Investors don't see Australia as a great place to invest because we're
running it poorly and because of that, the value of our dollar has
fallen drastically. If Apple spent no money on research and development, what
do you think would happen to the iPhone? Imagine what happened if the iPhone 3 didn't
innovate. You'd have got rid of the flipping thing. Well, that's what's happening to Australia. We're
not innovating. We're literally anti-innovating. The
cost of goods up, the cost of fuel up, housing up,
all these are like human needs up, up, up, up, up, up. Check this
out, $577 billion pumped into the economy, which
is 30% of the gross domestic product of the country in
that timeframe of COVID. I'm Lloyd James Ross, seven figure
investor and entrepreneur, and I've helped thousands of business owners and
professionals turn financial stress into success. If
you're stuck in old money habits, overwhelmed by investing or unsure where
to start, This is for you. I'll give you the mindset and
strategies to take control, grow your wealth, and achieve financial
freedom. It's time to make your money work for you. Ever
wonder why the Aussie dollar feels like it's worth less every time you
travel, shop, or fill up the tank at the gas station? You're
not imagining it. The Australian dollar is collapsing, and
it's not just bad luck or global chaos. There are real reasons behind
why it's happening. And today, I'm going to break them all down for you. In
this video, we're going to dive deep into why the Australian dollar is
losing value, what a fiat currency really is, the insane
money printing that happened during COVID, and how it all ties into
inflation, debt, and trust. And we'll look at the day
the Aussie dollar was floated. how inflation is baked into the system, and
why some are calling it the Australian peso in
jest. So if you care about your money, your future, or how to protect your
purchasing power, then this episode you do not want to
miss, all right? But before you watch this, go back and watch the
episode Why is the Australian property market collapsing? It's
our previous episode on YouTube. And there's a lot of incredibly
fun, entertaining comments in the comments there. So go check it out and find
out why it is collapsing. But we're going to find out why the currency is collapsing in
this episode. So before we jump into this completely, I
share some real data with you as to why this is happening in real time. I
want to talk to you about fiat currency. Currency is
just the exchange of value that we do in the world instead of barter.
People often talk about, oh, what happens if the world ends? I'm like, well, we
had a bit of a glimpse of that during COVID and guess what the currency of the
day was back then? It wasn't gold. It wasn't crypto. It
was toilet paper. Bartering,
trading goods and services with each other is actually the
original form of economics. Fiat
currency replaced bartering because it was just simpler
and easier. It's so much easier and frictionless to actually just use
paper asset, paper money to transact rather than say, hey, I'll
give you my iPhone if you give me that tire of your car, whatever it
might be. It just makes trading
goods easy and simple. A currency is
a store of value, it facilitates exchange of value, and
it's a measure or unit of currency. It does all these things.
If it doesn't do those things, it's not really a currency. It's more of an asset or something
else completely. What is fiat currency specifically? It's
a currency that has value because the government says it does. So
it's by decree. It's not backed by any hard assets. So it's
not backed by gold. It's not backed by silver. It's not backed
by any hard physical assets, all right? And
some examples of a fiat currency are, of course, the Australian dollar,
the US dollar called the greenback, the euro, the yen,
the British pound. These are all fiat currencies,
okay? And of course, it's how we're transacting now. And
incidentally, the US currency still stands as the strongest currency in
the world. And it accounts for about 50% to 60% of
global trade. So very difficult to knock that off its
perch. I can't see that losing its reserve currency
in the world at the moment, although the RMB in China
The digital renminbi probably has the chance next to
becoming the global world reserve currency if the USD falls
off its perch. But I can't see that happening in our lifetime. But let's talk about
why the Australian dollar is collapsing. So the Australian dollar became
a global floated currency. fiat
currency in the early 1980s. Before then, it was actually linked
to the US dollar. So, the day it was floated
was back in the 12th of December, I think
it was 12th, yeah, 1983. The same year I was born, a great
year. So at the time, the treasurer Paul Keating, who became the Australian
Prime Minister, under the Hawke government, on the 12th of December 1983, they
floated the currency. So before then, it was
pegged to a basket of other currencies. And normally, currencies
are pegged to the USD. But
eventually they thought we need to float this, okay? And floating
means it's now, it's got its own value and the
value of it is assessed against other currencies, all right? So the
RBA or the Reserve Bank stopped sending the price back then, but it still controls the
