Currency wars on our doorstep

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I envisage a raft of posts encouraging Australia to do the same. Australia should not print money! (Currency wars on our doorstep, January 21.) We do not have the debt levels of these countries who have a vested interest to create inflation to erode their debts. If we print and lower our currency we will import inflation from the printers. Inflation is not a good thing (and it takes a very long time to fix once unleashed) - just ask Hawke/Keating in the 80s. We do not have the debt levels to warrant this. We want the high currency to protect us from this inflationary mess which will be evident in a few years time. We should be focusing on fixing the structural issues that got western economies into this mess credit regulations, productivity improvements,flexible labour markets, reduced public sector etc etc
If there is one thing you can count on that is that those in control in this country are just plain too dumb to play this game how it needs to be played (Currency wars on our doorstep, January 21). Having weathered the GFC well Australia is in the box seat but will drop the ball...as it always does. But don't worry, now that we own little else other than freehold farmland we can sell more of this and that will save us.
The Rambotrader (January 21, 11:34 AM) dude is spot on (Built on the backs of first home buyers, January 21)!
We need to look at what the RBA and Gillard Government are doing now with regards to the AUD - what are Australia plans? (Currency wars on our doorstep, January 21.)
We are a country that exports and our AUD has been in export neagtive territory for too long- where does tyhe AUD go is EU Japan and USA all manipilate and protect thier curecies calues - do we just be complacent and allow the chips to fall where they may and then bicth about afterwards
Alan your right we now have money wars with the same issues at stake without the senseless loss of life (Currency wars on our doorstep, January 21). Australia is being affected more because we already have high wages with high on-costs of Super Levt @ 12% but now our dollar is too high many employers are justifiably looking at swapping Australian staff with staff from other english speaking countries where wages are but a fraction of ours. The banks and telcos have already started but imagine if all other admin type firms did it.? QBE has started, but imagine the consequences if others joined the chorus.
Thinking outside the square some government departments are already doing it indirectly but what if local, state and federal did it too and why not ? Lets debate it all.
I've said it before and I'll say it again. We are looking at the demise of full-on globalisation (Currency wars on our doorstep, January 21).
Globalisation is a flawed construct built on very shaky foundations, such as the assumption that strong common interests prevail among the participants and that they will behave accordingly as good, responsible global citizens. Pull the other leg! EU members couldn't do it so why does anyone think that the world as a whole can do it.
So far as Australia is concerned, deregulation and globalisation's main result has been a significant rise in our current account deficit since the early 80s. Some result!
A smart nation trying to build itself into a "smart" nation might grab this opportunity to throw some real money into driving development of the many high-tech industry ideas that have to go overseas every year to achieve lift-off (Currency wars on our doorstep, January 21).
Well said Adam the Archdeacon a strong currency is a sign of strength (Currency wars on our doorstep, January 21).
Rambo old chap use your cortex.
Whilst the world is printing we have an opportunity to 'print' here and use the funds to upgrade infrastructure, new Sydney airport, expand ports, VFT, etc. Probably a once in a generation (or two) opportunity (Currency wars on our doorstep, January 21).
Thanks Alan, it's brilliant to read a relevant article (Currency wars on our doorstep, January 21).
Just a slight preamble, Japan holds USD2 trillion of (US) Treasuries. Thats around 200 trillion yen, a big number!
So, our last partner in supporting, Truth, Justice and Currency strength, has seen the stupidity, of being economically altruistic.
Looks like Australia is the only country left, carrying the Torch (of economic fundamentalism).
QE for the individual, not for the Banks (Currency wars on our doorstep, January 21). $100k of personal debt is extinguished by $100k of QE for the individual. How long are we going to hypnotized into holding on to a consumer financial paradigm of employment and loan ONLY?
Japan is one of our major export countries. A 19% decrease in the value of the Yen makes Australia's export products extraordinarily expensive for them (Currency wars on our doorstep, January 21).
It will be interesting to see how much export is lost because of this drop in the Yen.
Also projects like the $34 billion Ichthys Project in Darwin could suffer too. When the project was announced the price of gas was $14, its now $2. The Japanese backers of this project may be feeling a little twitchy about now.
There are going to be some potentially severe side affects from this for Australia.
I hope that both sides of politics have a plan to deal with it.
If you ever wondered why people buy gold, you need wonder no longer (Currency wars on our doorstep, January 21).
What matters is what we do with what we have. Foreigners and Big Business invest to serve their own ends, not ours. Partly owned by Big Transnational Business it may be, but only government will serve the public interest (Currency wars on our doorstep, January 21).
Servants of transnational capitalism are actually working to de-industrialise and impoverish Australia. Former Treasury Secretary and top Gillard economic adviser Ken Henry has urged businesses to source more of their products from overseas.
Our political class are equally desperately eager to sell Australia out to transnational capitalism. We need more independents, not less, and fewer Laberals.
Many structural flaws are obvious in the current FTA model - except to Australia's besotted ideologues:
- long-term erosion of our capacity to act in our national interest.
- structural trade imbalances leading to higher trade deficits favouring the FTA partner country,
- long phase-in periods for any supposedly unregulated trade (in particular agricultural trade),
- losses due to trade diversion, and especially
- currency devaluation by the other party as a trade weapon, while we are bound not to increase tariffs and non-tariff barriers as a counter to the economic damage we suffer.
