dollar drop

The dollar is being sold down. There has always been a dirty float of the dollar and this is once occassion when intervention (indirect) by the RBA and the 4 pillars is in play.

Gold buying in India is at around this time of the year which the market calls 'Wedding Season', even though there is no such season. Buyers there buy around April yes. And being the largest consumers of Gold they would need a discount. We provbide it by lowering our dollar against the US which the Indians use to purchase our gold. They account for 23% -28% of all world gold purchases.

This is also the time for adjustments to some of the largest coal and other mineral contracts with the Chinese, that other giant. The Chinese have been forcing discounting amongst the producers in the Hunter Valleyu and Bowen basins in Australia.

The carrot and stick get bigger now with competition for Uranium sales. We want both China and India to buy. The non proliferation nonsense is to placate the greens and set the world at ease with our 'green' and 'environmentally responsible' credentials.

The dollar will remain low for at least 6 months with some hiccups in between. It is also a means of keeping jobs and job losses to a very low level. The unions will then have lost some of their steam when Howard comes out saying, "look the new industrial relations law has won acceptance from the workers'. You won't see the dark side of it. The media is Howard friendly. All we need is another wheat scandal but even then Aussies are not as intelligent or aware as we'd like the world to believe.

Lets pray the war goes on. But don't mention the war!!!