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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon, Sean Ailma.

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Speaker 2: Hello Michael, Sean.

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Speaker 1: Today's question is it's a cracker. It has come in

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Speaker 1: from Ben via our website via Fearandegreed dot com dot au.

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Speaker 1: If you've got your own question, feel free to shoot

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Speaker 1: it through the website or social media LinkedIn Instagram, Facebook,

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Speaker 1: any of those. Ben asks he says when the Republicans

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Speaker 1: win in the US in November, so he's kind of

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Speaker 1: already assuming that that is going to be the conclusion.

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Speaker 1: He goes, there are many economic plans they will implement,

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Speaker 1: but the one I'm really interested in is the plan

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Speaker 1: to devalue the US dollar, which I believe the VP

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Speaker 1: nominee jd Vance is particularly keen on. Ben says, what

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Speaker 1: are the best strategies to take advantage of this? Do

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Speaker 1: you think? Cheers? Ben and Sean. If I may, I'm

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Speaker 1: going to tack on my own Ask Fear and Greed

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Speaker 1: question valuing the US dollar?

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Speaker 2: What is it?

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Speaker 1: And how does one actually do it? As well?

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Speaker 2: Ah so much in this one. So first thing to

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Speaker 2: remember is the currency is just a price that goes

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Speaker 2: up and down depending on the flows of goods and

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Speaker 2: services in and out of a country. So when people

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Speaker 2: need to buy lots of iron ore from Australia, for example,

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Speaker 2: they need Aussie dollars to give to BHP, Rio Tinto

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Speaker 2: and Forcekew Medals and friends. So that pushes up the

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Speaker 2: price of the Aussie dollars. So when commodity prices rise,

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Speaker 2: you often see the Aussie dollar rise. There you go,

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Speaker 2: that's the reason. As a result, it's a bit of

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Speaker 2: a misnomer to say a strong or weak currency is

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Speaker 2: good or bad. There are benefits in having what we're

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Speaker 2: calling a strong currency, as in appreciating against other currencies.

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Speaker 2: So if the Aussie dollar is at seventy five US cents,

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Speaker 2: for example, it's cheaper to travel overseas. Now buying something

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Speaker 2: from China like a TV is cheaper petrol prices because

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Speaker 2: we import petrol. If the Aussie dollar is stronger, well

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Speaker 2: we might be paying a buck fifty a leader. But

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Speaker 2: the downside is that our exports become much more expensive.

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Speaker 2: It's actually harder to sell all that iron ore and

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Speaker 2: coal and gas and agricultural products and that offshore demand

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Speaker 2: for Australian stuff reduces when the Aussie dollar increases. And

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Speaker 2: this is where the whole jd vance Donald Trump theory

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Speaker 2: comes into it. They like the idea of devaluing the

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Speaker 2: US dollar because if it's cheaper against the Euro and

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Speaker 2: the pound, and the end and the Aussie dollar, it

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Speaker 2: makes the stuff the US makes more competitive on the

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Speaker 2: global market. US manufacturers, for example, will sell more stuff overseas.

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Speaker 2: All that money comes into the US economy helps growth,

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Speaker 2: No doubt that does work. All that's true. But the

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Speaker 2: Republicans can't just get elected and suddenly make the dollar cheaper.

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Speaker 2: That's not how it works. Markets decide the value of currencies,

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Speaker 2: and that's been the case ever since currencies have been floated.

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Speaker 2: I mean, we talk about the reforms of the Hawk

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Speaker 2: keeping is known in only three the floating of the

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Speaker 2: Aussie dollar. This is what we're talking about. The problem

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Speaker 2: for the US government is that the Green Bank, the

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Speaker 2: US dollar is the reserve currency of the world. It's

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Speaker 2: how many many things are priced. You know, when we

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Speaker 2: go through the cost of oil, cost of gold, I'm

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Speaker 2: always talking about it in the US dollars because that's

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Speaker 2: how it's priced. It is the reserve currency. It's what

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Speaker 2: people want. It's not like you can just devaluate with

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Speaker 2: a stroke of a pen. The way you can devaluate

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Speaker 2: and you know, Argentina has done it, and some basket

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Speaker 2: case economies have done it, it's just totally junk. Your

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Speaker 2: own economy run huge deficits. But even if the US

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Speaker 2: runs huge deficits, it's already is even they're doing bigger ones.

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Speaker 2: I don't think this should do it. You could just

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Speaker 2: totally junk the place. That's one way. You could definitely

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Speaker 2: devalue the US dollar. That of course comes with its

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Speaker 2: own challenges, you know, ten percent unemployment and all that

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Speaker 2: sort of stuff. So I suppose to answer the question

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Speaker 2: mister Trump and mister Vans. They can't just come in

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Speaker 2: and devalue the dollar now, it's just unless they totally

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Speaker 2: devalue the economy. So I don't think they're going to

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Speaker 2: do that. So it's not really an investing investment way

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Speaker 2: to play it. The final thing I'd say on this is,

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Speaker 2: you know, Ben, it's a guy called Alan greenspand he

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Speaker 2: used to run the Federal Reserve and he used to

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Speaker 2: talk about the you know, which way is the currency

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Speaker 2: going to do well, flip a coin and you've got

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Speaker 2: as much chance of get as getting it right. And

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Speaker 2: so if you're trying to, you know, your on your

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Speaker 2: money card with your local bank. And so I'm going

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Speaker 2: to buy us dollars because I reckon that at some

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Speaker 2: point that's going to devalue. Then I transferred back to

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Speaker 2: Australian dollars and I'll make money out of it. That's

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Speaker 2: fool's goal and that's what Alan Greenspand says, So I

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Speaker 2: back him on that. But the concept that they're just

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Speaker 2: going to come and devalue the currency, I mean, they

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Speaker 2: can try, but it's not really up to them.

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Speaker 1: That is the best explanation I have ever heard of

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Speaker 1: how that works. Like, there is nothing I can say

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Speaker 1: that will add any value at all to this. So

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Speaker 1: I think I think you've answered Ben's question very very well.

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Speaker 1: You've answered my added on questions that I added on

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Speaker 1: without any notice whatsoever, extremely well. I'm just gonna stop talking.

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Speaker 2: I think I spoke too much to be honest.

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Speaker 1: No, no, perfectly. I think you've answered it perfectly. And

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Speaker 1: if you would like Sean to answer your question also perfectly,

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Speaker 1: equally perfectly, then please send it on through via the

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Speaker 1: website fearangreed dot com dot au, or through any of

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Speaker 1: those platforms on social media LinkedIn, Instagram or Facebook. Thank

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Speaker 1: you Ben for the question, and thank you Sean for

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Speaker 1: answering it.

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Speaker 2: Thank you Michael.

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Speaker 1: I'm Michael Thompson and this is asked Fear and Greed