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Unlikely to happen under the current circumstances. All other major occurances of hyperinflation (Germany, Hungary, Zimbabwe, etc..) have required a substantial disturbance fo the socio-economic fabric, that we just arn't seeing (on the scale required).. yet.

You forget that the CAD itself would become horribly devalued in such a scenario (meaning that silver cannot possibly get cheap in CAD terms if their economy tanks) - cross currency metal arbitrage is nigh impossible as long as open FX and bullion markets exist. Only thing that are produced...

Japan's debt to GDP is over 200%.. and theyre still around - sure, not as prosperous as they once were, but not a 3rd world economy by any means. Its not the amount of debt that kills countries - its what the money is spent on, and the confidence that it will be repaid. The USA and Japan can...

the straddle trade is appropriate if: 1. If you think the volatility of Ag is going to rise you BUY the straddle. 1. If you think the volatility of Ag is going to fall you SELL the straddle

Its just a lot of trading happening around the 31.89 mark - ppl crossing the bid/offer spread a few times. Nothing special, and looking for patterns on 1min chrts is a bit futile imo

RMBS is already accepted under the RBA's normal Repo mrket operations.. with a 10% haircut (ie: a bank will only be able to borrow $90 for each $100 of RMBS pledged) - and they have to post margin (ie: if the value of the RMBS falls below 90%, they have to top up the difference with cash). Banks...

Which functionally is one and the same - regulatory capital is capital that can be liquidated instantly in order to pay liabilities when normal sources of funding dry up. Regulatory capital as a % of total assets, is very similar to having a % of deposits not lent out.. Since all loans a bank...

That is what banks try to do on aggregate, as its almost impossible to exactly match a 5yr loan with a 5yr deposit/bond of the same maturity. Also the economies of scale in funding markets make issuing anything less than 100mio in funding uneconomical. Btw, the minimum reserve ratio is set by...

No, the reserve ratio is then 0.5 (reserves as a % of total deposits), and while yes it does provide a larger buffer of liquidity, it still will not save the bank when there is a bank run, and ppl try to pull 10k out, while only 5k is available. Banking (in the sense of giving loans) cannot...

If deposits fall by 50% then its a bank run, and then the banks goes bust - not the fault of covered bonds though. The gov guarantee of 250k per account would have to step in to cover depositors.. and if the gov cannot borrow enough money to fund the guarantee, then Australia would already be in...

Loans can be created from deposits, or from money borrowed by banks elsewhere.. eg issuing bonds

Not quite - the difference between covered bonds and mortgage backed securities, is that if a loan in the covered pool defaults or matures, it has to be replaced with another loan, so that the cover pool is maintained And where would you like to keep your money/get a home loan/credit card etc...

A loan/morgage written by a bank is an asset: It generates cashflow, and will (hopefully) be paid off at then end. Kinda like putting your money in a term deposit - you earn interest, and (hopefully) receive your money back at the end of the term. Deposits are guaranteed direct. For the...

Total assets = Total Liabilities + Equity They probably will not issue 160bio of covered this year, but over 10 years, I don't see why not. Many Canadian and Scandinavian banks have 10s of billions of covered bonds on issue, and their economied/populations aren't that much bigger than ours

8% capital mean 8% of the banks funding (laibility side of the balance sheet), which consists of: Deposits Covered Bonds Senior unsecured bonds Subordinated bonds Preference Shares/Perpetual bonds Ordinary shares Also the fact that covered bonds are secured by mortgages means that as long as...

banks are only allowed to source 8% capital in the covered market, and since the senior unsecured market has pretty much frozen up for the past 6 months, this is one of the few way left for banks to raise funding without paying through the roof for it. Its covered by pools of mortgages btw..

CDS contracts covering Greek/Italian debt have been written by many banks, not just US ones. They are standardized contracts, governed by rules set out by ISDA (international swaps and derivatives association), which stipulate the kinds of "credit events" that will trigger the CDS payout...

not to mention that euro politicians are doing everything they can to make sovereign cds worthless...

The same process occurred when banknotes were backed by gold (gold certificates), or even when gold coin was the medium of exchange - you could still go the bank and ask to borrow gold, which they would lend out from their deposits.. Banks dont create money to hand out loans - they loan out the...

Wanna invest in wheat? There are plenty of ag ETFs.. Here is one: http://www.etfsecurities.com/csl/classic/etfs_wheat.asp It tracks the DJ-UBS wheat index, which in turn tracks the front (current) CBOT wheat futures contract. Your max risk is the sum you invest (it works exactly like a share)...