22 July 2012

Puppy pictures

I haven't done any non-metals stuff on this blog, but since Kid Dynamite is always going on about how great his dogs are :) I just thought I'd lay down a challenge to out cute our new addition.


Kid Dynamite said...

very cute, Bron. Those Aussie Shepherds are wicked smart!

Isn't that a bit stereotypical for Australia though? Aussie Shepherds?

what's his name: GATA?

Bron Suchecki said...

Aussie Shepherds were not a popular breed over here due to the coat - too hot for a working dog - but they are becoming more popular.

Wicked smart also means wicked naughty.

Name is Asher, apparently means blessed, fortunate (needless to say I had no input into the name).

S Roche said...

Hi Bron,

Cute puppy, thanks for sharing.

Now, back to work please: The BIS and the FDIC are both proposing that gold be re-classified from Tier 3 (50% RWA) to Tier 1 (0% RWA).

I thought this was all a bit, well...to good to be true therefore probably unlikely, until I read foot-note 32 on page 26 of the Bank for International Settlements document re Basel III "The First Pillar: Minimum Capital Requirements", as follows:

"12. Other assets
81. The treatment of securitisation exposures is presented separately in Section IV. The standard risk weight for all other assets will be 100%.(32)

(32) However, at national discretion, gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities can be treated as cash and therefore risk-weighted at 0%"

http://www.bis.org/publ/bcbs128b.pdf [see page 26, Item 12 Other Assets and Foot-note 32]

Then, I noticed that the FDIC document uses exactly the same wording...harmonisation or what?

http://www.fdic.gov/news/news/financial/2012/fil12027.pdf [see page 2]

As Basel III implementation starts January 1, 2013 I am reading this as, subject to the discretion of national Central Banks, gold bullion* can be treated as a 0% risk-weighted asset.

Isn't this the return of gold to the centre of the monetary system?

All the best


*ps interesting clarification of "allocated gold" in the wording of both documents!

Bron Suchecki said...

I see it as just giving bullion banks who already hold gold (fractionally) against their gold liabilities a bit more room to move re capital requirements.

I don't see conventional banks deciding to exchange their cash reserves for gold or sell mortgages for gold.

S Roche said...

Thanks Bron,

I was looking for just that sort of balance to my view that this development will give rise to a pro-cyclical loop for gold that will see Soros's expectation come to pass.