Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (11952)	12/19/2001 8:00:19 AM
From: Moominoid	Read Replies (2) of 74559

The economy is doing well because the cheap currency is great for our exports and currency devaluation ceteris paribus increases the GDP. I would bet on the upside as this won't continue forever. Especially as everyone is talking about gold going up and the Aussie is closely correlated over an annual time scale with gold - e.g. the devaluation of both against USD over last 5 years is almost exactly the same percent. Looking at Eliott Waves (which I got into recently) there is a nice zig-zag correction complete over that time frame in the AUD and other TA also shows signs of it bottoming. There may be other more rational reasons why the currency is weak apart from that gold is weak. Most often cited is that Australians are now net investors overseas in the last few years. $A50billion a year or so flows into the superannuation funds under the superannuation guarantee and there are only so many big cap Aussie stocks to put the money into. That new cafe/club/bar where MacDonalds used to be (it's called "The Holy Grail") was totally packed out tonight - where do all the people come from? :) Beautiful night with brilliant starry sky after a 32C and very low humidity day. David

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