pog, aud & qe., page-11

T

no quarrel from me re: POG rising in all currencies. I just think some will appreciate at a faster rate and to higher respective highs than others.

For instance, POG in AUD has already gone to 1500 and is now cellar dwelling at 1200. Conversely the POG in USD went to 1000 dropped to 850 then back up to 920 as we speak. So $300 drop in AUD matched with an $80 drop in USD ....

In USD the POG will go alot higher than 1000 and in AUD higher than 1500. But I'm not so certain the above ratios I suggested above are going to hold. I thnk it is reasonable to assume that AUD will reach parity with USD and perhaps surpass it, perhaps in next 1-2 years. Perhaps sooner.

So POG might go to 3000 USD but might only be say 2500 AUD ..... reason: our interest rates and economy and social order remain relatively intact (despite debt levels and world events) making Australia a geographical safe haven for investment.

I don't see the carry trade happening all that much because it is an end game scenario where converting back into your native currency will only be for consumption purposes. Rather, I see more permanent investment going on in Australia - investment in infrastructure and comodity related enterprises.

I don't see the hyper inflation occurring in Australia and similarly I don't see the massive devaluation that is going on in the states happening here. We will get portions of it, but not the full extent because in many respects our superior regulatory position has insulated us from most of the USAs stupidity.

BUt yes POG is going to rise in AUD no doubt about that. There will just be a disconnect between rises in AUD and USD based on the above happenings.

GC