Australian Dollar

[HiEquity]

What about all the national debt and interest that we have to repay with a reduced dollar

My poor grandkids will be still paying for the party two decades from now

What about it? It's denominated in Australian Dollars...

That's the thing about a floating exchange rate that is so hard to explain to people. For every transaction, there will be winners and losers but often not how you expect. If someone sold their USD to buy AUD when we were at $1.10 so they could lend our government some money, then they are the people who just lost a lot of money if they want to repatriate it - not us!

No-one is creating or destroying Australian dollars when they exchange them for someone else's US dollars - they just change ownership. There are still the same number of Australian dollars out there, regardless of the exchange rate.

As for the doom and gloom, people are forgetting that the benchmark price of iron ore and oil are in US dollars - a weaker exchange rate neutralises a fair chunk of the impact for miners. They benefit from the lower rate in the same way that farmers do.

And regarding the risk of importing inflation through a lower dollar, I was pretty worried about that too - but haven't you heard? There's been a big drop in the price of oil? Couldn't have been better timing to stave off the inflationary effect of the lower dollar and keep the RBA away from the trigger. Not to mention that this is as much a story of USD strength globally - we are in the same boat as everyone else - which means the products we import from europe for example haven't really got much more expensive anyway. So just like the story of China and iron ore after the GFC - we really are the lucky country!

One day our luck will run out - when there is nothing left except degraded agricultural land and holes in the ground - but I still think that could be awhile yet...

 

[Ausprop]

what did you do 13 years ago when it became the Pacific Peso and dropped below 50?

worked in the UK and bought aussie property with my left over change

 

[Blacky]

Touched 83. Today.

Personally it's good for me so I don't mind.

Blacky

 

[Deltaberry]

What about it? It's denominated in Australian Dollars...

Seriously concerns me some people's understanding of this stuff yet they are probably more qualified than most Treasurers we've had in recent history.

 

[Macca]

To HiEquity and Deltaberry,

In the past our national debt was denominated mainly in USD or perhaps GBP or other, I am having trouble finding some reading on the current denominations of our national debt.

It would be excellent news if we could repay in AUD as in the past the repayment burden at 50c AUD was horrific. Been there lived through it, anyone under 40 years of age has no idea what bad times are like(which is a good thing)

I would appreciate a link or 2 to bring me up to date.

I have found this one dated 2009, a bit old, 60% of our debt still in USD GBP mainly

http://www.aph.gov.au/About_Parliam...s/Parliamentary_Library/pubs/rp/rp0809/09rp30

 

[HiEquity]

Macca I thought you were referring to government debt, not private debt. Private debt is the problem of the people who owe it - nothing we can do about people who want to borrow in another currency...

 

[Ausprop]

It's not a subsidy. Fuels are taxed so that the government can use the money to spend on roads. So farmers, fisherman, and miners get the tax back from diesel as we don't use the roads. If we didn't get this back, I would be subsidising you.

http://www.theaustralian.com.au/bus...-offroad-is-fair/story-e6frg9qo-1226912389434


See ya's.

where can I claim my rebate for filling my yacht with 1,000 litres of the good stuff?

 

[topcropper]

where can I claim my rebate for filling my yacht with 1,000 litres of the good stuff?

Get onto your local member and have a great big whinge just like ya doing here and try and tell him it's a business expense and that you use the yacht to get to work and need a diesel motor in case the wind aint blowing?

Let us know how it goes?

Bloody hell! And they say farmers whinge?


See ya's.

 

[MTR]

So Au$ at 84 and continuing to trend downwards, anyone using this trend to make money?? and how do you do this??

 

[datto]

So Au$ at

84 and continuing to trend downwards, anyone using this trend to make money?? and how do you do this??

Just buy the USD and hope that it plummets ie the ozzie peso plummets lol

 

[nomadic]

So Au$ at 84 and continuing to trend downwards, anyone using this trend to make money?? and how do you do this??

I'm sure there's more sophisticated ways but take AU$1,000 to your local bank and ask to buy USD. Today they'll give you US$832 for it. Wait a week then take your US$832 back to the bank and change it for AU$1,007. Easy profit of $7.

