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Showing posts from August, 2008

Australian Dollar’s Plunge Continues

Great article about the recent Australian Dollar's Plunge on Australasian Investment Review . It's now the biggest imponderable for Australian business. Just as we seem to have pushed high oil prices and inflation to the back of the agenda with last week's Reserve Bank hint of a rate cut, possibly next month, the plunging value of the Australian dollar will force us to keep oil and cost pressures in the forefront of our mind. Exporters will be having a quiet cheer, the pressures of a 98 USc Aussie dollar and the prospect of parity with the US currency, have been ended by the near 10 USc drop in the value of the local currency in the past three weeks. The Aussie fell more than 4% last week alone against the US currency and the loss since its peak last month is now well over 10%. Suddenly exporters are getting more for their exports, while importers are having to pay a bit more, including importers of oil and petrol. Big investors feel the uS has better recovery hopes t

Will China go bust after the Olympics?

I saw this good article on TheAge.com.au . It is always the question I had in my mind. Should we sell off the resource stocks after the Olympics? HAVING just given the banks another drubbing, it can't be long before the market turns on resources stocks with a vengeance. After all both are at the, er, coalface of the credit crisis. Despite taking a direct hit, the banks are valiantly fighting back with a 9.5percent annual jump in their fees and charges. But the bigger problem is that China is becoming more vulnerable. Certainly if the experience of Sydney, Athens and the other Olympic cities is any guide, when the games are over it will have a huge hangover, apparently without any fun to earn it. In all the twists and turns of the credit crisis, one surprise is how China gets away with a rickety banking system. If ever there were a banking collapse waiting to happen, outside the US that is, it would have to be China. The other day the Bloomberg news wire reported one of the c