Rudd prints more money

more aussie dollars in supply

aussie dollars in same demand

aussie dollar gets weak?

discuss.

Transparent attempt at epic thread.

was a give away

Transparent attempt at epic thread.

I dunno. I can still see it, so I'd say it's more translucent than transparent.
Discuss.

I can't muster the enthusiasm for another AU econopolitics thread yet.

If it gets some legs I might see you guys on page 5 or so.

Since when is he printing more money?

krudd can stimulate my package anytime

last edited by paveway at 09:24:36 20/Feb/09

i stimulated your mum's package

that wasn't very well thought through was it

krudd can stimulate my package anytime

hawt

I thought a weaker dollar wasn't always a bad thing ?

A "weaker" australian dollar makes some of our exports worth more.
imagine ...
A piece of coal is worth 1 USD
That means a year ago, that same coal was worth about 1.10 AUD now its worth 1.35 AUD ... 20% extra AUD (excluding resource prices collapsing)! Means more mines are viable means employ more workers ?

Or makes our exports cheaper
It costs 1 AUD to make a Doo-Dad. That means it was selling for .95 USD
Now that sells for .69 USD, means that the importers buy 3000 instead of 2000.
Means the Aussie exporter made $3000 instead of $2000 AUD. Means demand is up, means employ another sweatshop worker ?


A "weaker" dollar is bad for importing and bad for Aussie tourists going overseas. So less chinese electronics and people spending aussie dollars in the UK ? More buying Aussie made and holidaying at home ?

*gross simplification ... but no more simple then the original post*

I wish to subscribe to your newsletter Obes.

Aren't the US and UK governments doing the same "printing money" as you put it, effectively canceling any imbalance out?

Rudd's 42b stimulus package pales into insignifigance against the $770b ($AU1.2 trillion) US stimulus package. So in terms of each country's relative devaluation of their currencies through debt, the US is pumping far more paper into its economy than Australia.

Watch that video that Spaceman posted in the other thread.

Exchange is not dictated solely by demand on Aussie $ but also demand on the exchanged (opposing) currency. The most ironic thing of all is that demand is not based purely on the amount of $ in circulation but on the perceived safety of the currency and relative % yields on that currency's investment opportunities.

Q&A last night was exceptionally entertaining with poor Swanny trying to get one up over Hockey. Each attempt at humour failed, his arguements were s*** and when challeneged on any topic he couldn't come up with any reasonable defence.

Wow. That bears striking resemblance to some forum participants here! :)

Aren't the US and UK governments doing the same "printing money" as you put it, effectively canceling any imbalance out?

Don't the chinese and arabs have vested interests in the USD not collapsing ?

yes they so far have been the ones buying US bonds. Given the bonds are denominated in USD they want the dollar to remain stable however when the US government stops issuing public bonds and resorts to bonds issued by the Fed, devaluation of the currency is inevitable.

When the Chinese decide their money is no longer safe in US teasury bonds and they elect to sell (or the arabs elect to sell their oil contracts in another currency) some major s*** is going to go down.

When the Chinese decide their money is no longer safe in US teasury bonds and they elect to sell (or the arabs elect to sell their oil contracts in another currency) some major s*** is going to go down.

Thai Baht ftw?

the reserve bank’s monetary policy rule is independent of the government (read Rudd), and since when did open market operations involve the printing of paper money?

open markets do not print money unless you are talking about private banking expansion of credit. it's when the reserve bank buys the government bonds that money is printed.

but if the government is issuing open market bonds they are then outbidding private borrowers for the same funds.

who knows how to spend money more efficiently and invest? the government or the private sector?

Australia has a Surplus.
Krudd spent it.
Now we have a Debt.
That not printing money YET.

You see the plan is that if everyone prints more money and so when things finally improve all that extra money floating around will mean the country will be wealthier. -_-a

Britain isnt printing more money.
Britain is doing "quantitive easing" which is defined as printing more money.

The US bond market will collapse in 2 weeks.
tick tock...
tick tock...

last edited by FaceMan at 13:12:12 20/Feb/09

who knows how to spend money more efficiently and invest? the government or the private sector?

To be honest infi it wasn't government investment or spending that got us into the s*** we're in. It was all those private private managers of private investment in private debt. So I don't see how a government could do any worse.

Well really all parties are just as guilty through various extreme forms of leveraging. That's not to say the forms of investment were flawed, just that the prices paid were distorted due to loose credit.

With proper constraint on the expansion of credit, the private sector is far more efficient. We are seeing belatedly this efficiency at work as the credit bubble contracts rapidly decimating bank shares to a fraction of their original price in the US because that is literally what they are worth.

The sociological problem is that people seem to think prices going up is good but prices going down is bad? No that's nature. And nature doesn't stop for anyone.

Australia has a Surplus.
Krudd spent it.

Actually not quite true. The spending will have made that bottom line worse.
But the surplus was a notional surplus.

I think they budget would have been on the wrong side of the ledger even if there had been 0 stimulus packages.

The revenue is down.
ie. Mining revenues are down (less royalties and tax), businesses are making less (less tax), people are spending less (less GST), more people are unemployed (less tax).

eg. What 3000 miners are out of jobs this year from BHP alone, all were probably on 120k+ each. Means $90mill (3000*$30,000) less for the government.

Just say they all get unemployment benefits worth 10,000 a year ... there's $30mill extra they are paying out.

That's a $120mil hole and the government didn't stimulate anything.

Debt is a tool, it's only as good or as bad as you let it be.
eg. Good debt ... How many people could afford to buy a house with out it ?
Bad debt ... UK Public debt clock

That's not to say the forms of investment were flawed, just that the prices paid were distorted due to loose credit.

And greedy folks in private sector allowed the loose credit.
And some of the forms of investment are pretty flawwed. eg. Naked short selling. (Selling shares you borrowed from another investor, the goal being to sell them now for more then they are worth in the future, so if you can flood the market with your short selling and create instability and thus a price drop you win ...)

every form of investment carries a proportionate amount of risk. every investor is free to choose how much risk they wish to accept.

if investors cannot make this choice then what's free about it?

Bad debt ... UK Public debt clock

I see your debt clock and raise.

US debt clock

$10 trillion. lol @ US citizens

Well just using those ppl that were conned into STORM as an example.
Financial planners were telling ppl how great STORM was and then getting kickbacks on all that professional advice.

Sure ppl are greedy but if you cant rely on Financial Advice from the Pro's then what can the average punter do ?

Sure ppl are greedy but if you cant rely on Financial Advice from the Pro's then what can the average punter do ?

if you are not prepared to do some research to chase the big returns then expect to get burnt.

Lazy investors get wiped out. That's nothing new.

Sure ppl are greedy but if you cant rely on Financial Advice from the Pro's then what can the average punter do ?

Never invest in something you don't understand ?

Well 'research' would entail Financial Planners ?
I mean thats what they do ?
except the advice was tainted/biased and not independent.

How about being accountable for what you do with your own money instead of seeking to blame someone else.

Never invest in something you don't understand ?

Like Nick Bolton who bought $47,000 worth of shares but now owes $94,000,000 on them.

Smart move hot shot!

GM must be due to fall over very shortly. They couldnt possibly expect to get any more money from the U.S Govt.

heh even the 'Heff' is going down.

http://au.biz.yahoo.com/y7finance_editorial/19022009/playboy_going_bust.html

airline bailout cant be far off either.