Yields on the 10-year Commonwealth bond hit a record intraday low of 3.78 percentage points yesterday…….CPI inflation for the September quarter was still running at 3.5%. That means investors are close to giving the Australian government money for free.
On top of that….. Investors seem happy to park their money with the Australian government despite the large risk that the dollar will take a serious tumble (though of course they are themselves mitigating that risk somewhat through their own purchases). If investors are separately hedging, which, frankly, they’re mad if they’re not, that will add further cost to the transaction, enough surely, to push the return negative.
via Australia: The safe haven – macrobusiness.com.au | macrobusiness.com.au.
Just a plug for Gold – not buying it..excuse the pun..