I never realized how strong the Australian dollar used to be. With the dollar so high I could purchase a good GPU for $450 instead of $1,200, a 4k TV for $200, a mountain bike for $100. We consumers have lost so much purchasing power over the last 50 years. The only time the dollar recently exceed parity with the US was ~2011. Now 1 AUD is equal to 0.653 USD. Our money is almost worthless, and the government is always trying to devalue the currency even further; the government hates the poor.
In 1974, 1 AUD was equal to 1.48 USD. What happened?
RefusdClassification on 30/05/2023 - 07:12
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No. No they didn't. It would have been well into the 90s.
Sorry, I should correct the 486 from my above Post. 40 years ago and missing brain cells affect my memory sometimes
I was a kid at the time, so memory is a bit hazy.
Possibly in the early 90s as at the time I was playing Police Quest and F19 Stealth Fighter.
An i486 in 1988? Yeah, nah.
You're likely right, it was a long time ago.
I think we've done alright to be fair.
Back in 1965 you couldn't even buy US currency with Australian currency as the AUD was worthless in comparison!
Paul Keating is what Happened and the deals with 3rd World Countries ie: CHINA.
PS: in 2012 i got a set of Tyres delivered in 4 days from the USA for under $1k, locally they were $3200
I recall a friend of mine had a tyre shop about that time, and someone bought some tyre like you, however my friend refused to fit them, because if something went wrong, they didn't want to cop the blame, etc.
Australian dollars to fitting tyres…. That’s a Segway, if I’d ever seen one.
I think the previous posts were referring to the price discrepancy, but on reflection, local dealers raised prices to cover operating costs etc.
I think there's more exchange going on with ex US postal rates these days.
In the last few years they have flown past any dollar devalue. I think FTA small print may contribute to mutual pocket lining.
Trump policies on everything made in the USA is skewed back their way more than before ,as well.
Have a look at Rockauto prices. Then look at postal rates. The days of better stuff (inc post) are well dead.
Nixon-Kissinger is what happened with their chopstick diplomacy of the early 70s.
They helped create the monster that we were obliged to engage economically.If you want to trawl history, do it properly.
Farmers love our worthless dollar. Especially when the taxpayer hands it out to them when the climate change impacts kick in.
Ironic given they have voted inter- generationally for the parties that deny,obfuscate and delay action on it.
As long as we keep America , the war machine factory and Gerry Harvey happy,that's all that countsOur dollar is not worthless though.
Just borrowed the definition from above.
OP said>
"Our money is almost worthless, and the government is always trying to devalue the currency even further; the government hates the poor."Worth-less would be a better term
Fair enough.
It's a fiat currency. It is well on its way to being worthless and will be worthless in the near future.
Every single other fiat currency in human history has also suffered the same fate. It is just a matter of time.
Err, okay.
I think.
@R4: The current crop of fiat currencies have lost more than 90% of their purchasing power since they were introduced.
The US dollar is actually around 98% loss of purchasing power.
2% to go.
With trillion dollar deficits and exponential debt growth, the final 2% isn't going to take long.
The only question is what comes next?
REAL money and the freedom and prosperity it has always brought, or some kind of global techno fiat,(CBDCs) which will be coupled with a global digital control grid/enforcement mechanism?
REAL money and the freedom and prosperity it has always brought
Alright, what's real money? Sorry, "REAL money".
@Loubon: Just like fiat money, gold/silver's value (unless you're using it for uh, dental work or the very few use cases of it being applied in a process) is based entirely on other people 'agreeing' on what it is worth and setting a price based on its scarcity.
You might as well be telling us Beanie Babies are REAL money.
@Crow K: Except it literally has a 10,000 plus year track record of maintaining relative purchasing power because, among many other beneficial traits, it is self balancing, in terms of its worth. It takes significant labour to locate, extract and refine. If its price is too low, then it becomes less worthwhile to produce, which results in less supply, which results in an increase in its price. Same on the top end. It fluctuates in a band (which has never been anywhere even remotely near reaching a 98% reduction in its purchasing power). 1g of gold basically buys the same amount of bread and milk today, as it did in 1800. This is because the price of bread and milk hasn't really changed. But the value of the currency we use to trade for bread and milk has collapsed.
Basically every human society in history has agreed gold and silver is valuable and ideal for use as money, including ourselves, until the last few decades that is.
