Hey ad,The US has only just began QE, so the last six years is...

Hey ad,

The US has only just began QE, so the last six years is not really relevant. Since the US began QE the USD has clearly gone down, and the POG in AUD has gone down! I remember a couple of months ago when it was nudging or just over 1500, now it struggles to stay above 1200, because as the POG rises, so does the AUD. The two are clearly linked to the USD.

But there ain't no argument about the effectiveness of QE as far as economic policy goes.

But there is about China. We can only benefit from China's growth under the auspices of the US. Short term we might get away with the US being economically weak, but long term if the US is weak economically then one of the things that makes Australia such a good place to invest (in govt bonds etc), which is stability, will be gone. Without the US economically strong the Chinese will not have to give us a good deal on anything. I think that your comment "We have what they need to industrialise." Is a double-edged sword, and we don't want to be on the wrong side if the US are economically weak. Therefore, no strength in US equities is bad news longterm for australia, unless we want a quantum shift in the way that we live; which we might!

- pug