Dirt dusted on dollar damage

Dalian is still powering today:

But Big Iron isn’t as the AUD rips:

Big Gas not happy, either:

Big Gold is downright unhappy:

Banks are partying after APRA didn’t address risk weights. But it is surely going to…

Big Liar is going nowhere:

ASX still stuck in the mud.

Houses and Holes
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  1. proofreadersMEMBER

    “Banks are partying after APRA didn’t address risk weights. But it is surely going to…”

    LOL. APRA and the RBA will do what they are told by Big Debt?

    • DingwallMEMBER

      And why not ….. they probably all have $10m+ loans with Big Debt……….. How high Sir ?

  2. The Dollar rips.

    I am a believer in a medium-term bull market for the AUD, and am surprised that MB is not, have to tell you.
    Take the damage to the advanced countries from their money printing – the deleterious resultant currency effects later will fail to be corrected by interest rate rises that adequately support their currencies. Australia is not in that basket. So, my ‘surprise’ that MB is bearish on the currency.

    Yes, we have debt/property bubbles/low wage growth and all the other well-known factors, but so have these advanced nations I refer to above. Clinging mainly to China’s demise is a long-straw = commentators have falsely assumed catastrophe there for the last ten years.

    So, a stable Aussie economy – unadulterated by ‘time-bomb’ effects that the money creation of other advanced nations will later cause their economies – will be a stand-out winner = the currency will be so strong over the medium-term = it’s got little to do with China/metal prices ….. it’s all to do in the future with the impending financial collapse of overseas asset prices once the money-printing and Central Bank reductions in Balance Sheets take place. We are not in that position and will fare very much better than the advanced countries = our currency will be strong.

    Maybe, as looking at the charts may suggest, the AUD has been forming a strong/long base formation – typical of a structural change in direction upwards – over the last two years.

    • Andrew LeesMEMBER

      I wonder if Australia isn’t in much the same position as those other economies that have printed money to support asset prices, except that in our case the printing has been done by the Megabank, and the assets are more weighted to real-estate rather than the stock market. When the rest of the world sneezes as you suggest, isn’t Australia going to catch a big cold on the wholesale capital market? As soon as bank rates increase to reflect that and the housing market starts to roll over and with that the overall economy, then see the capital flee our shores and our currency follow the flow.

      • No Andrew, we are so very very far from the money-printing position of the advanced countries: have a look at their ‘accident-waiting-to-happen’ positions … it’s mind-boggling = http://www.reuters.com/article/us-global-debt-iif-idUSKBN14O1PQ

        And, because we are so removed from their types of credit-creations – and the depression-causing effects the unwinding will occasion on their economies and currencies – we will be relatively strong. I cannot accept the other premises you offer. Go long the AUD, OK, medium-term.

        My point is also that HnH is really smart when it comes to his understanding of the resultant/consequent onerous effects of massive credit-creation. Thus my ‘surprise’ that he is ‘supportive’ of other currencies = ie. he is negative on the AUD.

        We’ll end this thread now, please – thanks. Go well.

      • Nuisance – I think you’ve drunk to much of the kool-aid mate. Yes the AUD is on a tear and will probably have an 8 in front of it soon but when you look at the terms of trade which is what the AUD generally follows it has been under pressure this year. There has been a bounce of late but if you look at what is happening in China, they have bond yields going from 3 to 5%, Shanghai prop prices registered their 1st fall in 2 years, wealth management products are being reigned in and the government wants to get rid of excess financial risks. Some estimates have total debt to gdp for China including off balance sheet and provincial debt at close to 400% debt to gdp and they have their 5 year government congress leadership change in November and there is talk that Xi wants to hold on till November after which steeper reform will come into play.

        All of this is coming at a time when commodities are already under pressure. The next month or 2 may see further aud bullishness but I only see this as an opportunity to short it.

  3. All these friggin Andrew’s giving their two cents worth.
    The other one reckons the American economy is slowing and the Chinese economy will hold on, giving support to the AUD.
    Well wonder we are all confused.