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It is indeed an old adage that while goods things are to be preferred over bad things it is possible to get too much of the former. Looking at recent comments from the governor of the Reserve Bank of Australia it is not difficult to imagine how these, albeit old and worn, pearls of wisdom may well have inspired Mr. Stevens in his effort to tiptoe the thigthrope between signalling the intention to raise rates into an expected economic recovery on the one side and trying to prevent the Aussie shoot of on helium into the sun with wings of wax on the other.

(quote Bloomberg)

Australia’s central bank Governor Glenn Stevens signaled a surge in the nation’s currency to near parity with the U.S. dollar has given him scope to slow the pace of future

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An Australian Dollar Play on China’s Growth

Tony Daltorio, The Investment U Research Team

Despite the continuing negative sentiment toward China from much of Wall Street, China’s remarkable economic growth continues unabated.

While Wall Street “experts” focus solely on the export-oriented eastern cities in China, they are missing the rapid growth occurring in other parts of China with the government’s “Go West” program.

And let’s not forget that within a few years, the size of China’s middle class will exceed the entire population of the United States.

However, there are still many investors who are not comfortable investing directly in China and buying Chinese companies.

There is another way to invest profitably in the economic growth in China, of which most investors are completely unaware. And it doesn’t involve owning any Chinese or Asian stocks.

It is the Australian Dollar.

The Australian

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Wherever we’re going, are we there yet? Nope! But we’re getting there. That is, America is sleepwalking its way into poverty. China is performing a kind of financial alchemy. And Australia finds itself subject to American-style problems, but benefitting from China’s Grand Economic Strategy.

But how about those powerful idealists on U.S. markets? Both the S&P 500 and the Dow were up nearly three percent. If you can believe it, they were led by financial stocks and retailers. Bank of America (NYSE:BAC) finished up 9.9% after Goldman Sachs (NYSE:GS) put it on its “conviction buy” list. Home hardware retailer Lowes was up 8.1% after a survey of U.S. homebuilder confidence surged.

By the way, what the hell is a “conviction buy” list? Does that mean you can only recommend stocks in which the executives have been convicted of a crime? And if it means a share you can buy with

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Because of its rapid economic growth over the last 30 years, it’s easy to forget that China is a communist country. The Chinese, like everybody else, love money. But the Communist party is clearly in control. One of the areas controlled with an iron communist fist is China’s media. The main TV station, China Central Television or CCTV, is owned, operated, and controlled by the government. And unlike the U.S., Chinese government officials can’t spout off their own opinion. Instead, they must speak the ‘company line’ of the ruling Communist Party and carefully choose their words....

In 1971 a nuclear physicist Ralph Lapp used the phrase “China Syndrome” to describe what might happen in an extreme example of a nuclear power plant meltdown. His theory was that the molten core of the reactor might be so hot and toxic that it would burn through the floor of the power plant and sink through the earth’s crust before exiting the other side of the earth through China.

This has never happened in the various nuclear accidents, but it’s a powerful idea that spawned the 1979 movie called The China Syndrome, which was released just 12 days before an accident at the Three Mile Island nuclear power plant in Pennsylvania.

I only mention it because the idea captures quite nicely the potential economic impact here of a Chinese economic slump. New Zealanders underestimate the impact of Chinese economic boom on the global economy generally and on our own economy.

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Australia’s central bank took the hatchet to its benchmark interest rate Tuesday, cutting 75 basis points to 5.25%, the lowest since March 2005. Since the start of September, the Reserve Bank of Australia cut interest rates three times for a total of 200 basis points, in an attempt to insulate the economy from the global financial crisis. 

The bank cited a variety of reasons for the cut, including turbulent financial markets, falling commodity prices, slowing economic growth China, and the recent rash of rate cuts issued by other central banks around the world.

Specifically, Australia joins the United States, China, India, Japan and South Korea, all of which lowered borrowing costs in the past week. The European Union and United Kingdom are expected to follow suit this week.

“International economic data have continued to point to significant weakness in the major industrial economies, and there have been further signs that

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Credit fears ease…  Chuck’s thoughts from the road… India cuts rates… China growth slows, but is still 9%… And Now… Today’s Pfennig! Good day…And welcome to what should be another volatile week in the markets. Credit worries eased somewhat over the weekend, which helped push money back into the higher yielding currencies. Today Federal Reserve Chairman Ben Bernanke will head to Congress to share his view on the economy. Should make for a pretty interesting day of trading. Hope you are sitting down and holding on, it looks like we are going to take another lap on the currency roller coaster!

The yen fell over the weekend as investors began moving funds back into the higher yielding currencies of Brazil, Mexico, New Zealand and Australia. I won’t go into the whole explanation of the carry trade again, but suffice it to say that these moves haven’t proven to have much staying

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