bhp direction, page-11

re: bhp direction - long term? Assuming the $US will remain at these levels longer term (it could even go further south), the long term outlook is for well above $10. In the short run though the currency translations will savage earnings and the price could yet go further south. As BHP is largely unhedged it should prosper longer term though. In the long run if the $US stays low against all currencies, prices will become less sticky for resources, and trend upwards towards their real level prior to the sinking of the $US. (As all commodoties are priced in $US - its decline has decreased their real value). Combine this with a global economic recovery within the next 2-5yrs and real commododity prices will be well above the real levels seen prior to the demise of the $US (due to increased demand) This double whammy if you like of higher real prices and higher global demand for resources short have an expodential effect on BHP's earnings in the longer run.