supply of the fiat currency to the market through interest rates, okay? Why
did they float it? Five reasons. One, they wanted to modernize
the financial world of Australia because if
you have your own currency, it's almost like a maturity in your
economics situation in your country. They wanted to grow and
mature into a country that has its own currency. They wanted to modernize the
economics of the country. The other thing they wanted to do, number two, is they wanted to remove inefficiencies. They
wanted to They wanted to end the need to interfere
with the currency market locally. All right. And number
three, they want to encourage foreign investment. So they want to open up capital flow
into the country. And so this increases the investment, the
trust that investors have when they're bringing money into your currency, if you have your
own local currency, they wanted to handle trade
deficits better. So this allowed the currency to self adjust. to
better handle trade deficit. It's like automatically rebalancing
trade. So they want to do that. And the fifth one is they wanted to stop speculation and
around what happens, the speculation pressure
by removing the artificial pressure from defending the pegs that it was against. So
they had all these reasons to do it. And so they
thought, you know, we need to do this. We want to mature as a country. We have to have
our own currency, right? So that's why they floated it
back in the 80s. Now, what's interesting about that is that it's
not been backed by anything. And so the US dollar used
to be backed by gold. And then they removed this under the Nixon presidency. They
removed this from the gold standard, which means that you could just print it infinitely.
And the problem with that is you can do the same thing with the Australian dollar. So over
time, it's in the nature of fiat currencies to actually fall.
And the nature of them to fall is caused by two reasons. One is price
inflation. So this is where the cost of goods and services actually goes up. And
also the supply of the money to the marketplace. So both those
things acting at the same time will create some sort of inflationary pressure,
which means your money is worth less year by year by year by the exact amount
of or roughly the amount of inflation. Inflation
is really important to understand. So part of this episode
is to explain to you why or importantly
how the Australian dollar is falling
in value fairly quickly. All right, so the
very first reason why
fiat currencies fall is because I said, as I said before, there's excessive
printing. So they can supply the marketplace with more
money. And of course, if you supply with more money, there's more of it around, it
causes inflation because people have more money to actually spend. So it bids up the price
of goods and services. So an example would be, I mean, COVID, it
was just brutal stimulus, like it was what's called
stimulus led inflation. So obviously
there was fear that by shutting the country down,
the world down, that there would be a credit squeeze, meaning
there would be an unavailability of credit to continue with business
in the economy. And if you have a credit freeze, you can have some
serious things happen in your country like a run on banks. You don't want
credit to be frozen. So to prevent that, they
opened up the floodgates. They opened up the supply of money to prevent a
credit squeeze. And of course, there wasn't really a credit squeeze. All
that happened was they just flooded the country with money.
They were paying people 750 bucks a week or whatever it was to
just function without a job. And of course, it went to so many
people. They took the money. They didn't save it. They obviously went and spent it on
shoes, clothes, blah, blah, blah, blah. and they just spent it, which is
great for the economy, but it pumped the price of goods and
services way up for a couple of years. And we've basically seen,
just from that one thing they did during COVID with supply of
money, we've seen the, I feel, the Australian dollar lose half
its value, I think, in the last five years. It's been absolutely insane. Before
COVID, 100 grand was 100 grand. But after COVID, I really
genuinely feel like, and you probably do too, it's more like 50 grand. Because
if you think of inflation at, say, 10% to 12%, the rule of
72 suggests that in the seven-year period, it loses half its value. So
it's not been quite seven years, but let's say five years, and the currency's
lost, I would say, half its value. So if it
feels like you're poor, it's because you actually are from what's called inflation-led,
sorry, money printing or excessive money printing-led inflation.
Okay, the other reason why it happens to is that there's, there's
a sell off in the currency. So if you have If
the reserve bank of any country drops interest rates, there's
less likelihood that people will want to buy bonds in the country. So
if there's less enticement of investment dollars into the country, then
you will find that the currency itself loses value. So here's what happens economically.
When you reduce interest rates to stoke the
economy, you actually reduce the
returns that people get when they send money into your country to invest. So
as rates fall, the value of the currency falls too.
