Rowdy100 Posted October 10, 2012 Share Posted October 10, 2012 and it's not "disbelief" that the Aussie $ will / can fall.. was simply asking how / why people here thik that it will...?? given that I stand to benefit hugely if it does, I have more than a passing interest in this subject... at the end of the day, nobody has a clue anyway... Link to comment Share on other sites More sharing options...
Rowdy100 Posted October 10, 2012 Share Posted October 10, 2012 agree that indian rupees aren't a bad option...good fixed term depoist rates for sure.. though not sure about property market....unless you want to live in it... It's probably possible for some capital gains in long-term perhaps, but if you intend to rent it out... good luck with that, rental yields are poor. and finding a tenant...difficult... Link to comment Share on other sites More sharing options...
Naam Posted October 10, 2012 Share Posted October 10, 2012 People may laugh, but there would be no harm with having some Indian Rupees in your basket of currencies. Over the last few years it has fluctuated between about 70-90 Rupees to the £ and is currently about 85 to the £ (Not sure about the Australian $) You can put funds it in Fixed term deposit accounts and earn about 9.5% interest per year, or invest in property (through a company) which is still rather cheap there. If you buy property, then its a handy and cheap place to pay a visit to, for a break, for a visa run or to escape the flooding in Thailand..... you can't hold INR outside India. the 9.5% are correct but you are liable to pay income tax plus you have big problems reconverting your money into unrestricted hard currency and repatriating it officially. black market conversion (minus 2.5-4.0%) no problem. also no problem for a foreigner to buy Indian property (except agricultural land), i.e. no company needed to buy an average quality 50m² condo in a remote Mumbai or Delhi suburb for USD 100-150,000 which would make visa runs or a break a rather expensive undertaking here's a chart GBP INR which is Rupee lost 33% vs. Sterling in less than 2½ years or an average of 13% per annum. Link to comment Share on other sites More sharing options...
Naam Posted October 10, 2012 Share Posted October 10, 2012 Calling a spade a spade, "safe currency" is an oxymoron. agreed, but the same applies to any asset. 1 Link to comment Share on other sites More sharing options...
Pib Posted October 10, 2012 Share Posted October 10, 2012 Calling a spade a spade, "safe currency" is an oxymoron. agreed, but the same applies to any asset. double agree...if I had been born Dutch back in the 1600's and with my investment luck I would have probably been involved in the first speculative bubble and lost my ass on Tulips. Link Link to comment Share on other sites More sharing options...
54321 Posted October 10, 2012 Share Posted October 10, 2012 People may laugh, but there would be no harm with having some Indian Rupees in your basket of currencies. Over the last few years it has fluctuated between about 70-90 Rupees to the £ and is currently about 85 to the £ (Not sure about the Australian $) You can put funds it in Fixed term deposit accounts and earn about 9.5% interest per year, or invest in property (through a company) which is still rather cheap there. If you buy property, then its a handy and cheap place to pay a visit to, for a break, for a visa run or to escape the flooding in Thailand..... you can't hold INR outside India. the 9.5% are correct but you are liable to pay income tax plus you have big problems reconverting your money into unrestricted hard currency and repatriating it officially. black market conversion (minus 2.5-4.0%) no problem. also no problem for a foreigner to buy Indian property (except agricultural land), i.e. no company needed to buy an average quality 50m² condo in a remote Mumbai or Delhi suburb for USD 100-150,000 which would make visa runs or a break a rather expensive undertaking here's a chart GBP INR which is Rupee lost 33% vs. Sterling in less than 2½ years or an average of 13% per annum. Only resident Indians, non resident Indians and persons of Indian origin are allowed to buy immovable property, there is an exception for people who retire and/or if you spend a certain length of time with in the country, however they will not issue visas that will allow you to spend that time and become that exception. You can fly to Chennai for about 2500 Baht with air asia (sale price) and take a train to Goa (from 200 baht) and have a holiday there, so not that expensive and there are many other reasonable options/routes. Providing you register the transfer of money with the Reserve Bank of India, who will issue a Non Objection Certificate which then allows you to repatriate the funds you send over. Agreed with another poster rent yields can be poor, but you can buy a 55 square meter apartment in Goa (5 mins from the beach) for under 1.5 million baht, and given the growing popularity of the state, and the growing number of wealthy Indians, one could anticipate appreciation in property Tax is payable on most investments, and yes you would have to pay tax which would reduce the rate to just over 6% and still a good return. Rupee lost 33 % against sterling 2 years ago, correct, but its practically unchanged compared to 6 years ago-your stats are selective Try telling superrich you can't hold rupees outside of India Been there done it and happy with the results. have you? Link to comment Share on other sites More sharing options...
