Good post Javanco,Australians have two hobby#. To dig holes #....

Good post Javanco,

Australians have two hobby
#. To dig holes
#. To build walls and flip it to each other,
What do we have to show for last decade of boom? Extremely high mortgage debt?
Our productivity has decreased yoy and we have not invested in anything meaningful during the boom we had/having.

Our saving grace is our location(resource) not our talent/innovation/productivity, I guess we are called lucky country for a reason :)

High AUD is not only bad for most of the domestic business like retails, tourism, manufacturing, education etc but its also not good for mining company with mine located in australia, as most of associated cash cost remains in aud with commodity sold in usd. It also result in less tax revenue for government. But higher AUD results in lower inflation(well comparatively) which act as a barrier for raising interest rates.Interest rate has become most important for aussie economy where a quater % rate rise creates an massive -ve reaction within masses(due to very heavy household mortguage debts).

RBA is between rock and hard place here, If they raise interest rate(supporting higher AUD), houshold suffers due to extra mortgage payment, domestic industry suffers due to higher AUD. If they drop interest rate, AUD falls rising inflation much higher than it currently is putting household under heavy pressure which is already struggling to meet monthly expenses due to rising food and energy prices.