Live, Love and Laugh

More bad news today from the Australian share markets... An overnight dive for the five-year low driven by the plunge in Wall Street. So what now? I can only watch the figures roll... downhill.

The initial dip in AUD exchange was a move to protect an exporting country (think about economic fundamentals between export price and demand). Many were just as puzzled as I was, when the dollar first shrank, pretty abruptly, after a series of strong soars against the USD. Later, I have learnt that the soar was caused by rising interest rates, a move to flood monies in the economy. If interest rates are high, why wouldn't you keep them in the bank? Once the monies are locked in, the dollar is then delibrately crushed, to prevent the country's export activities from slowing down.

But again, from a forum that I have been reading, someone realised the same trend that happened years ago, when the same thing was done to inflat the interest rates and inject the exchange rate to sky high, only to find it come crashing down not long after. And the same thing happened again! Shacks, I should have bought more Chanels back then! Haha, I'll know better next time! Really, the principle of "what goes up must come down" does work, and history has repeated itself.

But what happen now is, AUD has dropped way too low. 3 cents dive overnight, and an estimated overall drop of 30% in just three months! Has the strategy for export boost become a tad too pricey? Yet, no one could predict the next move by RBA (Reserve Bank of Australia) still.


I'm not inferring that Australia is heading towards recession, and economists certainly discourage "talking ourselves into recession". But the kinda market trends we are picking up from the news nowadays, I've got a feeling that the world economy has yet to hit rock-bottom yet, and will only get worse with time. The worst fear of "Great Depression II" may be eventually realised.

Alright, never mind what I say, I'm the ultimate pessimist if you don't know me by now! =)

Granted that I have job security during these rough times, it might still work out for me. The best time to build/ buy a home is to take advantage of the low interest rates, although Australia's interest rates is still not quite as low as US yet. SL's friend bought a new car in the US on the low interest rates, and then trade in his old one, with some profits from it to rejoice over!

Too much thoughts... It's back to studies now =(