Naam Posted October 10, 2012 Share Posted October 10, 2012 (edited) Only resident Indians, non resident Indians and persons of Indian origin are allowed to buy immovable property, there is an exception for people who retire and/or if you spend a certain length of time with in the country, however they will not issue visas that will allow you to spend that time and become that exception. i'm a German citizen and own since years several properties in Mumbai and Pune. been there too long before you and worked there in the 80s p.s. forgot to add that i hold an Indian residence permit which however was not the basis for buying property. bought my first property in 1991 but hold residence permit only since 2004. Edited October 10, 2012 by Naam Link to comment Share on other sites More sharing options...
chainarong Posted October 10, 2012 Share Posted October 10, 2012 All comments are flawed, because one hasn't got a crystal ball, however the proper value level for the AUD is around 95/98, but what it and all the other currencies have to do is nothing , because they will do what they want to do. 1 Link to comment Share on other sites More sharing options...
nemo38 Posted October 10, 2012 Share Posted October 10, 2012 I have most of my wealth in silver and gold. 80% of that is in physical - gold in Switzerland and Canada, silver in London. I have some paper silver/gold in the Central Fund of Canada - held at Charles Schwab. But that would probably evaporate, with other client assets, in the event of a crash. After a serious crash, there won't be any counter parties left standing to pay you off. Most of the rest of what I have is in USD. Western nations are being dismantled. Too much production has shifted overseas, useless immigrants have been mass imported creating social conflict and making welfare systems not viable. Endless bubbles transfer wealth from citizens to a few wealthy interests. When the SHTF, you have to ask where it will be a safe place to weather the storm, and secondly how to protect your assets. Australia is probably safer than the multicultural UK and "race war" USA. But the currency will drop against the USD. All currencies will probably drop against USD initially. Eventually the USD must hyper inflate. You may be better off investing in a place to live, spare food, and physical precious metals. Link to comment Share on other sites More sharing options...
yoshiwara Posted October 10, 2012 Share Posted October 10, 2012 (edited) Calling a spade a spade, "safe currency" is an oxymoron. agreed, but the same applies to any asset. double agree...if I had been born Dutch back in the 1600's and with my investment luck I would have probably been involved in the first speculative bubble and lost my ass on Tulips. Link ...whereas if I had been Dutch in the 1600s I would have been one of the earliest visitors to Japan, would have bought up fine specimens of ukiyo-e and now would be worth a fortune. Edited October 10, 2012 by yoshiwara Link to comment Share on other sites More sharing options...
samran Posted October 10, 2012 Share Posted October 10, 2012 I'm still confused how a Labor government has got anything to do with the value of the AUD... Link to comment Share on other sites More sharing options...
cloudhopper Posted October 10, 2012 Share Posted October 10, 2012 Eventually the USD must hyper inflate. Why is that nemo? The Fed and the 1% both know a hyperinflation will destroy the USD completely and the country would be unable to buy oil, food or anything else from any other country for some time. It could happen, but hyperinflation requires political action and the politicians are in the pockets of the 1% who know it is certain suicide, although a popular (yet misinformed) tyranny of the majority could force the politicians into a hyperinflation. If the USD does prove to be a currency of last resort as you predict then there will even bigger deflationary forces as imports priced in USD drop and IMO the deflationary forces will prove to be overwhelming. So far the money printers are losing the battle with bad debt destruction but I have a stack of PM just in case... Link to comment Share on other sites More sharing options...
