What is the real state of the economy?

[Power Raid]

That is again a simplification. Your statement is only true if youre talking about goods or services that have an overseas component to them. When the dollar falls do we automatically pay more for everything? Of course not.

I think it depends on whether you are considering Australians vs Australia. The majority of Australians will be hurt by the falling $ immediately through higher import costs rather than benefit from a lower dollar directly. Indirectly they would no doubt benefit through competitive exports stimulating the economy.

Unfortunately we over cooked the stimulus under Rudd which saw our $ sky rocket and seeing much of our export industry close or set in process closure. So it will take some time for new industry to emerge and benefit from Australia's lower $. In turn that means most Australians won't see the benefits immediately.

 

[Long Live HFC]

I think it depends on whether you are considering Australians vs Australia. The majority of Australians will be hurt by the falling $ immediately through higher import costs rather than benefit from a lower dollar directly. Indirectly they would no doubt benefit through competitive exports stimulating the economy.

I don't disagree with anything here; it has a bit more depth than the statement i originally objected to.

 

[medusala]

What are you two on about? The only reason the dollar went up was because we only got clipped by the GFC while everyone else got whacked. The traders that so many right-wingers seem to think are the bees' knees didn't expect us to get over parity, but the resources demand made it happen. Both those effects were bound to trail off, but to make out that somehow we've lost personal wealth is stupid when we can still buy the same things for the same dollars down the street.

If those things are imported then its pretty unlikely that you will be able to buy them for the same price Ratts. If $1 buys less than it used to then surely that means a decline in the standard of living?

 

[Lebbo73]

It's no surprise that your opinion here is such a simplistic binary construct. There are pros and cons to an expensive currency, just as there are pros and cons to a cheaper currency.

Asserting as you have here, that an expensive currency is all good, and a cheaper one all bad, is demonstrably wrong.

Yes there are pros and cons to a cheaper currency. The big con at the moment is believing that any significant manufacturing will return to Oz. We would of been better off if we kept interest rates at least 1 or 2% higher and maintained a stronger currency.

 

[Long Live HFC]

Who's claiming manufacturing would return to oz?

 

[Lebbo73]

Who's claiming manufacturing would return to oz?

Then we are better off with a higher A$

 

[Long Live HFC]

Then we are better off with a higher A$

No, *consumers* are better off in certain circumstances with a stronger currency. But that's a very narrow position to take if you're ignoring exports (since when are all exports classed as manufacturing?), foreign investment and tourism.

 

[yibbida]

The craziness is on you two for not knowing why a low Australian dollar is bad for Australians

http://www.liberal.org.au/latest-ne...key-speech-how-coalition-will-assist-business

Those who argue for a lower dollar are effectively arguing in favour of higher prices for consumers

- Joe Hockey - 28/02/2013

 

[Ratts of Tobruk]

If those things are imported then its pretty unlikely that you will be able to buy them for the same price Ratts. If $1 buys less than it used to then surely that means a decline in the standard of living?

Any business worth its salt takes into account variation in the dollar. Otherwise the price would be different every hour or every day.

And obviously Australia doesn't import everything. We make and grow heaps of things. Eagle in particular likes to talk about the economy when making his right-wing case, so it is irresponsible for him to talk as if Australia doesn't.

 

[Eagle87]

Any business worth its salt takes into account variation in the dollar. Otherwise the price would be different every hour or every day.

And obviously Australia doesn't import everything. We make and grow heaps of things. Eagle in particular likes to talk about the economy when making his right-wing case, so it is irresponsible for him to talk as if Australia doesn't.

My original comment was simply that I find it amusing that union warriors are prepared to fight to the death over retaining an extra couple of bucks an hour for working on Sunday while not even noticing that relative wealth has been smashed by the falling dollar.

We grow heaps of stuff and we make some, but we import heaps and part of the reason for that is said stupid working conditions...

We are using the blunt instrument of currency debasement to do the work of restructuring the economy and it's likely to have less ideal outcomes than proper restructuring of the economy including the way we employ people.

But hey, you can still buy a pie for roughly the same so it's all good. It's that sort of big picture thinking that drives our politics

 

[Ratts of Tobruk]

My original comment was simply that I find it amusing that union warriors are prepared to fight to the death over retaining an extra couple of bucks an hour for working on Sunday while not even noticing that relative wealth has been smashed by the falling dollar.

We grow heaps of stuff and we make some, but we import heaps and part of the reason for that is said stupid working conditions...

