Hi,
Again, a very perceptive comment. The Australians have been the big winners the past two years because of their hedging policies. Will they play a winning game too long and in the end regret this policy dearly? If they do not cover now, we say yes.
Ironically, the producers have , to date, been shooting themselves in the foot.Selling begets selling. Was it Newton's Law about a force set in motion? Our spiel is that the central bank, all important, selling is coming to a short term end. That will mean no supply to feed the natural deficit, and we have a big short term price rise as a result of the ensuing vacuum, that will lead to an even bigger price rise.
Best regards,
Bill Murphy
P.S. The Australians are the finest people on earth, We are trying to get this message ( cover some of your hedges ) to them. To answer your question in the most direct manner possible, they know not what they do , if they hedge down here and do not cover. |
