Thursday, July 20, 2006

Aussies want Greenspan back

THE dollar opened about half a US cent stronger today after the US currency tumbled at the prospect of an interest rate rise next month.

At 0700 AEST the local unit was trading at $US0.7499/01, well up on yesterday's close of $US0.7448/54.

A report showed US consumer prices rose 0.2 per cent in June, while the core rate, which excludes the volatile food and energy components, grew by a stronger than expected 0.3 per cent.
The figures led to increased expectations of an August rate hike in the US.

But US Federal Reserve chairman Ben Bernanke, during the first stage of his semi-annual report on monetary policy later in the overnight session, did not seem to confirm this would happen.

This sent the US dollar reeling, propelling the euro and the Australian dollar much higher.

Now I know diddly squat about monetarist theory and ‘The Market’. But I know Aussies get nervous when their dollar (or ten) rises against the ‘greenback’.

At the risk of mixing metaphors, your average American puts great pride in coming first.

On the other hand, the Aussie bloke is more of a pragmatist, he’ll happily come in second and savour the extra pleasure of patience.

You see, the downunder economy is still largely resourced (export) based. The dollar goes up and the product suddenly becomes less competitive. They can even afford more attractive financial kickbacks on a lower dollar.

Good old Ben Bernanke is no doubt a real dude, but when it comes to ‘central bank Texas holdem’ he is an open book. Not like the old master Greenspan. He never spooked the horses, tipped his hand or otherwise destabilized the economy.

So come on Yanks, get real! Bring Greenspan out of retirement, he’s probably had all the fun he’s ever going to get.


Reality-Based Educator said...

Alan Greenspan is the man who encouraged Americans to spend themselves into debt after 9/11, provided the means for a housing bubble that so many Americans further endebted themselves to take part in, and then lectured about the low savings/high debt ratios. In my opinion, fuck Alan Greenspan. He's an old Ayn Randian crony who ought to choke on all the money he's made for the banks off the backs of working and middle class Americans.

Sorry for the rant.

Cartledge said...

That may be RBE, but think of those poor Aussies with their strengthening dollar.
I would expect a little compassion and sacrifice here. :)

Anonymous said...

I'm still waiting for the fall of dollar. I need to buy some cheap books. :D