Globalisation is not an economic panacea. It's a juggernaut that sends jobs (from Western lands) to low-wage sweat shops in lands like Bangladesh, China and Mexico.
A currency war between America, Europe and Japan has gone global with Australia's Reserve Bank joining the war to 'protect' the Australian Dollar by lowering the official cash rate from 3% to 2.75% with promises of more cuts.
What effect will cheap commercial bank loans have? Probably the same effect they had in America. The money won't go into creating jobs in Australia.
It will go into share speculation to get rich without the indignity and vulgarity of working for a living.
What about gold speculation? In a downturn, what people lack is cash. Few speculators say: "My top priority is to ensure I buy gold from MissU for more than MissU paid for the gold."
BTW: The biggest downwards pressure on the market price of the Australian Dollar comes from George Soros who hopes to make a motza from short-selling the AUD.
To win the global currency war, maybe the RBA should short-sell the Aussie Dollar.
