Hidden goodness

Bad for a debt infested nation, great for us really. As banks raise rates more than the RBA this month, WBC, CBA and now ANZ - it means our trade dollar becomes more subdued from speculation the RBA will be need to be more aggressive to raise rates. This makes out exports less squeezed by currency, and the operating margin increases with the banks providing liquidity and healthier gearing. Why is this bad ? I think most people have super accounts no?

Sure - people will never feel great about rate rises, but little did they realise this can actually keep rates lower in the long run. I mean if you want to see an extreme example, you can always discover how team Greenspan Bernanke left rates low too long causing the housing bubble. Furthermore, treasury can't complain about banks raising rates - they injected stimullus packages to keep asset bubbles, which caused rates to remain high, instead of really hitting low.

Just don't tell the home loan owners why, they'll never see past the extra 20 basis points.

Didn't bounce

Perhaps not yet, it just went straight down. As if the sentiment is as negative as the number of sellers trying to get out of the Dollar as quickly as possible.

Whatever it is, gold has been rising sharply against the US Dollar but hardly when exchanged into the Aussie. It is still hovering around the 1140 per AUD. This means the AUD is now exchanging for 91cents US. Not so great for exports.

Fuel equates to $1.10 to $1.20 at the pump per liter - and this is on low demand and high reserves. I can only wonder what it would mean when the demand returns with economic activity, and the supply side of oil is constraint. This includes LNG and in many ways, other forms of energy supply including Uranium. I'd be ready to pounce if equities correct from any upward swing in USD but it just doesn't seem much will happen if a recovery is insight. I don't see recovery in sight, so I'm still hanging out for that correction, but happy to be wrong.

Of course, the Australian Reserve Bank (RBA) has pre-empted an inflation storm by raising rates to begin to drain liquidity out of the system. Surely this will anger many, but with Treasury flooding the system, I see this is as required move - if treasury hadn't had implemented such a massive expense, it would be likely rates would remain low for longer with a softer asset price. Soon our exports however, will face headwinds capping the AUD, I cannot see it continuing higher and higher without severe consequences for our exporters, which compels me to look into gold from the AUD perspective - I mean what happens when $1AUD buys $1.50US? Unless our global reserve currency changes, will this be sustainable?

House prices ? If oil was to rise to $150 pb USD pre levels of the GFC in demand growth and supply strain, I fear retail interest rates back to threatening the teens - perhaps rising even higher. Any higher, and the double whammy of inflation and rates will severely affect household budgets. For me, I feel compelled to enter other asset forms. After a severe correction in banks without the severe correction in Aussie housing, my risk appetite is naturally biased toward the big 4 banks - but now it is a tad high.

Still some will survive and pull through, we always do. I hope you are doing well - if you have thoughts I'd like to hear.

manipulation of gold

Predictably, as gold tops highs, the IMF attempts to prevent a full technical breakout by agreeing to sell its 403 tonnes the metal. Last time they announced it's sale was at the G20 when gold again reached the $1000 p.oz.

"a limited amount of its gold to help provide loans to poor countries and shore up its finances."

loans of dead money to poor countries? currencies that are backed by less and less gold in the form of SDR's, which are backed again by a basket of currencies being vastly depreciated by more quantative easing? Why loan useless paper to a country in need of commodities?

Inflation storm !

USD index may bounce

The USD index has come to a small support line which could indicate an intermediate bounce from this downtrend. The 50 Day MA is also coming to a respective support. Will it bounce I don't know but gold has also broken out on the upside. At present, it is trading at $1015 against the USD as I write. However, in Aussie dollars, this still low, around AUD$1150 to an oz. indicating a weakness in the US Dollar itself, as other economies currency strengthens.

This moving off economic weakness into national debt is going to be painful and the CPI will never reflect the truth. Good setup!

Are we still in recession?

You tell me !

