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Peso soars as Aussie dollar crashes


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Anyone seen that movie "The Day After" ?

 

So here we are, the day after Dubya declares to the media that we face global financial meltdown. Is there anyone who trusts the media to be smart enough and have enough cahones to tell us all how it is?

 

Well the G20 meets as of now.

 

This weekend may be make or break. So what can all the financial reps of all these economies do to avert the absolute carnage of the unwinding of global hedge funds?

 

Probably not enough to prevent it being newsworthy.

 

So what makes it worth the front page?

 

Put simply, the bankruptcy of the USA. Unless this works, the world's reserve currency will no longer be the USD.

 

The major trading partners of the PI include China, Japan and the US. I think it's in that order.

 

That suggests the peso will strengthen against the US and there should be a rush to exploit the natural resources of the PI, especially by Chinese backed countries.

 

Is there grist for the mill? Well, if I read correctly, we are looking at a new role for gold as a sort of "reprise" of times of yore. Fiat currency may be again backed by gold. If this happens, then Chinese miners will be all over the PI like a rash. Didipio in Mindanao has one of the largest gold deposits ever discovered. Its been dropped by an NZ company Oceana Gold due to the sovereign risk of mining the PI.

 

However, don't expect Chinese to play by Western rules. And why should they after this fiasco? They understand the PI I believe a lot more pragmatically than a Western company would, namely in terms of law enforcement, the clout of cash and their local community ties.

 

Mines take years at present to get up and going. The Chinese have an incentive to expedite this process and in fact if natural selection applies, they may develop the equivalent in the mining world of McDonalds. McMines would be able to tap into any major deposit with only a modicum of time and planning if the wheels of PI commerce are greased with RMB.

 

This is postulation but to me the Chinese are much more used to the idea of getting ahead in adverse conditions. They've done this in every major culture and earned respect in those cultures as industrious workers tolerant to hardship.

 

As for the AUD, I expect we will smile soon. If the G20 adopts a surrogate gold standard, as a country whose earnings are 60% commodities and a country with the 3rd largest gold output (at present), the kangaroo will jump higher :rolleyes:

 

Cheers

Tom

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smokey

well as the world is full of billions of people getting anything right is sheer luck.. as for the USD being replaced .. well maybe so but not in OUR lifetime..

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tom_shor
Former Liberal leader and economist John Hewson is predicting the $A could drop to 40c US and then trade in the 40-60c US range. A senior economist from Combank is predicting it to settle at around 80c US. So it's no wonder us non-experts struggle with predicting what will happen to the aussie battler.

 

The $A was 7 pesos when I first went to the Phils in 1981. In 1986 it was 13. In 2000 it was 25 pesos. So even 33 pesos is a good rate in historical terms.

 

If the prices in the Philippines had stayed the same you would be right. In 1986 SM in the sari sari store was P2. Deposit for the bottle P2.5. Jeepney fare was P1 and Rice was P8-15 a kilo. Shrimp was P40 a kilo. What are they now? Unfortunately for the time being you are hosed. Just like the guys using USD were last year. :)

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tom_shor
Back in the 80s the USD was in about 20 php to the USD or so. However, prices have significantly increased here since then. Without a doubt the Pesos, USD and A$ all buy way, way less than they did in the 80s.

 

I think the bottom line for the person that started this thread is that they were barely able to cover the personal expenses with their pension when the A$ was exchanging well with the peso, but not that it has dropped in value, they are unable to cope with the costs here.

 

You could get P25 if you had a $100 bill but you had to bring them with you.

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tom_shor
Anyone seen that movie "The Day After" ?

 

So here we are, the day after Dubya declares to the media that we face global financial meltdown. Is there anyone who trusts the media to be smart enough and have enough cahones to tell us all how it is?

 

Well the G20 meets as of now.

 

This weekend may be make or break. So what can all the financial reps of all these economies do to avert the absolute carnage of the unwinding of global hedge funds?

 

Probably not enough to prevent it being newsworthy.

 

So what makes it worth the front page?

 

Put simply, the bankruptcy of the USA. Unless this works, the world's reserve currency will no longer be the USD.

 

The major trading partners of the PI include China, Japan and the US. I think it's in that order.

 

That suggests the peso will strengthen against the US and there should be a rush to exploit the natural resources of the PI, especially by Chinese backed countries.

 

Is there grist for the mill? Well, if I read correctly, we are looking at a new role for gold as a sort of "reprise" of times of yore. Fiat currency may be again backed by gold. If this happens, then Chinese miners will be all over the PI like a rash. Didipio in Mindanao has one of the largest gold deposits ever discovered. Its been dropped by an NZ company Oceana Gold due to the sovereign risk of mining the PI.

 

However, don't expect Chinese to play by Western rules. And why should they after this fiasco? They understand the PI I believe a lot more pragmatically than a Western company would, namely in terms of law enforcement, the clout of cash and their local community ties.

 

Mines take years at present to get up and going. The Chinese have an incentive to expedite this process and in fact if natural selection applies, they may develop the equivalent in the mining world of McDonalds. McMines would be able to tap into any major deposit with only a modicum of time and planning if the wheels of PI commerce are greased with RMB.

 

This is postulation but to me the Chinese are much more used to the idea of getting ahead in adverse conditions. They've done this in every major culture and earned respect in those cultures as industrious workers tolerant to hardship.

 

As for the AUD, I expect we will smile soon. If the G20 adopts a surrogate gold standard, as a country whose earnings are 60% commodities and a country with the 3rd largest gold output (at present), the kangaroo will jump higher :)

 

Cheers

Tom

 

Yes the Chinese will be more than happy to plunder the Philippines and any other country that will let them. I am sure they could get it quickly because they will completly disregard the environmental damage they will do.

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The G20 met over the weekend. FYI thats: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK and the US, plus the European Union as a member in its own right.

 

"Russian president Dimitry Medvedev said that the G20 November 15 summit would become a step toward the establishment of a new global financial system.

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