Aussie Dollar Tanking

[tripitaka 0]

The global credit crisis is beating up the Aussie economy and dollar pretty badly. The way things are heading, it will be 20-25% more expensive for Aussies to come here this season. I wonder if this is going to have much impact on the local industry, particularly up in Hokkaido.

[keba 0]

I bet it will have an impact on the Aussie hordes, but how much the local Hokkaido economy depends on that is another thing.

 

Doesn't seem to make much sense to me though, our economy is in pretty good shape and our banks are better regulated and capitalised than those in the US and the Euro-zone. Why everyone is bailing out of the AUD is something I'd be happy to have explained to me...

[HelperElfMissy 42]

I asked that question as well Keba!

I would have thought that with the US economy taking a nose dive our currency would be UP against the greenback...maybe not against the Yen, but surely up against the greenback - but it has nose dived!!

 

Someone weakly mumbled the response that our banks hold a lot of US bonds as the reason... but that still doesn't explain it to me in a way that makes much sense.

 

I know that MY 5 weeks at the end of the year is gonna be a whole lot more expensive.

[keba 0]

I can still hope for a rebound in January, fingers are crossed...

[JA2340 16]

I'm hoping for a rebound just a bit before January!! I'll be in Japan 7th, so need to get some yen before then!

 

C'mon!!

[HelperElfMissy 42]

I gotta buy HK dollars in November, Pounds and Euro in December - so I am hoping for a lift a bit earlier than both of you!!

 

The Yen I will need in March - so a bit of time for me there.

[Rag-Doll 0]

I was going to send some cash back to Aus but I think I'll wait for a while. I think 1 AUD to USD 50 cents would be a good rate. won't be long, I'm sure

 

I don't know exactly why things are happening as they are but a couple of these might be at play

 

- Commodity prices are going down. Australia's current prosperity is largely commodity driven. If the US and Europe fall into a very heavy recession, China will slow down and so will its demand for Aus commodities. Factor in yet another (and quite major) manufacturing scandle and China's exports will suffer causing further downward pressure on its demand for aussie commodities.

- A lot of the money Aus banks use is raised in the US. Right now with so many banks on the nose, that makes it expensive for them. This is different and in addition to the CDO assets and investment problems they share with the rest of the world.

- La Nina didn't bring the break in the drought like she promised so the Aus Ag sector will still be dragging on the Aus economy.

- Rudd! Need I say more? Ok, that was a cheap shot, but so far, he hasn't exactly set the world on fire and the Aus economy is largely drifting. Add to this an impending interest rate cut, which will also take some of the shine off the AUD.

- There are some bargins to be had in the US at the moment. With the bail-out approved, people may well be more willing to buy some of that dodgy banking stock confident that the market has turned the corner, ala Mr. Buffet.

- The AUD was doing very well because the USD was doing so badly. If the US economy has dodged a bullet, it stands to reason we will see more poeple coming back to the USD at the expense of the AUD.

- This morning the rooster crowed three times and stratched the ground with it's left foot which is a probably as good a reason as any to sell the AUD and buy the USD!

 

Some of the above is actually contradictory, but then that's the market for you.

[r45 4]

That reaaon was good.

 

I would think lots of people for this season have either paid some or all or at least put aside for their hols. Would take a lot to cancel hols.

[NoFakie 45]

The income multiples in Oz and NZ make them a prime case for a property crash. It might take some time yet, but the fundamentals will out. This time is never different.

 

As for currencies, this looks like the carry trade unwinding. Carry trade money was a big factor in the AUD and Kiwi appreciating. Aside from the usual big players, a lot of housewives and ordinary Japanese people, referred to as "Mrs. Watanabe", have been speculating on currency fluctuations in the last few years, mainly selling yen and buying up the commodity currencies. Since summer 2007, many have been seriously burned.

 

I would imagine that people who can afford Niseko prices could afford 20% more and will also have friends who've not been over yet. If interest rates are falling in Oz, then I suppose mortgage repayments must be falling too. I think we're heading into a global depression though, so things don't look too rosy long term.

 

What do you think tripitaka?

[Rag-Doll 0]

Aust int rates are going down, fuel is cheaper, unemployment hasn't increased any significant amount...apart from the cost of beer and lift tickets, the change in the AUD shouldn't have too big an impact.

[JA2340 16]

Fuel is cheaper?? Not on this planet it ain't!

 

My trip to Japow has just increased by around 25%!! Not much change!!! Apart from the airfares (already paid for in AUD) and our Tokyo hotel (also paid in AUD) everything else is in yen and increasing by the day!

