What will happen to mining companies when USD collapses?

[chatty]

I believe that the USD will collapse soon, and if this is the case what will be the impact to the companies like BHP, RIO or other junior minings??

Do they export their products in USD currency?
If AUD appreciate against USD, the collapse in the USD would have negative impact on their profitablility???

On the other hand, if the US is going to expeirence hyperinflation soon. I believe it means most of resources, hard assets price will go up a lot. This will have positive impact to miners.

So I am not so sure whether who will be benefiting from this USD collapse and hyperinflation in the US scenario

 

[gordon2007]

I believe that aliens will come from uranus and pay off the us debt and all things will get better.

I don't have any factual evidence, but I believe it. Should I back the usd now?

I believe that the USD will collapse soon, and if this is the case what will be the impact to the companies like BHP, RIO or other junior minings??

 

[rub92me]

If you're certain about the USD collapsing, why bother with the miners? Just do the FX trade. Or am I missing something?

 

[skyQuake]

The implications of a collapse of the USD would mean mining companies would get pretty darn screwed too.

 

[stoxclimber]

Commodity prices denominated in $US would rise.

 

[So_Cynical]

USD down = Gold/Oil up.

 

[fureien]

sorry can u explain for the dummies like me why USD down = commodities up?

also i believe that USD is a core euro currency and used by alot of ppl organisations and countries as a safe haven so i dont think it will collapse anytime soon

 

[Nyden]

sorry can u explain for the dummies like me why USD down = commodities up?

Well, what do you think the USD is going to collapse against? It's purely relative, really. If the USD collapses, i.e. by losing a vast amount of its value - this of course means that every USD has less spending power; thus everything basically goes up vs it.

 

[brty]

Why do people have to think about 'collapse' in something, in this case $US. What about if it just declines a bit over the next year or so??

Likewise for 'hyperinflation', what about just plain old ordinary inflation??

To answer the original question though, if the $US goes down and commodities priced in $US go up, the Aussie miners will seem better off, then if the $A rises, the effect is likely to be fairly neutral.

If the $US collapses though, demand for consumer goods there will have collapsed, which means demand for the raw products will fall as the factory of the world (China) scales back production. This would be bad as Skyquake has already stated.

brty

 

[Trembling Hand]

Why do people have to think about 'collapse' in something, in this case $US. What about if it just declines a bit over the next year or so??

Likewise for 'hyperinflation', what about just plain old ordinary inflation??

Shows the thinking of the punters around here brty.

 

[Aussiejeff]

Why do people have to think about 'collapse' in something, in this case $US. What about if it just declines a bit over the next year or so??

Likewise for 'hyperinflation', what about just plain old ordinary inflation??

To answer the original question though, if the $US goes down and commodities priced in $US go up, the Aussie miners will seem better off, then if the $A rises, the effect is likely to be fairly neutral.

If the $US collapses though, demand for consumer goods there will have collapsed, which means demand for the raw products will fall as the factory of the world (China) scales back production. This would be bad as Skyquake has already stated.

brty

But in this Brave New World where *VERY BAD* news (which once might have sent markets plummeting) is now considered by the pundits to actually be *VERY GOOD* news in disguise, with markets soaring in response, isn't such *bad* news a source of comfort and very much looked forward to?

Now, I love it when the news gets *really bad*.

The markets always rocket up on a bull-wave of euphoria as a result.

Gee, even the threat of a nuke conflict with NK was enough to spark a rally.

Wheee!

 

[Beej]

Shows the thinking of the punters around here brty.

Too true!

Beej