The cycle over countless eons is as follows: gold and silver based money, with prosperity a relatively elastic money supply and stable prices for an extended period. This lasts until the governing authority decides that they no longer wish to be bound by the fiscal restraint that gold/silver backed money supply necessitates (for whatever reason - usually greed/special interests).
They then usually go from 100% gold/silver backed to some smaller %, which allows them to expand the money supply, before eventually arriving at a completely unbacked monetary unit by fiat, which eventually loses 100% of its purchasing power, resulting in collapse of the monetary system and untold suffering and misery to the population, before a new regime takes power and sound money is eventually restored. If you don't believe me, study history for 10 minutes, then get back to me.
But ok, sounds like you know better.
The real irony in your above comment is that a currency that was backed by beanie babies (whatever they are) would actually have more intrinsic value than the currency we currently use.
They then usually go from 100% gold/silver backed to some smaller %, which allows them to expand the money supply, before eventually arriving at a completely unbacked monetary unit by fiat, which eventually loses 100% of its purchasing power, resulting in collapse of the monetary system and untold suffering and misery to the population, before a new regime takes power and sound money is eventually restored. If you don't believe me, study history for 10 minutes, then get back to me.
But ok, sounds like you know better.
Well, yes. There's not enough gold in the world for us to use it as an actual currency. You can't drop shavings of it at the 7-11 to pay for gum.
Still, if you're convinced fiat currency is worthless, I'll take some off your hands (at considerable discount to its face value, of course).
Good luck designing our future economic system, person who's read history for more than 10 minutes. Your armchair ideas are both realistic and practical.
@Crow K: Nonsense. There is more than enough gold in the world to create a sound monetary system and have every $ backed by gold. Its just an accounting problem and would require a significant re rating in gold/silver prices (in fiat terms).
Also, no one is suggesting a shaving of gold be used to pay for goods at a 7/11. Nice strawman though.
In a sound money system, there usually exists paper notes. These are used for day to day transactions, such as at 7/11. The difference is these can also be exchanged for fixed amounts of gold/silver from a govt window and the notes are then extinguished.
Regarding your kind offer of taking any spare fiat I have lying around, presumably in exchange for your both well informed and well researched monetary advice, I am happy to exchange significant amounts of fiat for any gold/silver you have lying around… I will even do so at current spot rates?
In a sound money system, there usually exists paper notes. These are used for day to day transactions, such as at 7/11. The difference is these can also be exchanged for fixed amounts of gold/silver from a govt window and the notes are then extinguished.
Fiat with extra steps and we don't have inflation as well if we make sure we mine gold in the right amounts at the right times?
Don't take my dismissal of these wild unworkable fantasies as a criticism of your abilities. It's just something that will never happen, and it's time to return to the real world.
Basically every human society in history has agreed gold and silver is valuable and ideal for use as money, including ourselves, until the last few decades that is.
Yeah, "In the past it's always been an arbitrary token of agreed value" is not a great counterpoint to my "It's just a token of agreed value, like fiat and beanie babies".
Every human society has worshipped a God or deity of some sort - I guess that's an unchallengeable great idea as well, right?
@Crow K: You have clearly not read/understood anything I have said.
I have refuted each and every one of your points and it is now clear you are not acting in good faith.
As such, I shall bid you adieu.
Should you have any actual interest in the topic and perhaps broadening your understanding of the world we now live in, I can recommend "The Creature from Jekyll Island" by G. Edward Griffin, as a good starting point for you.
As such, I shall bid you adieu.
And with a tip of his fedora, he skated away on his Heelies.
3 cheers for the dog that turned into a horse?
I Might not be fed peanuts for much longer. :)
Population Matters.
Even with the relatively weak AUD most everyday products are still decent value. Feel bad about those in Venezuela , Argentina and Turkey. The second two, respectable but not lavish nations have been hit super hard by currency devaluation.
GPU are mainly needed to run advanced software for work, so treated as a business expense, or gaming which while fun isn't productive at all. Not seeing the issue here, many have the means but go without the latest and greatest.
TV is a once off purchase and they are already dirt cheap, I see people with a TV in every room, just consumerism/mindless consumption gone mad.
"I see people with a TV in every room" and I bet a few are whinging about interest rate hikes ,too.
Sadly TVs are not a recognised foreclosure commodity to the banks.
I see people with a TV in every room, just consumerism/mindless consumption gone mad.
Hey, we are supporting the electronics and entertainment industries.
uh duh….there were no GPUs or 4K in '74!
