I like the Australian Dollar
Did anyone see the CPI figure today?
So let me understand, I can buy a 2-year U.S. Treasury yielding 2 percent and trailing 12 month CPI is 4.3 percent and the market does not have a problem with that? I know my clients would not appreciate losing 2.3 percent per year of purchasing power, I know I don't. Is safety in terms of credit quality that important that investors are willing to lock in a loss of wealth? Given the news on KKR that appears to be the very case.
For those of us with fixed rate mortgages my real interest rate on my mortgage is less that one percent - go inflation.
Countless times I have counseled to hold a portion of cash and all assets outside the US dollar. I like the Australian dollar for a number of reasons.
So let me understand, I can buy a 2-year U.S. Treasury yielding 2 percent and trailing 12 month CPI is 4.3 percent and the market does not have a problem with that? I know my clients would not appreciate losing 2.3 percent per year of purchasing power, I know I don't. Is safety in terms of credit quality that important that investors are willing to lock in a loss of wealth? Given the news on KKR that appears to be the very case.
For those of us with fixed rate mortgages my real interest rate on my mortgage is less that one percent - go inflation.
Countless times I have counseled to hold a portion of cash and all assets outside the US dollar. I like the Australian dollar for a number of reasons.
- Yield
- Inflation fighting central bank
- Commodity based economy
- Next door to largest, fastest growing economies
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