PattayaPhom Posted October 10, 2012 Share Posted October 10, 2012 So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think Link to comment Share on other sites More sharing options...
samran Posted October 10, 2012 Share Posted October 10, 2012 (edited) So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think well, labour costs expensive in USD terms. Not that I think labour costs are a factor. Most labour is hired for non-tradeable reasons. You can't swap an Australian electrician, shop assistant etc for a foreign domiciled one to do that same job for you. As such, you aren't going to have labour costs effect the foreign exchange rate. What is holding it up now, ironically given the OP's question ,is that it is viewed as a 'safe haven' currency (for now) with yeilds well above most other places. As such, it appears that foreign central banks are also buying up AUD. How long that lasts remains to be seen given that the RBA wants to lower rates. In which case, the AUD would probably start tracking commodity prices as it historically has done. Edited October 10, 2012 by samran Link to comment Share on other sites More sharing options...
Mousehound Posted October 10, 2012 Share Posted October 10, 2012 So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think well, labour costs expensive in USD terms. Not that I think labour costs are a factor. Most labour is hired for non-tradeable reasons. You can't swap an Australian electrician, shop assistant etc for a foreign domiciled one to do that same job for you. As such, you aren't going to have labour costs effect the foreign exchange rate. What is holding it up now, ironically given the OP's question ,is that it is viewed as a 'safe haven' currency (for now) with yeilds well above most other places. As such, it appears that foreign central banks are also buying up AUD. How long that lasts remains to be seen given that the RBA wants to lower rates. In which case, the AUD would probably start tracking commodity prices as it historically has done. Sounds right. The Aus dollar is being talked down, as is the economy by the Aus goverment to help protect the balance of trade. There can be no doubt that the A$ should be and the government would like it to be lower. However, with most other currencies looking shaky and the Aus interest rates still healthy and with a stable government it may well stay up there for a few years. If I could cash up a few A$ then I would seriously look at buying overseas property. Spain might be good? Link to comment Share on other sites More sharing options...
54321 Posted October 10, 2012 Share Posted October 10, 2012 Only resident Indians, non resident Indians and persons of Indian origin are allowed to buy immovable property, there is an exception for people who retire and/or if you spend a certain length of time with in the country, however they will not issue visas that will allow you to spend that time and become that exception. i'm a German citizen and own since years several properties in Mumbai and Pune. been there too long before you and worked there in the 80s p.s. forgot to add that i hold an Indian residence permit which however was not the basis for buying property. bought my first property in 1991 but hold residence permit only since 2004. The rules have changed since the 80's that's a long time ago Link to comment Share on other sites More sharing options...
Litlos Posted October 10, 2012 Author Share Posted October 10, 2012 So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think well, labour costs expensive in USD terms. Not that I think labour costs are a factor. Most labour is hired for non-tradeable reasons. You can't swap an Australian electrician, shop assistant etc for a foreign domiciled one to do that same job for you. As such, you aren't going to have labour costs effect the foreign exchange rate. What is holding it up now, ironically given the OP's question ,is that it is viewed as a 'safe haven' currency (for now) with yeilds well above most other places. As such, it appears that foreign central banks are also buying up AUD. How long that lasts remains to be seen given that the RBA wants to lower rates. In which case, the AUD would probably start tracking commodity prices as it historically has done. Interesting about a year ago Rio/BHP etc were charging their customers about AUD180 a tonne for iron ore or thereabouts from memory. This is irrelevant to labour costs but indicative of corporate greed, and when the customers (China etc) develop their own supply lines and cut orders the worker at the coal face so to speak will be demonised. In the meantime the corporate fat cats will take larger salaries and bonuses based on perceived building of the corporate bank balance, but when it goes pear shaped is someone else's doing. No I am not a union lover, quite the opposite, just something I have observed. The mining companies basically gouged their customers when they could, and so now orders will dry up as the Chinese are known for playing the long game. This equates to developing their own controlled resources and using Australia as a spot market at best in the future for orders above existing contracts. Anyway back to the original question - Which currency for a safe haven? Cheers Link to comment Share on other sites More sharing options...
