Aussie dollar at parity right now
- Thread starter Ajax
- Start date
Lovely... time to buy more HKSE shares. My parents kept saying they'd buy HSBC shares at sub-$100. It's way below that and they haven't moved. Not to mention checking out Chongqing and Chengdu next month when I go.
chongqing should be interesting - that city redraws it's map every 3 months for the expansion.
i think this was a ploy by the RBA to get parity and sell more bonds.
either that, or they're trying to sell more poly money to countries that don't need it.
i think this was a ploy by the RBA to get parity and sell more bonds.
either that, or they're trying to sell more poly money to countries that don't need it.
its also a great opportunity for australian investors to start getting international exposure.
My next strategic step is to establish US$ borrowing facilities for global equities with the source capital being US$ and the borrowings in US$ with US$ borrowing rates.
as long as you're borrowing FIAT money to play the FIAT game, you'll be just fine.
Hmm Chongqing is really interesting indeed - as said in other threads I've given up in HK since I really wanted to buy into Bel Air No 8 but couldn't afford it at such lofty prices now. So mght as well go mainland.
nothing wrong with mainland.....as long as you know where you're treading.
i'd stay well away from Beijing and focus more on Shanghai / Chongqing.
still, the Yangtze will be dead in 5 years, it's irreversible, so I wonder what that will do to the local sentiment.
i'd stay well away from Beijing and focus more on Shanghai / Chongqing.
still, the Yangtze will be dead in 5 years, it's irreversible, so I wonder what that will do to the local sentiment.
Anyone who could not understand parity was a given and who feels "We'll soon back to 80c where we belong." should be day-trading, not making long term investments.
i would have thought its the reverse
anyone day trading on the belief that the AU$ is quickly reverting back to 80c is seeing their capital evaporate.
Those making long term investments have plenty of time to let things play out.
Are you saying it is OK to have "no idea" about the markets, as long as you have a long time line?
A day trader doesn't need to understand long trends, merely short term charts and price movements.
That's what's going to happen at some stage,just looking at the price of OIL again,and it's going up each day.."We'll soon back to 80c where we belong." should be day-trading, not making long term investments.
Not for the first time we don't see things in the same light. But we're used to that.
The A$ may well fall against a basket of currencies but the US$ will fall even further according to my crystal ball. Britannia only took 50 years to sink. I reckon the Yanks with Bernanke at the helm can halve that time.
Serious question. What is the alternative to the Fed's approach to the US economy? Is it simply just not doing anything and letting the econony self-correct?
I'm only looking at the raw numbers that one can look at,and what also remains very powerfull is the spending power of the normal person on the street in the US,and as someNot for the first time we don't see things in the same light. But we're used to that.
The A$ may well fall against a basket of currencies but the US$ will fall even further according to my crystal ball. Britannia only took 50 years to sink. I reckon the Yanks with Bernanke at the helm can halve that time.
top us based 50 companies now get above 70% of their external incomes from outside the US then from my way of thinking it can balance itself out,there is more money going in then what's going out..willair..
Did you include the massive amounts of money which goes overseas through interest every year? Last year the Fed gov paid out $189 Billion USD, but thats only with rock bottom interest rates. To give perspective, in '07 it was $352 Billion USD. Then for every company in the US taking in revenue from overseas, there is an overseas country taking revenue from the US.
no i am saying that if one is day trading on the belief that the AU$ should revert back to US$0.8, then obviously that person would be shorting the AU$, and hence currently would be sustaining continued and serious capital losses.
If the day trader was going long AU$ that would be a different case.
However someone taking a long term perspective that the AU$ will 'balance' back to US$0.8 (or below), and investing accordingly has a longer time horizon. They also have the benefit of the underlying foreign investment.
You can look at it from several angles,but the way the aussie dollar is going it's only a matter of time before the revenue streams Labor needsDid you include the massive amounts of money which goes overseas through interest every year? Last year the Fed gov paid out $189 Billion USD, but thats only with rock bottom interest rates. To give perspective, in '07 it was $352 Billion USD. Then for every company in the US taking in revenue from overseas, there is an overseas country taking revenue from the US.
to balance and maintain the books will start to dry up..willair..
Traders don't take short term positions on long range beliefs.
Hi IV,
I feel I don't quite understand your logic here yet:
With high AUD-USD exchange rate, we can benefit from borrowing / investing in USD + low US interest rate.
Yet, is it correct any profit made over there would become less when profit is converted back to AUD?
Thanks
Anyone who could not understand parity was a given and who feels "We'll soon back to 80c where we belong." should be day-trading, not making long term investments.
Sunfish my comments were based on this. Any day trader who feels we should be back at 80c and traded accordinly will have been obliterated over recent weeks.
Therefore people with such sentiments SHOULD NOT be day trading according to their beliefs. There market can trade away from a persons beliefs longer than one can remain solvent.
Hi IV,
I feel I don't quite understand your logic here yet:
With high AUD-USD exchange rate, we can benefit from borrowing / investing in USD + low US interest rate.
Yet, is it correct any profit made over there would become less when profit is converted back to AUD?
Thanks
My investment belief is that the AU$ is long term over valued. So i am looking at ways to enact my investment belief.
If debt is utilised there are two options
(a) invest overseas using australian debt. The benefit of this is that if the AU$ falls, the overseas asset increases in value, yet the debt remains the same. However one needs to calculate the interest rate cost differential because the debt cost is in AU$.
(b) invest overases using intial australian sourced seed capital. but then borrow overseas (US$). If the AU$ drops you wont get the same kick value because only the 'equity' will increase. However the cost of financing the debt is much lower.
For my self i am moving towards (b). It also provides greater protection because one doesnt know for how long the AU$ will trade in a strong position. It could be strong for several years, in which case the interest cost differential will accumulate.
I should also mention that i am utilising a 'dollar cost average' method of obtaining international exposure.
Ie i am going softly softly and adding to positions over time.
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