GBG gindalbie metals ltd

foreign exchange risk

  1. 411 Posts.
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    When I thought we could see the light after this capital raising I read articles about forex exposure on gbg. when will the bad news end!!!. A rising $A or more to the point a collapsing $US is not all bad news. Sure gbg may need more $us to fund their construction phase but hey this is only part of the story. if the $A remains high into 2012,2013 and beyond then gbg will require fewer $A to retire that $US debt. The other thing to realize is that as the $us declines prices of commodities such as iron ore and gold tend to rise in $Us terms providing somewhat a natural hedge. The key I think is what will happen to the $A after gbg goes into production. If the currency slides back to 0.80 then this is when the real forex loss occurs. My gut feel is that $A will remain strong for many years as the US is effectively bankrupt and is likely to keep interest rates near 0 percent and probably continue to print money. Forex problem? What forex problem? Come on let's get positive on this one !!!!!!!!!
 
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Currently unlisted public company.

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