[Rag-Doll 0]

Sorry JA, I was talking about a different planet.

[tripitaka 0]

Originally Posted By: Mr Wiggles

The income multiples in Oz and NZ make them a prime case for a property crash. It might take some time yet, but the fundamentals will out. This time is never different.

As for currencies, this looks like the carry trade unwinding. Carry trade money was a big factor in the AUD and Kiwi appreciating. Aside from the usual big players, a lot of housewives and ordinary Japanese people, referred to as "Mrs. Watanabe", have been speculating on currency fluctuations in the last few years, mainly selling yen and buying up the commodity currencies. Since summer 2007, many have been seriously burned.

I would imagine that people who can afford Niseko prices could afford 20% more and will also have friends who've not been over yet. If interest rates are falling in Oz, then I suppose mortgage repayments must be falling too. I think we're heading into a global depression though, so things don't look too rosy long term.

What do you think tripitaka?

Wigs,

It will be hard for all those property companies to sell the condos in my opinion. People say that the Aussies who ski in Japan are so rich that it doesn't matter what it costs. However, it is the rich Aussies who are getting punished by the credit crisis--the business owners, the financial industry workers, the property investors.

For the younger ski traveller, it's not such a big deal because you don't have a mega-mortgage to pay off or a margin trading account sending you bankrupt!

[HelperElfMissy 42]

True Trip,

 

I know a few people who woulda/coulda/mighta bought a Niseko property last January who have recently got the call from the stockbroker or the bank! One friend of ours lost a 6 million dollar commercial investment property and 6 months ago no-one would have guessed it could be possible - he was well set up with quite a big buffer.

 

Times like these we are glad we are in Fruit and Vegies and not some high end luxury goods that are the first to go when people belt tighten.

[BagOfCrisps 24]

You in fruit and veggies Mamabear, really? Do you grow them? That sounds much more exciting than what I do (office stuff).

[Go Native 70]

In terms of who is now buying properties in Niseko the market is swinging decidedly towards SE Asia. Some apartment developments now are almost solely owned by investors from HK and Singapore. There's no shortage of money in these regions and most of the companies here are marketing big time in those markets.

[keba 0]

Thanks for all the informative explanations guys, but I'm probably never going to understand the currency market. Just cough up the extra 25% for the cost of the trip. Am glad I've already got flights booked and paid, though.

[-30deg 0]

You could be forking out more than 25% given what has happend on the world markets overnight.

[@tokyo 14]

 

http://www.snowjapanforums.com/ubbthread...html#Post287196

[HelperElfMissy 42]

Originally Posted By: BagOfCrisps

You in fruit and veggies Mamabear, really? Do you grow them? That sounds much more exciting than what I do (office stuff).

BOC,

Grow them? LOL!!! I have a BROWN thumb! I kill the herb garden at home! (slight exaggeration)

The bills are paid by the Fruit and Veg Wholesale company. Papabear started it 15 years ago, and while I have worked in the business from time to time, particularly in the beginning I tend to steer clear - not good for the relationship to work together. Have 60 staff, so it is a pretty big operation nowdays - so I am not really needed anyway.

My priority for the last 17 years has been raising our 4 sons, but I DO work part time as a Deaf Sign Language Interpreter, and also responisible positions for the State and Federal Electoral Commissions during election times. I really love working the elections because it is a short period of seriously intense work - the last one I got 5 weeks work out of - exhausting but I loved every minute of it. I also love working as an interpreter because I am always doing something different, from courses to on the job training, to tupperware parties to doctors appointments to court appearances. NOW THAT is interesting work.

But I don't mind office work either - if you are feeling bored you can always get up to mischief....

[keba 0]

Ouch! 1AUD = 73yen today.

 

Forget the holiday in January though, I'm just glad I'm 20 years from retiring, and hopefully the world economy will have recovered by then, and my super will not be worth peanuts.

[Rag-Doll 0]

On the train this morning I was scrolling through the news headlines on my blackberry:

 

Aussie dollar plunges

Wall street rout

Global sharemarket in turmoil

Meteor heading for Earth!

 

I actually laughed out loud - it's the end of the world folks!

 

Seriously though, gotta feel for the retirees out there with their super funds being king hit in the worst kind of way right now.

[Mantas 3]

If I was about 2 years from retirement I don't think I'd have my 40 years of savings sitting in a high risk "high return" portfolio. Damm silly if you did.

[Yuki's Passion 1]

I have a sinking feeling its not just going to be the aussie dollar, but most currencies that are going to tank...

[sbeatton 0]

You need to think of dollar averaging. Holiday this year , not so good, but averaged out over 20 years, not so bad.