…bloody millenials!In 1974, 1 AUD was equal to 1.48 USD.
What a waste to the average consumer as it was before online shopping/international shipping.
Good point. If the dollar was worth $1.48 now with the current spending patterns now, TVs would be the price of a Tesla, and inflation through the roof. The more it's $ worth, the more it costs pro rata. Globalisation has expanded massively since 'the good old days'. As have FTAs- across the board. Those FTA deals are about keeping fats cats well off in every country that signs up, not to benefit the plebs at the supermarket isle or paying off a mortgage..
NO, the opposite would be true - Imported TV's would be cheaper.
However the rest is true export the premium australian beef and lobsters, price them locally at inflated international Beijing or Tokyo prices and import radiated farmed Venamai Prawns from the polluted Mekong instead. As for the price of housing migration will cause that.
However, at that time there were substantial Import and duties and sales tax on manufactured goods.The TV is made in China.
In 1970's the Chinese Yuan was worth 2.46 USD, now it is worth 0.14 USD.
At the 1970's exchange rates the Chinese TV would cost 17.5 times more in US dollars than it does now.
That would still cost MORE in AUD.@AnophthalmiaCervidae: The Chinese didn't export TV's in the 1970's - it was a closed economy, they rode bicycles, starved on meagre rice and waved little red books. Nixon didn't visit until 1972 and the following year he removed the USD from the gold standard. China was a CLOSED communist nation that could fix the yuan/USD exchange rate to any rate because they didn't trade. Australia followed by removing it's fixed exchange rate in 1983 - both events increased money supply without corresponding productivity. The increased economic productivity was provided by cheap imports from asia manufactured by cheap labour inputs.
Thus China devalued their dollar to reduce the input costs (labour+), and hence manufacture competitive TVs.
@[Deactivated]: That is why it does not make sense to say that a TV would be cheaper now if exchange rates were still the same as they were in 1974.
The devaluation of China Yuan has had a much bigger impact on the cost of a television today the than the appreciation of the USD vs AUD over the same time.
If we were stuck at 1974 exchange rates, Asian imports wouldn't be as cheap.
A boon to Australian businesses though who could import from the US and charge a 400% markup.
"I could purchase a good GPU for $450 instead of $1,200, a 4k TV for $200, a mountain bike for $100"
Lol if you arent a troll.
suggest you read up on Argentina, it's sobering.
Here's a youtube video to start; https://www.youtube.com/watch?v=vu22RNjjrG0&pp=ygURY2FzcGlhb…"read up on Argentina, it's sobering"
But their beef is absolutely superb.
Absolutely the best !!!Remember, you can't BBQ currency :)
You can use it to light the fire though. Particularly useful when there's high inflation.
Nah … paper money is full of toxic subtances …
Just increase the debt ceiling, that fixes all your problems. Better still don’t have one. We need a universal currency.
We need a universal currency.
LOL!!
Welcome to 1940'somethingWill that universal currency be the … US dollar? … Chinese Renminbi? … European Euro?
Or perhaps something like GOLD and move back to centuries ago.
Comparison of what our dollar is worth compared to the USA and what we buy price wise doesnt show the whole picture.
I still rather live here for all the other advantages.
This forum must be filled with trolls. The number of stupid questions put forward that can be solved with the first Google result that instead provide an opportunity for revisionist history is pretty amazing.
"Our money is almost worthless, and the government is always trying to devalue the currency even further; the government hates the poor."
Well, so many misconceptions in only one sentence.
Our money buys lots of stuff "locally". Not so with expensive imported goods.
Currency devaluation is a funny word. When the USA (or China for that matter) devaluates to make their currency "competitive" everybody panics of currency wars. Countries with "expensive currency exchange" find difficult, harder to trade overseas, to export.
Currency devaluation hits the rich harder than the poor. The poor have no currency to spend … the rich have bucketloads of it. The rich suffer the most (the rich silly enough to hold currency that is).
By the way, Forex in 2000 was about that AUD/USD 1.48.
It FLUCTUATES …
The rich don't hold wealth in currency. They use assets and debt.
When you are using someone else's money (debt), you benefit as the currency depreciates.
The rich are much more financially literate than the masses (or else employ financially literate people to advise them).The exchange rate for AUD/USD in 2000 was around 0.60, and fell to a low of 0.4775 in 2001.
Not sure what source you are using to get your exchange rates, but try here: https://tradingeconomics.com/australia/currency
back in the days when we manufactured our own things and before globalisation took off I suppose.
