Australian Dollar is collapsing

[Adumbration]

5 hours ago, thaibeachlovers said:

Speaking as one that is suffering because the housing market is out of control with regard to increasing prices to buy/ rent, and in a country where people are living in cars or motels ( at taxpayer expense ), a collapse in the property market would be a very good thing, IMO. If so called investors ( IMO gougers ) lose out, I would not lose any sleep over that.

Homelessness in Australia is a very significant problem already.  It will increase exponentially over the next few years as interest rates are held higher for longer.

 

When China provides military support to Russia, the USA will impose additional strict economic sanctions on the PRC.  When that happens Australia's economy will be caught in the crossfire.  The Aussie dollar will collapse to circa 50c and the basketcase that is Australian Residential property is doomed.

[Adumbration]

6 hours ago, nigelforbes said:

The exports part is correct but the rest of it is nonsense

 

https://tradingeconomics.com/australia/exports-by-

country

Nice infographic.  Thanks for posting.  It demonstates clearly that when China moves on Taiwan Australia will lose access to >60% of its export markets overnight.

Edited February 26, 2023 by Adumbration

[Adumbration]

Less than a month ago when the AUD/USD pair was trading at circa 72c, I initiated a large postion in NYSE:SGOV purchasing with AUD through my IBKR account.

 

SGOV is currently yielding close to 5% with distributions paid montly.  When the Fed next meets that yield will go up.

 

Because my position is unhedged, in addition to my montly distributions, to date I have also made a gain of >5.5% on the collapse of the Aussie dollar.

 

If the AUD rallies against the USD in the near term, I intend to use more of my aussie dollars to buy more SGOV.

 

As the FED holds rates higher for longer I will gradually ladder some of my SGOV into NYSE:SHV.

 

I currently hold a good portion of my AUD in ASX:BIL.  It is currently yielding circa 3.6% with distributions paid monthly.  That will increase when the RBA meet on the first Tuesday of next month.  ASX:BIL responds to rate movements more rapidly than ASX:AAA because the later holds bank deposits while the former rolls over money market instruments on a day to day basis.  In a rapidly rising rate environment BIL has the slight edge on AAA. The converse will apply when rates start to fall.

Edited February 26, 2023 by Adumbration

[nigelforbes]

1 hour ago, Adumbration said:

Nice infographic.  Thanks for posting.  It demonstates clearly that when China moves on Taiwan Australia will lose access to >60% of its export markets overnight.

If, not when, and the likelihood of them doing so is remote.

[Adumbration]

On 2/26/2023 at 3:42 AM, thaibeachlovers said:

Speaking as one that is suffering because the housing market is out of control with regard to increasing prices to buy/ rent, and in a country where people are living in cars or motels ( at taxpayer expense ), a collapse in the property market would be a very good thing, IMO. If so called investors ( IMO gougers ) lose out, I would not lose any sleep over that.

Massive problems emerging in the Australian residential property market.  As I predicted:

 

https://www.abc.net.au/news/2023-02-27/sydney-rental-crisis-hits-hard-state-election/102019950

[Adumbration]

Diana Mousina, a senior economist at AMP, has put out a special note on the level of mortgage stress in Australia.

She says Australian household debt as a share of income is sitting around a record high at 189% of income, which is significantly above most of our global peers, and the majority of this debt is in housing.

"This makes Australian households vulnerable to changes in home prices and interest rates, with the risk of mortgage stress increasing as home prices fall and interest rates are increased," she says.

She says a significant increase in mortgage repayments due to higher interest rates is the biggest risk to household spending in 2023.

Household interest costs (as a share of income) reached a bottom of 4.4% in March 2022 thanks to the decline in interest rates over the pandemic, but they've and have now increased to around 7% (however, that measure also includes households that don't  have a mortgage, so it dilutes the impact for indebted households).

She says the average household in Australia has a mortgage of around $600,000 (across variable and fixed loans). As a rough guide, monthly mortgage repayments are due to increase by around $13,000 per year if we account for the full increase in the cash rate so far (by 325 basis points).