We are using the blunt instrument of currency debasement to do the work of restructuring the economy and it's likely to have less ideal outcomes than proper restructuring of the economy including the way we employ people.

But hey, you can still buy a pie for roughly the same so it's all good. It's that sort of big picture thinking that drives our politics

And when the $ was at record highs under Labor, you were complaining about the economy despite how rich you clearly thought everyone was. Odd.

 

[Eagle87]

And when the $ was at record highs under Labor, you were complaining about the economy despite how rich you clearly thought everyone was. Odd.

See, now you're just being your usual "us v them" dickhead. Which you're welcome to be.

The rest of us are busy trying to build stuff...

For clarity, the ALP had as much to do with the high dollar as the current government has to do with the low dollar.

I'm not sure if you are able to grasp that.

 

[Ratts of Tobruk]

See, now you're just being your usual "us v them" dickhead. Which you're welcome to be.

The rest of us are busy trying to build stuff...

For clarity, the ALP had as much to do with the high dollar as the current government has to do with the low dollar.

I'm not sure if you are able to grasp that.

Trying to build stuff... right. Shall I go back thru the comments you were making then to see how often you referred to the unheralded wealth of Australians thanks to the high dollar? Or was that when you were demolishing the site before you could build on it?

 

[Eagle87]

WTF are you going on about?

You really are a sad sad little man stuck in your us and them world.

For clarity, the most recent ALP government(a) were amongst the worst and least effective governments in our history.

The current government is almost equally s**t.

I'm not interested in the playing of politics.

It seems its your only Interest.

Adios

 

[Ratts of Tobruk]

My apologies, you did say Australians were rich back then:

The ALP have determined you are "rich" and as such you need to pay your way and support "working Australians" ....

And that flimsy modelling will, as always, be a massive underestimating of real cost increases.

Argh, bugger. Your quotation marks caught me out. It appears you were mocking the ALP for suggesting people could afford a carbon tax, even as the AUD floated between $US1.05 and $US1.10.

My overall point would be that maybe you care greatly about the strength of the Aussie dollar because you are living in Thailand? For everyone else it's not an indicator of wealth. Obviously.

And, no, I am not living in an "us vs them" world. I am reacting against your self-interested approach to economics. There are people in different situations that yourself, but you consistently argue for an economic situation that I suspect benefits you foremost, rather than a society made up of a variety of interests and people trying to make something of themselves.

 

[Eagle87]

Not at all. I consistently argue for a better economic position than the comparatively poor one we have because we won't address real reform and instead we've become a lazy, bloated, inefficient country ...

I argue for an economic situation that benefits the country the most and therefore provides maximum opportunity longer term for everyone.

I completely grasp the idea that it's not all about economics. But all that namby pamby leftie s**t does cost money

I have more assets in Oz than Asia. And much of my current business income comes from Australia. The economy is several levels of shite worse at present than its been for a couple of decades. And people bleat anytime ANY change that effects their position is floated - and you take a kinda shot at me for worrying about the bigger picture?

 

[medusala]

Any business worth its salt takes into account variation in the dollar.

No Ratts, they don't. If they source domestically and sell domestically then they really aren't affected by it.

For everyone else it's not an indicator of wealth. Obviously..

Ratts, it is though. Australia has been living beyond its means and its lost competitiveness. Two ways of that being fixed (and the market will force that, doing nothing isn't a long term option). You can either reduce wages in nominal terms or in real terms via the fx rate.

I am reacting against your self-interested approach to economics...

Well then Ratts, you must utterly DESPISE unions

 

[Ratts of Tobruk]

No Ratts, they don't. If they source domestically and sell domestically then they really aren't affected by it.

No s**t, but we were talking about people that were effected by the dollar. Obviously.

Ratts, it is though. Australia has been living beyond its means and its lost competitiveness. Two ways of that being fixed (and the market will force that, doing nothing isn't a long term option). You can either reduce wages in nominal terms or in real terms via the fx rate.

I disagree. People do not judge their wealth by converting it into USD based on the current exchange rate. The vast majority only care if they are about to holiday or are returning to Aus to spend money they earn overseas (in which case the lower dollar is preferential).

Well then Ratts, you must utterly DESPISE unions

Nup. I'm a Union fan based on what they've achieved over the decades and how relatively cooperative they were during deregulation. I sometimes query if they need to be such a large and permanent fixture, but within any space of 5 years you do tend to see evidence for their continued relevance. When I've said that to Union people they've argued that the large and permanent business lobbies demand a Union presence in response, which makes some sense, but isn't that satisfying given lobbies shouldn't necessarily have sway... Anyway, as we've seen recently at the Trade Union RC, right-wing Unions continue to work with business rather than against them so I think a pure anti-Union position is generally politically motivated.