But as rates increase, the value of that local currency also increases. So
if you think about it... Before coven as covert hit
they were drastically reducing interest rates down to 1% so that massive
fall interest rates meant it sent the currency just
falling in value as a massive sell-off in the currency because People
didn't want to bring money into Australia then to invest because it was very low yields very
low bond yields here And so it made no sense to
put money in here. So a lot of that Caused you
know a sell-off in the currency. So interest rates do have a big impact And
then the other reason to why why inflation happens or why currencies
fall over time is There's actually a loss of confidence and trust a
lot of fiat currency is based around trust And
so if you start to lose trust in the in the in the currency, you
can have a collapse in the real value of it So some really serious examples
of this happening. You may have heard of these happening, but eventually what
happened in Zimbabwe is is they printed so much
money that it lost complete trust with the local people
that live there. And they absolutely exploded the
inflation there, which I'll come to in a second. And the same thing happened in
Venezuela, Argentina, The same thing happened in
Germany in the 30s. We've seen in the past multiple examples
of what's called hyperinflation from an absolute loss
of trust in local currency. So I'll come back to the data in a second on that.
The other reasons why currencies lose value over time is
because there's no hard backing. There's not backed by gold or any hard assets. And
it's just easy to print. So they can abuse that ability to print the fiat
currency. So there you go. When
you do it too much, so let's say for example, your interest rates are super low,
but you also print way too much money, you can get huge
imbalances that happen or you can get huge oversupply of a
currency in a place and the currency can effectively become
worthless. And so if I look at the examples of when this happened,
When when the currencies actually became worthless, right just possibility
in why me in Germany, which is pretty precedes World War two
This is kind of what they reckon cause the rise of Hitler is that in
why me in Germany? They needed a in 1923 they inflated
the currency so much you needed a wheelbarrow to buy a loaf of bread a
wheelbarrow of it was the marks at the time to buy a Bread,
which is crazy. Zimbabwe was 2008. It had
89.76 trillion percent inflation. The
inflation rate was just out
of control. They set the currency on fire. In
Venezuela in 2016, 2021, it became worthless.
It was just like paper. You can see it can
absolutely lose value in a period of months. It can just
dissipate. The value can dissipate. It's
designed to erode your money. So usually inflation
erodes your money by about 2-3% a year and it's a
quiet tax on your money. We really shouldn't be living in
a world where inflation exists. In fact, we should have deflation. I
would prefer deflation to inflation but somehow the
government has conned us all into thinking
wrongly that 2-3% inflation is what
we really want. I don't know how they've conned us into that, but deflation
is what we want. We want to actually have more wages increase and the value of things
like homes fall in value. Why do we want
prices of goods to go up? Come on, why do we want our
Big Mac to go up in price? We want it to come down in
price and we want our wages to go up. We want to get wealthy, not poorer, but
what has happened is that the fiat currency controlled by
governments, when it's not backed by hard assets has given them the
ability to print and the ability to keep inflation at
3% a year. Now, I think it's more than that. But what that's done is it's created a
quiet tax on the people and it's made everyone a lot poorer. And I
think it's just, we just don't want that. But I mean, they've conned us into thinking that's
normal. So, okay, back to a 2%, 3% a year. Don't
worry, I'll come to, in the next episode, I'll talk about how to overcome this stuff. So
it's designed to erode your money. What's inflation like in Australia? So these are
the stats from Australia. Currently, CPI stands for Consumer
Price Index. And it's where a basket of goods from groceries to
rent and fuel and so forth is put into a basket of average good prices. And
over the course of a year, CPI, Consumer Price Index, assesses
the increase in price from the basket of
goods in one year to the next year. So if CPI is 3.6%, right, then
that means the basket of goods for the next year has gone up by
3.6%. So the current inflation in Australia, they say, is
3.6%. However, it was up to 8% because of
COVID, because of all the massive money supply they put into the economy for
particularly no reason. They should have not done what they did, but it is done
now. So it's come down, right? But
that's the current inflation rate. The Reserve Bank of Australia targets
about 2% to 3%. But again, that's a quiet tax on people. And
of course, they're anticipating if oil
goes up, if there's more war, If
there's more inflation that's caused by that, then they may increase
rates and that can have a huge effect on the economy. But
for now, it seems like inflation is under control, but I don't believe
it. Again, in the episode I did on why the Australian
property market is collapsing, I talk about this thing called the the
Maxibon index that's a real personal life
experience. And I bought one the other day too, six bucks. And by
all accounts, the inflation rate is not 3%. And you probably agree with
me. And if you don't agree with me, put it in the comments below. If you agree with me, pop in the comments below.
