Having now had some experience with politics from other countries (not as a politician, thank you very much) I now see Australian politics in a different light.
From watching the current currency exchange rate for the Australian dollar and watching short political news items (online) I see how they manipulate the value of the dollar against that of the outside currency. As an example, with Christmas shoppers looking for bargains the Australian Reserve Bank increases the base interest rate to make Australians think twice about hooking into their credit cards and thus decreases the amount of spending on imported goods.
I had always understood that the Australian government manipulated the currency but now I understand how and why. The exchange rate against the US Dollar and the British Pound is very good for Australians who want to purchase imported goods or who are currently out of the country but how good is it for the Australian economy in the long-run?
The Australian base interest rate is one of the highest in western based economic societies and the only one to my knowledge that has increased since the ‘financial crisis’, much of which I believe was media driven for a purpose, which in my view is a good thing for Australians and Australia. Having watched these figures for most countries over the last 12 months I can see now that Australia is in a very good position in the current economic turmoil. Most other countries have no leeway to manipulate their economies if things do not get better for them or if things do start to slide again. They can print more money of course but in the short and the long term that would only create more problems, not only for themselves but for those currencies which depend upon their stability.
I would be interested to hear anyone else’s views on the above. Just remember that they are only my observations and nothing more. I am happy to hear if you disagree, it always makes life interesting.
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