real economy. The RBA has a limited toolset. What else can they do? They try, and try.

    Results have shown that all lower rates have done is stimulate asset prices, exacerbating distortions and wealth inequalities.

    I expect that the RBA and APRA’s hopes that lower interest rates will translate to higher business lending, innovation and productivity, are fading. But still, they try.

    Personally, I think only microeconomic reform, tax reform and targeted government spending can solve this one.

  4. Actually I think the RBA wants lower interest rates and a higher AUD because that is what suits Megabank best.

    Offshore funding for Megabank loan book stays cheap, while punters are more likely to draw on such funds.

    The RBA has been very actively defending the AUD on its descent, this has been no more obvious than in the trading following the rate cut announcement.