yoshiwara Posted October 10, 2012 Share Posted October 10, 2012 So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think well, labour costs expensive in USD terms. Not that I think labour costs are a factor. Most labour is hired for non-tradeable reasons. You can't swap an Australian electrician, shop assistant etc for a foreign domiciled one to do that same job for you. As such, you aren't going to have labour costs effect the foreign exchange rate. What is holding it up now, ironically given the OP's question ,is that it is viewed as a 'safe haven' currency (for now) with yeilds well above most other places. As such, it appears that foreign central banks are also buying up AUD. How long that lasts remains to be seen given that the RBA wants to lower rates. In which case, the AUD would probably start tracking commodity prices as it historically has done. Interesting about a year ago Rio/BHP etc were charging their customers about AUD180 a tonne for iron ore or thereabouts from memory. This is irrelevant to labour costs but indicative of corporate greed, and when the customers (China etc) develop their own supply lines and cut orders the worker at the coal face so to speak will be demonised. In the meantime the corporate fat cats will take larger salaries and bonuses based on perceived building of the corporate bank balance, but when it goes pear shaped is someone else's doing. No I am not a union lover, quite the opposite, just something I have observed. The mining companies basically gouged their customers when they could, and so now orders will dry up as the Chinese are known for playing the long game. This equates to developing their own controlled resources and using Australia as a spot market at best in the future for orders above existing contracts. Anyway back to the original question - Which currency for a safe haven? Cheers The question is flawed. The question should be what is the trade? Link to comment Share on other sites More sharing options...
Litlos Posted October 10, 2012 Author Share Posted October 10, 2012 Sorry you lost me on that one, no idea what the trade reference is Cheers Link to comment Share on other sites More sharing options...
koolbreez Posted October 10, 2012 Share Posted October 10, 2012 The safe haven against volatile currencies has always been gold, going back as long as there has been currencies traded, as long as simply protecting your wealth from depreciating was the purpose, and not looking for growth. As far as the safest currency, that would be the Chinese Yuan, that has a goverment set exchange rate, that does not, and will not float on the free market, but because of that fact it is hard to aquire outside of China. Link to comment Share on other sites More sharing options...
yoshiwara Posted October 11, 2012 Share Posted October 11, 2012 The safe haven against volatile currencies has always been gold, going back as long as there has been currencies traded, as long as simply protecting your wealth from depreciating was the purpose, and not looking for growth. As far as the safest currency, that would be the Chinese Yuan, that has a goverment set exchange rate, that does not, and will not float on the free market, but because of that fact it is hard to aquire outside of China. wrong. Link to comment Share on other sites More sharing options...
