#246 - Why Is The Australian Dollar Collapsing?!

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 review on Apple Podcasts and Spotify and subscribe to us on YouTube so you never miss an episode. And if you're serious about building wealth, make sure to check out the links in the show notes and follow me on all social media platforms, at LloydJamesRoss for