In my opinion a lot has to do with RBA and its stand of not interfering in the Currency markets and keeping higher interest rates then other developed nations:
Think about it:
1) High AUD has literally killed a few industries, namely, tourism, Steel, Manufacturing, more financial sector jobs. There are umpteen examples of other developed nation banks interfering with their currencies to either cap the rise (Swiss Franc) or flood the market with dollars to drive down the currency (Eg US Dollar). So the reason should be asked why did they interefere? Simple to ensure their products remain competitive and they protect jobs
2) High Interest Rates - Feeds straight into high dollar. I mean seriously, we're all pretending to live in almost million dollar homes, but we have no money to spend on retail or leisure? At some point something has to give? And for the life of me, I don't understand why create such a huge interest rate differential that results in migration of money from borrowings in lower interest rate economies to invest in Australia at higher interest rates.
3) It was only Tuesday that the RBA said - Suck it up... and stop whingeing, well the ABS data proves that we've got problems? How much has the RBA misjudged the situation - Glenn Stevens IMO you have it wrong
4) Moreover the RBA says well the funding costs have increased for banks, well why don't they lower rates to allow more funding from within the country.
5) The politicians keep ranting about Carbon Tax and mining tax, just look at yourselves, awarding yourself increased pays when the country's growth is virtually at a stand still
6) For me, even the miners are strugling, just check out my beloved KZL - Spectacular fall from grace
Lastly, I wonder what the RBA will do once CHina slows down immensley, just imagine the percentage of planned investments in the mining sector being axed?
My two cents after a terrible day - RBA get your act together
KZL Price at posting:
16.5¢ Sentiment: LT Buy Disclosure: Held
