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sabang

"These foreign financial institutions are up to their old tricks. After getting trillions of dollars out of their respective governments to avoid GFC-induced bankruptcy - which was largely engineered by their criminal greed - because they are ''too big to fail'', they are already using their influence to maintain ''business as usual''.

Why funnel the money gouged out of American and British taxpayers into lending to their national economies to maintain employment when there are richer pickings elsewhere? Two of those destinations are Brazil and Australia. Their resource-rich economies are still doing well compared with most other countries because they are riding in the slipstream of the strong demand for commodities from China and India.

Cash is pouring into these economies, not for development, but to speculate on the local currency and the sharemarket. The rising value of the Brazilian real and the Australian dollar against the US dollar has had a disastrous impact on both countries' non-commodity export and import competing industries. Brazil's popular and largely economically successful left-wing Government led by President Lula da Silva is meeting the problem head on. It has decided to impose a 2 per cent tax on all capital inflows to stop the real appreciating further....


The Australian dollar bubble and the incipient housing bubble should be micro-managed. Capital inflow could be dampened by a compulsory deposit of 1 to 2 per cent to be redeemed after a year to stop speculative inflow. Home ownership has become a tax shelter. The steam could be taken out of the rise in house prices if negative gearing was limited to new housing. This would obviate the need for higher interest rates that affect everyone."

Foreign capital | tax | Brazil | Australia | Kenneth Davidson


The Aussie dollar is a plaything, has been for many years. Far more money is 'wagered' on the South Pacific Peso than is required in the international supply and demand for AUD's in actual trade. This speculative money mainly comes from US and UK financial institutions- but Australia's actual exports are dominated by supply to China and Japan, and strongly growing to India. This is bullshit- and the gutless wankers we call politicians should do something about it. This foreign speculative money is also thanks to taxpayer bailouts in those countries- so much for 'reform of the banking system'.

Nothings changed at all- it's still one big casino, and the Aussie dollar is at the centre of the orgy right now. A bank that invested it's taxpayer bailout moneys given to it in USD, would have made a 35% annualised rate of return since the beginning of 2009 by promptly switching that money into AUD, and riding the upsurge and interest rate differentials. Benefit to Australia- $0.00, in fact a loss. Benefit to the foreign Banks domestic economy $0.00- unless you're a Bank shareholder, or employee. Nice.

I've had a great ride on the Aussie, in fact I'm safely making money now out of the financial crisis- so lucky me. But I'll be getting out of the SP Peso on the next decent uptick. Again, the Australian dollar is a plaything of foreign Banks.

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