There is as much certainty in financial market forecasting as there is in predicting the weather but sometimes an unfolding event has a whiff of inevitability about it, even if it is the same inevitability seen two years ago, and that's the falling value of the Australian dollar.
Back on March 22 in 2013 I wrote something very similar when describing the Aussie currency as the world's next big short, a prediction would would have been true if prices for coal, oil and iron ore, the country's three biggest exports, had not collapsed faster than the Australian dollar.
Back then the Australian currency was valued at around $1.04 and my prediction was that it would retreat to its 2007 level of 80c, largely as a result of the end of a resources boom which had propelled the dollar to unsustainable levels.
Hard Landing
The boom is over, and the crash is far worse than anyone imagined, which only leaves one question: why hasn't the Australian dollar fallen further than its current 77c?
The answer is that the next leg down is only a matter of time because the combination of falling business investment, political turmoil and what seems to be a rush for the exits by big foreign firms has triggered forecasts of the country's first recession in more than 20 years.
Seasoned economic observers, including former
Terms Of Trade Keep Falling
What no-one seems to have done yet is connect those forecasts, and the worsening trading conditions, with where the dollar is heading and while some people see it dropping into the 60c range the reality is that it is likely to fall further, perhaps down to its 2001 level of 49c.
If that happens then the Australian dollar will have effectively have mimicked the value of the country's major exports, coal, iron ore and oil (in the form of liquefied natural gas).
Forecasting a sub-50c exchange rate for Australia might seem harsh but that's because defenders of the currency are either basing their views on hope rather than facts, or because they're too young to have lived through a recession.
After all, anyone who is 40 years old today was still at school when the last recession hit.
Winds Of Change
Older Australians can sense the winds of change blowing through their country, and many are wondering what's delaying the inevitable collapse in the currency which might make imported goods and international travel more expensive but will boost the income of exporters on conversion.
To put the looming Australian currency and economic crisis into perspective it's helpful to be living close to the eye of the storm, and that's the west-coast city of Perth where the China-driven resources boom struck 12 years ago and where the decline of China as a raw materials customer is hitting home today.
Long-term locals have seen it before. I think this is my fifth boom and bust which means you learn the hard way when its best to duck for cover.
High Debts Point To Trouble Ahead
What I look out for are signals such as unsustainable share prices, property prices rising thanks to low interest rates despite a high and rising level of mortgage stress, household debts which
The worst suggestion so far came from one of Australia's high-profile billionaires, Andrew Forrest, who was worth more than $6 billion a little over 12-months ago and is now worth $1.5 billion, a 75% fall which could get worse because the company in which he is the major shareholder, the iron ore miner Fortescue Metals, is sailing close to its break-even point.
It was Forrest who last week said in the Chinese city of Shanghai that the world's big iron ore producers should act together to limit production as a way of forcing up the price of the steel-making commodity from its current six year low of $53 a ton to $80-or-$90 a ton.
Harebrained Ideas
Government competition regulators were quick to launch an inquiry into Forrest's comments to see precisely what he was suggesting. Sam Walsh, chief executive of the rival Anglo Australian mining giant,
Nothing is likely to happen with Forrest's idea but it did serve as another tell-tale sign of the stress being felt in the Australian business community and a belief that the country is heading for a crisis of a sort not seen since the mid-1980s.
And, if you look back to that decade you will discover a priceless observation about Australia from the man in charge of the economy, the Federal Treasurer, Paul Keating, who famously warned that the country was in danger of becoming "a banana republic".
"I get the very clear feeling that we must let Australians know truthfully, honestly, earnestly, just what sort of international hole Australia is in," Keating said. "It's the price of our commodities. They are as bad in real terms as since the (Great) Depression."
No-one today is using depressions analogy as Keating did but most people can sense the worsening climate which should trigger the next downward lurch in the currency.
