The reverse Midas touch: the gap with Australia

19 comments on “The reverse Midas touch: the gap with Australia ”

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1. Hayden 1

   27 April 2012 at 9:47 am

   Financial experience: making money using other people’s money to buy and sell money.

   Good for everyone except those whose currency is being bought and sold, I suppose.
   • bbfloyd 1.1

     27 April 2012 at 4:23 pm

     i’m still waiting to hear how much johnny sparkles made personally out of being involved with selling down his own countries currency while at trust bank….

     an attack which, by the way, caused an awful lot of pain and hardship here..
     • Gosman 1.1.1

       27 April 2012 at 4:31 pm

       The NZ dollar was deemed to be overvalued and so it proved to be. How is that causing a lot of pain and hardship here?

       BTW I think you mean Bankers Trust and I’m pretty certain that he didn’t have anything to do with it. Perhaps if you have some hard evidence though it might help your case.
       • McFlock 1.1.1.1

         27 April 2012 at 4:37 pm

         Gos, you really like to spread your bullshit over a wide area, don’t you.
              
         For someone who claims to know about being a banker, you sure seem oblivious to the effect an overvalued currency has on an export-based economy. 
          
         • Gosman 1.1.1.1.1

           27 April 2012 at 4:45 pm

           Ummmmm… McClock you do realise what the whole Bankers Trust incident that bbfloyd is likely referring to was all about ?

           Because your whole comment about how currencies being overvalued are damaging to an economy kind of seems stupid when put into the context we are discussing here.
           • McFlock 1.1.1.1.1.1

             27 April 2012 at 4:52 pm

             Oh, you weren’t talking about speculators profiting off NZ currency over-valuation in the mid-late 1980s?
              
             • Gosman …

               27 April 2012 at 4:59 pm

               No I don’t actually think you realise what the attack was all about. You seem to think that the attack caused the overvaluation when it was all about taking a position that it would fall by short selling the currency. In a sense the attack was beneficial to exporters as it contributed to the NZ dollar falling. If John Key was involved you should be thanking him for helping the NZ export industry. Just goes to show how lefties like you don’t understand markets very well at all.
               • McFlock …

                 27 April 2012 at 6:48 pm

                 Yeah, that’s the sort of shit you like to spread – note the contraction from “a lot of pain here” to debating the minutae of effects on exporters only. 
                      
                 I said “export-based economy”, not “exporters”. I’m sure they loved it for three minutes, until their imported materials went through the roof.
                 • Gosman …

                   27 April 2012 at 7:59 pm

                   I was tempted to respond but the fact that when I look at it you are now trying to argue that a lower exchange rate hurts importers and possibly the wider economy as well means I can’t be bothered. Congratulations you have discovered that changes in the value of goods and services has positives AND negatives. Most high school economics students get taught this in the first year.
                   • McFlock …

                     28 April 2012 at 1:01 am

                     Congratulations, gos.
                      
                     I have no difficulty admitting that you won the debate you imagined you were having.
                          
                     One day that will coincide with what everybody actually wrote. Keep at it!
     • muzza 1.1.2

       27 April 2012 at 4:59 pm

       Key and Krieger worked together, the timelines cross…people will form their own conclusions!

       Key has given himself away on many occasions with his own words!
       • Gosman 1.1.2.1

         27 April 2012 at 5:05 pm

         Mere speculation there muzza.

         BTW why is an overvalued exchange rate beneficial compared with a lower exchange rate?

         Care to explain that logic Einstein?
       • muzza 1.1.2.2

         27 April 2012 at 5:12 pm

         Get stuck into Wiki Gosman, its what you do best, Im not wasting another second on this response!

         Notice I said nothing about high or low currency, as it relates to this conversation, only that there is ample room for “speculation”, as you call it about Keys involvement!

         “Care to explain that logic Einstein”

         — Read your post bro, that last question makes no sense what so ever, given what I wrote!

         Silly boy!
         • Gosman 1.1.2.2.1

           27 April 2012 at 5:15 pm

           You seem to think there was something wrong with what Krieger did. All he did was bet that the NZ Dollar was overvalued. In this he was proved right and made a shed load of money off it. Why is this wrong and what difference would it make if John Key was involved?
           • mike e 1.1.2.2.1.1

             27 April 2012 at 6:52 pm

             Gooseman you have said many times in the past that futures trading is insurance now your saying it is gambling.
             Enough of your bs rambling.
             • Gosman …

               27 April 2012 at 7:55 pm

               Wrong.

               Let me illustrate the differences between short selling, futures, and options with a example involving your opinion.

               Imagine if your opinion on this matter had a value, one that meant people were willing to trade it.

               Let us say for the sake of the argument that the current value of your opinion was ‘Worthwhile’. This could be quite possible as people might regard your opinion as being of some consequence.

               However I regard your opinion as being ‘Almost worthless’ (i.e. much,much less than the current value). I think it is is seriously over valued at this point in time because I don’t think you have a clue what you are thinking on this subject.

               I haven’t currently invested in your opinion because of my view that it is over valued. So how do I make money off my view?

               If I sell your opinion to people who regard it higher than I do at a price less than it is currently regarded as when I don’t own any of it then that is short selling.

               Say I sell it to for a value ‘Has a few flaws but generally okay’. The person buying might think they are getting a bargain but I continue to sell your opinion at a lower and lower value but still above where I think it is worth.

               Soon people might start to question the real value of your opinion and might start valuing it even lower and in fact regard it as ‘Almost worthless’. This is where I make my money.

               I will then purchase a bunch of your opinions at the lower value and pass them on to the people who wanted your opinion at the higher value. That is short selling.

               This is different from Futures which has to do with the value of your opinion in say 12 months time from now. Obviously if your opinion isn’t worth much now the value of it will be low in the future. I can insure against the chance of you getting some sense by buying or selling your future opinion now. This is the insurance I spoke of previously. I want to protect myself from the chance that your opinion has changed dramatically in this time

               An option is merely me buying the right to buy or sell your future opinion at a particular value. I don’t necessarily need your opinion in the future but if it is substantially different from the value that the option I bought it at then I might make something from it.

               Quite obviously the price of the future and option on your opinion is related to the current value. It is where the complexity comes into the equation especially for options.
2. Stickler 2

   27 April 2012 at 9:56 am

   Where is your source for these figures?
   • bbfloyd 2.1

     27 April 2012 at 4:25 pm

     where’s your chart to prove this one’s wrong sticky one?
     • Stickler 2.1.1

       28 April 2012 at 12:37 pm

       I have none, but in the interests of academic rigour, I think a cited data source should be provided so the reader can verify the charts veracity for themselves. 

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