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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: rz who wrote (62544)4/23/2005 6:54:25 AM
From: KyrosL  Read Replies (3) of 74559
 
Australia has a much bigger real estate bubble than the US -- which is now bursting. So, even though its mortgage industry is not as crazy, the wealth effect still spills over into excessive consumption, mostly of imports, hence their trade deficit. However, their government runs a budget surplus, and their social security system funds are already in a "lock-box". Also, part of their trade deficit is actual FDI pouring in to finance expansion of mines, etc.

So, I still think the AUD is not overvalued vs the USD, and I put my money where by mouth is by recently tripling my FAX position, when FAX started selling at nearly 10% discount to its net asset value.
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