Stuffin’ the stockin’ with $A bounty

Andrew Pegler – 21 December 09

To parity and beyond! No this ain’t Toy Story, it’s the real world and it’s great news for the great Aussie consumer who this Christmas will be piling those cheap imports under the Christmas tree, near the new stereo on top the Playstation resting on the new European designer table.

As we have covered before in this column parity refers to that moment when AU$1 equal US$1. At the moment it’s hovering at about 92 cents and as it rises the price of imports goes down. So not surprisingly importers and Australian consumers who like cheaper products are cheering the little Aussie dollar upwards. Go you good thing.

Think of it in terms of saffron.

That intrepid Aussie importer wandering through the Egyptian souk looking to buy saffron with the AUD in his skyrocket can now buy 30% more of the stuff than he could at the start of the year. And when he comes back to Australia he can pass that savings on to the saffron lovers of this great nation, who will sprinkle it on their Christmas lunch with abandon. The same goes for the acres of consumer electronics arriving literally by the boat load. Everything is cheaper from computers to iPhones from Nauruan synchrotrons to French solar-powered combobulators. And while the new plasma may not fit comfortably under the average Aussie Christmas tree I am sure you’ll find a way.

This may be great news for the patriots, the travellers, the importers and hence you the humble punter but some sectors of the economy are finding the rise and rise of the dollar unbearable. Specifically people who make stuff for export or for sale to other Aussies. The relative price of their goods had shot up, way up, and that has scary implications for the economy and for your job security. For example, while the higher dollar makes imported cars cheaper, the wheels have come off for Aussie car parts manufacturers whose prices have gone through the sun roof forcing some offshore and others out the door. And then there’s agriculture which, between the exchange rate, the weather and rising interest rates, continues to get hammered. So as you pile those cheaper imports under the Christmas tree this year spare a thought for the millions of jobs that are on the line.

And now, for no fathomable reason, here’s a little Christmas ditty you can sing between the beers, tears and cheers of this festive season.

On Donner on Blitzen, on Kevin on Wayne. On Tony on Barnaby – oh gawd here we go again.
You guys can argue, you guys can fight, but at the end of the day just get the economy right.

In other news… Time Magazine has named Federal Reserve Bank Chairman Ben Bernanke its 2009 Person of the Year. Managing editor Richard Stengel reckoned that without him “it would have been a lot worse. He helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivalled power over our money, our jobs, our savings and our national future”. I say fair enough too.