Economic Turmoil in the US and Australia

I’m very upset at the Australian dollar plummeting in a blink of an eye. From reaching heights of US$0.98 in July to now closing just below US$0.68, the Australian dollar has lost 30% in value in under 3 months.

Imagine if you’ve invested $1 million into the US dollar few months ago and sold out now? You’d make the quickest $300,000 gross you’d ever imagine.

What does that mean for people like me? It means it is now more expensive to travel overseas and purchasing overseas goods. With the price of oil dropping to around US$90 per barrel, I haven’t noticed any drastic changes in local petrol prices and also airfares. That really sucks as I’m planning to travel overseas early next year.

I’m sure there’s news all over with blazing headlines on how the global markets are following the US path as confidence of investors spiral downwards and selling off whatever they can to salvage what’s left.

Sure you’ve heard of all the sweet news of the US government bailing out companies such as Freddy Mac, Fannie Mae and AIG. I suppose this is to impart confidence into investors to not go into a selling frenzy and add further momentum to the downward freight train.

Rumours have emerged that Richard Fuld, Lehmann Brothers’ CEO tipped the economic landslide with the bankruptcy of Lehmann Brothers. But I guess he has no problems with his healthy $300 million in bonuses over the last 8 years. Apparently he feels horrible.

Yet despite these events, Berkshire Hathaway, Warren Buffet’s company, has bought a $5 billion stake in Goldman Sachs, another ailing investment bank.

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