My friend One Salient Oversight says that Australia is shooting itself in the foot economically by allowing ‘market forces’ to destroy our industries and jobs:
The Reserve Bank of Australia (RBA) needs to devalue the Australian dollar.
One reason why Australian industry is losing out to Asian companies and corporations is NOT because they are somehow inefficient or uncompetitive, it’s because many Asian nations deliberately keep their currencies low in order to boost their industry.
Australia allows the Foreign Exchange (forex) market to determine the price of the Australian dollar, while nations like Singapore, China and Japan actively intervene to run current account surpluses and boost their industrial sector.
The forex market is NOT operating the way a market should, and by allowing the Australian dollar to “float” has turned our country into a nation of consumers and borrowers, while our trading nations have turned into nations of producers and savers who desperately need us to borrow and consume more and more and more.
To protect jobs and to protect the nation, the RBA needs to actively intervene in the forex market to devalue the Australian dollar. The goal of this should not be a pegging of the currency, but rather a balanced current account.
The result will be higher inflation and higher interest rates, but it will protect jobs.
People would rather be employed and for things to be a bit more expensive than be unemployed and be able to buy cheap stuff from Kmart.