Do you, like me, often wonder why we are struggling to understand the reasons for higher prices?
Also, the crashing of stocks and shares, the change in monetary rates?
Because the Australian dollar is so strong against other currencies, which is good if you like to holiday outside Australia, but bad for our exports. Then you will begin to understand the reasons for our price increases.
Money makes the world go around, but if the most powerful country in the world manages their finances to show massive overdrafts, we all will pay the price. The UK is attacking Libya, and the costs in terms of planes, fuel and ammunitions, is extensive. The result is the monetary unit, the pound, suffers. And who has to pay? Everyone who buys and sells produce. How do the UK government pay their debts?
But this is nothing to the cost of a war in Afghanistan, and Iraq. Because even the mighty US dollar cannot sustain the enormous debts beginning to mount up. It is their debts which pulls the US dollar down.
We here in Australia manage our defence costs…and with care manage to stay solvent due to our valuable mineral ores. But the export prices are lower due to the weak US dollar. The results are higher prices and eventually higher borrowing rates. The Americans know the only way is to get out of their foreign policies and savagely cut their defence bills.
We need to make sure we are not drawn into any costly policing roles in foreign countries. We have the minerals, we have best budget controls, and we have to wait a while until the Ozzie dollar returns to a more acceptable exchange rate. Until then food and fuel prices as well as Gas and electric bills will continue to increase.
Always remember…win or lose…wars cost a great deal of money.
by Professor P.T. Brown