I'd love to see what you think about that. What's driving
the, so here we go. What's driving inflation in Australia right now? There's probably five
core things driving inflation. One, COVID
shortages, so there's higher price on goods. So there was actually, we couldn't import
as many goods as what we used to. So like, remember when like boats were going up in value and
cars were going up in value? It's like, well, it's complete opposite to what you realize. So
there was higher price on goods that caused inflation. Rising energy and
fuel costs, that's still causing inflation. It's crazy to think how
much. fuel costs for us now in diesel, it kind of doubled. I
remember I used to be able to fill my car up for like a hundred bucks. Now it's like 160. So
I'd say there's 60% inflation on fuel, which is gnarly in five years.
So that's over 10% a year. We've got number three, wage
pressures. So We do have a, because of the aging
boomer population, we have a shortage in certain labor
markets in Australia, and that caused wage inflation. So you look at all
these inflationary pressures happening at the same time, housing and rental costs, because we
like to keep interest rates ridiculously low for too long because we're idiots. We
had... housing and rental costs go massively up.
So we had rental inflation and price of
housing inflation. So these are all important things. You're going to look at it. This
is like the cost of goods up, the cost of
fuel up, the cost of wages up, the cost of
like that's for businesses, hiring staff, going to pay more, housing up.
All these are like human needs up, up, up, up, up, up. And
of course, you add in the government stimulus that I spoke about, they pumped
in, check this out, $577 billion pumped
into the economy, which is 30% of the gross domestic product
of the country in that timeframe of COVID. They
just chucked the Australian dollar on the fire and shred it, just burnt it.
That's just wild. They kept the JobKeeper on
for 3.8 million workers for way too long. I remember they were
paying everyone $750. I didn't get mine. Did you get your $750? I
never got $750. Where's my $750? Just
quickly, if you're ready to take control of your finances but feel stuck on
where to start, I have a solution. My book Money Buys Happiness
simplifies investing and wealth building with practical steps to help
you achieve financial peace. Get your copy via the
link in the show notes and let's get your money working for you. Now back
to the episode. A friend of mine, I had him on the show, Simon
Beard, he owned Culture Kings, founder
of Culture Kings. I've had him on the show. Go back and check out the episode of me interviewing
Simon. He said
he set up to sell his business before COVID, but it just
so happened that the government stimulated the economy with
COVID money. He said that really went straight into the hands of
his ideal customer, which is young kids, and they went and bought hats and shoes and stuff from Culture
Kings and he said his business has blitzed and he said he
exited perfectly and he sold for 600 million. So
that's an example of how sometimes this type of thing can also benefit business
owners. But he also said that it was just wildly well-timed and go
check out the episode too. But this is what happened during COVID. Why
is the Australian dollar falling? What's causing the collapse of the Australian dollar? I'm
going to give you 10 real core reasons. So get ready and buckle up
for this. The first reason is this, the Reserve Bank
of Australia versus the Federal Reserve of America. So right now,
the Reserve Bank of Australia has a cash rate at 4.1% and
the federal fund rate is higher than that. So the USD federal
fund rate is over 4.5% and they're increasing and they look like they're going
to hold rates where they are, but we just dropped rates. So the fact that
the Reserve Bank of Australia is dropping rates, is
causing our currency to fall in value, and the fact that the federal funds
rate in America is keeping them steady, or maybe even increasing them, it's
gonna create more demand for the US dollar. And because we
measure the value of our Australian dollar against the US dollar, we're seeing it
fall against the greenback, okay? So there is this battle against the
two reserve banks at the same time. We're reducing rates, creating Australian dollar
weakness, and they're keeping rates the same, or increasing them. It looks like they're
not increasing them yet, but they might, and it's creating Value in
the US dollar so you can see that's the first thing that's creating this weakness.