 

[medusala]

Anyway, as we've seen recently at the Trade Union RC, right-wing Unions continue to work with business rather than against them so I think a pure anti-Union position is generally politically motivated.

That's blatant corporatism Ratts (a central tenet of which philosophy?)

When unions and business do sweetheart deals who do you think suffers? The answer isn't politically motivated, its common sense.

Why does it cost so much more to build a commercial property in Melbourne? There is no FREE LUNCH.

 

[Ratts of Tobruk]

That's blatant corporatism Ratts (a central tenet of which philosophy?)

While we do spend a crazy amount of money on roads given most countries don't have such wide freeways, I don't think that East Link will lead to anything more nefarious that Wantirna South, Godwin.

 

[Power Raid]

What are you two on about? The only reason the dollar went up was because we only got clipped by the GFC while everyone else got whacked. The traders that so many right-wingers seem to think are the bees' knees didn't expect us to get over parity, but the resources demand made it happen. Both those effects were bound to trail off, but to make out that somehow we've lost personal wealth is stupid when we can still buy the same things for the same dollars down the street.

Stop fishing for gullible people to embezzle. And if you are one of those gullible people - it's pretty hard to live in Australia as PR does without spending AUD.

rubbish, we went up because we over cooked our stimulus. Our $ went through the roof, killing much of our valuable industry that employed low skilled workers. Imagine that, the political party for the blue collar workers killing blue collar worker industry!

but what goes to far up will go too far down........as the world knows we will be paying off a generation of debt whilst the rest of the world continues to grow.

I actually don't mind currency going up or down as it is a part of life. what I do care about is labor's reckless management of our economy and put their political self interest first. they could be seen having a RECESSION given their economic history (Hawke Keating years (and I do believe that was the recession we had to have)) and in response they over cooked it.

Instead of just having a RECESSION, LABOR CHOSE to kill much of our manufacturing, refining and much of our export industry.


Out of interest are you upset because I said the AUD would drop? I recall you felt getting out of AUD was almost "unaustralian".......it turns out it was just common sense.

Oh and you can live in Australia despite holding FX. its called using your AUD income if you have it or trading back into AUD. Perhaps ask your mum about really complex things like exchanging currency.

 

[Ratts of Tobruk]

Out of interest are you upset because I said the AUD would drop? I recall you felt getting out of AUD was almost "unaustralian".......it turns out it was just common sense.

Oh and you can live in Australia despite holding FX. its called using your AUD income if you have it or trading back into AUD. Perhaps ask your mum about really complex things like exchanging currency.

I don't care that you gibber on barely coherently all the time, but don't try and suggest I have said things that I haven't. It means I have to waste time and space on BF pointing out you are yet again full of it.

 

[Mofra]

rubbish, we went up because we over cooked our stimulus. Our $ went through the roof, killing much of our valuable industry that employed low skilled workers. Imagine that, the political party for the blue collar workers killing blue collar worker industry!

The stimulus supported the employment rate by 1.7% according to Treasury's official analysis - harsh to describe it as a job-killing measure when the reality was exactly the opposite.

Regardless of stimulus, having an RBA cash rate with a 3 in front of it was always going to allow the Aussie dollar to rise against currencies who had central banks cutting rates to zero or near enough to it.

 

[Power Raid]

The stimulus supported the employment rate by 1.7% according to Treasury's official analysis - harsh to describe it as a job-killing measure when the reality was exactly the opposite.

Regardless of stimulus, having an RBA cash rate with a 3 in front of it was always going to allow the Aussie dollar to rise against currencies who had central banks cutting rates to zero or near enough to it.

nothing quite like short term gain for long term pain


oh and the interest rates were higher to off set the stimulus.....and yes that is why our $ rose higher than it should have.

 

[Lebbo73]

The stimulus supported the employment rate by 1.7% according to Treasury's official analysis - harsh to describe it as a job-killing measure when the reality was exactly the opposite.

Regardless of stimulus, having an RBA cash rate with a 3 in front of it was always going to allow the Aussie dollar to rise against currencies who had central banks cutting rates to zero or near enough to it.

It didn't support the employment rate by 1.7%. It only delayed the inevitable at great expense to our future generations!