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

    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

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