FederalXBT

Asian Currency Crisis - Part two? Aussie Dollar Collapsing. RU

Short
FX:AUDUSD   Australian Dollar / U.S. Dollar

Aussie Dollar looking extremely weak adding it to the list.
Japanese Yen extremely weak
China Yuan Extremely weak.

There's a problem brewing in Asia / Oceania if the FRED does not start lowering rates you're going currencies like the JPY / CNY / AUD potentially lose 30-70% of its value against the
United States Dollar.

  • Japan cannot raise rates due to the leverage used by the BOJ to buy US treasuries and Japan Treasuries.
  • China lowering rates will not work as its completely reliant on cheap US Dollars to function.
  • Australia have also pivoted due to them having the highest household debt in the world, Australia relies on China to purchase resources, they cannot raise rates to deal with inflation the system cannot handle it.
  • These could be the first major currencies to enter the point of no return debt to GDP ending up like Venezuela, Argentina, Turkey, Lebanon
  • Debt To GDP Ratio's
    JAPAN - 264% "GOV debt to GDP"
    AUSTRALIA - 113.60% "House hold Debt"
    CHINA - 80% "GOV debt to GDP"

    For people who are unaware once you go past 100% in debt regardless if its Government or household, there has never been a currency in history that has survived paying off its debt and retracing.
  • Currencies failing will make debt cheaper to repay? well the second side of that is CPI / Inflation Japan & Australia cannot seem to get out of.
  • Sanctioning Russia & forcing a new BRICS development has really backfired here.
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