MrCro

it's where the funding comes from is the issue, state Government could be bankrupted by such an event.

I read a long while ago now that Katrina was a factor in the USA financial crisis build up.

Love the good old aussie positive attitude but life has been going on here in a "we're not in resession" bubble for last 2 years and eventually there is going to be a pop.

Sherlock Holmes

My crystal ball says that during 2011 there will be some bad-ish news out of Australia and some good-ish news out of the U.K. and that by end 2011 we may see £1.00 = $2.00.

I wonder.

bcworld

I have a similar feeling. So many of the indexes published show various sectors of the economy contracting although unemployment is still falling. Meanwhile in the UK you see things like manufacturing expanding at the fastest rate for many years. I too think the pound will recover a bit this year.

As for the floods - sure some sectors will benefit financially but the govt coffers will also be substantially depleted - less to spend elsewhere.

rackcatt

Planning to move to move to Australia in summer, should i exchange money now or wait ?

Sherlock Holmes

First off, I have no expertise in this...sooo..read with caution. I think the pound may dip a bit again but there may be a slow rise after that. Very slow. Just keep an eye on it and see what is going on. I think we all hope that by summer it will be better.

Or, you could do some now, some later?

rackcatt

yeah that might be an idea, some now some later...

lancastrian48

I reckon your right Boyle

freebo

I do too, although it could just be wishful thinking, several sources are suggesting interest rate rises for the UK in the 2nd half of 2011 which should be positive for the pound. The outlook for Aus rates seems to be stablising and less increases than previously thought could happen, which would also help Aus mortgage payers.

Again for the floods, its too early to say but the loss of exports may be more significant to the dollar than the rebuilding cost.

fish.01

They are talking about the floods being very inflationary (tradie wages, food etc). Coupled with low unemployment does this mean the reserve will increase interest rates in an attempt to dampen inflation? If so, then those higher interest rates would increase the value of the aussie dollar?

hevs

I saw something last night that said that the interest rate is more than likely to stay untouched rather than the expected rise in Feb...

fish.01

Yeah I imagine that would be the case now with the disaster just happened but maybe when inflation starts shooting up...?

Turban Explorer

Inflation due to scarcity of food, labour and services will surely only be a localised thing?

fish.01

Somewhat but not totally - limited labour means all states will have to pay more to retain/attract tradespeople from other states/immigrants. Limited fresh food means all states will have to pay more.

hevs

I think thats the ripple effect will be country wide. Especially as I believe Canarvon to be flooded (banana plantations there are huge!) My cousin has a 30,000 hc farm in Donald, their crops are gone, and their house isnt doing too well either...Its NOT just QLD thats copping it thats for sure...and thats just a couple of small things...link them together....

fish.01

Yeah I agree. If QLD/NSW can't supply its quota of fruit and veg all Australia will be short not just flooded areas. If Brisbane requires hundreds of extra tradies then other markets will lose some and that will drive up wages.