They may be Boris, but it won't be symptomatic of Australia's position. Memories are short. In the last two financial predicaments, Australia did very well out of commodities and the Australian dollar out performed. It went to about $1.15 US. All we hear regurgitated on our news, is the Fed position in the US, and the need to raise interest rates which is of their own making overseas because they have quantitatively eased so heavily in relative terms compared to Australia but importantly have not engaged the population with full employment as well as the implication for us to raise rates. The reserve bank has resisted because the economic scenarios are different. Rust belt problems which got Trump elected still remain. Perhaps we will see a defence led recovery in light of the Ukraine situation? I feel they won't be able to raise interest rates substantially in the US for two reasons. Firstly, they are so far in debt they cannot pay the yield; and secondly, in the US, Mid term Elections are due. It would be a brave party tor advocate interest rate rises. In Australia, Morrison is touting tax relief and full employment closer to 3%. Overseas, there is unemployment. The issue is that o/seas central bank have virtually liquidated their assets with monetary easing. In that context, the only way out is for them to devalue their dollar, and that is what we saw last time.
Our commodities are necessary goods, and those with cash overseas, will invest in Australia. Safe haven a real yield. Just look at the case for RNU. Climate change driven agenda. All good. Capital raise now will see plans delivered.
RNU Price at posting:
31.0¢ Sentiment: Buy Disclosure: Held
