Our dollar is so strong, Germany wants some

[Jovial Monk]

Bundesbank considers Australian dollar assets

Published 4:22 AM, 14 Jun 2012 Last update 4:22 AM, 14 Jun 2012

In a move that would prove a dramatic step in Australia’s emergence as a safe haven for investors rattled by the European debt crisis, Germany’s central bank, Bundesbank, is reportedly considering adding Australian dollar assets such as bonds to its foreign currency holdings, according to The Australian.

Bundesbank officials have reportedly been holding meetings with major Australian banks and the Reserve Bank of Australia in recent months to discuss the potential change in foreign currency strategy.

Talks began as far back as 2010, when the RBA prepared a briefing document for the Bundesbank detailing the nature of Australia’s debt markets and the economy, The Australian reported.

The Bundesbank’s current foreign currency reserves are dominated by US and Japanese government bonds, with 93.1 per cent of its €29.433 billion ($A37 billion) in foreign currency reserves being held in US dollar assets.

Amid the instability of the European debt crisis, the Australian dollar has proven increasingly attractive for central banks. Russia’s central bank has recently added Australian dollar assets to its portfolio.

http://www.businessspectator.com.au/bs. ... nt&src=hp7" onclick="window.open(this.href);return false;

Of course, the downside is, dollar remains high, hurting manufacturing and tourism. OTOH interest on govt bonds so low the surplus will be bigger than expected. Buying stuff online from overseas is good too.

[mantra]

Maybe we're going to become part of a new revamped Eurasia Group? Sounds ominous. We're going to be tied in with European currency or at least committed to little or no movement in our dollar. What harm will that do us?

As far as buying stuff online - the government is already establishing a GST on various products so that our retailers won't have any competition.

[Jovial Monk]

Germany is looking to keep its foreign exchange reserves in strong, stable foreign currencies. That means well governed, strong economically us. That is all.

No, govt not moving on the GST, fashion retailers ARE trying, with some success, to block purchases from overseas but already ways to bypass that have been set up.

Ahhh after library stint nothing like kicking back with some corn chips, my home grown superhot salsa and a glass of beer! Ahhh beer, nice pssst on opening bottle, crisp sound of pouring, lots of lovely froth that settles down but doesn’t disappear entirely, bring glass to mouth, hmmm delectable aroma and bouquet, then glass hits lips and that spruce kiss of malt and hops. . .ahhhh!

[Jovial Monk]

Peter Martin, where we are in 7 graphs:

http://www.petermartin.com.au/2012/06/w ... seven.html" onclick="window.open(this.href);return false;

[Jovial Monk]

More indications how good the economy is:

http://www.marketeconomics.com.au/2081- ... g-get-real" onclick="window.open(this.href);return false;