But that's underestimating the increase in mortgage servicing costs that will hit households in coming months.

She says variable mortgage holders (70% of loans outstanding) will see repayments changing around 3 months after the RBA adjusts the cash rate and fixed mortgage holders (30% of outstanding loans) are only impacted when the loan term expires, with most fixed loans set for 2-3 years in Australia.

She says the majority of the interest rate impact on mortgaged households will happen this year, as around 880,000 fixed loans expire in the next 12 months and reset to mortgage interest rates that are 2-3 times higher.

Look where things could head (assuming the cash rate hits 4%).

There are other parts to her analysis, but her conclusion isn't great.

"We think that the downside risks to the household sector are greater than the RBA (and most commentators) are estimating," she says.

"In our view, the risk of mortgage stress lies with recent borrowers (those who have taken out loans between 2020 - mid 2022) which is around 62% of outstanding housing loans. These households have not had time to build prepayment buffers, have faced large declines in home prices, have had a very fast repricing of mortgage rates, are more likely to have taken out larger loans and were probably not stress tested for the current increase in interest rates."

[Neeranam]

 It was much worse when I went there 15-22 years ago

[still kicking]

9 hours ago, Neeranam said:

 It was much worse when I went there 15-22 years ago

My housing loan interest was 17%

[Neeranam]

On 2/26/2023 at 9:12 AM, Adumbration said:

The Aussie dollar will collapse to circa 50c and the basketcase that is Australian Residential property is doomed.

Guess my sister sold at the right time, bought a house in Hampton for 600k 25 years ago and sold for 3.5 mil 4 months ago. 

Wish I'd bought that land 25 years ago in Khon Kaen city ????

[Lucky Bones]

Is Adumbulation still bangin' his broken short-term drum?

Needs to get out more.????????

 

[Adumbration]

2 hours ago, Neeranam said:

Guess my sister sold at the right time, bought a house in Hampton for 600k 25 years ago and sold for 3.5 mil 4 months ago. 

Wish I'd bought that land 25 years ago in Khon Kaen city ????

Farangs can't own land.  That was in the back of your mind when you didn't buy it.

[Adumbration]

13 hours ago, still kicking said:

My housing loan interest was 17%

And now 3 decades later you are living pension check to pension check in a rental what happened?

 

No doubt your no cause eviction notice will arrive shortly and then you will be living in a tent like all of the pensioners in this article:

 

https://www.abc.net.au/news/2023-02-27/sydney-rental-crisis-hits-hard-state-election/102019950

[Artisi]

46 minutes ago, Adumbration said:

And now 3 decades later you are living pension check to pension check in a rental what happened?

 

No doubt your no cause eviction notice will arrive shortly and then you will be living in a tent like all of the pensioners in this article:

 

https://www.abc.net.au/news/2023-02-27/sydney-rental-crisis-hits-hard-state-election/102019950

Get a life - your negative nonsense is becoming so boring. 

 

[HighPriority]

8 hours ago, Artisi said:

Get a life - your negative nonsense is becoming so boring. 

 

He’s only got 1 shtick.

At least he’s now come out in the open that he’s only interested in betting and thus talking down the Aussie Dollar.

The guy is a filth bag with delusions of grandeur.

Truth is nothing, if enough peanuts talk a currency down it’ll fall and people, real people will get hurt… but that’s ok because the peanuts will make 0.3% profit.

Happy days…

 

[Isaan sailor]

Misery loves company.  USD has fallen to the mighty Baht as well.  From 35.37 on Tuesday to 34.64 today.  So when does the all-powerful Baht fall?

[still kicking]

10 hours ago, Adumbration said:

And now 3 decades later you are living pension check to pension check in a rental what happened?