I don't buy clothes every month, I don't buy appliances every month to keep the roof over my head, and I don't need to update my television every quarter, but I must pay for food, fruit, vegetables, fuel, insurances, utilities, energy and other costs in order to maintain my household, all which directly affects the household budget. The lucky lot who are not caged by these categories, I think you are a minority. So do you think Australia is still in recession?

Taken from the ABS site...

12 Some of the compiled series are self explanatory, such as 'All groups excluding Food'. Other series and their composition are described below:

• All groups excluding Financial and insurance services: Reflecting the changing composition of the CPI, from September quarter 1989 to June quarter 1998, comprises the All groups CPI excluding house insurance, house contents insurance, vehicle insurance and mortgage interest charges and consumer credit charges; from September quarter 1998 to June quarter 2000 comprises the All groups CPI excluding house insurance, house contents insurance and vehicle insurance; from September quarter 2000 to June quarter 2005 comprises the All groups CPI excluding insurance services; from September quarter 2005 comprises the All groups CPI excluding Financial and insurance services.
• All groups excluding Housing and Financial and insurance services: Reflecting the changing composition of the CPI, from September quarter 1989 to June quarter 1998, comprises the All groups CPI excluding Housing, house contents insurance, vehicle insurance and consumer credit charges; from September quarter 1998 to June quarter 2000 comprises the All groups CPI excluding Housing, house insurance, house contents insurance and vehicle insurance; from September quarter 2000 to June quarter 2005 comprises the All groups CPI excluding Housing and insurance services; from September quarter 2005 comprises the All groups CPI excluding Housing and Financial and insurance services.
• All groups, goods component: comprises the Food group (except Restaurant meals expenditure class), Alcohol and tobacco group, Clothing and footwear group (except Clothing services and shoe repair expenditure class) and Household contents and services group (except Household services sub-group); the Utilities, Audio, visual and computing and Books, newspapers and magazines sub-groups; and the House purchase, Pharmaceuticals, Motor vehicles, Automotive fuel, Motor vehicle parts and accessories, Sports and recreational equipment, Toys, games and hobbies and Pets, pet foods and supplies expenditure classes.
• All groups, services component: comprises all items not included in the 'All groups, goods component'.
• All groups, tradables component: comprises all items whose prices are largely determined on the world market.
• All groups, non-tradables component: comprises all items not included in the 'All groups, tradables component'.
• All groups excluding 'volatile items': comprises the All groups CPI excluding Fruit and vegetables and Automotive fuel.
• RBA measures 'Weighted median' and 'Trimmed mean': These measures are calculated following the methodology adopted by the Reserve Bank of Australia. The 'Trimmed mean' is calculated by ordering the CPI expenditure class components by their price change in the quarter and taking the expenditure weighted average of the middle 70 per cent of these price changes. The 'Weighted median' is the price change of the component in the middle of this ordering. For calculating the 'Weighted median' and 'Trimmed mean' series, where CPI components are identified as having a seasonal pattern, quarterly price changes are estimated on a seasonally adjusted basis. Seasonal adjustment factors are calculated using the history of price changes up to the current quarter CPI and are revised each quarter. These revisions to the seasonal adjustment factors lead to revisions in the 'Weighted median' and 'Trimmed mean' series. Movements in the series from one period to another are expressed as percentage changes (see paragraph 9).

13 Market goods and services excluding 'volatile items': in addition to the items excluded from the series 'All groups excluding 'volatile items'', also excludes: Utilities, Property rates and charges, Child care, Health, Other motoring charges, Urban transport fares, Postal, and Education. A detailed description of the special and analytical series was published in Appendix 1 to the September quarter 2005 issue of Consumer Price Index, Australia (cat. no. 6401.0).

14 The ABS is grateful for the assistance of the Reserve Bank of Australia for specifying the items included in the 'All groups excluding 'volatile items'' and 'Market goods and services excluding 'volatile items''. The Reserve Bank of Australia does not accord any special policy status to these series.

