Straya!

[Tyrannical]

"I'm Australian" is just an excuse Americans use to act like drunken assholes. Just look at Mel Gibson.

The Jews drugged him, everyone knows that

[Hermit]

Three of Australia's bird species are arsonists.

[Hermit]

Police doing a chariot race at the Sydney showground in 1936

[Seabass]

Three of Australia's bird species are arsonists.

So even the birds in Australia are trying to kill you...

[mistermack]

Three of Australia's bird species are arsonists.

And it's not just birds.

Flying pigs are a real hazard as well.

[Hermit]

Three of Australia's bird species are arsonists.

So even the birds in Australia are trying to kill you...

Don't be silly. They just prefer their lizards barbecued. Wouldn't you?

[pErvinalia]

It's finally happened - a wallaby hops down a main street in Sydney CBD. It's been named "Bridgette"...



Straya!

[mistermack]

Looking at the currency markets again for the last year, the Pound has risen against the Australian Dollar from 1.61 to 1.73 over the last 12 months.

Is Oz printing money, and why, I wonder? I would have expected the lucky country, with all it's commodity wealth, to be able to pay it's way without loss to the value of the currency.

I don't think it's the pound being particularly strong. I looked at gold, and the pound buys roughly the same weight of gold as this time last year. Unless the pound and gold are both equally strong on the year.


Is there such a thing as a figure that gives the cumulative average value of all the world's currencies, that you can compare a single currency against, to see how it's doing against the rest of the world?

[pErvinalia]

We usually act to keep our currency exchange rate lower as it benefits our largely export driven economy. There's a lot of teeth gnashing if the exchange rate gets much above $US0.80

[mistermack]

We usually act to keep our currency exchange rate lower as it benefits our largely export driven economy. There's a lot of teeth gnashing if the exchange rate gets much above $US0.80

A lot of commodities are priced in US dollars anyway, so the value of the Oz dollar wouldn't really affect the exports, except to change what the final value in Oz dollars will be.
I suppose because of that, if you link the Oz dollar to the US one, you get less volatility in the final price you get in Oz dollars.
Mind you, a lot of commodity prices go up and down in response to changes in value of the US dollar for that reason.
If the US dollar falls, the oil price in dollars tends to rise to compensate.

[pErvinalia]

We usually act to keep our currency exchange rate lower as it benefits our largely export driven economy. There's a lot of teeth gnashing if the exchange rate gets much above $US0.80

A lot of commodities are priced in US dollars anyway, so the value of the Oz dollar wouldn't really affect the exports, except to change what the final value in Oz dollars will be.

Yeah, but when we are talking about commodities that we provide a large portion of to the world (like iron, coal, uranium, and probably heaps of others), then the price of those commodities falls in US dollar prices as the Aussie dollar falls (equivalent to the US dollar going up in value).

[Hermit]

Looking at the currency markets again for the last year, the Pound has risen against the Australian Dollar from 1.61 to 1.73 over the last 12 months.

Is Oz printing money, and why, I wonder? I would have expected the lucky country, with all it's commodity wealth, to be able to pay it's way without loss to the value of the currency.

The commodity market is volatile, in some cases extremely so. Iron ore, for example, has dropped dramatically from US$ 180 per ton to to US$ 40 between March 2011 and December 2015.



Coal tends to go up and down in tandem.

There are periods when companies export their respective commodities at a loss for months on end just to keep the business running, and hope to make up for the loss when the global economy recovers. Some make it, some don't. Arrium still managed to turn a modest profit on its exports of iron ore when it fetched between $110 and 150, but started racking up huge losses when the price per ton dropped below $70. In April 2016 it went into receivership. Improved production efficiency and an across the board 10% wages cut of its remaining 10,000 employees were not enough to keep it going. A bit over a year later the remains were bought by GFG Alliance, owned by Sanjeef Gupta and family, who reckons he can transform the wreckage back into a viable business.

So, no, owning lots and lots of raw commodities is not sufficient for a strong national economy. Profitability, and therefore strength, depends on the state of the global economy.

[pErvinalia]

We usually act to keep our currency exchange rate lower as it benefits our largely export driven economy. There's a lot of teeth gnashing if the exchange rate gets much above $US0.80

A lot of commodities are priced in US dollars anyway, so the value of the Oz dollar wouldn't really affect the exports, except to change what the final value in Oz dollars will be.

Yeah, but when we are talking about commodities that we provide a large portion of to the world (like iron, coal, uranium, and probably heaps of others), then the price of those commodities falls in US dollar prices as the Aussie dollar falls (equivalent to the US dollar going up in value).

The other big "export" industry to consider is tourism. That's definitely in AUD.

[mistermack]

Sounds like Iron needs an OPEC.

Iron is easier and cheaper to stockpile than oil. Easier for the customer countries to stock up while the price is low, and cut back when it rises. And the world stock of future scrap is always increasing.

Should have diversified into mining bitcoins.

[Hermit]

Sounds like Iron needs an OPEC.

Cartels do tend to stabilise prices and maximise profits, but they are difficult to create, and they are no panacea either. Right now OPEC in general and Saudi Arabia in particular is digging its own grave by throwing the spanner in Iran's oil sales.

In my previous post I was merely explaining why a nation's possession of natural resources does not guarantee a strong currency or economy. I hope to have enlightened you on that issue.