 

No doubt your no cause eviction notice will arrive shortly and then you will be living in a tent like all of the pensioners in this article:

 

https://www.abc.net.au/news/2023-02-27/sydney-rental-crisis-hits-hard-state-election/102019950

I told you many times before I don't live in that dump Sydney, I haven't had a rent increase in 7 years I lost my super because I got done in Thailand, I still support my nephew in Thailand who studies and can afford to come to Thailand twice a year you just a hater of Australia give it up.

[Adumbration]

Collapse really picking up steam now.  RBA went soft on 25 point increase last week.  Fed is going to go a full 50 points next meeting.

 

Australian residential property is toast.  MSM in Australia has suddenly realised that they will be at war with China within 3 years and 70 of the export market will be lost.

 

Diana Mousina, a senior economist at AMP, has put out a special note on the level of mortgage stress in Australia.

She says Australian household debt as a share of income is sitting around a record high at 189% of income, which is significantly above most of our global peers, and the majority of this debt is in housing.

"This makes Australian households vulnerable to changes in home prices and interest rates, with the risk of mortgage stress increasing as home prices fall and interest rates are increased," she says.

She says a significant increase in mortgage repayments due to higher interest rates is the biggest risk to household spending in 2023.

Household interest costs (as a share of income) reached a bottom of 4.4% in March 2022 thanks to the decline in interest rates over the pandemic, but they've and have now increased to around 7% (however, that measure also includes households that don't  have a mortgage, so it dilutes the impact for indebted households).

She says the average household in Australia has a mortgage of around $600,000 (across variable and fixed loans). As a rough guide, monthly mortgage repayments are due to increase by around $13,000 per year if we account for the full increase in the cash rate so far (by 325 basis points).

 

But that's underestimating the increase in mortgage servicing costs that will hit households in coming months.

She says variable mortgage holders (70% of loans outstanding) will see repayments changing around 3 months after the RBA adjusts the cash rate and fixed mortgage holders (30% of outstanding loans) are only impacted when the loan term expires, with most fixed loans set for 2-3 years in Australia.

She says the majority of the interest rate impact on mortgaged households will happen this year, as around 880,000 fixed loans expire in the next 12 months and reset to mortgage interest rates that are 2-3 times higher.

Look where things could head (assuming the cash rate hits 4%).

There are other parts to her analysis, but her conclusion isn't great.

"We think that the downside risks to the household sector are greater than the RBA (and most commentators) are estimating," she says.

"In our view, the risk of mortgage stress lies with recent borrowers (those who have taken out loans between 2020 - mid 2022) which is around 62% of outstanding housing loans. These households have not had time to build prepayment buffers, have faced large declines in home prices, have had a very fast repricing of mortgage rates, are more likely to have taken out larger loans and were probably not stress tested for the current increase in interest rates."

[Adumbration]

On 2/26/2023 at 9:34 AM, Adumbration said:

Less than a month ago when the AUD/USD pair was trading at circa 72c, I initiated a large postion in NYSE:SGOV purchasing with AUD through my IBKR account.

 

SGOV is currently yielding close to 5% with distributions paid montly.  When the Fed next meets that yield will go up.

 

Because my position is unhedged, in addition to my montly distributions, to date I have also made a gain of >5.5% on the collapse of the Aussie dollar.

 

If the AUD rallies against the USD in the near term, I intend to use more of my aussie dollars to buy more SGOV.

 

As the FED holds rates higher for longer I will gradually ladder some of my SGOV into NYSE:SHV.

 

I currently hold a good portion of my AUD in ASX:BIL.  It is currently yielding circa 3.6% with distributions paid monthly.  That will increase when the RBA meet on the first Tuesday of next month.  ASX:BIL responds to rate movements more rapidly than ASX:AAA because the later holds bank deposits while the former rolls over money market instruments on a day to day basis.  In a rapidly rising rate environment BIL has the slight edge on AAA. The converse will apply when rates start to fall.

My SGOV investment has yielded just on 8.5 percent return over just two months on the collapse of the Australian dollar.  In addition to the monthly distribution yield that is just shy of 5% but will increase when the Fed raises the cash rate another 50 basis points towards the end of the month.

