I've noticed that the Australian dollar, over the past 2 years, has fluctuated between USD$0.88 and USD$0.91. Actually, it's gone much higher and lower, but it has passed both markers several times. Right now, the Australian buck is at $0.883, which means its probably a good time to buy.
My plan is to buy the Aussie dollar (on paper, not in reality) and "sell it" at USD$0.910. I will "buy" again if (and when) it reaches $0.880. I will repeat this process as often as I am able over the next 2 years (I expect to do so at least 4 times), and add up the profit.
So, here goes:
August 25, 2010 USD$10,000 at AUD$1.13155 ($0.883743) = AUD$11,315.51
September 3, 2010 The Australian dollar has climbed to USD$91.09, so it's time to sell.
The latest fad amongst opinionators seems to be to compare China's recent, rapid economic assent to Japan's former economic 'miracle'. I just read an article opining that the cure for the American trade deficit with China is to encourage Chinese companies to build factories in the U.S., the way Japanese companies such as Toyota did in the '80s. The article was written by several 'experts', including a former U.S. trade negotiator (who should have known better).
I'd like to point out one itsy bitsy problem with that idea: Chinese companies do not export to the United States. Let me repeat that: Chinese companies (with a few exceptions) DO NOT EXPORT to the United States! The products which are exported from China are either:
a) made by foreign companies in China
b) made by joint enterprises in China
c) made by Chinese companies under contract, or licensing arrangement, with foreign companies.
Think about it: can you name a single Chinese brand? I bet you can name a dozen famous Japanese brands: Sony, Toshiba, Toyota, Honda, etc. You can probably even name a few South Korean brands: Samsung and Hyundai, for instance. But there are no famous Chinese brands (at least, not yet). So where are these Chinese companies which are going to build factories in the U.S.?
The Chinese economy does not resemble Japan's in the '70s and '80s, except in it's growth rate. It's a completely different situation. So please, spare us the facile and misleading comparisons.