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Hedge Funds Gambling

I wonder how many Australians realise their future is determined by unaccountable hedge funds and currency trade speculators who ultimately determine the value of many of the world’s currencies? Currently they have stopped betting on the US dollar because there are few signs the US Federal Reserve will significantly lift interests rates in the near future as a consequence of the United States’ legislative paralysis that has occurred since the Groper became President. Their attention is now focused on the European Central Bank and the Australian Federal Reserve.

Billions of dollars are transferred in an instant around the world as currency speculators play with national currencies to create artificially generated market expectations they can manipulate to lift their bottom line. The current hike in the Australian dollar is linked to currency speculators abandoning the United States market and buying up Australian dollars. This market frenzy has seen the Australian dollar rise from less than 75 cents to 80 cents.
In financial terms, Australia is a minnow in the ongoing currency wars that are carried out by currency speculators whose actions have profound implications on tens, if not hundreds, of millions of people. The increasing dollar has an immediate effect on both businesses and workers in Australia. Apart from cheaper overseas holidays, the benefits of a high Australian dollar are minimal.

A higher Australian dollar increases costs for local businesses and makes Australian exports more expensive in a globalised market place. This leads to a shrinkage of the national economy, increased underemployment and unemployment and static or decreased wages. Paradoxically, the higher Australian dollar will put downward pressure on inflation and wage growth. This means the Australian Federal Reserve won’t increase interest rates any time soon. When the currency speculators have made their financial killing by manipulating the Australian dollar, they’ll move offshore and destabilise another sovereign nation state for their financial gain.

There is nothing rational or economically beneficial about allowing the Australian currency to find its own level in a marketplace that is controlled by white pointer sharks. The floating of the Australian dollar by the Hawke/Keating Labor government in the early 1980’s removed the power of the Australian government to regulate its currency. The economic benefits that have resulted as a consequence of floating the Australian dollar have been fleeting and have only benefited the 10% of Australians who have the disposable income to benefit from Australia’s investment friendly taxation laws. Everybody is feeling the pain of allowing unaccountable corporations and speculators, whose major responsibility is to make ever increasing profits for their major shareholders, to determine the international price of the Australian dollar.

Dr. Joseph Toscano, Sep 2