INTJ the thinker, or the emotional cripple

He can either grow up to be really good, or very evil

is what I heard from many eons ago describing how I would grow up to become. Although it seems hocus pocus, I seem to have adopted an introverted approach to life, with a thinking bias as oppposed to the Feelings, for which judgements are made. Thinking makes this person especially cold and thoughts have little regard or understanding to Feelings.

As much as INTJ's would like to think they able to resolve and understand many opinions and differences in the world, and be totally empathetic of others, I have become completely overcome lately by how little I am able to understand the Feelings orientated personality. I think in this case, as correctly pointed out

Personal relationships, particularly romantic ones, can be the INTJ's Achilles heel

It is amazing, given the ability I feel I can predict and foresee, the consequences of an action that is Thought orientated, in an even greater opposite, I'm enormously overwhelmed by how monumentally lacking in insight I have for the consequences of ones Feelings and those whose actions are performed from ones Feelings. I think (and this may be the destroyer of all confidence left in this Thinking mindset) the structure itself of believing I can understand a Feelings orientated person cannot be overstated - these are opposing poles with an enormous gap. Bearing in mind humbleness and open mindedness to this should be embraced.

I have also noticed the interaction between ones Introverted versus another Extroverted, at which the Extroverted are able to externally verbalise their own thoughts or feelings almost immediately and conversely receive thoughts, with finesse and flow - the Introvert struggles to make sense of what thoughts are beneath the surface and a mockery of what is externalised when it does. In this way, an Introvert may feel completely overwhelmed by a thought or worst, an overwhelming feeling the Introvert-Thinking cannot rationalise and verbalise and turns into a state of internal paralysis - it then manifests as an ugly broken and irrational process when externalised. In the way that an Introvert Introvert pair are unable to verbalise and bridge the gap between their differences as they both consume in their internalised feelings, the Extrovert Introvert pair may fair better by gathering evidence from an external source into their own T or F processes.

Here in lies the danger then, I have come to observe. Although a Thinking and Feelings pair are unable to bridge the gap easily between Introverted Introverted pairs, the Introvert Extrovert strikes a conversation where a very close admiration can result, or very violent misunderstandings as the two Thought and Feelings are opposing poles - making best use of the Extrovery Introvert pair to relate will be highly beneficial. This gap will borrow the iNtuition versus the Sensing to come into play. Where the iNtuition misses much of the gap in between what is being said, and may completely glide over the minor details and set their agenda, the Sensing can receive the Thinking iNtuitive but highly crippled Feelings of the INTJ and grow violently out of synch. The Perception and the Judgement orientated personality then seals the path as the be all for the Judgement personality, but the Perception orientated exhibit flexibility and interprets their sensory from moment to moment, not realising the Judgement that has already been made.

Overall then, I would say the danger in the INTJ's traits allows them to be carried away in their own thinking far far and beyond what is currently concrete and real. Their lack of understanding of the Feelings orientated persons, and their Judgemental attitude can become destructive to those of Feelings orientated especially of a Perceptive nature. The FP may appear to the TJ as inconsistent and lacking in long term direction, where the TJ may appear to the FP as heartless, mean and lacking understanding. In this observation then, I would theorise from a thinking point of view, that to bridge the gap between an INTJ personality, that the required exponent best suited is the Extroverted iNtuitive Thinking and Perceptive in nature. In this way, I would envision that this piece of thought may well be perceived as cold and unloving to an opposing poles reader, it would be interesting to know.

USD Index

The USD Index is now below support at 77.61. Although this may rub off as some high side in the S&P, it is detrimental of this trend is confirmed.


Gold has made an impressive $30 recovery in 3 days peak to peak. In Australia, gold is only worth $1116 per oz, confirming the weakness in the US Dollar. How long the Aussie can maintain this high Fx remains to be seen but any weakness in AUD will translate to a price rise here locally for raw materials.

Is this violent move being made clearer now? A few more days should help confirm.