How the Australian dollar can save Australia

If it’s allowed to. The John Hempton Jolly Swagman podcast at 35 minutes.

Exactly right. If only it was allowed to fall by the interests that dominate monetary policy.

Comments

    • And when Malaysia said death to fx traders they should have instead sent them gifts for thanks. Why have the RBA defended the hell out of it previously if much lower is good? There are simply no countries ever that have let their currency fall 40% because it’s good. The Australian debate has gone delusional. WHEN iron ore falls to $40(double where it had never been until 2002), Australia will continue its history of huge booms and huge busts.

    • 40 years ago China produced no gold.
      Now they are the largest gold producer at 422 tonnes per annum.
      China is the largest hoarder of gold with at least 25,000 tonnes… and that’s just the government.
      China has encouraged its people to save in gold since 2003… with a middle class of 400 million, this will be a huge boost to its middle class.
      China “idiots”?
      I don’t think so.

      • It was sarcasm in reference to the fact that they are trying to stop their currency collapsing despite Hempton and MB claiming letting the currency collapse would lead to rivers of gold.

  1. – But here one “Houses & Holes” assumes that monetary policy can influence the value of a currency (e.g. the AUD)
    – Take e.g. interest rates in the US. Already in the early 1960s the US FED started to “print money”/increase the size of the balance sheet. This was meant to push US interest rates lower. But instead of of a steadily expanding balance sheet US interest rates kept rising and rising in the 1960s and 1970s.