One thing that I’m finding interesting at the moment is the belief ( I would think unrealistic ) in continuing strong or rising commodity prices.

I as search back to my days as en exporter of real product I remember living and dying on exchange rates. Sure I could cover for a limited time to take me over fluctuations however what we have seen over the past few years and particularly in the past few months is ringing alarm bells with me.

As the US Dollar drops and the Chinese currency with it does not a new group of competing forces come into play?

If the Australian economy is riding on the Chinese tsunami of raw material requirements ( in volume ) and we are madly investing to support that volume are we seeing an exchange rate that will erode the margins in that volume. There can be nothing worse than being committed to volumes and finding the more you produce the more you hurt.

I’d be interested in knowing how you see this playing out.