The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, September 23, 2011

Aussie smashed: down to 0.96 US cents (11% off highs); imported inflation here we come

The Aussie-USD cross has been belted big-time, and is now down more than 11% from its recent highs. This will worry the RBA and reduces the chance of rate cuts: the RBA will argue that the much lower dollar is stimulatory and inflationary (ie, tantamount to rate cuts in and of itself ). If the Aussie stays under parity through Q4 it could make for some very interesting final quarter inflation results. On the RBA's behalf, I am crossing my fingers for a benign Q3 outcome...I was expecting a second half depreciation in the Aussie as a function of rising US inflation (tick), reduced US creditworthiness (tick), and rising US yields (wrong). Instead, it has arisen due to a flight to quality during a time of extreme uncertainty.

at 6:41 AM