Why is the AUD declining?

In the last 30 days the AUD has declined against the USD by about 10.67% from $1.0636 to approx $0.95. Further, the AUD has declined by 9.3% against the Yen, 9% against the Yuan, 5.38% against the Pound and 3.5% against the EURO. It appears that certain proprietory traders must be making a motza out of this decline, because the fundamentals for such a decline simply do not add up. Business Journalists justify the declining AUD by arguing that it has been caused by the Greek debt crisis, declining natural resources and a rumour that the RBA might cut interest rates. But these arguments simply fail to make any funadamental economic sense, when analysed in respect to the global predicament in the US and Europe. In fact Australia is a diversified and modern economy and produces much more than mere iron ore. Moereover, Australia has a growing GDP, whereas the rest of the world does not. So why then is the AUD being punished? The answer is that the market has been indulging in PURE SPECULATION. Unfortunately there is a ridiculous perception that the AUD is completely related to the price of natural resources and that the failure of Greece is going to lead to economic armagedon and thus lower prices of iron ore and cause the AUD to reduce to X. The fact of the matter is that, if Greece defaults, there will be many other dominoes that will fall flat before Australia. Economists doubt that even if Greece, Ireland, Portugal, Spain and Italy fail that it will cause China's demand for natural resources to decline below growth on the year proceeding. The fact of the matter is that Australia will be exporting more goods and services to Asia than the year prior, even if America and Europe slumps into depression. So this argument should not be a question of why the AUD is failing, but rather why its not gaining against the rest due to the inherently bad economies in the EU and USA. Perhaps we should be arguing about why the USD and EURO are trading at such an over inflated level given their domestic predicaments?

Quantitative Easing could mark the beginning of the end for the USD

We all know that the Federal Reserve's quantitative easing is undermining the value and security of the US dollar. In an attempt to kick start domestic product supply chains and to undermine cheap Chinese imports. This type of debasement could very easily spark the end of a US Dollar dominated world. But which currency would be a suitable replacement for the USD? The EURO and the POUND have their own fair share of issues. The YEN represents yesterday's Asia in decline shadowed by the recent economic miracles of China and India. Further, China's pegged YUAN is too highly controlled and exposed to governmental manipulation to be a likely candidate. The AUD and the CHF are perceived to be too small and not liquid enough to be a safe enough bet. So, perhaps the only foreseeable solution will be for countries to hold a bread basket in reserve of an assortment of currencies (i.e. EURO, POUND, YEN, AUD, CHF, USD, YUAN, GOLD). Or, perhaps the Gold or Silver standard will return.

This chart perhaps shows the beginning of the end for the USD.

India's population growth

India has over 1.2 billion people and it is exponentially growing. Unlike China, India is the worlds biggest democracy and has made no attempt at curbing its growth with a one (1) child policy. So, what will happen to a much bigger India with projections of about 1.9 billion in twenty five years, and its resources are already depleted. India will either have to spread its resources more widely amongst its population or face increased polarity between the wealthy and the poor. In essence, India's classes will all grow in number, however they will likely remain as equal fractions. The biggest issue will be food and water, the quality and consumption per head will more likely reduce or be imported from surrounding countries to replenish the gap.

Liability of Airlines for recklessness

Qantas Ltd as an example has had a string of commercial accidents since it was floated on to the market in 1997. In the scenario that an airline suffers fatalities (deaths), which are attributed to by its maintenance, could the airline itself and its Directors be criminally liable under the Commonwealth Criminal Code.

In the scenario that an airline suffers a casualty the company and the Board of Directors could be criminally liable for cutting maintenance, so long as it was sufficiently connected to the fatalities. In this case the Court is empowered to make a finding of recklessness and order a fine on the company and prosecute the Directors individually. Under the Commonwealth Criminal Code at 5.4 (1)(a) a finding of recklessness will be made in the situation where a Director is aware of a substantial risk of death or injury and that the circumstances exist and that it was unjustifiable to take the risk, and the company takes the risk anyway.