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 !!!!!!!!!
GBG Price at posting:
78.5¢ Sentiment: LT Buy Disclosure: Held
