Too big to sell

5 comments

1. Well, I suppose there is one other place to go … gold!

   And, how does this interact with the new Basel III requirements?

   1. The UST market is about 7.5tn, Gold would go up A LOT If there was even marginal diversification out of USTs and into Gold. Remember, production is trivial each year.

      For Basel 3 i think it’s a tiny development. For level 1 assets the ratings move won’t have an impact, however if there is a knock on impact down the ratings chain, it may bump some corps etc out of the level 2 asset class.

      Sent from my iPad

2. Ah, yes, that currency that lost 6% in 4 days … I’d rather put my money in 10 years US$ ! :)

   1. Well, the yield differential at 10yrs is about 200bps, so you have to remain bearish AUD to think the total return will be lower over a ten year period.

      Sent from my iPad

      1. exchange rate is unknown = risk.

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