A group of analysts have made a statement that the AUD/USD ASX 200 Plunge is due to stop soon, and only from the unexpected danger of recession and a double dip. When does the AUD/USD ASX 200 Plunge stop?
We always take things at face value until we understand them. And when it comes to the crisis in world stock markets there are many uncertainties. Some people know the details, some just speculate. And still others simply wish the crisis would just disappear.
History repeats itself; even when we are quick to dismiss such predictions. In fact in the last seventy years there has been a lot of speculation on the ability of the Aussie dollar to maintain its strength or whether we would fall from a higher level. Some say in the future it will fall, but others believe we will rise because the world economy is better than most people realize.
Those people who predict we will fall because of the over-leverage in today’s markets are Luddites who do not understand what is going on. Others say it is all caused by technology taking over the global economy. Many people say the Dow Jones Industrials Average is a bubble.
There is a serious stock market trend as well, a good one. And it is a positive one. These markets like they are now are taking a lot of risk and it is doing so well.
Even though we have the world financial crisis, it is a save grace for our stock markets. We also are showing that there is enormous demand for risk in the form of risky assets. I have been doing this for forty-five years and it appears there is a lower risk world that will continue to thrive.
The slowing down of the jobless rate and the growth of home prices is another sign. Housing is a saving grace. That too will continue, because a lot of people are buying because of risk. But the over-amplification of risk in the past is shrinking.
What will happen to the market in the future depends on negative economic news and how bad it gets. The market is showing signs that this is occurring and it is a good sign.
A little advance warning that the market is beginning to reach a new ceiling is that people are increasingly focusing on what could go wrong and how a better tomorrow can be achieved for the stock market. They are looking at job security and their families to determine how to achieve their own financial security.
The growing awareness of financial security among consumers is an important part of the equity markets. This has implications for the retail investor, but also for the pension funds that provide funds for retirement.
The domestic market is seeing these changes as well. Because of the troubles in the international financial markets the domestic markets are turning more conservative and stable. And because of that they will continue to ride out the fluctuations in a positive way.
The increasing joblessness in the last six months of a record number of job seekers can be attributed to many factors, the most important one being a shrinking job market. The lack of jobs means the number of people competing for each job is small. It is this fact that explains why the jobless rate, which was close to 15% in December, is now hovering around 9%.