samran Posted October 11, 2012 Share Posted October 11, 2012 So has anyone got any valid reasons why the Aussie $ is going to fall..??? Labour costs too expensive, already companies are moving away from oz....maybe not as soon as the OP suggests but sooner than you think well, labour costs expensive in USD terms. Not that I think labour costs are a factor. Most labour is hired for non-tradeable reasons. You can't swap an Australian electrician, shop assistant etc for a foreign domiciled one to do that same job for you. As such, you aren't going to have labour costs effect the foreign exchange rate. What is holding it up now, ironically given the OP's question ,is that it is viewed as a 'safe haven' currency (for now) with yeilds well above most other places. As such, it appears that foreign central banks are also buying up AUD. How long that lasts remains to be seen given that the RBA wants to lower rates. In which case, the AUD would probably start tracking commodity prices as it historically has done. Interesting about a year ago Rio/BHP etc were charging their customers about AUD180 a tonne for iron ore or thereabouts from memory. This is irrelevant to labour costs but indicative of corporate greed, and when the customers (China etc) develop their own supply lines and cut orders the worker at the coal face so to speak will be demonised. In the meantime the corporate fat cats will take larger salaries and bonuses based on perceived building of the corporate bank balance, but when it goes pear shaped is someone else's doing. No I am not a union lover, quite the opposite, just something I have observed. The mining companies basically gouged their customers when they could, and so now orders will dry up as the Chinese are known for playing the long game. This equates to developing their own controlled resources and using Australia as a spot market at best in the future for orders above existing contracts. Anyway back to the original question - Which currency for a safe haven? Cheers To answer your question - at the moment AUD according to the financial markets. But I'm not sure about your contention about how the mining industry works. Generally, miners are price takers, not price makers. Added to this, I'm not sure where China can develop alternative supply lines, especially when you take into account shipping costs. Australia will always be a preferred supplier. Having said that, I think the mining boom is coming off the boil. Whether that is a soft landing or a crash remains to be seen. Link to comment Share on other sites More sharing options...
Naam Posted October 11, 2012 Share Posted October 11, 2012 Only resident Indians, non resident Indians and persons of Indian origin are allowed to buy immovable property, there is an exception for people who retire and/or if you spend a certain length of time with in the country, however they will not issue visas that will allow you to spend that time and become that exception. i'm a German citizen and own since years several properties in Mumbai and Pune. been there too long before you and worked there in the 80s p.s. forgot to add that i hold an Indian residence permit which however was not the basis for buying property. bought my first property in 1991 but hold residence permit only since 2004. The rules have changed since the 80's that's a long time ago read again when i bought the first property which had nothing to do with my job years earlier. the last property i bought in early 2011. and... pretty please, don't lecture me about rules in India. Link to comment Share on other sites More sharing options...
Naam Posted October 11, 2012 Share Posted October 11, 2012 The safe haven against volatile currencies has always been gold, going back as long as there has been currencies traded, as long as simply protecting your wealth from depreciating was the purpose, and not looking for growth. As far as the safest currency, that would be the Chinese Yuan, that has a goverment set exchange rate, that does not, and will not float on the free market, but because of that fact it is hard to aquire outside of China. Link to comment Share on other sites More sharing options...
kblaze Posted October 11, 2012 Share Posted October 11, 2012 Sorry you lost me on that one, no idea what the trade reference is Cheers I think he is trying to say that you are never going to get a satisfactory answer to your question as everyone will have different views as to which currency is safe, depending on how they view the currency's respective economy and its position going forward. Thus, one must be agile and ready to move capital around as necessary aka trade. Posters have already posited their ideas of "current" safe havens, because that is the best anyone can really do; what is seemingly safe at the moment. USD, CHF, and even your own AUD all fit the bill, among others. 1 Link to comment Share on other sites More sharing options...
kblaze Posted October 11, 2012 Share Posted October 11, 2012 Also; this is a great thread, different views accompanied by some support...I like it Link to comment Share on other sites More sharing options...