That's why when you go to America I've been to America. I'll be going to America for
the third time this year You feel like a poor person as soon as you walk
off the plane you get off the plane. You've lost half your purchasing power I
was at the airport and recently coming back from the States and we're in a long line and
we're coming through the gates to go through Immigration as American guy big
loud American guy from Hawaii was then he was you know, you could tell
he's from America and And I said, oh, I
said, how does it feel to be a millionaire? He's like, what are you talking about? I said, you just got the plan in
Australia. You got US dollars, you're a flipping overnight millionaire. So it's
a really challenging time to go to America right now because we have huge weakness of the
Australian dollar versus the USD, OK? The second reason why the Australian
dollar is collapsing is this. China's economic slowdown. Our
currency is very driven by resources
here. So like our currency is heavily dependent on the
price of iron ore, the price of coal, the price of all
the different metals that we send overseas. And so we're
very resource driven currency. And
so When China pumps and the economy is
killing it over there, and they're importing a ton of our resources, the
value of our dollar is a lot higher. So the fact that recently,
too, because of the tariff war that is happening with the US and China, massive
exports dropped out of China like 34% year on year. So it's
a huge shift in how much they're consuming there. And of course,
their property market completely collapsed. They were building
ghost cities, and those ghost cities actually turned
into just wasted steel and all this incredibly wasteful
resource. And we were pumping China with so much iron ore
to build all these buildings. And that's started to come off the ball now. A lot
of the property sectors come off and decreased. So
the fact that China's slowed down means there's less demand for
our commodities here, which means there's less demand for the
Australian dollar. Does that make sense? So that's the second reason. The third reason
why the Australian dollar is collapsing is because commodity
prices here are falling across the board. We've had a massive fall in lithium. We've
had falls in iron ore prices, spot iron ore prices falling. We've
had, thankfully, gold's increased in value, but we've
had a lot of Again, commodities in Australia fall away because
the demand for those commodities, not just in China, but other areas around
the world has actually slowed down because of a slowdown in
global economic growth. There's been very sluggish growth in the
world's economy, which means if Australia's got, in fact, Australia does
have the richest resources in the world. Recently, they just discovered like,
I think it was $6 trillion worth of iron
ore deposits here, some crazy number. I think it was 6 trillion. I mean, look
at how powerfully rich we are as a very rich resource nation.
It's just that the growth in the world has meant that, hey, we don't
need as many resources from you, Australia. So of course, our currency falls. The
fourth reason why it's collapsing is this. There's sluggish wage
growth here in the country. In fact, we've been in a silent recession for the last
three years, I think. I mean, it's been like
a quiet recession, because a recession is when you've had two successive quarters
of negative GDP growth. But we've been so close to negative.
We've just been sitting, we're teetering on negative. We're like zero point something. It's
just been teetering on no growth. We've been in
a bit of stagflation where nothing's actually happening. So
we've had sluggish wage growth, we've had more consumer
spending, and we've really not had any productivity gains. And
so if you're not a productive country, why would your
currency be valuable? it wouldn't be, right?
So you're seeing this, you know, the fact that we've got pumping out
social security so much, we're pumping at NDIS, we're pumping
out We're providing poor
energy policy. All these things that I spoke about in the other video
on why the Australian property market's collapsing is the same reason
why a lot of our currency is collapsing at the same time, right? So there you
go. Cautious consumers means there's a weaker domestic economy. So
we're not spending on parts of the economy we need to spend on
for a productive outcome. pumping
up housing where we're really not spending when we need to spend. Number
five reason why the Australian dollar is collapsing, debt to
GDP. 111.5% in quarter three
of 2024. It's one of the highest globally. That
means that we've got the most debt to GDP. In
fact, we've got the highest household debt to
income or to GDP in the world. We do. We have the highest household
debt. I think it's something like 200%. It's a
whole 100% higher than other countries. It's like we're just soaking
in debt, which tells me a lot of the The
monetary supply that's coming to the economy is just pumped into land. It's
a weird thing. We have this saying in Australia, we dig holes and buy houses.
That's our whole economy. We dig holes, buy houses. Unfortunately,
the world doesn't want what we're digging out of the holes as much, so the currency is falling. Of
course, if we're pumping up property and increasing the inflation in that area, we're
also hurting the currency. Number
six reason why the Australian currency is collapsing is because we
also have an account deficit. We have a trade deficit. We're 14 points.