Wow! So OP thinks Australian money is “almost worthless”?? How can he possibly survive living in Australia using worthless money. Emigrate to the US where everything is so good.
Minimum wage in US is USD7.25, in Australia it is AUD21.38.
Only when if the exchange rate gets to 0.34 will someone on minimum wage in Australia earn "less" than someone in USA.and on the "Big Mac Index" a Big Mac is also still cheaper to purchase in Australia than the USA at the current exchange rates..
On minimum wage in the USA a person would need to work 43 minutes to earn enough money to buy one Big Mac, compared to 22 minutes here.
My understanding is that, when our dollar is too high, we are more expensive (our products and services we export), so our global customers (eg. China) go to competitors instead, and we have less money coming into the country. We'd also be less appealing for tourism, and a few other industries.
I don't think it's very helpful to call OP an "idiot", it's quite a complex topic.
Anyway, here's ChatGPT4's response to your question if that helps:
It seems like you're expressing frustration about the decreasing purchasing power of the Australian dollar, which is a valid concern that many people share. It's important to note that currencies fluctuate for a variety of reasons including inflation, interest rates, political stability, economic performance and market speculation.
Firstly, let's address the idea of "purchasing power". Inflation naturally decreases the purchasing power of money over time, as the cost of goods and services generally rise. It's not exclusive to Australia; it's a phenomenon experienced by all economies. Also, one cannot compare absolute prices of goods like GPUs or TVs across different times without considering changes in technology, quality, production costs, and market demand. The cost of these items has been influenced by various factors over the years, not just changes in currency value.
As for the AUD to USD exchange rate, it's true that the Australian dollar peaked close to parity with the US dollar around 2011, but it's not accurate to say the currency is now 'worthless'. Exchange rates fluctuate due to a myriad of factors like differences in interest rates, economic growth, geopolitical stability, and trade balances. Even if the exchange rate is lower now, it does not mean the currency is 'worthless', it just means that the currency is worth less relative to the US dollar than it used to be. This doesn't necessarily mean Australians are poorer, as cost of living and wages also factor in.
When it comes to monetary policy, the government and central bank often have complex decisions to make. While it may seem like they're 'devaluing the currency', what they're often doing is implementing policies designed to stimulate economic growth, which can lead to a lower exchange rate. However, such actions also tend to increase employment and income levels, which can offset the impact of a weaker currency.
Finally, it's crucial to consider living standards, wages, and income inequality when discussing wealth and poverty. Although some goods may cost more now in nominal terms, living standards in Australia, like many developed nations, have increased significantly over the past 50 years. Australians on average live longer, healthier lives with access to better services and technology. This doesn't negate the struggles many people face due to income inequality, cost of living pressures, and other economic challenges. But it's important to have a comprehensive view of these issues.
In summary, it's understandable that currency fluctuations and perceived loss of purchasing power can be concerning. However, these are complex issues with many contributing factors, and the value of a currency is just one aspect of overall economic health and personal wealth. It's always worthwhile to engage with these topics in-depth and to voice your concerns to your representatives or through public platforms.
Anyway, here's ChatGPT4's response to your question if that helps:
No, not helping. ChatGPT4 is banned here!
We were slightly better than parity in April 2013. I was holidaying in the US at the time. Good times.
This, and the price of "gas" in USA was sooo low you could drive for miles.
I dont quite understand the whole concept of wanting the AUD low value, I get the part about exports but if thats the only reason then why dont we just want it to go down to 0.10 USD? Meanwhile the countries that i see doing really well and improving in quality of life for their Whole population seems to be countries where their currency is actually very strong or on the rise, and the countries where quality of life is dropping seems to be countries whose currencies are dropping in value? So I am not sure why for Australia we want a dropping currency?
Btw Genuine question, as it doesnt make sense to me.
Would life be better for us if Australia used the American dollar? It'd be weird having American financial crises influence out currency, and have our currency be largely immune to our own financial crises.
Why not?. We are after all, just another outlier for the USA anyway. Great Southern Philippines, complete with a regular car park called the NT.
You're right, we are virtually an economic and cultural vassal of the US. Our defence strategy entirely depends on the US, saving us many billions every year. Our music, movies, and television is largely US. Most of our favourite brands are US in origin or US owned. If it weren't for the ABC, and upcoming streaming laws about Australian content, it would practically be entirely US based.
