bagnap

Australian Dollar Preparing to Break Out

This would have to be the most uninformed and stupid set of reasons to buy the aussie dollar, backed up by a set of grand, chesterfield chair style musings on global power relationships and a spurious chart of the last 2 years trading (just to put the technical cherry on top....).

Let me attack your ideas one by one.

1. "I am one of those expecting a shift in economic power from Western economies (namely the US) to Eastern economies (China, Japan, etc)". Well, sure, nice idea. Very Macro. You are to be complemented on your Forward Thinking-Ness. So, as a fairly advanced, western economy, what does the Aussie dollar have to do with this trade opportunity? Why not buy yen? Why not buy Chinese shares or some Nikkei futures? Buy some Indian shares?

2. "In particular, Australia, as a producer and exporter of precious metals". Well, yes, that is true. However, there are a few other things we export, like iron ore and bauxite (aluminium ore) which completely overshadow our gold exports. We also have a fairly strong banking and services sector.

3. "fiat currencies are troubled". Umm....The Australian Dollar is a fiat currency.....en.wikipedia.org/wiki/.... We did away with the gold standard some time ago....And if fiat currencies are troubled (in the sense that they are losing some of their 'fiatness'), why wouldnt hedge funds pick on the one with the most liquidity (5th most traded currency in the world) and is the most vulnerable (tiny army, vulnerable to global demand through commodity prices, small central bank, similar property problems as the USA).

4. "fiat currencies are troubled"....Anyway...... they? How? Since when? Do you count the strengthening Euro in this statement?

5. "fiat currencies are troubled". Hell...buy gold...Dont buy the Aussie Dollar. Just buy gold..Buy gold....

6. Lucky last....if you are looking for such a long term macro trend why restrict your historical bear market to such a short term horizon starting since August 2008?

6. Buy for the breakout...Well, yes you could, but if you are really trading such macro trends surely you would want to look at a little more history a but further back than AUGUST 2008....You'll see (if you look back a bit further and do some research) that in the last commodity price shock (Asian Crisis, where oil went down to $10 per barrel) the Aussie was completely hammered down to sub 50c.



I'll address them one by one.
You claim to bel