Check this out. 14.7 billion in
deficit Q1 2025, right? That's a
current account deficit. That's a trade deficit on the current account of 14 billion.
So we've got a net capital outflow from Australia. And the reason for that too
is because our interest rates are too low. So that
is burning not well for the value of the Australian dollar. Number
seven, the global risk off sentiment. So global risk off means
people are not open to investing in what's called risk assets. So things
like tech stocks and so forth that generally are high
growth, they call that risk on. And risk-off sentiment means
we're not prepared to swing at those risky assets. So what we want
to do is we want to go back into non-risk assets. So there's a
global shift in risk-off sentiment
versus risk-on, and the Australian dollar is a risk-on currency. And
so if there's no risk on, then the value of the Australian dollar is falling. And
so basically in uncertain times, so when there's risk off sentiment,
people run to the US dollar. They run
to the Japanese yen. They run to other currencies that are more strong than
ours. They run away from the Australian dollar. That's what happens. So
what we want is to have risk on. But that's not happening because there's wars. There's
fear of inflation. There's all these fears happening in the world right now. And
it's running people to the U.S. dollar. That's why the
U.S. dollar has gained so much strength and the Australian dollar has lost so
much value. Number 8 reason why the Australian dollar is falling in
value because the Forex market, so there was large traders holding about 8,500. net
long Australian dollar contracts in early 2000, earlier this
year. And so that shows you there's a lot of volatility risk. And so if there's a
lot of volatility risk in the currency, generally speaking, it's not well sought after,
it's too risky for people to hold, so they don't want to hold it. So the demand for Australian dollar falls,
okay? Number nine reason why the Australian
dollar is collapsing is geopolitical tensions, right? What's happening right
now is Iran and Israel are at
war, effectively overnight, we just announced they're at war. And so that's
huge, I would say, destabilization
of that region, not to mention the fact that Russia and Ukraine are
still at war. So we've got two wars happening. We've got uncertainty
in China in terms of the economy. We've got huge uncertainty and
civil unrest in the United States. There's a lot of protests happening around the ICE
removal of illegal immigrants there. So massive
uncertainty, particularly in the Asia-Pacific area where our currency lives.
And so there's a huge amount of investor caution. So they're not really wanting to put their hands on
the Australian dollar, like, nah, Take me to the USD, take me to gold, take
me to all these not, you know, risk-off type currencies and assets.
And so that's causing this fall in the value of the Australian dollar.
And finally, number 10, weak business investment. In
Australia, we don't have a lot of people wanting to invest in our country because we
don't invest well in new businesses. We don't invest well in innovation. I
saw this article pop up the other day. Annoyed me, it was like two days ago.
And Anthony Albanese, the prime minister, said that Australia is
a leading tech country. I just want to punch it.
What? What? What? Leading tech can't ... We
can't even get our NBN sorted. We're
terrible at adopting technology. We're slow. We're
way out of date already in AI. We're
not really ... We used to be tech innovators. Australia had
some cool inventions. We invented the torpedo. We invented the Victor lawnmower. We
went to the Hills Hoist, Clothesline, we're innovators. No, but we
used to be more of a manufacturing-related innovation economy, but we
have pretty well just destroyed all manufacturing in the country. We're
not tech innovators. We don't invest in businesses. In fact, our
banks do not lend well to businesses. They are more about
lending to property owners. What's happened is because we've just
become property sycophants, property like
addicts. All we've done is bid up our own land price with
our money. We're a bunch of idiots. What we need to be doing is spending money on
business innovation. We've been hit hard with
capital sliding into Australia for investment because we have soft growth. Of
course, if you have a country that has not innovated, imagine a
company For one second, just imagine there's a company, a
business, and it spends no money on R&D. So
no money on research and development. If Apple spent no money on
research and development, what do you think would happen to the iPhone? It
wouldn't have innovated since the iPhone 3. Imagine what happened if
the iPhone 3 didn't innovate. What would you have done? You'd have got
rid of the flipping thing. Well, that's what's happening to Australia. We're not
innovating. We're literally anti-innovating. All
we're doing is taking the money we got and chucking it to non-productive parts
of the country. Country
working, because we're not innovating. We're not spending any money on R&D. Zip.
