Aug 12, 2013

Is the dollar danger over? And what happens if it isn’t?

Conventional wisdom is that the Aussie dollar will continue to fall, delivering a boon to business and governments alike in coming years. What if it doesn't, ask Glenn Dyer and Bernard Keane?

While conventional wisdom and forecasts have the dollar going lower in coming months and easing the pressures on the economy and the federal budget, we should ask if that will necessarily happen — and what will happen if it doesn’t.

A surprisingly sharp 4% rise in the value of the dollar last week is a reminder that its link to an improving Chinese economy and economic outlook remains the biggest danger to the ability of a new government to boost the sluggish local economy and manage the transition from the mining investment boom.

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4 thoughts on “Is the dollar danger over? And what happens if it isn’t?

  1. GrumpyPedant

    WTF is that NESPRESSO commercial which keeps jumping across articles. …apart from the obvious which is I would NEVER EVER buy a NESPRESSO after having my reading experience so compromised – I am tired of Crikey double-dipping on subscriptions and advertising.

    If I subscribe I don’t want to see adverts much less have them jump across the screen – you guys are no better than Sydney airport.

  2. Andybob

    If they really want the dollar to fall why not stop worshipping the golden calf of the triple AAA rating, borrow a heap of money to build infrastructure and let the markets decide we’re not such a safe haven after all.

  3. Mike Smith

    @Grumpy: But they are good. An expensive way to buy coffee, but its reliable. I don’t like the flip out ad though. Normally I don’t see ads, but Chrome’s addin manager blew up, and I haven’t done a restart on it yet.

  4. Liamj

    @ Andybob – that would require the ALP to grow a spine and defy the ‘all debt is bad’ morons. Presumably we’re supposed to build up a huge surplus and watch it drain away on investment markets like Norway and superannuants everywhere.

    The A$ will surely break parity again, as the US these days has nothing to offer but an inept military and overexpectant populace. They could export cretinism, the Institute for Pulic Affairs could do with some imported competition (is that what Radio Nationals Counterpoint is for?).

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