Yes, some say there may be a rate rise to prop up our dollar if or when it plummets when the speculators decide to exit their positions.
RBA Leaves Rates on Hold!
- Thread starter Rixter
- Start date
Yes, some say there may be a rate rise to prop up our dollar if or when it plummets when the speculators decide to exit their positions.
?? if they could control that they would be getting the dollar down now. the RBA couldn't give a stuff about the dollar
Given the news out of Europe overnight, the AUD is only going up
Whilst I am sure there is devil in the detail, they are only 3-4 years behind the US in doing this
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Perhaps short term in reaction to Europe being "saved"... but my understanding is that strict austerity is expected in return for the assistance, which can surely only dampen growth in the medium term, reducing Europe's ability to buy from China, supporting their growth and resource demand (so IMO short term AUD could go anywhere, but IMO over the medium term, eg 1-3 years, it will head lower).Given the news out of Europe overnight, the AUD is only going up
If the Eurozone issues are finally resolved, and I don't hold out much hope that the latest will be a quick fix, then I'd expect the Euro to rise on the FX markets.
The Australian Dollar is perceived as a safe haven, so I'd expect it to fall if that happens.
Someone described the latest Euro fix as being sixteen members in a club voting for the seventeenth to pick up the tab. The question is whether Germany will put up with having to foot the bill. I suspect not.
If there was an easy solution to the crisis then it would have been implemented by now. There's a need to re-write some of the governing treaties of the EU (and David Cameron's intransigence really hasn't been helping), enforce spending limits, and pay down or even default on excessive debt.
As for alternatives to austerity, Francois Hollande was elected on a platform of France spending its way out of recession. Funnily enough, his plans now closely ape those of his predecessor due to pressures from the bond markets. For a lot of countries there probably isn't a choice, and membership of the Euro removes certain fudges such as a period of high inflation or a devaluation that a government might historically have employed.
The Australian Dollar is perceived as a safe haven, so I'd expect it to fall if that happens.
Someone described the latest Euro fix as being sixteen members in a club voting for the seventeenth to pick up the tab. The question is whether Germany will put up with having to foot the bill. I suspect not.
If there was an easy solution to the crisis then it would have been implemented by now. There's a need to re-write some of the governing treaties of the EU (and David Cameron's intransigence really hasn't been helping
), enforce spending limits, and pay down or even default on excessive debt.As for alternatives to austerity, Francois Hollande was elected on a platform of France spending its way out of recession. Funnily enough, his plans now closely ape those of his predecessor due to pressures from the bond markets. For a lot of countries there probably isn't a choice, and membership of the Euro removes certain fudges such as a period of high inflation or a devaluation that a government might historically have employed.
the quickest way out of the mess is a dose of high IRs and high inflation.
but no-one can do that, so we end up with this quasi stagflationary situation with a "whole lotta nothing, but nothing's getting better" situation.
countries operating their own financial systems with a common currency was always fraught with danger.
the chickens have come home to roost, now.
I'm not sure if there is an easy solution. There's a piece over at the FT in which the economist Jim Reid reckons that the seeds of the financial crisis go back to 1971. His argument is that once the US came off the Gold Standard it began to run persistent budget deficits.
If the root cause was over forty years ago, then it's going to take a long time to resolve.
If the root cause was over forty years ago, then it's going to take a long time to resolve.
Robert Kiyosaki also believes the problems we face today are due to the uncoupling of the US dollar to gold...
Because there can now be unlimited debt.
Ned more money to pay that debt off, it's off to the printers to print some more out of thin air to pay that debt down.
Can someone please explain...in very simple terms...
"how" a government can just print money?
How CAN they do it?
where does this money go?
how does this help?
Pleezzz...simple terms....
Central Banks print/electronically transfer money they create out of nothing and lend it to the government, and then charge interest.
This is why there is always more debt than there is money.
It doesn't but politicians don't understand how money works so they keep doing it.
The reason behind the 'why they do it' is to create inflation.
Theoretically, by creating inflation, the debt becomes worth less.
Of course within the banking system the govts have printed so the big banks etc have liquidity and are able to fund their debts etc.
One view is that inflation is currently being cancelled by deflation. People are cutting right back and saving which deflates prices while central banks inject money which is designed to inflate, thus ATM, there is little inflation. Many commentators have said that while benign inflation figures are being reported, the real figures are much higher (eg look at food prices around the globe etc).
Hope that makes sense, it does my head in too.
Theoretically, by creating inflation, the debt becomes worth less.
Of course within the banking system the govts have printed so the big banks etc have liquidity and are able to fund their debts etc.
One view is that inflation is currently being cancelled by deflation. People are cutting right back and saving which deflates prices while central banks inject money which is designed to inflate, thus ATM, there is little inflation. Many commentators have said that while benign inflation figures are being reported, the real figures are much higher (eg look at food prices around the globe etc).
Hope that makes sense, it does my head in too.
Can someone please explain...in very simple terms...
"how" a government can just print money?
How CAN they do it?
where does this money go?
how does this help?
Pleezzz...simple terms....
Excellent interview, talks immense sense.
I also enjoyed it. Thanks for sharing, Fence.
I tried to find a transcript but was not successful. The following link gives a little taste of what was discussed with some time markers for those that don't wish to watch the full 45 minutes:
http://www.kitco.com/ind/Tommy/20120905.html
