The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Saturday, July 23, 2011

More upside risk to Aussie bonds and the AUD?

Just catching up on long overdue economics reading. Frankly, I have not been keeping up to speed on a lot of stuff. UBS reckons that a downgrade of US Government bonds from AAA to AA is a real possibility as soon as early August if Congress does not agree to a substantial $3-4 trillion deficit reduction plan. If this occurs, I would expect it to be a major event for the Aussie dollar and Aussie bond prices. Money market funds in the US, and many other fixed income investors would have to sell US debt that was no longer AAA and replace it with something else. One would think Aussie assets would feature in the mix.

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