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Analysis: Pressure building in the Australian dollar

Apart from being the best looking currency in a world full of ugly competitors there are not many reasons for the Australian dollar to continue trading above $US1.05, leaving open the question as to w

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Interesting opinion. We can only wish that it becomes true. The Oz Dollar, driven by mass export of raw mined materials, unprocessed food, and skilled labour are driving some of the local sectors, including education, manufacturing and services (like call centres), to the brink of extinction. The devaluation of the dollar would therefore drive unemployment down, and increase the price of our food exports, energy imports and everything else that we import. Oh, wait, Inflation, up the interest rate, the Japanese start investing again, and well, now we have no more deficits. That will push the Ozzie dollar to perhaps even US$1.05. Wait, arenât we there yet? Just another opinion.

Remember, too, that the Rudd government inherited a Treasury with a healthy surplus before it started its reckless spending spree which left Australia with $42.3 billion of net debt for 2009-10 and $84.6 billion of net debt for 2010-11. The Gillard government (for factional reasons operating under the same hopeless Treasurer, Wayne Swan) then drove the nation further into the red by pushing our net debt up to $147 billion in 2011-12. In the latest Budget update, net debt is estimated to fall to $144 billion by the end of the 2012-13 year, but the government's own monthly financial statements show that net debt continues to grow month by month because it is addicted to spending. Five years ago, the Rudd government lifted the nation's credit card limit to $75 billion, increasing it again the following year to $200 billion. The Gillard government increased the country's credit limit to $250 billion in 2011 and again to $300 billion in 2012. Swan, in the Rudd government, demonstrated poor economic management, but with the loss of some of the notional restraints applied by former Finance Minister Lindsay Tanner, showed himself to be a totally lousy manager under Gillard. To appear at all competent, Swan now resorts to pointing at failed Euro-economies, hoping the electorate will overlook the manner in which he has squandered national savings on worthless policies.

Your comment lacks perspective. The GFC is the cause of most of the developed worlds financial woes rather than any politically motivated mismanagement of the economy. Australia has been lucky in escaping any crushing debt and when you look at the massive debt in the Eurozone (some 10.3 trillion Euro) and the USA (US$16.4) Australia is looking very healthy indeed.

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