weak, page-7

re: resource companies and lack of hedging Howdy ...

RBA is the best currency hedger in the country .... ask any senior foreign exchange trader with over 15 years experience .... ooops you won't find any ... may still be one of two.

RBA back in 1989 was an agressive seller of the currency. It stood there and sold gradually all the way up thru the 86cent to 90 cent level ... AUD in the end made a high in NY one day of 0.8990 .... the rest was history ..... next time the RBA was seen in the market for over a billion dollars was .... under 50 cents ..it dipped its toes in the seventies, but they themselves described it as a test and smooth.. US hedge funds selling stupidly below 50 cents was the next big show for them .... RBA just stood there and took all the sellers on.

How short all our memories must be ... remember when the RBA sold most of its gold ... what was the price ....
somewhere around USD400 ... lots of bleating at the time but lots and lots of central banks joined in much later and lower. Funny the bleaters shut up when gold hit a low 2 years or so later of USD 253 ish.

One just has to look at the profits the RBA has generated for the goverment over the last 10 years to see how good they really are. Profits paid to the goverment I beleive are around 28.2 billion dollars for the 10 years .... obviously not all from specualting but that is some serious money that has been generated and credibility built up !!!

So if I had an exposure to exchange risk .. the next time the RBA got serious ... over 1 billion in a month ... maybe I might be tempted to start covering.

Oh and prior to the RBA selling in 1989 at above 85 cents .... yep they were the major buyer on the dip below 60 cents in August 1986 in the wake of Paul Keating famous Bannana Republic talk on the 14 th May 1986.

If the RBA was a company it would have a dividend of around 10 % ... not bad for a goverment run institution.
I would buy shares !!!!

Good luck