 

[Olmate]

10 hours ago, Adumbration said:

My SGOV investment has yielded just on 8.5 percent return over just two months on the collapse of the Australian dollar.  In addition to the monthly distribution yield that is just shy of 5% but will increase when the Fed raises the cash rate another 50 basis points towards the end of the month.

 

I recently sold some gold from a pot at the end of that rainbow, 100% return right there! ????

[TimeMachine]

My current feeling is that the Australian dollar will cycle between 20-30 baht per dollar for the next eternity. Taking that into account, I will wake up every morning, spend a dollar, then sleep. Cycle.

 

And I think it's as likely as there being a war with China about Taiwan as there is a war with Australia about it's take over of Native's land. China will probably control Taiwan but no one will care ultimately.

[Olmate]

6 minutes ago, TimeMachine said:

My current feeling is that the Australian dollar will cycle between 20-30 baht per dollar for the next eternity. Taking that into account, I will wake up every morning, spend a dollar, then sleep. Cycle.

 

And I think it's as likely as there being a war with China about Taiwan as there is a war with Australia about it's take over of Native's land. China will probably control Taiwan but no one will care ultimately.

 Agree that. Doubt the oz first nations people will lose the next one despite what the dollar does.????! 

[Adumbration]

Collapse back on track today.  Next stop AUD 22 baht.

[Olmate]

4 minutes ago, Adumbration said:

Collapse back on track today.  Next stop AUD 22 baht.

Exciting life u have there! ????

[giddyup]

On 11/10/2022 at 4:51 AM, thaibeachlovers said:

Yeah. One well known bank in NZ owned by Oz company is making billions and cutting services and branches- scum.

I drew all my money out of said bank and transferred the lot to Thailand. I was just sick of never being able to get through, poor customer service (usually from India) and just the pig headedness of the actual staff I had to deal with. They made it extremely difficult and stressful to withdraw MY money.

[Henryford]

On 3/13/2023 at 1:03 PM, TimeMachine said:

My current feeling is that the Australian dollar will cycle between 20-30 baht per dollar for the next eternity. Taking that into account, I will wake up every morning, spend a dollar, then sleep. Cycle.

 

And I think it's as likely as there being a war with China about Taiwan as there is a war with Australia about it's take over of Native's land. China will probably control Taiwan but no one will care ultimately.

You might care when you have no micro chips.

[owl sees all]

 

18 minutes ago, Adumbration said:

Collapse back on track today.  Next stop AUD 22 baht.

Yes! And i think it's going to get worse.

 

The Aussies determination to share a bed with the US, will send the down-unders to ruin. Can't get me head round the whole thing. Australia should be one of the most wealthy countries in the world.

[KhunBENQ]

Steep decline for EUR and USD too. No idea why the Baht skyrockets.

 

Edited March 18, 2023 by KhunBENQ

[Adumbration]

Xi is meeting with Putin right now.  When war kicks off with China, Australia will be forced to join in by the US and will lose 80% of its export markets overnight.

 

Australian dollar is heading for <50C on the USD.

 

If you are curently living on the OAP from Australia you need to have your ducks in a row to ensure if you can survive when the exhange rate for AUD is 12 THB.

[Adumbration]

34 minutes ago, KhunBENQ said:

Steep decline for EUR and USD too. No idea why the Baht skyrockets.

 

BOT intervention.  Spending their USD to buy baht.  Smart move.  Someone at the BOT suddenly realised that USD will be worthless to them when war kicks off with China.

[Adumbration]

46 minutes ago, owl sees all said:

 

Yes! And i think it's going to get worse.

 

The Aussies determination to share a bed with the US, will send the down-unders to ruin. Can't get me head round the whole thing. Australia should be one of the most wealthy countries in the world.

It was.  But the bulk of Aussie net worth is tied up in residential housing.  It will be crashing at least 25% this year, and the following year when war kicks off with China, it will crash another 30-40%.