Y'all godammed right.
Brings me back to when we went on holiday in the US during mid 2011 when we were buying 1.10 USD…. That was a good time :)
Yes, USA was on sale.
'With the dollar so high I could purchase a good GPU for $450 instead of $1,200, a 4k TV for $200'
LOL - in 1974 you COULDN'T 'purchase a good GPU for $450 instead of $1,200, a 4k TV for $200' because that technology DIDN'T EXIST in 1974
nor I'm guessing did the OP - evincing such depth of economics - focused around his ability to buy a GPU and TV … :-)
1973-74 was the US energy crisis & fuel shortage - where long lines of huge gas-guzzling cars queued up at gas stations to try to buy limited stocks - after which fuel-efficient Japanese cars suddenly became more appealing
Imagine being dense enough to post this
we bent over… and are still being shafted
Economics aside for one second, perhaps the issue is every time the dollar drops the price of everything goes up and feed the story that exchange rates caused it, seems to apply to things grown or made here. Then when the dollar rises again, things rarely (not never) get cheaper again. Hence the hate of a falling dollar.
1 btc = $27k usd
also be smart and earn usd and use exchange rate as advantage… takes care of taxes
What do you mean by earning in USD takes care of taxes? I would like to know more about this.
According to the ATO:
"All foreign income, deductions and foreign tax paid must be translated (converted) to Australian dollars before including it in your return. There are rules about which exchange rate to use. Generally, these require amounts to be converted at the exchange rate prevailing at the time of a transaction, or at an average rate."export sales still reaps exchange rate benefits.
ATO only applies for companies registered in australia.
think.
Usa cash rate to inflation is much closer than aussies. Expect RBA to increase a lot more than what most pundits are predicting, this will drive AUD value higher. Next year will be a very interesting one for Australia, heaps of fixed mortgages going to variable with massive jumps in repayment, increasing unemployment rate, shot consumer confidence, a left wing govt who have to appease the green agenda..etc
Later in 1947 india got independence and we moved to Australia
Could be worse; in 1980 the Iraqi dinar was USD$4.00…
The owner of the Iraqi dinar must be swimming in it right now.
I'd have bought at least 2 Iraqi dinars.
From National Museum Australia
Prior to 1983 the value of our currency (the Australian pound then, after decimalisation, the Australian dollar) was always pegged to that of another currency (the British pound, then the US dollar), and then a moving peg in relation to a basket of currencies.
The actual value of the dollar under these systems was determined through a morning discussion between the Governor of the Reserve Bank of Australia and the heads of the federal government’s Treasury, Finance and Prime Minister and Cabinet departments.
The Reserve Bank could then use its foreign currency reserves to intervene in the market and manipulate the level of the dollar.
So back in 1974 the value of the currency was propped up by the RBA, which was nice for our exchange rate, but ultimately unsustainable, which resulted in the currency being floated. Check out the link for a short but interesting wrap on the what, why's and how's.
Thr shud b a video about it on youtube i was watchin the other day
I hope it never returns. My wife earns her income in USDs. The lower it gets the more she gets!
Money printer went brrrrr ….
Bitcoin fixes this.. Few..So the US dollars net worth is minus $31 trillion? Meaning an average debt of $93000 for every person in the country..
So is this the equivalent of going down to your local bank with a nuclear shotgun and teliing them."You will be giving me a big bag of money, so I can give you back some interest & when that runs out, you will be giving me more".
So basically further devaluing the currency of the "bank" of their chosing. Which means its all relative. ie. the Aud is worth less than minus 31 trillion?
Imagine telling a bank YOU WILL be extending your borrowing capacity.
But really, its just constant international bank robbery (with your sweet Nuclear shotgun).
Gough Whitlam Happened
Australians engage in discourse like they have some kind of knowledge or aptitude in finance and life when in reality EVERYTHING runs of a miners and a few farmers yet it doesn't stop the IT lords of the world and the beaucrats of the world fantasting about their self importantance, are no better than Centrelink folk and could be replaced by anyone from India or AI for 1/30th the cost.
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We had Commodore C64s but only to clear excess stock.
We had a presentation when setting up Computer Departments in a major chain. I think Commodore did their bit sprouting 24 hour DOA on the X86 product. Amstrad followed, and said as of today we are now 48 hour (it could have been the other way around), completly derailing commodores presentation. Then IBM followed and had Bob Dwyer as a guest speaker. Snnnnorrrreee