I occasionally review exchange rates between the AUD and the USD.
As few months ago, the Oz dollar was running about 95 cents of the USD.
I was in the process of purchasing some rare literature from an Australian acquaintance. Because of exchange rate, is was a little salty, but i decided I wanted the materials anyway.
If I had waited (unknowingly of course), I would have paid about $40 less US than what I did.
Cie la vie.

But my real question is: What has happened to cause the fall in value of the AUD against the USD.
The AUD is worth 64.47 cents this morning.
It was about 62 cents a couple of days ago.

This is bad for Aussies wishing to import from the US, but good for us importing from Oz.
What the hell happened in a few short months, and how is affecting the economy and business activity within Australia?

Regards,
Steve

it's pretty good for our GM factory down here selling you fellers Pontiac G8 sedans and pickups, but bad for me wanting some big engine bits

Basically it's the financial climate.

Less money going round all up, so people less willing to invest - especially internationally - and so not as much investment coming into Australia (banks, business, infrastructure) as before.

Definitely sucks for us that want parts from the US... if only I'd ordered all of my bits months ago !!!

Lots of outside influences effect our dollars value. We are but a small fish in a big pond. Australias total GDP is less than California's (a state). The floating of the dollar allows us to weather these storms better than trying to poor heaps of money into maintaining an artifical level like we used to. Hopefully the dollar will go up again when the rest of the world realises how f^%@&^ing great it is to live here.

the real reasonis this:
The reason it went up was foreign investment. As interest rates went up the foreigners saw oz $$ as a good buy. More buying drove the price up. As the interest rates dropped so did the return driving investment away. The volitile rates makes foreign investors look for a more stable market. They sell off aussie $$ driving the price down ....

Hi

I bought a heap of bits before the Pacific Pesos bottomed out this time, just waiting till it gets up a bit gain to order some bits from Racer Parts Wholesale in the US.

Steve

Bankers is the word or the problem too gready

Hi Steve,
It would be a good thme for you to buy a Country Buggy & send it back to the usa with the way the dollar is at the moment.
Craig.

ztnoo,

Our banking and financial systems are in great shape compared to the rest of the world. The main reason for the drop in AUS$ value is, our economy is largely based on exporting commodities, (with a big emphasis on mining and raw materials).

The rest of the world thinks US and Europe will have a deep recession and China's growth will slow, which will mean a world wide slow down in demand for the things we produce. Hence the low value of the Aussie dollar.

Basically, we are at the bottom of the food chain, so even if we are really healthy, our dollar gets disproportionately affected when things go wrong further up the line.

Our exporters (other than mining and raw materials) will be rubbing their hands with glee, as for importing, we should do well out of tourism for a while, why not come for a look while it's cheap?


Regards,

Matt.

It's all just supply and demand. The outflow of investment capital to other countries (in particular the yen) had devalued it.

Greed has nothing to do with it. It still amazes me that people suggest investment bankers' greed are to blame in AUS. Australia is well off in all this. Out system is working perfectly.

Hi

Something I've heard a few times about these funny home loans in the US, which was the start of all this.

Apparently if you default on a home loan in the US mortgage market your not held responsible for the debt, you just hand the keys back, end of story.

Unlike in Australia where the bank will chase you to the grave if you owe them.

So some borrowers got in over their heads on overvalued properties, apparently more pain to come as some more of these loans come off the "honeymoon rate"

Steve

Have a look here for the simplified version

sub prime morgage meltdown ==>> http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true 

HAS STOPPED ME from getting my brakes & air suspension...........................much much sadness,
time for another beer......helps a bit

Ive had 2 other explanations.

THE DONKEY RAFFLE

A YOUNG HILLBILLY NAMED KENNY, MOVED TO TEXAS AND BOUGHT A DONKEY FROM A FARMER FOR $100.00. THE FARMER AGREED TO DELIVER THE DONKEY THE NEXT DAY.

THE NEXT DAY THE FARMER DROVE UP AND SAID, "SORRY SON, BUT I HAVE SOME BAD NEWS, THE DONKEY DIED."

KENNY REPLIED, "WELL, THEN, JUST GIVE ME MY MONEY BACK."

THE FARMER SAID, "CAN'T DO THAT. I WENT AND SPENT IT ALREADY."