In fact, we're borderline going to lose our security agreements
to the United States, because we're run by a bunch of Muppets. Frankly,
and you don't really have to, it's gross incompetence is
what it is. We're so attached to doing
what's right with all these woke agendas that we cannot
even start to look at how our country's gonna live for the next 50 years. If
we don't innovate in Australia, we're not gonna have any capital
investment in Australia. I mean, if you think about it, if Australia was a
company in a business right now, truthfully, and you know that it's
not innovating, and all of its poorest non-productive
employees, imagine your business, you got all these employees, and all
they do is just move paper around all day, they don't actually do anything productive, and
a lot of them are sick and tired and fat and overweight, and you just give them all this money
out of the profits, and none of them are producing any sales for your business, what do you
think would happen to your business in the next 10 years? It'd be gone. It'll
be gone. What do you think is happening to Australia? If
we're not innovating and spending money on R&D, if we're not actually incentivizing
and paying our highest, most productive talent, if
we're actually incentivizing to actually do
less work, so we're actually putting too much into social security. If
we're not innovating our energy policy, and we're making it
even more difficult to actually pay for energy. In fact, if you look
at your energy bill of the last quarter, tell me, how is it
that a country with the most land has the greatest housing shortage
in the world? And you tell me how the country with the most resources and
energy and hydrocarbons in the world is having the
highest energy prices in the world. How? It's
because the business that we run here is being run by
an idiot. And it's good, Warren Buffett says,
invest in a business so good that even an idiot can run it because sooner
or later one will. So if you look at Australia as more
of a business, as an example, is that strong
in resources, wonderful. Light in population, wonderful.
We actually have almost no one lives here. Massive land mass, wonderful. You
would think based on that, we would be the richest country in the world.
And the value of our Australian dollar would be way above the
US dollar. But the truth of the matter is, because we're running it
poorly, investors don't see Australia as a great place to
invest. And because of that, the value of our dollar has
fallen drastically. And it's sitting around about 0.649 US
cents to the one Australian dollar. And the history of the
Australian dollar has been, on average, it'll sit at about $0.75. So we're oscillating
around this weaker Australian dollar. It's collapsing further and
further and further and further from inflation. then you can
possibly even keep up with and that's why it would feel like right now
despite wage increases, despite the fact that having
some successful years in your business or your job, And you're like, why
am I feeling poorer? And it's because of these things happening all at once that
are collapsing the Australian dollar. So they're the 10 reasons why
the Australian dollar is absolutely collapsing. They're
all very succinct. They're all happening at the same time. So yeah, a
couple of things happening. One, you're going to feel poorer because
you effectively are from inflation. And two, if you assess it
against other currencies, we're also falling. So we're falling in the the
foreign exchange rate of other currencies, and we're also falling from
the inflation rate of our own currency. So two things happening at once. So
it's not a great time to be investing overseas, that's for sure, for the Australian dollar.
But it can flip and it may flip, but what we do need is we need a complete flip of
the Australian economy with better leadership, but that's out of our control. So
what is in our control? What is in our control? How do you
protect yourself from the inflationary hit to
the Australian dollar? And how do you protect yourself against you losing
wealth over time if you're earning Australian dollars? All right. And that's a great question.
So it's not falling randomly. It's a result
of all these unchecked spending, rising debt situations and
a system designed to quietly erode your wealth, right? But what
you have to understand is it's happening. And you can implement steps
yourself to actually prevent it. Alright, so in the next
video, I'm going to break down exactly how
to protect your money during inflation, right
from smart investments and ideas that are simple, you can follow follow
model, and they're well documented and well known. And I'm
going to go through exactly what has happened to countries that have
gone through hyperinflation, what actually happened to them, and how hard assets
can prevent you losing wealth if that happens to the Australian dollar. Alright,
so if this video gave you value, hit the like button,
hit the subscribe button, share with someone who needs to hear it. And don't
miss the next episode because I dive deep into how to prevent your
money from eroding away in the next one. So go check it out. Knowledge
is power, but only if you use it. See you in the next episode. Thanks for
listening to Money Grows on Trees. If you enjoyed the episode, leave a five-star
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