“Honey! Honey! I have a question for you. Could the Australian dollar like…you know…halve?” asked Barbie.
“Of course not, darling”, said Ken. “Australia is a stable democracy and liberal market economy. For a currency to halve it would need to have:
- “a bursting housing bubble and an exhausted central bank;”
- “a truly awesome external liability secured against massively inflated domestic assets;”
- “a rapid turnover of political leaders that played their roles as sectional sock puppets then were disposed of;”
- “an emerging oligarchy that rejoiced in allying with global capital to viciously plunder the resource endowment;”
- “a policy executive completely in the pocket of said oligarchs, and”
- “a strategic context in which competing Great Power alliances saw Australia as the “tip of the spear””.
“Darling, all of those things would need to be true for the Aussie dollar to halve. Don’t worry your pretty little head over it”.
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Later, when alone, Ken called his broker and old buddy, “Ridge, I want you to go maximum short the Aussie” he said.
When Ridge failed to respond, Ken screwed up his courage and repeated more loudly this time “MAXIMUM SHORT AUSSIE”.