KENNY SAID, "OK, THEN, JUST BRING ME THE DEAD DONKEY."

THE FARMER ASKED, "WHAT YA GONNA DO WITH HIM?"

KENNY SAID, "I'M GOING TO RAFFLE HIM OFF."

THE FARMER SAID, "YOU CAN'T RAFFLE OFF A DEAD DONKEY!"

KENNY SAID, "SURE I CAN. WATCH ME. I JUST WON'T TELL ANYBODY HE IS DEAD."

A MONTH LATER, THE FARMER MET UP WITH KENNY AND ASKED, "WHAT HAPPENED WITH THAT DEAD DONKEY?"

KENNY SAID, "I RAFFLED HIM OFF. I SOLD 500 TICKETS AT TWO DOLLARS A PIECE AND MADE A PROFIT OF $998.00."

THE FARMER SAID, "DIDN'T ANYONE COMPLAIN?"

KENNY SAID, "JUST THE GUY WHO WON. SO I GAVE HIM HIS TWO DOLLARS BACK."

KENNY EVENTUALLY BECAME THE CHAIRMAN OF ENRON

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

In the absence of the man, the assistant told the villagers. "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up with all their savings and bought all the monkeys.

Then they never saw the man nor his assistant, only monkeys everywhere!

Now you have a better understanding of how the stock market works.

Dollar was back up to 68c AUS last night

was 61cAus a couple of days ago...

Hopefully it will keep going up...

I have some parts in the US to bring back... lol

Lee

Only 18 months ago it hit 78c or so and we all went "WOW! got to buy me some bits!" Then it was like 98c and we all went nuts. Now it's down again and we all complain. Take the good with the bad people. In the US, people are going broke every day while we are only having a minor downturn.

New ghia, how about buying a locally made brake setup and keeping our industries going.

Well I'm travelling to the USA in a month so I hope it goes up a bit

whatever is happening it sux! i really hate how the US dollar has so much influence on everyone else's dollar.....

Well the Ole Aussie dollar made ground yesterday - FRIDAY


it was close to 68c US...

from 61cUS not long ago.....

so If You happen to have any Aussie dollars left...

they are getting better.... lol

Lee

If We could only get the petrol prices down to Aust prices and NOT singapore pricing....
Are We stupid or sumething....??

CB CRAIG,
I can't disagree with you at all.
With the exchange rate what is now, it is certainly more favorable now to import something from Oz that what it was just a few months ago. That is definitely on my mind.
There is a CB about 8-9 hours from me in Memphis, Tennessee for sale, but honestly the owner is asking too much for it.
$10,000 USD =15,121.50 AUD (@ this morning's exchange rate, .66141 AUD = 1.00USD)
http://www.thesamba.com/vw/classifieds/detail.php?id=656253 
It's my understanding he paid something in the $4000-$5000 range for the vehicle a year and a half ago.
I think he is looking for some obnoxious profit taking with his price as posted.
It might be worth $6000-$7000 USD (9,072 - 10,585 AUD).
Here in the US, CB's are largely unknown, and there are only a very few buyers interested in paying that kind of money for one.

As to some other points:
The mortgage meltdown was precipitated by a policy promoted by the Clinton administration.
The theory was that everyone should own a home, so lenders were instructed to relax mortgage qualifications to the point where any Tom, Dick, and Harry could borrow money to buy a home.
It neglected to take into consideration, some people only have a renter's mentality, and will never have the mindset or the discipline necessary to own their own home.
Also, lots of people were loaned money and bought way more than they could realistically afford in servicing the loan payments.
On top of that, many of these marginal buyers lost their jobs and coupled with huge increases recently in fuel and food costs (precipitated by higher freight, increasing production costs, and additional price pressures on corn from ethanol producers), lots of folks suddenly couldn't afford what they bought.
They epitomized the instant gratification mindset (I want the world and I want it NOW!), regardless of their ability to handle the costs associated with servicing the loans.
So the housing market has completely gone to hell. It is a buyer's market. If you have the $$$ or have previously arranged financing, you currently have your choice of whatever you want here in the US. Now, if you have poor credit history, and can't qualify under new, tighter restrictions for home loans, you are out of luck.....probably for a very long time.
Many of these folks with notes they can't service are really between a rock and a hard spot. They can't service what they have, and because of a very weak market, houses won't appraise out to new buyers for what the owners have to have to get out from under the loan. Many of these types of owners have defaulted on their loans