We need more protection (higher tariffs, interventionist industry policy, government business enterprises), not less, and fewer Hard Right ideologues.
The Labour/Green/Independant Govt has made several incorrect (but money market predictable) decisions: avoided a GFC recession by deficit spending 150+ billion, ditching a flexible employment mechanism called Work Choices, has achieved negligible tax reform, introduced a carbon tax to increase manufacturing costs, is allowing the exportation of nearly all our natural gas resources and is refusing to allow in lower cost labour freely to assist build required infrastructure and revitalise labour intensive manufacturing (Currency wars on our doorstep, January 21). Now Australia is 20%+ out of step and/or overpriced (labour, real estate & energy costs) with the UK, Europe, USA, Japan & China. In the national interest and to fight the currency war that's clearly been unfolding for 2 years and will last another 5 years Gillard & Swan have to step up for their last BIG initiative and reiterate Paul Keatings famous words "this is a recession we have to have". A mild recession can be engineered and is the only "collective" mechanism the Australin electorate will accept to achieve the necessary correction thats now 3 years overdue. "Its Time" to take this distasteful medicine before the next global crisis unfolds.
the big four central banks biggest nightmare is deflation...what they are trying to achieve is a goldilock's outcome of "just right inflation...if it isn't just right then they are the rest of us are in a right pickle and will see a world none can imagine..civilization is but a thin veneer over base animal instincts (Currency wars on our doorstep, January 21).
The recession we had to have combined with the lifting of tariff restrictions sent the business I was in to the wall. The high dollar is doing the same to the current business, the hay we made while the sun shone having dwindled to nothing. How high does the unemployment rate have to go before we stop allowing mining to prop us up and start looking at how to support businesses and grow jobs locally. (Currency wars on our doorstep, January 21).
Japan doesn't know what they are playing with (Currency wars on our doorstep, January 21).
Since most Japanese companies have moved their manufacturing base offshore from Japan, devaluing their currency is only dressing up corporate profits. A hollowed out manufacturing base from decades of strong currency isn't suddenly going to boom (take UK for example)
Unless they can find a market for exporting pensioners or building more roads to nowhere but somewhere that will end in tears as it always does.
Total pack of jokers. About time politicians had some back bone to tell it how it is and actually solve the problem not kicking the can down the road.
The US needs to devalue it's currency rapidly to avoid bankruptcy (Currency wars on our doorstep, January 22). It is preventing many countries from doing the same to their currencies. Obviously this tactic is now being reversed in Japan for ulterior reasons ie the US is going to lose its global position as reserve currency and therefore lose its control over the petrodollar. China is the replacement. The US will do 'anything' to keep its position. In the meantime Australia will be destroyed. The only way out is to realise Australia is self-sufficient and does not need this international 'expertise'. Australia has every natural resource needed for any product we could care to make. We have masses of land and masses of resources. We should realise we could easily isconnect ourselves from the global central banking system headed by the BIS, get rid of our Central Bank, wholly owned by the Queen, and cahrt our own path. Federation 1901 was a pretense, we do not control our own countries destiny. It is time we took full control. Is it not?
.. Whos winning the war more to the point! Good old USA (export inflation and control oil $) Reserve $ advantage.
Some in the Middle east might say not in the end. (Currency wars on our doorstep, January 22).
Bill Edwards (January 21, 1234 PM): "So far as Australia is concerned, deregulation and globalisation's main result has been a significant rise in our current account deficit since the early 80s."
You appear to completely discount the benefit of cheap imported goods to Australian consumers, and the benefit to poor countries of allowing them to free trade into our markets. It is morally better to buy goods made in India, allowing the whole Nation to lift itself out of poverty, that it is to keep them out with Tarrifs and trade barriers, then wring our hands and raise money to buy food for their starving. When was the last famine in India? Just after Free Trade was introduced.
Yes, Globalisation will transfer jobs and wealth from rich countries to poor ones, but arguably makes both trading partners better off.
Is there really a currency war? If anything, intervention by central banks in FX markets has decreased since the financial crisis rather than increased (Currency wars on our doorstep, January 22).
Japan's policy change have had the side effect of depreciating the Yen, but increasing government spending and introducing a more sensible inflation target is more about defeating deflation.
If QE was really about "debasing" relative exchange rates then it has been extraordinarily unsuccessful given the risks involved. In reality, it is not.
The whole idea of "currency wars" just seems to stem from a nice turn of phrase rather than reality.
I would like to understand all of this, but like everyone else, it is a new phenomenon to me (Currency wars on our doorstep, January 21). It appears that the trade imbalance China provided the US allowed massive spending and debt in that country. Unfortunately it is the World's no. 1 power and its attempts to fix its problems include "bugger everyone else, take this" - and so the massive QE.
All nations will be damaged, but I think those who do not follow will be annihilated. This includes Australia. There is no relief in standing aside in a zero sum game.
Anyone see this historical pattern here (Currency wars on our doorstep, January 21)?:
1. Currency Wars
2. Trade Wars
3. World War
Then after all of that, a one world currency, government (i.e. G20) and military (i.e. the UN) so "it can never happen again".
What Australian government and RBA can do is to benchmark AUD against a basket of major currency. This will help to keep AUD within a competitive range. It will also discourage speculators (Currency wars on our doorstep, January 21).