 

[datto]

^^^^^less tax!

 

[sanj]

I'm sure there's more sophisticated ways but take AU$1,000 to your local bank and ask to buy USD. Today they'll give you US$832 for it. Wait a week then take your US$832 back to the bank and change it for AU$1,007. Easy profit of $7.

That wouldn't work in Australia with the silly margins retail banks charge

 

[pinkboy]

I'm sure there's more sophisticated ways but take AU$1,000 to your local bank and ask to buy USD. Today they'll give you US$832 for it. Wait a week then take your US$832 back to the bank and change it for AU$1,007. Easy profit of $7.

That wouldn't work in Australia with the silly margins retail banks charge

The split is likely 5c in favour of the bank.

Probably better off opening a CMC Market account and trading Forex CFDs where the difference is only a couple of pips. Also trading in this manner you may not have to declare this as income* (*seek very specific advice here)

Thats not advice BTW.


pinkboy

 

[willair]

I'm sure there's more sophisticated ways but take AU$1,000 to your local bank and ask to buy USD. Today they'll give you US$832 for it. Wait a week then take your US$832 back to the bank and change it for AU$1,007. Easy profit of $7.

Problem with that is the bank would charge a service fee,the last time I went in for the daughter and depending on the teller generosity and the way I looked and was dressed they wanted 15bucks on top,iv'e found it's better the try those small money changers in the CBD get the numbers on paper and play each other of each other it worked for me..imho..

 

[Blacky]

So Au$ at 84 and continuing to trend downwards, anyone using this trend to make money?? and how do you do this??

Im very keen to figure out a good (safe) way to do this. My knowledge of Forex isn't strong enough to dive in feet first yet, however, Im sure a similar opportunity will come up in the future.

I am of two firm beliefs -
1) USA markets will perform well over the next couple of years - especially in comparison to Australia
2) The AUD/USD will continue to decline.

As such I am purchasing USD market stocks (VTI). This is denominated in USD. I have only tipped in a small amount at this point due to cash availability, but will continue to tip in more as cash allows.
In Australia the VTS stock has moved from about AUD$119 to $128 (7%).
The VTI index has moved USD$103 to about $106 (3%).
The AUD/USD has moved 87c to about 84c (4%).

For those not earning USD and living in Australia the VTS stock is the same as the VTI, but denominated in AUD.

Blacky

 

[Blacky]

Problem with that is the bank would charge a service fee,the last time I went in for the daughter and depending on the teller generosity and the way I looked and was dressed they wanted 15bucks on top,iv'e found it's better the try those small money changers in the CBD get the numbers on paper and play each other of each other it worked for me..imho..

If you are dealing in cash a much easier way (and cheaper) is to open a Citibank multicurrency account.

You can have multiple currencies and can transfer from one to another with a phone call. The charges are far less than any of the other banks, and Citibank consistently has 3-5c better exchange rates than the banks.
Todays rates
CBA buy 0.7920
Citibank buy 0.8497
If you move $20k or more Citi will beat the posted rate.

Again - if you are doing this regularly, and on a large scale there are easier and cheaper ways than this - by opening an FX account with one of the online brokers.

Blacky

 

[MTR]

82

Australian Dollar:
The Australian Dollar plunged below 0.83 during trade on Friday as US labour market data shocked investors adding nearly 100,000 more new jobs than anticipated throughout November. Friday?s Non-Farm Payroll report showed some 321,000 jobs were added highlighting the strength of economic recovery throughout the US and adding support to calls for the Fed to adjust interest rates as early as July next year. The Aussie now trades at fresh 4 year lows having moved comfortably through what was seen to be key support levels at 0.8320 as attentions now turn to Chinese Trade balance Monday and NAB business confidence Tuesday for directional impetus into the start of the week.

 

[MTR]

Who would have thought that the Aussie dollar would be free falling now at 81.

I can see now why they are predicting 72 next year.

 

[Oscar]

Hi MTR.

This is obviously very good for the Atlanta investments. Like a free rental increase of around 25% since purchase.