So the situation got so dire the federal government (i.e. US taxpayers) stepped in with a 700 billion USD bailout of mortgage and securities lenders to prop everything thing up so the system doesn't entirely collapse due to mismanagement, risky ventures, and damned poor judgment. In a capitalistic system, the risk/reward modus operandi should be the paramount consideration about the way things operate. That means if you screw up or make bad decisions, the risk and downside should be yours alone. The problem is the defaults are so big, the entire economic system of the biggest player in the world's economy might go down like a rock and thus affect every other economy in the world, in some cases catastrophically. Still it makes me sick to my stomach and burns my ass to think I'm helping bailout some big wig who works for one of the major big wig banks for his bad decisions. Gggrrrrrrrrr!

If Obama wins our presidential election on Tuesday November 4, it is my opinion things will further go to hell. We'll see higher taxes to support a widening and growing social welfare state. Capital gains taxes will go up dramatically which will drive investment away.....simply put, incentive for those individuals and companies who are the real driving force of our US economy will be squashed like the proverbial Halloween pumpkin. If that happens, the US economy is going to be going south for the winter and it may not come back north anytime soon.



Hang on everybody because I see some rough times ahead for all of us.

Regards,
Steve

Maybe if you guys spent a couple of billion less on the war machine and more on social/health/education projects and jailed some of those scam artists that the taxpayers are now bailing out it might go north a bit quicker?

Free download

Zeitgeist Addendum explains the banking system and why we are in a mess.


http://www.zeitgeistmovie.com/dloads.htm 

This came to me in an email:



21 Economic Models explained with Cows

SOCIALISM
You have 2 cows.
You give one to your neighbour.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the milk
away...

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

LEHMANN BROTHERS VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of
credit opened by your brother-in-law at the bank, then execute a
debt/equity swap with an associated general offer so that you get all four
cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a
Cayman Island Company secretly owned by the majority shareholder who sells
the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one
more.
You sell one cow to buy a new president of the United States, leaving you
with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

A FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot, and block the roads, because you want
three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and
produce twenty times the milk.
You then create a clever cow cartoon image called 'Cowkimon' and market it
worldwide.

A GERMAN CORPORATION
You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and milk
themselves.

AN ITALIAN CORPORATION
You have two cows, but you don't know where they are.
You decide to have lunch.

A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
The state milk corporation buys the milk and adds melamine.
The state news media reports a triumph of Chinese socialism in setting a new world record for bovine productivity.
You arrest and shoot the newsman who reports the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

Watch it drop again when interest rates go down.

Things are looking up a bit for you Aussies.
.6966 = 1.00 USD
http://www.xe.com/ 
Live rates at 2008.11.04 22:49:46 UTC

AUD
Aussie dlr on defensive, bonds advance to record
2008-11-17 05:39 UTC (GMT)

By Wayne Cole

SYDNEY, Nov 17 (Reuters) - The Australian dollar came under

renewed pressure on Monday after a meeting of world leaders

disappointed skittish investors desperate for immediate action to

forestall a looming global recession.

The Group of 20 pledged to do all they could to support

growth, but left the specifics up to individual countries.

'If there were great expectations for the G20 meeting, the outcome proved to be much ado about nothing,' said Robert Rennie, chief currency strategist at Westpac. 'That's left the Aussie hostage to stock markets for day-to-day moves,' he added. 'While the underlying bias is down given how dark the mood is on the global economy.' Equity markets have become a minute-by-minute barometer of risk appetite and when they fall, 'riskier' currencies like the Aussie tend to follow.

The link was clear on Monday with the Aussie initially

following Asian shares lower, only to pare losses as Japan's

Nikkei led a somewhat surprising rally.

In late trade, the local dollar was hovering at $0.6471,

having been as low as $0.6363 in early trade from $0.6586 in New

York on Friday.

The currency also found dogged support under $0.6360, leading

to talk the Reserve Bank of Australia (RBA) was buying again,

though the central bank declined to confirm it.

The Aussie also see-sawed on the yen, falling almost four yen

to 61.04 at one stage before bouncing to 63.00 late in

the day.


http://www.xe.com/news/detail.htm?articleId=75197