Naam Posted October 11, 2012 Share Posted October 11, 2012 To answer your question - at the moment AUD according to the financial markets. But I'm not sure about your contention about how the mining industry works. Generally, miners are price takers, not price makers. Added to this, I'm not sure where China can develop alternative supply lines, especially when you take into account shipping costs. Australia will always be a preferred supplier. Having said that, I think the mining boom is coming off the boil. Whether that is a soft landing or a crash remains to be seen. Australia’s jobs data surprised on the upside and is spurring some second thoughts about an RBA rate cut next month. The 14.5k increase in jobs was three times more than the Bloomberg consensus expectations. The details were also supportive as a net 32.1k full-time jobs were created, while 17.7k part-time jobs were shed. In Q2, Australia lost an average of 2.8k full-time jobs a month. In Q3 it created an average of 14.1k such positions. The Australian dollar, which had fallen out of favor in recent weeks, has been carving out a technical bottom this week, recording higher highs and higher lows each day. Nearby resistance is seen in the $1.0300-15 area. These gains are likely to prove corrective in nature. A rate next month may still be on the table. The unemployment rate, which the RBA tends to emphasize, rose 0.3 percentage points to 5.4%. That is the biggest rise in three years. As is the case in the US where the unemployment rate often says more about the participation rate than job creation, the same is true in Australia. Labor force participation had fallen to a 5-year low in Australia (65%) in August and rose 0.2 percentage points in September. The minutes from the RBA’s October meeting will be released next week (October 15) and may offer insight into its penchant for cutting rates at successive meetings. However, many operators may be reluctant to take too strong a view ahead of the Q3 CPI report the following week (Oct 23). Link to comment Share on other sites More sharing options...
Rowdy100 Posted October 12, 2012 Share Posted October 12, 2012 So in laymans terms... what does all that mean for the Aussie $... it seems even the "experts" can not really predict what is happening from day to day.. I've read so many opinion pieces during the last 12 months about which way the aussie $ is going and "expert opinion" ranges from .75 to 1.10... thats a pretty big guess isn't it ?... and really my 6 year old next door neighbour could probably do the same thing... take a punt on that big of a range of possibilities... hardly seems like "expert"... In my world "experts" are paid to get it "right"... win / lose... nothing grey about that... but these experts forex analysts all seem to be guessing. . Anyway, ... it seems likley there will be another interst rate cut next month and the Aussie $ will come back a bit... not much will probably happen between now and then with the aussie sitting at around 1.02 - 1.04... After that, it's hard to see how it can go down too far below parity 1.00 - .98 (if at all) given that the US seem to have a whole raft of "issues" that they need to sort out...not least unlimited QE 3 and a so called "fiscal-cliff" coming early next year... Not an expert on what all that exactly means...though it certainly doesn't read like it's great news... and I guess printing your own "monopoly style" money without an apparent timeframe limit has never been great for the value of said money. In a "basket-case" world economy (and that is what it seems we have right now) - the Aussie $ appears to be a "safer haven" bet than other equally or more risky options (???) Relatively high deposit interest rates and Triple AAA rated banks that basically guarantee those deposits seems like a pretty safe bet in this environment and that is unikley to change for some time...the fundamentals of the Aus. economy appear pretty sound (whilst many other parts of the world do not) Just my opinion... and it's not biased becasue I have an Aussie passprt... i stand to gain signficantly if the Aussie $ "sh..ts itself" and I hope it does come back to where is "should" be and anywhere close to where it was in 2007 (.75) would be a real excuse for a massive party at my house... but I just can't see that happening anytime soon... hope I'm wrong..! Cheers Link to comment Share on other sites More sharing options...
samran Posted October 12, 2012 Share Posted October 12, 2012 So in laymans terms... what does all that mean for the Aussie $... it seems even the "experts" can not really predict what is happening from day to day.. I've read so many opinion pieces during the last 12 months about which way the aussie $ is going and "expert opinion" ranges from .75 to 1.10... thats a pretty big guess isn't it ?... and really my 6 year old next door neighbour could probably do the same thing... take a punt on that big of a range of possibilities... hardly seems like "expert"... In my world "experts" are paid to get it "right"... win / lose... nothing grey about that... but these experts forex analysts all seem to be guessing. (This is not directed at you Rowdy...just picking up from where you left off...) A real expert knows that you can't predict FOREX. And they say nothing. I've made prognostications about Australia, and by implication, China, but I'd be a sucker to make a call on the AUD. Like you, I'd like it to tank. It would be party time for me as well. Link to comment Share on other sites More sharing options...
Rowdy100 Posted October 12, 2012 Share Posted October 12, 2012 agreed.. well said.. Link to comment Share on other sites More sharing options...
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