Underperforming growth in China, improving economic conditions in the US, and the RBA’s recently announced cut in the cash rate to a record low of 2.75% have forced downward pressure on the Australian dollar – culminating in a loss of nearly 8% in value against the USD since mid-April. Crashing from its peak of $US1.10 in July 2011, the AUD has reached an 11 month low, with many analysts warning investors to brace themselves for further deterioration.
Hand picked selection of economics content from around the web. This week: Europe, US election coverage, the RBA’s monetary policy and the cost of free range chickens. ESSA, 7 October 2012 World Economy Europe Greek Prime Minister Warns of Societal Collapse Like Weimar Germany; Citizens Storm Defense Ministry; – Global Economic Analysis Greece is politically …
It’s commonly assumed that interest rates of any sort of debt has to be positive, because it just doesn’t make sense otherwise: why would you pay someone to hold on to your money for you when you can do the same by putting it in the bank and earn interest? If you don’t trust the bank, you could still withdraw it in cash and put it under the mattress for safekeeping so logically they shouldn’t exist. But if you go to your preferred financial press and do a quick search for current rates on Swiss 2 year bonds (on Bloomberg) for example, at the time of writing the yields on these things are negative. But we just said that they don’t make sense…?