Currency woes

Dollar dazzler: why they want our money

Michael Janda seems to be saying that the high Australian dollar is a problem, but there's nought to be done about it now.

Alan Kohler blames our economic blues on another thing as well:

....Australians have had it up to here for three long years - nothing but mad, hysterical politics, day in, day out. And a strong currency.

So what we are seeing in Australia is the effect of a very unusual double whammy: political instability coupled with a strong currency.

Usually the first leads to the opposite of the second, but unfortunately the credit ratings agencies don't watch Question Time in Federal Parliament: if they did they would have cut Australia's credit rating several notches below AAA long ago.

But one of the worst things about the current popular mis-perception of the Australian economy was in the media again recently - the idea that Australia's budget deficit would not have happened under a Coalition government.

This is absolutely outrageously wrong - and Christopher Pyne's dishonest (but probably successful) attempt to further lodge this meme in the brain of the public just illustrates further why I cannot see myself voting for the Coalition next election.

Update:   it occurs to me that, if the sudden deterioration in polling for Federal Labor in Newspoll is correct, and is maintained next year, the electorate is going to be acting in pretty much the same way as it did in the run up to the 2007 election win of Kevin Rudd.   That is, it will not be under the influence of much in the way of credible policy alternatives, or acting against a government that the great majority of economists have a problem with:  it will simply be voting because of the "vibe".

Update 2:  as I understand it, this news this morning only makes worse for our over valued currency problem:

Fed makes new rate pledge, pumps cash into US economy