Based on several information sources, including the BIS, I have constructed an approximation of Exter's Inverse Liquidity Pyramid with the values at each level:
I have also produced rough estimates on where values may end after the next round of the crisis:
(click on picture to enlarge)
Will any of these estimates be remotely accurate?
Who knows.
The point of this exercise is to consider the consequences of a re-frozen, or at least slushy credit market, and an impaired bond market.
Any significant rise in interest rates from extremely low levels in developed economies would crush real estate and bond values.
Even cash may become an impaired asset at some point if the Fed succeeds in generating inflation (which I doubt, at least in the short term).
So gold remains our sole safe haven.
(click on picture to enlarge)
Will any of these estimates be remotely accurate?
Who knows.
The point of this exercise is to consider the consequences of a re-frozen, or at least slushy credit market, and an impaired bond market.
Any significant rise in interest rates from extremely low levels in developed economies would crush real estate and bond values.
Even cash may become an impaired asset at some point if the Fed succeeds in generating inflation (which I doubt, at least in the short term).
So gold remains our sole safe haven.
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